By: Judith McGuire
The payments landscape is dramatically shifting as a result of changes in consumer behavior enabled by advances in personal devices and digital technology. Merchants and other businesses are adapting their business models to enable consumers to more conveniently shop, pay and access goods and services.
We all see the shifts in the continued movement of shopping and payments from merchant locations to the e-commerce, card-not-present space. We also see the rise of omni-channel shopping where consumers are increasingly using pay and deliver, pay and pick-up, and merchant apps.
Over the past few years, we have been enhancing our network services to address these emerging debit payment needs. We introduced the PULSE E-Commerce transaction, which we have supported for a limited set of merchants. We have incrementally added e-commerce features to better serve merchants and issuers, including support for CVV2, AVS and partial shipments. Whereas previously merchants have had 100 percent of liability for these transactions, beginning August 27, 2018 they will have dispute rights in accordance with dispute rules.
In addition, we are adding requirements that issuers support CVV2/CVC2 and AVS, and we are also adding chargeback and dispute rights that more closely align to industry practices. Issuers will assume liability in some cases and should ensure that they use fraud-monitoring protocols comparable to those used for similar transactions currently authorized through other networks.
We believe these changes will help you retain superior economics with your card-not-present volume while maintaining a consistent experience for your cardholders.
- Chargeback and Dispute Rights – Effective August 27, 2018, the PULSE Operating Rules and Procedures, R18.1, v3.0 will support chargebacks and disputes for PULSE E-commerce transactions that will better align to industry practices. Issuers are required to respond to AVS and CVV2/CVC2 verification requests for these transactions, and will not have chargeback rights for approved PULSE E-commerce transactions if they do not respond or if the response is other than CVV2/CVC2 Verified and Matched. In addition, merchants may dispute chargebacks by providing compelling evidence as detailed in the Representment Section of the PULSE Disputes Rules, v2.0. These changes do not apply to gift cards. See the Rules for additional details.
- Chargeback Limits and Monitoring – Beginning August 27, 2018, we will require
e-commerce merchants to maintain a 1 percent or less average monthly chargeback-to-sales transaction-count threshold. We will work with merchants identified in this program to ensure that they are providing customer service directly to cardholders in a manner that minimizes the cost and administrative burden of chargebacks to issuers. Merchants unable to maintain the required threshold may lose their ability to route these transactions to issuers through PULSE.
What’s Staying the Same?
- Fraud-Mitigation Services – PULSE has robust fraud-mitigation tools to help identify suspected fraud patterns, and we work with issuers to minimize impact as needed. If you’d like information on fraud mitigation solutions, click here or contact Fraud Operations at 866-892-3517.
- Superior Economics – You will continue to receive competitive interchange rates and low network fees.
I encourage you to register for our webinar on July 12 to learn more about these changes and other e-commerce trends. If you have any other questions, please contact your Account Executive or call 877-247-8573.
As always, we appreciate your continued support of PULSE.
Judith McGuire, Executive Vice President - Product Management