by Ty Hardison

Payment security compliance deadlines and revisions announced

Merchants should be aware of the pending payment industry deadline of July 1, 2010 related to the Payment Application Data Security Standards (PA-DSS).

Effective July 1, 2010, acquirers must ensure that merchants only use PA-DSS compliant applications.

What does this mean to merchants?  If you are using old payment devices or software, you may need to upgrade.  Merchants using point of sale register systems should inquire with their point of sale vendor about their compliance status if they have not already done so. Merchants should also review the information posted on the PCI Security Standards Council website at or on the Visa website at

PA- … more

New Merchant Services to lower costs and earn rewards

Merchant Rates, where ALL merchants large and small can get an Interchange rate price structure to lower their costs, has been redesigned with a new look for 2010. has also added new content. In addition to providing an instant, detailed merchant interchange rate quote calculator and guide, has created a Frequently Asked Questions resource, covering topics including:

Merchant Interchange Q&A

Merchant Rates Quote Q&A

Payment Technology Q&A

General Merchant Account Q&A

Card Payment Rules Q&A


Vantage Points Rewards, a client loyalty rewards and corporate giving program where a portion of the value of each award is donated to the Food Bank, has also been redesigned.

If you are not earning rewards processing … more

From Imaged to Paperless Checks

Paper checks don’t remain as paper very long. In today’s digital age, they are quickly imaged so they can be electronically cleared and settled.

Converting paper to digital images became law in 2003 with the passage of the Check Clearing for the 21st Century Act (Check21) and the initial implementation meant large companies and banks didn’t have to ship paper all around the country.

Today, more and more of the paper check imaging is being done by merchants and businesses that accept them. Community banks led the way in deploying remote-deposit check scanners as a way to offset the competitive advantage mega banks had with their branch network. By scanning and electronically depositing check images, community banks were able to attract business customers and businesses … more

No Interchange reform legislation in 2010

House Financial Services Committee Chairman Barney Frank announced his committee would not take up Interchange legislation this year.   However there are steps that small businesses, family-owned restaurants, local retailers and service providers can take to help themselves without waiting on the government.

Immediately switch to an Interchange pass-through pricing plan.  For example, effective October 2010, Visa will extend Small Ticket Interchange to most merchants.  This is an effective reduction in the overall Interchange costs for most merchants.  However, few merchants will benefit since there is no difference between a transaction over or under $15 in their current merchant account contract.  In fact this is just one example.  Most merchants are … more

Strategy to Advance Contactless

In an article on Digital Transactions “Could Visa’s New No-Signature Rule Hurt Contactless Payments?” it was argued that Visa’s expansion of its policy to no longer require signatures for transactions less than $25 for most U.S. merchants would undermine contactless payments.

In our blog post Visa Changes Debit Debate, Backs Contactless, we suggested that extending Visa's No Signature Required (NSR) program (on transactions <$25) to most merchants (along with converging signature and PIN debit rates and expanding small ticket Interchange on transactions <$15) were policies that supported contactless payments.

Changing ingrained behavior takes time and doing it in steps makes sense.  Step one, training merchants and … more

Visa Changes Debit Debate, Backs Contactless

Visa changes the signature vs. PIN debit debate with policies to support contactless payments. 

In an interview in the June/July 2009 issue of Cards&Payments magazine, Ellen Richey, global head of enterprise risk for Visa, discussed the adoption of chip technology to make purchases more secure. Richey said “the U.S is not going to be adopting a chip-and-PIN credit card or debit card any time in the very near future” suggesting that in the U.S., the deployment of a contactless-chip card network may not include a PIN component.

In October 2009, Best Buy announced that it would discontinue it’s acceptance of Visa contactless payment cards. Why?  Best Buy reportedly took issue that Visa contactless lacked the option of PIN acceptance, while payment industry … more

Visa's Debit Rates Converge

Visa has announced additional changes for April 2010.  Visa will adjust the following U.S. Visa Debit Interchange reimbursement fees.  The significance here is that for many merchants the underlying Interchange costs for accepting a Visa signature debit (check card) will be the same as accepting a PIN debit transaction. 

Visa Signature Debit

Fee Program Current Fee April 2010 Fee

CPS Retail Debit 1.03% + $0.15  0.95% + $0.20

CPS Supermarket Debit 1.03% + $0.15 ($0.35 max) 0.95% + $0.20 ($0.35 max)

CPS Service Station Debit 0.70% + $0.17 ($0.95 max) 0.75% + $0.17 ($0.95 max)

CPS Automated Fuel Dispenser Debit 0.70% + $0.17 ($0.95 max) 0.75% + $0.17 ($0.95 max)

Interlink PIN Debit

Visa has announced changes in the pricing for Interlink debit transactions.

Fee … more

Visa extends Small Ticket Interchange to more Merchants

Visa has announced additions to the CPS/Small Ticket Interchange Program, currently available to Local Commuter Transport, Taxicabs and Limousine, Restaurants, Fast Food Restaurants, Parking Lots and Garages, Motion Picture Theaters, Video Rental Stores, Bus Lines, Tolls and Bridge Fees, News Dealers, Laundries, Dry Cleaners, Quick Copy, Car Wash and Service Stations.

Effective October 2010, Small Ticket Interchange will be extended to most merchant category codes (MCCs).  Current Small Ticket Interchange applies to transactions less than $15.  The current Visa Small Ticket Credit Interchange is 1.65% + $0.04 and the Visa Small Ticket Debit Interchange is 1.55% + $0.04.

This is an effective reduction in the overall Interchange costs for most merchant categories.  However, … more

The Essential Merchant Guide to Card Payment Refunds

Buyers need not only an understanding of the benefits and value of what you are selling, they also need clearly stated billing, return, shipping and other policies important in their decision making process. This guide will focus on the essentials of a card payment refund policy:

Setting a Return Policy

Refund Best Practices

Handling Refund related Chargebacks

Beware of Refund Scams

Lower costs with Credit Voucher Interchange

Setting a Return Policy

A good return policy can help close sales. Your return policy or lack thereof can justify higher or lower cost as reflected by higher or lower risk of buying from you in the mind of your customer. Your return policy can even define your brand - think Nordstrom.

Handling refund requests in a way that makes good business sense and … more

The Fifth Anniversary of Reward Card Interchange

Reward credit cards are used by card companies to compete with one another for the business of affluent consumers. Card issuers attempt to influence the purchase behaviors of cardholders with higher spending limits by rewarding them to spend more at merchant locations. And by most accounts they have been successful.

This spring marks the 5th anniversary of rewards Interchange. The decision to implement a higher rate for a rewards card verses a non-rewards card was introduced in response to a growing American Express market share. The competitive landscape in 2005 found MasterCard and Visa card issuers increasingly using rewards as a key component of their cardholder acquisition strategies in order to compete with AmEx for affluent consumers.

So in April 2005, both MasterCard and Visa … more