Life lesson - In case you're not aware

Effy wrote:

FormerBoater wrote:

Effy wrote:

FormerBoater wrote:

jkmac408 wrote:
.

Visa and MasterCard do make the rules. There are literally volumes of rules and regulations published by both Associations that dictate what Issuers, Acquirers and Merchants can and cannot do with regard to the payment system.

And yes, I did work for a Visa/MC member institution for many years prior to retirement.

Well you are just plain wrong. No other way to really say that.
Not sure what member institution you worked for or in what capacity but it obviously wasn't the IS flow.And what in the world does onboarding or acquisitions have to do with this?

V and MC are processors. They are not a governing body. They may house rules in their engines but they do not make them. That's the FED, OCC and the banks. Sure they'll provide supporting documentation of how your client profiles are set but they do not tell the banks what to do. It's the other way around. They aren't even the ACH. They process transactions, some of which are payments based on transaction codes. One code = payment, one = block, etc. There are hundreds. The flow goes something like this - card members are on boarded at the bank - either at a branch or on line, a profile is created and warehoused (in house or FDR or some other repository). An account profile and customer profile are separate and linked by a primary key (usually systemically assigned and indigenous to the bank), statuses, rules and any other behavior is set at the BANK/ISSUER. Not at the processor. The profile might be sent to the processor for transaction purposes but it's sent to the processor NOT the other way around. The BANK tells the processor (V and MC) how to behave. Again, not the other way around. So when ABC bank says set this population of accounts (grouped by product keys, FIMP or some other demographic code) to perform with this set of codes, that's what the processor does. it follows instructions based on settings defined at the bank/issuer level. Payment processing (which is not what we are talking about) is defined at the ACH and FED level and the processors behave accordingly. But no mistake about it, V and MC are not telling banks or the FED how they will process payments or any other transaction. It's the other way around.

Visa Inc. (/?vi?z?/ or /?vi?s?/) is an American multinational financial services corporation headquartered in Foster City, California, United States.[citation needed] It facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit cards and debit cards.[3] Visa does not issue cards, extend credit or set rates and fees for consumers; rather, Visa provides financial institutions with Visa-branded payment products that they then use to offer credit, debit, prepaid and cash-access programs to their customers.

In summary, the banks are customers who use VISA and MC to process transactions. VISA is a vendor. The bank is the customer. The vendor(Visa/MC) does work for the customer(bank) based on what the customer(bank) needs. VISA may have rules for merchants as far as minimum charge processing etc. But VISA can't even enforce that. The Bank/issuer enforces that to the merchant.

I worked for an Acquirer who also served the processor function in the payment system and is subsidiary of the largest financial institution in the USA.

Visa and MC are simply huge switches in the payment system. They set the rules and the data/message formats.

MC publishes its rules and Interchange rates for merchants.

http://www.mastercard.us/merchants/support/rules.html

Visa's 1,149 pages of rules/regulations can be found here:

http://usa.visa.com/download/merchants/Public-VIOR-15-April-2014.pdf

Both V and MC route the authorization requests to the Issuers recieved from the Acquirers and processors based upon the BIN (Bank Identification Number). The Acquirers and processors recieve the authorization requests from the merchant.

The Issuers are the only part of the payment system which can approve or decline an authorization requests. If your Issuer declines the transaction based upon location (out of home area), it is purely up to their discretion.

As far as enforcement of the rules, both V and MC have the ability to levy penalties for any merchant that does not comply with their rules.

Merchants have been fined hundreds of thousand of dollars by V and MC when data integrity rules have not been followed by the merchants.

Visa's Cardholder Information Security Program (CISP)rules can be found here:

http://usa.visa.com/merchants/protect-your-business/cisp/index.jsp?ep=v_sym_cisp

The bottom line is that the majority of the plethora of rules and regulations are designed to protect us, the Cardholder. V and MC want their brands to be as ubiquitous as cash.

If your Issuer is declining your authorizations based upon your location, this goes against the purpose of the payment system and you as the Cardholder have every right to protest this policy with your Issuer.

My experience with 2 separate Issuers is that they will change their policy for the Cardholder if you object.