The most notable changes are:
- Interchange rate increases, which will impact card not present transactions in particular
- Adoption of 8-digit BINs
- Subscription billing rule changes from MasterCard
Due to the pandemic, VISA and Mastercard delayed some interchange rate increases that were previously planned for the US market in April 2021. These rate changes, which will affect card not present (CNP) transactions in particular, are now scheduled to go into effect in April 2022.
VISA will also introduce incentive rates for certain CNP consumer credit transactions processed using a VISA EMV Payment Token. These rates will be roughly 10 bps lower than the non-tokenized rates on qualifying transactions. VISA says the change is being made because incentivizing greater use of tokens will improve e-commerce authorization rates and bolster security at a time when fraudsters are increasingly targeting digital and e-commerce channels.
In response to a sharp increase in the number of card issuers, the International Standards Organization (ISO) identified an expected shortage of novel combinations for Bank Identification Numbers (BIN) and called for an expansion of the BIN from six to eight digits. The BIN has traditionally composed the first 6 digits of the primary account number. The digits within the BIN identify the brand (VISA, MC, Discover, AMEX), card type (debit, credit, prepaid, etc.), card level (black, platinum, etc.), and the bank which issued the card.
VISA and Mastercard are adopting the new standard in 2022. After April 2022, VISA will only issue 8-digit BINs. Mastercard will issue 8-digit BINs after April 2022 but has not set a date for discontinuing issuance of 6-digit BINs. Both networks have mandated that acquirers and processors need be able to accept and accurately process 8-digit BINs by April 2022.
If your system is not set up to handle 8-digit BINS, your company may not be able to process transactions and there may be PCI complications as well. Verisave recommends contacting your processor to make sure you are set up to process 8-digit BINs. See this resource for more information
In 2022, MasterCard will introduce new requirements for US merchants using a subscription/recurring billing model. These new requirements focus on enhancing cardholder notification, cancellation, and disclosure standards to reduce consumer complaints and chargebacks.
Key elements of the new requirements include:
- Disclosures at point of payment that detail subscription terms and obtain the customer’s affirmative acceptance of the term
- Enrollment confirmations by email or other electronic methods that include subscription terms and clear instructions regarding how the consumer can cancel the subscription
- Establishing electronic cancellation method similar to unsubscribing from email messages
If your company uses subscription or negative option billing models, Verisave recommends that you review MasterCard’s bulletin for additional details on the new requirements and guidance regarding how to comply.
Verisave is a third-party cost-reduction firm specializing in merchant accounts and credit card processing fees.
Verisave is not a payment processor, and is not affiliated with any processors, card brands, or banks.
Verisave has more than 20 years of experience optimizing and monitoring the credit card processing industry.