American Express Fees
Network Fees (Assessments) will be assessed on monthly gross sales volume.
Inbound fee may be assessed where the country code of the card issuer differs from that of the merchant.
Non swiped fee (digital wallet) will be assessed to any charge initiated by a digital wallet utilizing a merchant application within a mobile device, and not via the contactless interface, for which American Express did not receive both (i) the full magnetic stripe and (ii) the indicator as to whether the card was swiped.
Card Not Present (CNP) Fee will be assessed on any transaction where the card is not presented at the time of the transaction.
Credit Processing Fees
“Qualified” transactions are defined as electronically authorized, chip read or swiped transactions on non-specialized Consumer Credit and Debit Cards, where the cardholder and card are present at merchant’s point of sale device and batches are closed daily.
A “Mid-Qualified” surcharge may be added to the Qualified rate on the following transactions: a) cardholder and card are present at merchant’s point of sale device, transaction is key entered, signature is obtained and/or Address Verification Service (“AVS”) with full match of billing zip code is utilized, transaction is settled within three days of authorization and the settled amount equals the authorized amount; b) cardholder and card are not present at merchant’s point of sale device, a single authorization is obtained, order number is required, AVS with full match of billing zip code, transaction is settled within two days of authorization, and the settled amount equals the authorized amount; c) certain Discover, American Express, Visa and MasterCard cards, including but not limited to Rewards Signature Debit, Premium, Signature Preferred, Prepaid, Enhanced Value, & World Card transactions; d) all lodging, car rental, small ticket, convenience and Express Services transactions.
A “Non-Qualified” surcharge may be added to the Qualified rate for transactions that do not meet the requirements stated above and may also apply to transactions made with a Business, Corporate, International, Purchase, & Commercial Cards; T & E, Mail/Telephone, e-commerce, and certain Discover, American Express, Visa and MasterCard cards, including but not limited to Rewards Signature Debit, Premium, Signature Preferred, Prepaid, Enhanced Value, World, World Elite, Enhanced and High Value Card transactions.
Debit Processing Fees
PIN Debit Regulated rate will be assessed on PIN based debit transactions using a card issued by a financial institution with assets in excess of $10 Billion.
PIN Debit Non Regulated rate will be assessed on PIN based debit transactions that are processed using the debit networks.
Offline Regulated will be assessed on signature based debit transactions using a card issued by a financial institution with assets in excess of $10 Billion.
Offline Non Regulated will be assessed on signature based debit transactions that are processed using the debit networks.
Miscellaneous Fees
Cross Border transaction assessment may be charged on transactions where the country code of the card Issuer differs from the country code of the merchant.
International Acquirer and Service Fees (Visa’s International Acquirer and Services Fees, Maestro U.S. and MasterCard’s Cross Border and Acquirer Program Support Fees, and Discover’s International Service Fee and International Processing Fee for Currency Conversion) may be charged on international transactions.
Transaction Integrity Fees will be assessed on certain signature debit and prepaid, and credit card transactions that do not meet (CPS) minimum requirements.
Zero Floor Limit Fee will be assessed on settled transactions that do not correspond to a valid authorization issued within the prior 30 days.
Zero Dollar Verification Fee will be assessed on transactions where merchant requests an address verification response without an authorization.
CVC2 Fee will be assessed on transactions in the United States where the three digit code on back of the cardholder’s card (CVC2) is included in the authorization request. This fee applies when verifying cardholder information without also authorizing an amount on the card.
Payment Card Network Access/Usage Fee is assessed by Visa, Mastercard, and Discover on each transaction for accessing their systems.
Digital Enablement Fee will be assessed on card not present sales volume involving signature debit, consumer credit and commercial credit transactions.
Politically Exposed Person
The term “politically exposed person” generally includes a current or former senior foreign political figure, their immediate family, and their close associates. Interagency guidance issued in January 2001 offers banks resources that can help them to determine whether an individual is a PEP.269Guidance on Enhanced Scrutiny for Transactions that may Involve the Proceeds of Foreign Official Corruption issued by the U.S. Treasury, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Office of Thrift Supervision, and the U.S. Department of State, January 2001. More specifically:
- A “senior foreign political figure” is a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation.270It is important to note that while government-owned corporations may present risks of their own, the government-owned corporations themselves are not within the definition of a “senior foreign political figure.” In addition, a senior foreign political figure includes any corporation, business, or other entity that has been formed by, or for the benefit of, a senior foreign political figure.
- The “immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children, and in-laws.
- A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.
Processing Integrity Fees
A fee charged if authorizations are not cleared or reversed in the time frames indicated by the card brands. There are 3 types of Authorizations: Pre-Authorization , Final Authorization, and undefined Authorization.
Visa Claims Resolution (VCR)
In response to the rising number of chargebacks and an increase in related processing time and costs, Visa is introducing their new dispute service initiative, Visa Claims Resolution (VCR).
Visa Claims Resolution is designed to streamline and expedite the dispute resolution process. The intent for this change is to eliminate or reduce invalid disputes and responses, automate liability assignment from the current litigating based process. It will provide a more efficient process with simplified rules, user guided workflows, and reduced resolution time frames.
With VCR Visa is making significant changes and has focused on shortening and simplifying the dispute resolution process requirements to ensure there are consistent rules for Issuers, Acquirers, and merchants.
Key VCR Objectives
- Provide the most relevant information from issuers and cardholders
- Quicker resolution with reduced time frame improves customer experience
- Consolidation of chargeback reason codes
Visa will be reducing the timelines, touch points, and actions involved in dispute resolution by proposing that all disputes follow one of two new processes:
The issuer will initiate a dispute and depending on the dispute category selected by the issuer, the dispute will be processed via either the Allocation or Collaboration workflow.
- Allocation – For fraud and authorization disputes, Visa will determine a liability assignment. Acquirers and merchants will have the ability to respond under certain conditions (e.g., compelling evidence as determined by Visa, invalid data, credit issued)**
**Please note provisional credits will no longer be issued for allocation chargebacks. - Collaboration – While most disputes will fall under the category of Allocation, a subset for processing errors and consumer disputes will still require interaction among merchants, acquirers, and issuers. Through the Collaboration process, VCR will reduce the time frames and simplify this communication using a streamlined workflow.
Issuers will be required to fill out an enhanced Dispute Questionnaire that will ensure that all the required information is captured before the dispute can be initiated. This allows for a faster, more efficient process.
Key Terms-What Changes
VCR will re-define the disputes process and create some new key terms that relate to the VCR process.
- Chargeback will be replaced with the term Dispute.
- Representment will be replaced with the term Dispute Response.
Reduced Resolution Time Frame
The new VCR process will provide more efficient processing and in some cases, less need for multiple cycles of back and forth to exchange information and documentation. This in turn, will allow for quicker resolution of the dispute.
Process Optimization
By removing invalid disputes from the system, VCR will prevent the merchants, acquirers and issuers from spending unproductive efforts on these disputes.
You will see a reduction in the dispute response time frames. This will provide issuers, acquirers, merchants and cardholders with a faster dispute resolution experience. It also further streamlines the dispute resolution process and increases cardholder and merchant satisfaction.
| Stage | Current Time Frame | New Time Frame |
|---|---|---|
| Dispute (formally Chargeback) | As per applicable reason code | No change |
| Dispute Response (formally Representment) | 45 calendar days from the Chargeback Processing Date | 30 calendar days from the Dispute Processing Date |
The dispute categories will be simplified from 22 chargeback reason codes to 4 dispute categories.
The following are the current 20 chargeback reason codes:
| 1. Fraud | 2. Authorization | 3. Processing Errors | 4. Consumer Disputes |
|---|---|---|---|
| 78 (Service Code Violation) | 82 (Duplicate Processing) | 90 (Non-Receipt of Cash or Load Transaction Value) | |
| 86 (Paid by Other Means) | |||
| 62 (Counterfeit Transaction) | 70 (Card Recovery Bulletin or Exception File) | 74 (Late Presentment) | 30 (Services Not Provided) |
| 81 (Fraud-Card Present) | 71 (Decline Authorization) | 76 (Incorrect Currency or Transaction Code) | 41 (Cancelled Recurring Transaction) |
| 83 (Fraud-Card Absent) | 72 (No Authorization) | 77 (Non-Matching Account Number) | 53 (Not As Described or Defective Merchandise) |
| 93 (Merchant Fraud Performance) | 73 (Expired Card) | 80 (Incorrect Transaction Amount or Number) | 85 (Credit Not Processed) |
This second chart highlights the dispute conditions that fall under each of the four Dispute Categories.
| ALLOCATION DISPUTES (FRAUD) | ALLOCATION DISPUTES (AUTH) | COLLABORATION DISPUTES (PROCESSING) | COLLABORATION DISPUTES (CONSUMER) |
|---|---|---|---|
| 12.6-Duplicate Processing/Paid by Other Means | 13.6-Credit Not Processed | ||
| 12.7-Invalid Data | 13.7-Cancelled Merchandise/Services | ||
| 13.8-Original Credit Transaction Not Accepted | |||
| 13.9-Non-Receipt of Cash or Load Transaction Value | |||
| 10. Fraud | 11. Authorization | 12. Processing Errors | 13. Consumer Disputes |
| 10.1-EMV Liability Shift Counterfeit Fraud | 11.1-Card Recovery Bulletin | 12.1-Late Presentment | 13.1-Merchandise/ Services Not Received |
| 10.2-EMV Liability Shift Non-Counterfeit Fraud | 11.2-Declined Authorization | 12.2-Incorrect Transaction Code | 13.2-Cancelled Recurring |
| 10.3-Other Fraud-Card Present Environment | 11.3-No Authorization | 12.3-Incorrect Currency | 13.3-Not as Described or Defective Merchandise/Services |
| 10.4-Other Fraud-Card Absent Environment | 12.4-Incorrect Account Number | 13.4-Counterfeit Merchandise | |
| 10.5-Visa Fraud Monitoring Program | 12.5-Incorrect Amount | 13.5-Misrepresentation |
Please be advised that the chargeback processing letters will be revised to reflect these specific changes.
If you have additional questions that relate to VCR, please contact your sales office.