In the payments industry, we’ve grown to expect change. Payment service providers face a constant barrage of rules, regulations and revisions from all angles: PCI, CPFB, FCC, you name it. Some of these regulations crucially affect the security and function of your merchant’s transactions, while other may feel more like procedural paperwork.
Here are a few changes heading down the pike that will definitely impact your merchants. Start now to prepare your merchants for change:
The biggest changes are set to arrive in April, and they affect chargebacks. We’ll be seeing a pretty much complete overhaul of the chargeback system. Here are the highlights:
- End of merchant liability exclusion for Visa and Amex chargebacks under $25
- End of limit to 10 chargebacks per counterfeit Visa and Amex card
- Implementation of Visa Claims Resolution (VCR) for chargebacks
What Will VCR Mean
All Visa chargebacks will be handled under Visa Claims Resolution. Basically, VCR will tighten up chargebacks on both the retailer and consumer ends. In the long run, this should cut fraud. Consumers will find it more difficult to push through invalid chargebacks. The sticking point your retailers need to know is that their time to respond to a chargeback is being clipped from 45 days to 30 days. But on the plus side, retailers will find a simplified chargeback code system, which should make the process a little easier to manage.
Price is always a sensitive issue for merchants. It may be wise to give them a heads up about a rate increase in April, as Mastercard is raising its assessment fee from 0.11% to 0.13%.
End of Signature Capture
In April 2018, all the major credit card brands are dropping the signature requirement for card purchases of all amounts. It’s great that brands have taken action to eliminate this unnecessary step at checkout, as the signature is pretty much useless for fraud prevention. Dropping the signature, combined with much faster chip processing speeds these days, should really cut checkout friction.
Merchants will be facing a number of changes impacting their ecommerce platforms. June 30 is the deadline for the TLS 1.2 switch. Make sure your merchants know that this is significantly important. Earlier versions of TLS and all versions of SSL, are no longer secure. They leave your merchants vulnerable to attacks that can decode encrypted data. You can read more about TLS here.
Ecommerce merchants should also plan to meet the April deadline affecting subscription and card-on-file billing. Keep in mind, this is just the tip of the iceberg for your merchants' ecommerce sites. Which brings us to the next point...
Help Keep Your Head Above Water
It’s becoming harder every year to keep compliance with the vast number of regulations and changes facing all companies in the payments ecosystem. In light of this, regtech as an industry is growing exponentially. While much of regtech at this time is focused on serving large fintech concerns, the fact remains that all participants in our industry need help. Here's hoping that 2018 brings regtech solutions scalable for payment providers and merchants of all sizes.