As of May 1, 2010, MasterCard and Discover have released new rules that impact the way merchants who accept those cards must handle certain aspects of PrePaid Credit or Debit Cards as well as regular bank Debit Check cards.
Going forward there are three critical issues you must be aware of as a merchant:
1. If someone uses a PrePaid Credit or Debit Card, when you give them the receipt for their transaction you must display the remaining balance available on that PrePaid card.
2. If someone uses a PrePaid Credit or Debit Card or a regular bank issued Debit Check Card and there’s not enough available on the card to complete the entire transaction, you must accept split payments and allow them to pay the remaining balance with another card.
For example, suppose someone is checking out of your online store and their order costs $50 total. When they go to checkout, if their PrePaid or Check Debit Card only has $30 available on it, the system will authorize the $30 and then give them an opportunity to add another card during checkout to pay the remaining $20 balance.
3. If your customer chooses to cancel the order in the case of #2 above, then your gateway must be able to immediately release the hold placed on the initial Authorization created for the PrePaid or Check Cards.
So what does all this mean to you, the online merchant?
Well for now it doesn’t mean a whole bunch for your average small- and medium-sized online merchant.
The first step to make the above even possible in the world of SMB Ecommerce is for the common gateways we all use (like Authorize.net) to implement the tools needed to support these mandates.
Second your shopping cart vendor will need to add support for these features specifically to your gateway; finally, you’ll need to implement these changes in your online store.
For now all you need to do is be aware of what’s coming and pay attention to future announcements from your shopping cart provider and, more importantly, your merchant account and payment gateway provider. As of now, Authorize.net has gotten an extension from MasterCard and Discover and these mandates are not required for Authorize.net customers until June 30, 2011 (14 months from now).
If you have questions, you should check with your payment gateway provider as the mandates and dates for compliance will vary by gateway.
Guest post by Rick Wilson of Miva Merchant. Miva Merchant is an IMA Diamond member.