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Interchange Untangled - Part 4

This is the fourth article in a series written in response to numerous reader requests for definitions of the various interchange levels. We are working with several industry experts to explain the interchange "buckets," and how transactions are assigned to the processing levels. For the most current rates, please refer to the table distributed with our August 25, 2003 issue of The Green Sheet.

Visa Custom Payment Service (CPS) Retail 2 Transactions for Select Emerging Markets This type of transaction is restricted to specific market sectors that Visa targets to increase card usage. These include government agencies; schools; utilities; insurance companies; and cable and other pay television Merchant Category Codes (MCCs) [4899, 4900, 5960, 6300, 8211, 8220, 8299, 9211, 9222 and 9399].

The transaction must be key-entered and electronically authorized. It must also be sent for processing within 24 hours of the authorization. These transactions are not required to use Address Verification Service (AVS) to be authorized.

Visa CPS/Automated Fuel Dispenser Transactions

This category was created specifically for petroleum merchants using pay-at-the-pump terminals. The MCC must be 5542 and be registered and certified with Visa. Only one electronic authorization per transaction is allowed, and the complete unaltered contents of the magnetic stripe have to be transmitted. The transaction must be sent for processing within 24 hours of the authorization.

A $1 status check, usually referred to as the "pre-auth," is sent as part of the transaction authorization. The settlement amount must be less than or equal to $75 to qualify for this rate. The merchant's name and location must be provided in the authorization record.

MasterCard Service Industries Incentive Program (SIIP) Transactions

This type of transaction is restricted to specific market sectors that MasterCard is targeting to increase card usage. It applies only to MasterCard-branded consumer cards and is restricted to key-entered transactions for telecommunication equipment and services; cable and other pay television services; utilities; and insurance MCCs (4812, 4814, 4899, 4900, 5960 and 6300). An electronic authorization is required, and the transaction must be settled within one day of the authorization. The transaction must also include a special indicator in authorization and settlement records. The merchant is required to sign a marketing agreement with MasterCard.

MasterCard Warehouse Club Transactions

Transactions in this category must meet all Merit III requirements. The merchant must be registered with and qualified by MasterCard as a warehouse club merchant with a MCC 5300.

MasterCard Public Sector Transactions

This transaction type is restricted to specific market sectors: court fees; payment of fines; bail bonds; taxes and government services not classified elsewhere (9211, 9222, 9223, 9311 and 9399). The transaction type only applies to consumer cards; an electronic authorization is required, and it must be settled within two days of the authorization.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
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