Visa has recently introduced three new compliance requirements (‘mandates’) related to the use of Visa’s authorization and clearing systems. These mandates all have associated assessment fees. Two of the three mandates became effective July 1, 2009, and the third goes into effect on October 1, 2009.
Zero ($0) Dollar Account Verification / $0 Authorization
Merchants currently processing $1 (or any other low amount) authorizations as a means of verifying a Visa card are now permitted to process a zero ($0) dollar account verification request (a.k.a a $0 authorization). Zero dollar authorizations provide merchants with an effective means of validating account numbers and other authentication elements such as CCV and AVS.
| + | Effective July 1, 2009, Visa implemented an Account Verification Fee for each $0 authorization. |
| + | The fee applies only to transactions processed by U.S.-based merchants. |
| + | The fee does not apply to partial or full authorization reversals. |
Zero Floor Limit
Visa requires that all transactions submitted for clearing (capture or settlement) be properly authorized, regardless of the amount.
| + | Effective July 1, 2009, Visa instituted the Zero Floor Limit fee for each transaction submitted for clearing that did not receive a proper authorization (including authorization code). |
| + | This fee applies only to transactions processed by U.S.-based merchants. |
Misuse of Authorization System
Visa requires all authorization transactions to be followed by a clearing (capture or settlement) transaction or, in the case of a cancelled order, for the authorization to be fully reversed.
| + | Effective October 1, 2009, Visa is instituting a fee for each authorization transaction that is not followed by a clearing transaction. In the case of a cancelled order, the transaction must be fully reversed within 72 hours. |
| + | This fee applies only to transactions processed by U.S.-based merchants. |
| + | This fee does not apply to partial or full authorization reversals. |
| + | Merchants submitting low-amount authorizations as a means of verifying card data may be charged the misuse fee, even if they are reversing the authorizations within 72 hours. Merchant should instead be submitting zero dollar authorizations as specified above. |
