This information is intended to summarise the primary Rules and regulations contained in the International Operating Regulations of the Card Schemes as amended from time to time (the "Rules") so as to enable Merchants to operate within those Rules. For the avoidance of doubt, the Rules always prevail over this information in the event of any dispute.
The Card Schemes have the right, either in law or in equity, to enforce any open of the Rules pertaining to the relevant Card Scheme and to prohibit conduct that creates a risk of injury to that Card Scheme or which may adversely affect the integrity of that Card Scheme's systems, information, or both.
Display of Card Scheme symbols
Merchants should display and exhibit (and keep displayed and exhibited) to the general public at each of their points of sale world-wide at which cards are accepted for payment for product(s), such identification symbols or decals as are approved or supplied by the Bank/Processor from time to time.
Merchants should always obtain authority to debit the cardholder's account for each sale. It is Merchants sole responsibility to procure the authority of the cardholder and the Merchants are responsible for producing evidence satisfactory to the Bank/Processor that authority was obtained for debiting the cardholder's account. Merchants should retain documentary evidence of dispatch of the approved product(s) purchased. The acceptance of cardholder not present card transactions does not guarantee payment from the Bank/Processor whether or not authorisation has been granted by the Card Scheme or a card issuer for any particular sale.
Stored Credentials and Recurring/ Instalment Payments
A stored credential is information (including, but not limited to, an account number or payment token) that is stored by the merchant to be used for the following type of transactions:
Recurring – A transaction in a series of transactions processed for the purchase of goods or services provided at regular or fixed intervals.
Instalment – A transaction in a series of transactions processed over a set period and number of payments for a single purchase of goods or services.
Unscheduled credential on File (UCOF) - A transaction using a stored credential for a fixed or variable amount which is not part of a scheduled or regular agreement but where the cardholder has provided consent for the merchant to initiate one or more future transactions.
Cardholder initiated credential on file (CIT COF) - A transaction using a stored credential for a fixed or variable amount which is not part of a scheduled or regular agreement but where the cardholder themselves initiates the payment.
When capturing a Stored Credential for the first time, the Merchant must establish an agreement with the Cardholder that contains all the following:
- A truncated version of the Stored Credential (for example: last 4 digits of the Account Number), as it may be updated from time to time
- How the Cardholder will be notified of any changes to the agreement
- How the Stored Credential will be used
- The expiration date of the agreement, if applicable
Merchants taking a recurring, instalment or Unscheduled credential on File payments must obtain the cardholder's express consent and inform the cardholder the exact details of the agreement including:
- The Transaction amount and currency (including all associated taxes and charges) or a description of how the Transaction amount will be determined
- Whether the amount is fixed or variable
- The Schedules date(s) of the Recurring / Instalment Payment
- Whether the Schedules date(s) are fixed or variable
- Cancellation and refund policies
- For Recurring Transactions, the fixed dates or intervals on which the Transactions will be processed.
- For Instalment Transactions, the total purchase price and the terms of future payments, including the dates, amounts, and currency
- For Unscheduled Credential-on-File Transactions, the event that will prompt the Transaction (for example: if the Cardholder's balance falls below a certain amount)
Any changes to a cardholder’s Payment Agreement must also be communicated at least seven working days prior to the next payment being taken. You must communicate to cardholder in any of the following situations:
- More than six months have elapsed since the last payment
- A trial period, introductory offer or promotional activity has expired
- There are changes to the Recurring/Instalment Agreement: - any change to the amount of the Payment and/or - any change to the date of the Payment
Terms and Conditions of Sale
Merchants should at all times clearly display at their points of sale the terms and conditions of sale. In addition, the Merchant should at all times display in a prominent position at its at its points of sale a complete and accurate description of the approved product(s) offered for sale or supplied by the Merchant and the nature of the commitment that the cardholder is assuming.
Merchant points of sale should contain clear details and information about customer service, its contact details (including legal name, trading name, legal address, business address, email, phone and fax), currencies accepted, its delivery policy and the country of its domicile and registration (if applicable) and its refund/returns policy. Merchants should also comply with all requirements and guidelines in respect of Internet payments issued by the Bank/Processor or any Card Scheme together with all legal and regulatory requirements that apply from time to time.
Merchants should clearly inform the cardholder that they are committing to payment before they select to continue with any action that should result in a payment to the Merchant. Merchants should afford the cardholder an unambiguous option to cancel the payment at this juncture. The Bank/Processor may investigate any complaint, which it receives from a cardholder about the Merchant and should be entitled to require that the Merchant amends and/or clarify the terms and conditions of sale immediately upon the receipt of a notice from the Bank/Processor to this effect. If the Merchant processes recurring sales the Merchant should offer an online cancellation facility to cardholders. Merchants should notify cardholders at the outset that subsequent charges will be debited to their card for such recurring payments.
No Discriminatory Surcharges
Merchants should not directly or indirectly require any cardholder to pay a surcharge, to pay any part of the fees or Merchant Service Charge, whether through any increase in price or otherwise, or to pay any separate charge in connection with the transaction in which a card is used. A surcharge is any fee, charged directly or indirectly, deemed by the Card Schemes to be associated with the use of a card that is not charged if another payment method is used.
Merchants may not engage in acceptance practices that discriminate against, or discourage the use of a specific card brand in favour of any other card brand or payment method that is also accepted.
Excessive levels of chargebacks and disputes are subject to Fee Assessments.
Refunds (in any form) are not permitted to Mastercard® or Visa® cards for gaming transactions.
Refunds to a card, when there has been no corresponding sale on that same card are not permitted under the Card Scheme Rules.
The Merchant should only process Refunds where there is a corresponding sale and then only up to the value of that sale and no more. Refunds should only be made to the card upon which the original sale was debited and not to any other card.
Each Refund must be processed in the original sale currency and to the value of the original sale or part thereof (at the rate of exchange prevailing at the time of the Refund as advised by the Bank/Processor if applicable).
Transaction invalidity, chargebacks, disputed sales and time limitations
The card Issuer reserves the right not to honour transactions from the Merchant, for instances when the submission provided by the Merchant to the Bank/Processor does not comply with the specifications referred to in the Card Scheme Rules.
A sale may be invalid if:
It is split into two or more connected sales;
- or Incurred where the cardholder to whose account that charge is made disputes in writing to their card Issuer, the authenticity of the sale;
- or In respect of which the original Receipt or copy thereof was requested in writing by the Bank/Processor but not supplied by the Merchant within a reasonable timescale;
- or Product(s) were not dispatched to the address held on file by the card Issuer and the cardholder disputes in writing the receipt of such product(s);
- or The copy of the sale receipt presented to the Bank/Processor is incompatible with the copy of the sale receipt provided to the cardholder;
- or Previously submitted to the Bank/Processor (duplicates);
- or The card has expired or not yet become valid at the time of the sale;
- or It does not contain a valid card account number assigned by the appropriate Issuer;
- or Submitted in an illegible or improperly formatted manner;
- or In violation of the law or currency regulations as applied to cards in the country in which and at the time that the transaction was incurred;
- or The amount of the sale does not agree with the sum of the individual approved product(s) purchased;
- or A receipt is issued which is for any reason illegal, unenforceable, or of no legal effect;
- or Presented to the Bank/Processor in a currency other than that of the original sale;
- or The Merchant is unable to prove to the satisfaction of the Bank/Processor that the debit of the cardholder's relevant account was authorised by the cardholder;
- or The Merchant has not provided the product(s) purchased by the cardholder;
- or (In the card Issuer's exclusive opinion) the Merchant has not supplied the product(s) as advertised;
- or (In the card Issuer's exclusive opinion) the product(s) supplied was not of Merchantable quality or fit for their intended purpose.
A chargeback is possible from the date of the initial sale until 180 days after the date the consumer should have received everything they paid for (this may be a date after the date of the initial sale). For example, if a consumer pays for a holiday on 1st February 1998-2011 and the Holiday is for 2 weeks starting 14th July 1998-2011 and finishing 1st August 1998-2011 they can chargeback until 1st February 2011 (180 days after their holiday would have completed). This is why Banks/Processors see future delivery as more risky.
In the event that the total value of invalid transactions effected by the Merchant exceeds a level that the Bank/Processor considers excessive or unreasonable, the Bank/Processor usually reserves the right to chargeback the total value of the invalid transactions and/or terminate the Merchant Agreement.
Where required the Merchant should provide reasonable and timely co-operation (including access to the Merchant's related records) with any enquiries from the Bank/Processor, the Bank/Processor's authorised agents, the police or other official investigators regarding suspected fraud.
The decision as to whether a chargeback stands as valid is solely that of the card Issuer and such decision may be conclusive as to the determination of any chargeback.
If the Merchant fails to notify the Bank/Processor that it disputes a chargeback within the specified period, of receipt of the Bank/Processor's notice, the Bank/Processor may pass the debit to the Merchant and the Merchant forfeits their right of dispute.
Merchant Monitoring Programs
The major card schemes all impose additional fee assessments for merchants with excessive chargebacks/disputes. They do this because "trust" in their brand by cardholders is vital to the continued success of their brands. Cashflows strongly recommend all Merchants read the following guides which are available online: