3D Secure: How to minimize fraud while maximizing conversion
4 Minutes
Reminder for Card on File for Mastercard and Visa
Firstly, don't forget Visa and Mastercard's deadlines for using the correct indicators for card-on-file transactions are:
Visa: October 14, 2017
Compliance action may apply from April 30.
Mastercard: June 12, 2018
Compliance action may apply from October 1.
Visa card scheme updates
New AVS pricing in Europe
From June, Visa Europe will introduce a new fee for Address Verification Service (AVS). This will be charged for each usable AVS response in the authorization message where the response code is not G, S or U.
As part of Adyen's transparent Interchange++ pricing, we'll pass these costs on to you.
Purchase return authorization
Visa has announced it will require merchants to send an online authorization message before submitting a refund request.
The effective dates for this are:
| Region | Large merchants* | Other merchants |
|---|---|---|
| US and Canada | October 2018 | April 2019 |
| Latin America and Caribbean (LAC) | April 2019 | October 2019 |
| Asia Pacific (APAC) & Central and Eastern Europe, Middle East and Africa (CEMEA) | October 2019 | April 2020 |
| Europe | April 2020 | April 2020 |
* Large merchants = minimum annualized Visa purchase return volume of
- $1 million for AP, CEMEA and LAC
- $5 million for Canada and Europe
- $10 million for US merchants
To reduce the impact this new regulation has on your integration, we don't plan to mandate a separate authorization call before a refund.
We'll let you know of any additional information in the coming months. This could include:
- Required integration changes (if any).
- Impact on scheme fees.
- Operational considerations in case of refused refund authorization calls.
- Any other potentially relevant information.
Commercial Interchange rates updates
Effective from October 13:
Visa will update its Interchange rates for intra-European EEA and Non-EEA commercial cards. This will impact domestic and cross-border European commercial card transactions.
Visa will identify commercial cards issued in Turkey and Israel as interregional. This will trigger interregional commercial interchange rates.
If you have a low ATV and high Business Debit traffic, you'll benefit from this change. This is because the majority of the Business Debit cards will now trigger an interchange rate of 0.75% instead of €0.60 fixed. Other commercial products will trigger higher rates.
Full details below:
Intra-Europe EEA and non-EEA (excluding Israel and Turkey)
| Rate type | Product | Old rate | New rate |
|---|---|---|---|
| Business Debit | Visa Business Debit | €0.60 | 0.75% |
| Business Debit Extended Access | Visa Business Debit | €0.60 | 0.75% + €0.60 |
| EMV Chip (incl. contactless) | Visa Business Credit | 1.30% | 1.35% |
| Visa Corporate and Visa Purchasing | 1.35% | 1.55% | |
| Ecommerce | Visa Business Credit | 1.45% | 1.45% |
| Visa Corporate and Visa Purchasing | 1.50% | 1.65% | |
| Standard | Visa Business Credit | 1.45% | 1.60% |
| Visa Corporate and Visa Purchasing | 1.50% | 1.85% |
Notes:
Business Debit cards issued in the following countries qualify for Business Debit Extended Access rate: Bulgaria, Cyprus, Czech Republic, Germany, Greece, Hungary, Iceland, Latvia, Lithuania, Romania, Slovakia, Slovenia, Spain and Switzerland.
The intra-Europe EEA and non-EEA rates for Visa Business Debit products will also apply on a domestic basis to the following countries: Andorra, France, Greece, Hungary, Iceland, Liechtenstein, Luxembourg, Monaco, San Marino, Sweden and Vatican City.
The intra-Europe EEA and non-EEA rates for Visa Business credit, Visa Corporate and Visa Purchasing products will apply on a domestic basis to: Andorra, Belgium, France, Hungary, Iceland, Latvia, Liechtenstein, Luxembourg, Monaco, Netherlands, San Marino, Sweden and Vatican City.
Israel and Turkey
| Rate type | Product | Old rate | New rate |
|---|---|---|---|
| Commercial | All Business Debit | €0.60 | 2.00% |
| All Commercial Credit | 1.30%-1.50% | 2.00% |
Mastercard card scheme updates
New Card Not Present fee
Mastercard has announced a new scheme fee for Card Not Present transactions. This is applicable to intra-European and interregional transactions. It will also be applicable to domestic transactions in the UK and Ireland.
This means:
- An additional 5 basis points will be charged for all interregional Card Not Present transactions.
- An additional 2.5 basis points will be charged for all intra-European Card Not Present transactions.
- For the UK and Ireland: an additional 2.5 basis points will be charged for all domestic Card Not Present transactions. The acquirer cross-border fee for Card Not Present transactions (4.5 basis points) is discontinued for UK and Irish merchants.
Effective dates for SEPA region:
- January 1, 2019, for merchants in Belgium, France, Netherlands, Portugal, Spain.
- July 1, 2018, for all other countries.
New scheme fee for refunds
Mastercard will start applying scheme fees on refunds. This means the Volume, Cross-border and Reported Transaction fees will also apply to refunded transactions from July 1, 2018.
Same as for captured traffic, this means that the relative scheme fees for a refund will be higher for interregional transaction compared to intra-European and domestic transactions.
Changes to domestic scheme fees
Mastercard has announced an increase to its scheme fee pricing in Spain, Portugal, the Netherlands, France, Belgium and Italy. This is effective from July 1. It means the Volume, Acquiring Reported Transaction, and Acquiring Cross-Border fees will increase.
We'll pass on the new scheme fees as they become applicable.
If you have any questions about the above card scheme updates, contact sales support or speak to your account manager.
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