Fall 2019 Interchange and Upcoming 2020 Updates for Visa, MasterCard, Discover and AMEX

Fall is always a time for change. The credit card companies have released their Fall interchange and process updates, along with notice of refund changes to come in 2020. We are here to help you navigate the latest changes from Visa, MasterCard, Discover, and American Express.

Visa and MasterCard:

In April 2020, both Visa and MasterCard are coming out with regulation changes that require refunds go through the authorization process, the way that sales always have.

This change is intended to improve the consumer experience and create more transparency. It should also reduce consumer inquiries about their refund and unnecessary disputes because the cardholder was impatient in waiting for the refund to post. Consumers will be able to see refunds more quickly – in pending status until settled and posted.

Merchants will need to be prepared for a new situation: the issuer might decline an authorization on a refund due to, for example, the consumer’s card being closed. Ascent continues to strongly advise that when issuing a refund merchants ALWAYS initially refund to the exact same card as originally charged.

In the rare case that the authorization for the refund is declined by the issuer, the merchant may process the refund onto a different card, preferably from the same Card Brand. If that is not possible, the merchant can refund via a different method (check, credit on future purchase, etc.). To protect yourself from potential chargebacks, if you receive a decline on the refund authorization, we suggest documenting carefully:

  • Document receipt of a refund authorization decline on the card originally charged
  • Document the refund via another card or alternate payment method with a clear receipt acknowledged in writing (signature or correspondence) by the cardholder

MasterCard:

MasterCard is introducing new Transaction Processing Excellence fees to promote correct and positive processing behavior. MasterCard will assess fees for excessive authorization attempts.

Best Practices for Handling Declined Authorizations

  • When a card is declined, immediately contact the card holder to notify them, and advise that they contact their credit card issuer to resolve any issues that may cause the card to decline
  • If the cardholder advises they have contacted the bank and resolved the issues, a card can be attempted a second time
  • If a second decline is received, it is best to either ask the card holder for a different form of payment, or wait at least 24 hours before attempting to authorize the card again (waiting is necessary because even if the card issuer has made changes to their system it may take time for them to be applied throughout their network)
  • If a card is attempted for a third time the next day and declines for a third time it is best to ask the card holder for a different form of payment

Discover:

Discover follows Visa and MasterCard in reducing chargeback response timeframes.

Effective October 8, 2019, Discover will reduce the timeframe to file a Dispute Arbitration from 30 days to 10 days. Discover will also reduce the timeframe to re-present a dispute from 45 days to 30 days.

If you are receiving chargeback notifications by snail mail, please consider updating to email or fax notifications.

Amex:

American Express starts allowing charges for property damages, within regulations.

Amex’s requirements are similar to Visa’s. Click here for more details.

Please reach out with any questions or concerns, or to update your chargeback notification method, to support@ascentprocessing.com. We are here to help.