Many changes are being announced within the payment scheme rules, like those related to the transaction receipts and chip liability shift. Presentation will also give an insight to the MasterCard Dispute Resolution Initiative announcement as well as dispute-related hot topics and modification for AEIPS PIN transactions.

1. UPCOMING PAYMENT
SCHEMES RULES
CHANGES
Sara Novakovič, Dispute Operations Department
Koper, June 2017

2. CONTENT
1
2
3
4
Payment schemes groups and chargeback reason codes
Visa rules changes
American Express rules changes
MasterCard rules changes
NORMAL 2

3. PAYMENT SCHEMES GROUPS AND CHARGEBACK REASON CODES
MasterCard Visa American Express
Chargeback
Guide
• Authorization-related
Chargeback
• Cardholder Dispute Chargeback
• Fraud-related Chargebacks
• Point-of-Interaction Error
• To be 2018 MasterCard Dispute
Resolution Initiative
Visa Core Rules and
Visa Product and Service Rules
• Chargeback reason codes
(21)
• To be April 2018 Visa Claims
resolution
• Chargebck reason codes
consolidated in Fraud,
Authorization, Processing
Errors, Consumer Disputes
Business and
Operational Policies
• Retrieval Chargeback Types
• Authorization Chargeback
Types
• Processing Error Chargeback
Types
• Cardmember Dispute
Chargeback Types
• Fraud Chargeback Types
NORMAL 3

4. MASTERCARD RULES CHANGES
REVISED CARDHOLDER DISPUTE STANDARDS FOR INVESTMENTS AND SIMILAR DISPUTES
MasterCard modified the cardholder dispute requirements for chargeback message reason code 4853 (Cardholder
Dispute) to restrict the processing of certain chargebacks concerning investments, foreign exchange accounts, and similar
disputes.
Issuers are not entitled to process a cardholder dispute concerning these and other account-related services.
Such services include, but are not limited to:
• withdrawal of account balances
• trading/investment decisions
Chargeback right
• for transactions in which any value is
purchased for gambling
• investment
• or similar purposes
No chargebacks
• use of these chips or value
• unspent chips
• withdrawal of such value
• winnings, gains or losses resulting from
the use of such chips or value
.
NORMAL 4

5. MASTERCARD RULES CHANGES
The issuer may use message reason code
4853 for:
• Goods or services not as described or
defective
• Goods or services were not provided
• Digital goods were purchased totaling USD 25
or less and did not have adequate purchase
controls
• Credit not processed
• Counterfeit goods
• Recurring transaction canceled prior to billing
• Addendum dispute or “no-show” hotel charge
was billed
• Purchase transaction did not complete
• Timeshare agreement or similar service
provision was canceled within Mastercard
timeframe
• Credit posted as a purchase
The issuer must not submit a chargeback using
message reason code 4853 for:
• Payment Transactions and MoneySend Payment
Transactions
• The cash back amount or any portion of the cash
back amount
• MasterCard Commercial Payments Account
transaction. A MasterCard Commercial Payments
Account transaction occurs when PDS 0002 (GCMS
Product Identifier) was MAP (MasterCard
Commercial Payments Account) in the First
Presentment/1240 message
• Failure to credit shipping or handling charges for
buyer’s remorse cancellations or returns
• A retail sale processed as a cash disbursement.
Customers must accept these transactions and
collect the difference in the interchange fee and cash
directly from the acquirer.
NORMAL 5

6. MASTERCARD RULES CHANGES
REVISED FRAUD EXPEDITED BILLING DISPUTE RESOLUTION PROCESS FORM
MasterCard has revised and renamed the Expedited Billing Dispute Resolution Process (Fraud) Form (Form
412).
Issuers use the completed forms for:
• supporting chargeback documentation
• for fraud and non-fraud related
chargebacks
• instead of a written complaint generated on
behalf of the cardholder
Expedited Billing Dispute Resolution or
Dispute Resolution forms may be used:
• by customer service representatives to
complete while on the phone with the
cardholder
• company
• or government agency representative on
behalf of a MasterCard® corporate card
cardholder
NORMAL 6

7. MASTERCARD RULES CHANGES
CHIP LIABILITY SHIFT DELAYS FOR U.S. REGION AUTOMATED FUEL DISPENSER MERCHANTS
MasterCard announced delayed U.S. region automated fuel dispenser (AFD) merchant participation in the
counterfeit and lost/stolen/never-received-issue (NRI) fraud chip liability shifts for U.S. region domestic
MasterCard ® and Maestro ® point-of-sale (POS) transactions.
U.S. region AFD merchants
Cards issued outside of the U.S. region 1 October 2017
Cards issued in the U.S. region 1 October 2020
NORMAL 7

8. MASTERCARD RULES CHANGES
REVISED STANDARDS FOR CHARGEBACK MESSAGE REASON CODES 4871, 4834, and 4831
Changes to Message Reason Code 4871
CVM List
MasterCard will require issuers to provide the cardholder validation method (CVM) hierarchy within the
documentation supporting this chargeback. The CVM list is unknown to the acquirer and is not detailed within
data element (DE) 55 (ICC System Related Data).
As such, it will be essential that the issuer demonstrate to the acquirer:
• For U.S. region acquired transactions, either offline PIN, online PIN, or both have a higher priority than
signature for point-of-sale (POS) usage
• For U.S., Canada, and Europe region acquired transactions, offline PIN have a higher priority than signature
for POS usage
• An issuer having only online PIN but not offline PIN prioritized higher than signature will continue to be
unable to use message reason code 4871 when the transaction is acquired in either the Europe region or
the Canada region
MasterCard will verify the CVM list in the event the dispute reaches the arbitration process.
NORMAL 8

9. CHANGES TO MESSAGE REASON CODES 4834 AND 4831
MasterCard will require issuers to provide documentation to support the alternate means of payment.
This change will provide clear and concise information to the merchant in order for the merchant to provide
either a valid rebuttal to the chargeback or acknowledge the validity of the chargeback and accept it.
Documentation supporting the chargeback includes (but is not limited to):
Cash receipts
Statements from other credit cards
The 23-digit Acquirer Reference Data (ARD) value, if the same
MasterCard was billed or detail showing a completed funds transfer
1
1
2
3
4
9
MASTERCARD RULES CHANGES
NORMAL

10. ANNOUNCING CHIP/PIN LIABILITY SHIFTS FOR THE MIDDLE EAST/AFRICA REGION
MasterCard announced that the Middle East/Africa region will adopt domestic and intraregional chip liability
shifts and participate in the interregional chip liability shift for lost/stolen/never-received-issue (NRI) fraud
(chip/PIN liability shifts) for MasterCard point-of-sale (POS) transactions occurring on or after 1 July 2017.
Under a lost/stolen/NRI chip liability shift:
• The issuer assumes liability for lost, stolen, and NRI fraud transactions, unless a hybrid* PIN-preferring card
is used at a POS terminal that is not a hybrid PIN-capable terminal
• The acquirer assumes liability for lost, stolen, and NRI fraud transactions, if a hybrid PIN-preferring card is
used at a POS terminal that is not a hybrid PIN-capable terminal.
10
MASTERCARD RULES CHANGES
*Hybrid means both magnetic stripe and chip
functionality are supported.
NORMAL

11. MASTERCARD RULES CHANGES
REVISED STANDARDS FOR ISSUER AND ACQUIRER HANDLING OF FRAUDULENT ACCOUNTS
Effective 14 October 2016 MasterCard lowered the value of the Fraud Notification Service (FNS) counter that
limits an issuer’s ability to initiate a fraud-related chargeback from 25 to 15.
After this date, issuers must relinquish their fraud chargeback rights on:
• Transactions authorized subsequent to the date of the second fraud chargeback on the account
• Transactions identified as fraudulent after 15 fraud-related chargebacks already have been initiated on an
account.
MasterCard will block any fraud-related chargebacks that exceed any of the FNS-related criteria.
FNS Counter Exceeds 15 Fraud-Related Chargebacks
An issuer must not use a fraud-related message reason code if submitted more than 15 chargebacks in aggregate involving the same
account for message reason codes 4837, 4840, 4870, or 4871. Message reason code 4863 first chargebacks will be included in the
FNS count once the FNS fraud chargeback count is two or greater.
11NORMAL

12. REVISED STANDARDS FOR CONTACTLESS CVM LIMIT AMOUNTS IN THE U.S.
MasterCard is increasing the cardholder verification method (CVM) limit amount for transactions occurring at
merchant locations in the United States.
Effective for transactions occurring on or after 13 October 2017.
The Quick Payment Service (QPS) CVM limit amount will remain at USD 50
MASTERCARD RULES CHANGES
Contactless transactions occurring at
merchant locations in the United States
USD 50 USD 100
12NORMAL

13. VISA RULES CHANGES
RULES RELATED TO TRANSACTION RECEIPTS WILL BE UPDATED
Visa updated rules related to transaction receipts to help simplify merchant / acquirer operations and
reduce costs associated with transaction receipt storage and fulfillment.
Request for Copy
An issuer may continue to initiate an RFC of a
receipt for any transaction.
The acquirer must fulfill the RFC within 30 days by
sending the issuer a copy of the
receipt bearing signature, if:
• The RFC occurred within 120 days of the
processing date of the transaction
AND
• The transaction occurred in the face-to-face
environment and required a signature
Providing Receipts to Cardholders
Merchants must provide cardholders with a
receipt only in the following circumstances:
• Transactions initiated by the merchant
without reference to the cardholder, such as
recurring and installment transactions
• When the receipt is required to make a
refund, or when there are restrictive
conditions of sale
• In all other transactions, when the
cardholder requests it
Merchants must make a paper receipt available
to a cardholder, but may provide an electronic
receipt at cardholder request.
13NORMAL

14. Merchant Receipt Retention required period to retain receipts from 13 months to 120 days for transactions that
require a fulfillment.
Fulfill the RFC with a copy of the receipt
Include other relevant information in the
fulfillment (such as a car rental contract)
Send a non-fulfillment message
Merchant and/or
acquirer may
choose to
14
VISA RULES CHANGES
NORMAL

15. VISA RULES CHANGES
CARDHOLDER LETTER - SECURE ONLINE BANKING REQUIREMENTS
Visa reminds issuers that for chargebacks that require a cardholder letter, a certification on behalf of the
cardholder may be provided when a document containing all of the following is obtained:
• Cardholder’s complete or partial account number.
• Merchant name(s)
• Transaction amount
• The unique identity (5). To avoid confusion, issuers should highlight the location of the unique identity on
the document
• Issuer certification that the unique identity represents the cardholder’s signature
15
(5) Any method the cardholder uses to establish a unique identity,
whether through via a password and/or another login identification
method, is considered a valid representation of the cardholder signature.
NORMAL

16. VISA RULES CHANGES
• Visa continues to work with Bank
Indonesia to determine new
dates for the ATM EMV liability
shift. As soon as these dates are
confirmed, Visa will incorporate
them into the Visa Rules.
• Indonesia remains excluded
from ATM EMV liability shift
participation, issuers in all Visa
regions cannot charge back
fraudulent counterfeit ATM
transactions.
In response to a regulatory
directive from Bank Indonesia,
the central bank in Indonesia,
Visa announced that it would
defer Indonesia’s participation
in the EMV liability shift.
ATM EMV LIABILITY SHIFT TIMELINE FOR INDONESIA REMAINS DEFERRED
16NORMAL

17. VISA RULES CHANGES
NEW TERMS, IDENTIFIERS AND UPDATED RULES FOR CREDENTIAL-ON-FILE TRANSACTIONS
To increase transparency, consistency and approval rates for transactions using stored payment credentials
Visa introduced new identifiers and terms and update associated rules, including those related to merchant
disclosures and some authorization processing requirements.
New Stored Credential Transaction Category
The term Stored Credential applies to all COF
transaction types, including:
• Recurring
• Installment
• Unscheduled COF (New)1
• Cardholder-initiated COF2
1 Merchant-initiated transaction that uses a stored
credential and does not occur on a fixed schedule.
Transactions previously indicated as recur that do not
occur on a fixed schedule will now be classified as
Unscheduled COF transactions.
2These are transactions initiated by the cardholder
using stored credentials so the cardholder does not
need to re-enter card details.
Merchant Disclosure Requirements
Effective 14 October 2017, Visa is updating and
expanding existing rules related to merchant
disclosure requirements. Merchants and third
party agents that offer cardholders the option to
store their credentials on file must:
• Obtain cardholders’ consent to store the
credential
• Disclose to cardholders how those credentials
will be used
• Notify cardholders when any changes are
made to the terms of use
17NORMAL

18. AMERICAN EXPRESS RULES CHANGES
ONLINE ORDER/IN-STORE PICK-UP TRANSACTION PROCESSING
The Cardmember experience is moving toward a seamless approach through all available shopping channels
involving physical establishments as well as digital channels; this includes online order/in-store pick-up
Transactions.
As a result, Card Transactions increasingly share elements from both Card Present and Card Not Present
environments. American Express has developed policies to address online order/in-store pick-up Transaction
processing.
This update will:
• Promote the adoption of SafeKey® as a more secure option for online Transactions
• Increase awareness of the importance of implementing fraud mitigation measures for in-store merchandise
pick-up
18NORMAL

19. AMERICAN EXPRESS RULES CHANGES
CHAPTER 4 - S/E AND ATM STANDARDS
Internet S/E Card Acceptance Requirements:
When conducting Transactions over the Internet, S/Es:
• Must use the appropriate Point of Service Data Code indicating the Transaction was processed via the
Internet.
• Must electronically authorize and electronically submit all Internet Transactions. All Internet sales must have
a zero floor limit.
Note: Internet Charges made with Chip Cards through a Chip-Enabled Device are considered to be Card
Present Transactions
Online Order/In-Store Pick-up Transaction Processing:
Transactions involving Internet orders for Goods scheduled to be picked up at a designated physical store, are
authorized and paid for in-store, prior to the Goods being picked up, are considered Card Present
Transactions.
Internet Transactions conducted via online order, where the Goods are later picked up in-store, may be
authorized using SafeKey.
Goods and Services Not Received: ISO Code has been modified by adding authorized third party-related
compelling evidence to the Acquirer’s Second Presentment responsibilities.
19NORMAL

20. AMERICAN EXPRESS RULES CHANGES
DISPUTE MODIFICATION FOR AEIPS PIN TRANSACTIONS
This policy extends the existing Chargeback protection by restricting the Issuer's ability to transfer liability in the
event the Acquirer doesn't fulfill or partially fulfills a Retrieval Request submitted under Retrieval Request
Message Reason Code 6006 - Legal Request or Fraud Analysis.
For AEIPS PIN Transactions, the following dispute restrictions apply:
Impact to Acquirers:
• No longer liable for Chargeback ISO Code
4516 - Request for Support Not Fulfilled if the
Acquirer does not fulfill a Retrieval Request
Message Reason Code 6006 - Legal Request
or Fraud Analysis
• No longer liable for Chargeback ISO Code
4517 - Request for Support
Illegible/Incomplete if the Acquirer partially
fulfills a Retrieval Request Message Reason
Code 6006 - Legal Request or Fraud Analysis
Impact to Issuers:
• No longer allowed to submit Chargeback ISO
Code 4516 - Request for Support Not Fulfilled
if the Acquirer does not fulfill a Retrieval
Request Message Reason Code 6006 - Legal
Request or Fraud Analysis.
• No longer allowed to submit Chargeback ISO
Code 4517 - Request for Support
Illegible/Incomplete if the Acquirer partially
fulfills a Retrieval Request Message Reason
Code 6006 - Legal Request or Fraud Analysis.
20NORMAL

21. AMERICAN EXPRESS RULES CHANGES
ISO 4516 - Request for Support Not Fulfilled :
Excluded Transactions :
• Transactions where the Retrieval Request was initiated using Reason Code 6016 Cardmember
needs for personal records
• Transactions that qualify under the No Signature/No PIN Program
• Expresspay, Expresspay Mobile, or Digital Wallet Contactless-initiated Transactions, where the
Transaction amount is less than or equal to the market threshold for Expresspay Transactions as
indicated in “Exhibit 6 NoSignature/No PIN Program Thresholds.”
• AEIPS PIN, Digital Wallet Contactless-initiated and Digital Wallet Application-initiated transactions
where the Retrieval Request was initiated using Reason Code 6006 - Legal Request or Fraud
Analysis.
21NORMAL

22. AMERICAN EXPRESS RULES CHANGES
ISO 4517 - Request for Support Illegible/Incomplete
Excluded Transactions:
Any Transaction with the RR Message Reason Code 6008 Cardmember requests copy bearing signature with one
of the following Transaction types:
• Card Not Present Charges
• Aggregated Transactions
• No Show Reservations Program
• Advance Deposit or Payment Program
• Transactions with the RR Reason Code 6016 Cardmember needs for personal records
• A Final Chargeback where a Retrieval Request was not requested for the disputed Transactions
• A Final Chargeback where the requested Documentation was provided in the Second Presentment
• Transactions that qualify under the No Signature/No PIN Program
• Expresspay, Expresspay Mobile, or Digital Wallet Contactless-initiated Transactions, where the Transaction
amount is less than or equal to the market threshold for Expresspay Transactions
• AEIPS PIN, Digital Wallet Contactless-initiated and Digital Wallet Application-initiated transactions with the
Retrieval Request Reason Code 6006 - Legal Request or Fraud Analysis
22NORMAL

23. www.mercury-processing.com
+386 5666 2309
Sara.novakovic@mercury-processing.com
Sara Novakovič
Chargeback specialist
Dispute operations department
CONTACT
NORMAL 23

24. THANK YOU!
Any questions?
NORMAL 24