A new Visa transaction integrity fee will be charged starting April 14, 2018, on any credit transaction that does not meet the custom payment service (CPS) qualification standards. Visa, MasterCard, Discover and Amex update their Interchange guidelines biannually in April and October. This fee will be $0.10 per transaction.
So, what are the CPS qualification standards, and how can you expect this fee to impact your monthly merchant statements?
As part of Visa’s Interchange guide, the CPS program allows certain low-risk transactions to qualify for a lower processing rate. To qualify, the business must ensure that the transaction has been properly secured and authorized to minimize the risk of fraud. Both card-present and card-not-present transactions have their own rules and criteria to qualify for CPS pricing. If the criteria are met, these transactions will qualify for a lower rate; otherwise, they’ll downgrade to a higher, costlier rate.
CPS pricing impacts the Interchange, or wholesale cost, of running a transaction. The Interchange goes up with risk or reward, so incentivizing businesses to mitigate risk and passing on the cost savings is a win-win for Visa and the businesses that accept its cards. That said, this new $0.10 fee increases the penalty for not adhering to CPS guidelines, and puts additional pressure on businesses to mitigate risk.
Below are the current retail and card-not-present criteria for Visa’s CPS program. These rules are subject to change.
Does your business follow the guidelines above for retail and card-not-present transactions? Is there a particular rule you didn’t know about? We’d love to hear about your experiences reducing risk in the comments section below.