With more people shopping online than ever before, digital payments have become the norm, driving unprecedented growth in the industry. A massive portion of digital payments go through two giants: Visa and Mastercard. But their policies and regulations are constantly evolving, so keeping up can take time and effort. Here are some tips and guidelines to help you navigate the ever-changing Visa/Mastercard landscape — and capitalize on the booming digital payment industry.
Track Visa and Mastercard Policy Changes
With more people shopping online than ever before, digital payments have become the norm, driving unprecedented growth in the industry. A massive portion of digital payments go through two giants: Visa and Mastercard. But their policies and regulations are constantly evolving, so keeping up can take time and effort.
Visa and Mastercard are two of the biggest payment networks in the world, with a combined market share of over 70%. As such, their policies and regulations exert a major influence on how businesses accept payments. The sheer size of these companies also means that they’re constantly updating their policies. From card acceptance requirements to fraud prevention protocols, card brands regularly issue new guidelines to which all merchants must adhere.
Here are some key reasons why you should always stay updated with Visa/Mastercard policy changes:
- Compliance with industry standards and regulations.
- Reducing fraud losses and chargebacks.
- Ensuring a seamless customer experience.
- Protecting your business from costly penalties.
That last item alone should inspire you to stay current with these updates. Remember, ignorance is not bliss. Failure to comply can lead to hefty fines from both networks or even suspension from accepting payments.
Examples of Recent Policy Updates
Let’s illustrate the importance of staying up to date with a few recent examples of policy changes. Effective April 15, 2023, Visa changed two dispute-handling policies: 10.4 and 13.2.
Here’s how the first one, 10.4, changed. Previously, customers could ask their bank to reverse a payment made to a subscription service, even if it was more than four months ago. But with the updated policy, you can provide evidence to challenge the chargeback request. The updated policy will allow you to submit a combination of the following documents and reject the chargeback request:
- Details of the transaction device (IP address, device ID or fingerprint)
- Details of the customer (account/login ID, delivery address)
- Any other additional relevant information — the more you can provide, the better.
If you can demonstrate that a cardholder signed up with your service at least four months before the disputed transaction, and hasn’t challenged any previous payments, you can prevent the issuing bank from proceeding with the dispute. With the right evidence, you can put the brakes on a potentially costly chargeback and keep your hard-earned revenue in your pocket.
Another policy change occurred regarding clause 13.2 for disputing conditions. Have you ever had a customer claim they were charged for a canceled subscription, but provide no evidence to back up their story? It’s frustrating, but now you have some relief. From April 15, 2023 onwards, Visa updated its policies to require card issuers to provide reasonable evidence to support a disputed transaction. The evidence includes:
- Certification of permission withdrawal for subscription payment.
- Date of authorization withdrawal.
- Specific method of contact with evidence.
The dispute request will automatically stop in absence of the supporting information, documents and evidence.
A Good Payment Processor Can Ensure Compliance
The examples we’ve mentioned illustrate how important it is to keep all the documents relating to past transactions available. That’s where you could use the help of a reliable payment processor — a service provider that helps merchants accept payments from Visa and Mastercard. Outsourcing the task of processing, authorizing and settling payments frees businesses to focus on their core operations.
More importantly, most payment processors offer services such as PCI compliance and fraud protection, to ensure your business complies with all Visa and Mastercard rules and regulations. You don’t have to worry about staying up to date with the latest policy changes since your payment processor will handle it.
Instant Availability of Data
Given the vital role your payment processor plays, it’s crucial to choose one that not only keeps your transaction data secure, but also makes it easily accessible. You want a processor that can store all the important information, such as device details, IP address, account and customer details for at least 120 days. But why stop there? We recommend having at least 180 days of past transaction data available.
With the right payment processor, you can ensure you have all the necessary documentation to dispute fraudulent chargebacks, protect your revenue and keep your business compliant with Visa and Mastercard policies.
Integrated Dispute Prevention With Order Insight
An integrated chargeback prevention system can work wonders in helping keep disputes at bay. One such system is Order Insight, which uses API technology to give the issuing bank and cardholder a real-time view of what was purchased. With this tool, you can nip a dispute in the bud before it takes root.
Wrap-Up
As you can see, with the right payment processor by your side, you can navigate the ever-changing landscape of payment policies with ease. By taking advantage of tools like chargeback prevention systems and storing transaction data for at least 180 days, you can protect your business from fraud, reduce losses and ensure a seamless customer experience.
Jonathan Corona has two decades of experience in the electronic payments processing industry. As chief operating officer of MobiusPay, Corona is primarily responsible for day-to-day operations as well as reviewing and advising merchants on a multitude of compliance standards mandated by the card associations, including, but not limited to, maintaining a working knowledge of BRAM guidelines and chargeback compliance rules defined in both Visa and Mastercard operating regulations.