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A Thing

Card Association news you can't ignore

By David H. Press

Many ISOs will be shocked by Visa U.S.A.'s new requirements for all tri-party agreements. Effective June 1, 2006, a stand-alone disclosure page is now mandatory when an agent and/or processor is a party to a merchant agreement. It isn't required when the merchant agreement is limited to the merchant and member bank.

Basically, the disclosure page ensures that the merchant is aware of the member bank's involvement in the process and that the merchant agreement is not just with the ISO.The disclosure page must be a separate document and contain the Internet protocol's minimum address resolution protocol standards. The document also must be provided to the merchant at the time of solicitation, signed by the merchant and given to the merchant along with the merchant agreement.

Member banks were sent information on disclosure page format, and requests for exceptions must be submitted to Visa by members. Compliance monitoring is scheduled to begin in June 2006. Members with agents who do not comply may be subject to fees or other special conditions. (More information about disclosure page requirements is in "Visa requires change to all merchant agreements" in this issue of The Green Sheet.)

Publication updates

MasterCard International updated its Merchant Rules Manual effective April 6, 2006. It is available online at

The manual contains excerpts from MasterCard member publications that provide information applicable to merchants. The update reflects recent changes to MasterCard's security rules and procedures.

It includes MasterCard's Bylaws and Rules pertaining to merchant card acceptance and published in April 2005. Subjects include use of the MasterCard marks, prohibited practices, merchant obligation to honor all MasterCard cards, authorization and presentment of transactions, and the secure treatment of card account and transaction data.

The manual also excerpts MasterCard's Chargeback Guide, published in May 2005, which covers such topics as how to complete the sales transaction; deal with suspicious cards; handle credits and returns; and fulfill special procedures that pertain to particular types of transactions including hotel/motel, cruise line and car rental.

In addition, it contains excerpts from the company's Security Rules and Procedures, newly published in January 2006. These address responsibilities of the member bank regarding any merchant from which the member acquires MasterCard transactions. It also describes various MasterCard programs and clarifies common areas of confusion among ISOs and merchant level salespeople (MLSs).

The update also delineates acquirers' responsibilities for merchant education, which not only helps merchant retention, but it also lowers ISO risk. Merchant education may also allow an ISO/MLS to retain high-residual merchants that tend to get into chargeback trouble. The text of this section follows:

Once a merchant is established, an acquirer must institute an ongoing relationship of fraud prevention, including an education process consisting of periodic visits to merchants, distribution of related educational literature, and participation in merchant seminars. The acquirer regularly, as reasonably appropriate in light of all circumstances, must review and monitor the merchant's Web site(s) and business activities to confirm and to reconfirm regularly that any merchant activity related to or using a MasterCard mark is conducted in a legal and ethical manner and in full compliance with the Standards. (Section: 7.2.3)

Educational tools online

Visa recently made merchant education easier by posting its educational tools (most of which are free) on a Web site that is accessible to any merchant:

Also available for merchants are materials displaying the new Visa brand mark that appears on newly issued Visa cards, at the POS and in marketing materials. The new mark continues to use the blue, white and gold colors, but the word "Visa" is much more prominent. Transition to the new Visa brand mark will continue over the next five years. These materials, as well as a variety of other brochures and pamphlets, can be ordered online at

MasterCard also provides merchant education information at

David H. Press is Principal and President of Integrity Bankcard Consultants Inc. Call him at 630-637-4010, e-mail or visit

Article published in issue number 060601

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