Visa Rules Every Merchant Should Know

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Visa Rules Every Merchant Should Know
There are specific rules that merchants need to be aware of to stay in the card network’s (and customer’s) good graces.

It is important for merchants to stay on top of all payment compliances. There are specific rules that merchants need to be aware of to stay in the card network’s (and customer’s) good graces. In this post, we’ll discuss a few fundamental rules that Visa wants merchants to know.

Accept All Visa Cards

When you offer Visa as a payment option online or at your brick-and-mortar locations merchants must accept all the types of Visa cards. This includes Visa debit, credit, and prepaid cards. Visa notes that Visa debit and credit cards may have different acceptance policies if you are located in the U.S., Australia, New Zealand, or Canada.

This is a rule to stay in compliance with Visa, but it also an important one for customer experience. Most cardholders expect to be able to use any card they would like. Being limiting in the checkout process can cause friction and even the loss of sales.

Surcharges

A surcharge is when a merchants adds an additional fee at check out if the customer is using a card. These fees are also known as a checkout fee. Surcharges are only permitted in limited regions of the world which include the United States, Australia, and New Zealand. Surcharging isn’t allowed everywhere in the United States. There are states such as Colorado, Connecticut, Kansas and others that limit surcharging. For U.S. merchants to start surcharging they must notify Visa and their acquirer at least 30 days prior.

Visa suggests that merchants should consider the following before starting to surcharge:

  • How it will affect customer experience
  • If your competitors are surcharging or not
  • What information about surcharging must be disclosed to your customers (the customer must be told about the surcharge fee at the point of sale in-store and online, and it must be displayed on every receipt)
  • Compare the cost of accepting credit cards to other forms of payments

Minimum Transaction Amount

  Merchants that are in the United States or in a U.S. territory can impose a minimum transaction amount. If a merchant imposes a minimum purchase requirement it can not be greater than a $10 minimum and it can only be imposed on Visa credit cards. It is important for merchants to comply to this rule because Visa informs cardholders “If a merchant refused to accept your Visa card on the basis that the merchant requires a minimum or maximum amount on a Visa debit card, or the amount on a credit card is greater than US $10, please notify your Visa card issuer.”

Requiring ID

When it comes to requesting to see cardholder identification there are some guidelines. When purchase is made in-person, merchants can request to see cardholder identification. If the identification given does not match the card, it is up to the merchant if they will accept the card or not. If the cardholder does not have or does not want to provide identification the merchant should honor the card if there is proof of card presence, a valid authorization, and a valid signature or PIN.

Merchant Category Code

A Merchant Category Code (MCC) a four-digit classification code that is assigned to a merchant to describe the predominant business activity of the merchant. These codes are used for activity tracking, reporting, and risk management.

For merchants it is important to be assigned the correct Merchant Category Code. This code needs to best describe the business of the merchant. If a merchant has more than one line of business that would qualify for more than one MCC, Visa suggests the merchant should:

  • Use the MCC that describes the business with the highest sales volume, or
  • Use a different MCC for each business

It is important for merchants to stay on top of all payment compliances. There are specific rules that merchants need to be aware of to stay in the card network’s (and customer’s) good graces. In this post, we’ll discuss a few fundamental rules that Visa wants merchants to know.

Accept All Visa Cards

When you offer Visa as a payment option online or at your brick-and-mortar locations merchants must accept all the types of Visa cards. This includes Visa debit, credit, and prepaid cards. Visa notes that Visa debit and credit cards may have different acceptance policies if you are located in the U.S., Australia, New Zealand, or Canada.

This is a rule to stay in compliance with Visa, but it also an important one for customer experience. Most cardholders expect to be able to use any card they would like. Being limiting in the checkout process can cause friction and even the loss of sales.

Surcharges

A surcharge is when a merchants adds an additional fee at check out if the customer is using a card. These fees are also known as a checkout fee. Surcharges are only permitted in limited regions of the world which include the United States, Australia, and New Zealand. Surcharging isn’t allowed everywhere in the United States. There are states such as Colorado, Connecticut, Kansas and others that limit surcharging. For U.S. merchants to start surcharging they must notify Visa and their acquirer at least 30 days prior.

Visa suggests that merchants should consider the following before starting to surcharge:

  • How it will affect customer experience
  • If your competitors are surcharging or not
  • What information about surcharging must be disclosed to your customers (the customer must be told about the surcharge fee at the point of sale in-store and online, and it must be displayed on every receipt)
  • Compare the cost of accepting credit cards to other forms of payments

Minimum Transaction Amount

  Merchants that are in the United States or in a U.S. territory can impose a minimum transaction amount. If a merchant imposes a minimum purchase requirement it can not be greater than a $10 minimum and it can only be imposed on Visa credit cards. It is important for merchants to comply to this rule because Visa informs cardholders “If a merchant refused to accept your Visa card on the basis that the merchant requires a minimum or maximum amount on a Visa debit card, or the amount on a credit card is greater than US $10, please notify your Visa card issuer.”

Requiring ID

When it comes to requesting to see cardholder identification there are some guidelines. When purchase is made in-person, merchants can request to see cardholder identification. If the identification given does not match the card, it is up to the merchant if they will accept the card or not. If the cardholder does not have or does not want to provide identification the merchant should honor the card if there is proof of card presence, a valid authorization, and a valid signature or PIN.

Merchant Category Code

A Merchant Category Code (MCC) a four-digit classification code that is assigned to a merchant to describe the predominant business activity of the merchant. These codes are used for activity tracking, reporting, and risk management.

For merchants it is important to be assigned the correct Merchant Category Code. This code needs to best describe the business of the merchant. If a merchant has more than one line of business that would qualify for more than one MCC, Visa suggests the merchant should:

  • Use the MCC that describes the business with the highest sales volume, or
  • Use a different MCC for each business

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