April 2008 Interchange Overview

Visa and MasterCard have announced Interchange modifications to become effective April 2008.

Visa

Visa is implementing an International Service Assessment (ISA) fee on U.S. acquired transactions when the issuer country is foreign for both international purchase and cash advance transactions except on a U.S. military base, embassy or consulate.

Visa will modify Visa Signature Preferred card Interchange for Card Not Present (CNP), Retail and Corporate Electronic charge types as well are certain credit voucher rates.

Changes to the No Signature Required Program (US issued card transactions less than $25), which provides chargeback protection on eligible transactions for fraudulent transactions in a card present environment, is being expanded to include Supermarket Credit and Debit plus:

• hardware stores
• dairy product stores
• gift, card novelty and souvenir shops
• variety stores
• candy, nut and confection stores
• bakeries
• book stores

PIN Debit

Visa will implement changes to Interlink Supermarket and Interlink Standard rates.

Effective April 1, 2008, the following debit networks will modify their price structures as follows:

• Alaska Option will increase their transaction fee to $0.26 per transaction.
• Jeanie Debit Network will increase retail transactions to $0.20 + 0.75% per transaction, Quick Service Restaurant transactions to $0.17 per transaction, and Supermarket transactions to $0.28 per transaction.

MasterCard

MasterCard is enhancing systems to recognize Puerto Rico and other U.S. territories so transactions between merchants and cardholders will not longer be subject to cross border fees.

In an effort to penetrate growing market segments, MasterCard is introducing new incentive Interchange rates, including Core, Enhanced, World, World Elite and Debit Interchange, to apply to Insurance and Real Estate merchant categories.

To further growth in the Bill Payment market segment, MasterCard is reducing the Interchange rates associated with most consumer credit Utility transactions. Core, Enhanced and World Utilities Interchange will decrease by $0.10 and Debit Utilities will drop by $0.30.

MasterCard is requiring that Vehicle Rental transactions being submitted for Commercial T&E Rate III must include the Rental Rate with their current addendum detail.

MasterCard is requiring that transactions qualifying for Commercial Data Rate II and Commercial Face-to-Face Interchange programs include a non-zero tax amount that is within a range of 1% to 30% of the transaction amount, unless the transaction is presented as 'tax exempt' or as 'tax not collected'. Vantage will populate a 'tax exempt' indictor when tax amount is equal to zero to safe guard against potential downgrades.

Discover

Effective April 4th, Discover is reducing the timeliness for all Prime Submission Level programs by 1 day. Timeliness refers to the number of days from when a transaction is processed until it is submitted through Interchange to Discover (most industries set at 2 days). Your best practice is to settle daily.

Also effective April 4th, Discover is increasing Supermarket rates by +0.05%, decreasing Debit Express Services Interchange by -0.05%, increasing Debit Petroleum by +0.02% and Commercial Electronic by +0.04%.