We added the ability for our customers to use a PIN to do a Visa debit card transaction earlier this year. Our initial disclosure and application has always stated the zero liability limit does not apply to ATM transactions or to transactions using your PIN that are not procesed by VISA. I was reading in an old post from 2008 something about annual disclosure to do with pinless debit transactions. Have I missed something to do with disclosures when we added that function to our cards?

Here's the verbiage from VISA operating rules:

Non-Visa Transaction Processing - U.S. Region
PIN-Debit Network Requirements - U.S. Region
A U.S. Issuer that enables Non-Visa Debit Transaction processing on its Visa Check Card or Visa Debit Card must ensure that all such transactions are facilitated by a PIN-Debit Network.
An Issuer that enables Non-Visa Debit Transaction processing and that does not require that all such transactions be authenticated by a PIN must:
• Clearly communicate to its Cardholders at the time of implementation of such processing or at
the time of issuance, and on an annual or more frequent basis thereafter, that it has enabled Non-Visa Debit Transaction processing and that it does not require that all such transactions be authenticated by a PIN
• Clearly communicate to its Cardholders the identity of the debit networks for which such transactions are enabled on the Visa Check Card or Visa Debit Card
• Provide Cardholders with examples of the types of Cardholder actions that may be required to initiate a Visa Transaction on such Cards
• At least 30 calendar days before implementation, notify Visa that it does not require that all Non-Visa Debit Transactions be authenticated by a PIN
• Clearly communicate to its Cardholders at the time of implementation of such processing or at the time of issuance, and on an annual or more frequent basis thereafter, that the provisions of its Cardholder agreement relating only to Visa Transactions are inapplicable to non-Visa transactions

If your customer can make PIN-less payments (i.e. bill payments) that will be routed down your PIN network instead of the VISA network, you must provide an annual disclosure reminding your customer that they can perform these types of transactions on their card, and that these transactions are not covered by VISA Zero Liability.

So would this have affected us before we had the PIN-Debit capability?(when we were only signature based) That last paragraph regarding bill pay had me wondering.
Also, I don't really get the purpose in this, what's the difference in not entering a PIN for small/some transactions and not having to sign for some transactions?

This clause would not apply to a bank that only offered signature based cards. However, in order to keep your cards in compliance with Reg II, you needed to add a second unaffiliated netowrk.

The purpose of this disclosure is to inform your cardholders that the PIN-less bill payments that they make that are routed down your new PIN netowrk are NOT covered by Zero Liability. Cardholders generally assume that if they do not use their PIN, the transaction is processed by VISA and covered. Since the PIN networks now offer these alternative transactions, VISA wants them to be informed of this fact to protect the VISA brand integrity.

The small transactions processed at Limited Amount Terminals on the VISA network are covered by Zero Liability so there is no need for additional disclosures on these.

So I need to do a separate notice regarding the PIN-less payments and send them to now although I guess we should have done it when we added PIN capability?

In order to comply with VISA provisions, yes this disclosure should be provided. I'd begin by checking with your card processor or forms vendor to see if they have any model disclosures that would comply with this clause.

Ok, thanks for your help.

Can we address the annual disclosure requirement by posting a notice on our website and including a statement message directing our account holders to our website?

I'm thinking this may not work since account holders does not necessarily equate to cardholders.

Notices that are required by federal law to be in writing can be made in e-form under E-SIGN. Privacy is an exception as E-SIGN doesn't apply, but the customer still has to agree.

For other disclosures, state issues follow your UETA, lower than that would be by agreement.

So does the annual notice regarding pinless debit transactions still only apply to Visa and not Mastercard? Are there any annual disclosures required on Mastercard? We recently changed from Visa to Mastercard for our debit cards and we used to send our annual notices for pinless debit transactions on Visa in March, so wanted to know if I needed to be getting ready to send a Mastercard version. Thanks for any guidance.

There are no such annual disclosures required by MasterCard. Other than providing your cardholders with an updated cardholder agreement including verbiage for MasterCard Zero Liability and Cross Border Transaction fees, there is no ongoing discosures required.

How are others providing the ongoing disclosure that Visa requires? We have been including it on the back of our statements, but we're wondering if we could take it off from there and just include it in a statement message once a year. Does anyone else do it that way?

I am wondering the same as Deena. Can we use a statement message once a year directing them to the website that has the Annual Disclosure Statement? I am curious how other banks are doing this.

We have a new core processor who generates and mails our statements. There is not room for this "annual or more frequent" disclosure on the statement. There will be an additional charge to add this disclosure page to the mailings.

Can anyone answer whether we are allowed to have a statement message directing the customer to the website for this disclosure? Thanks.

Can anyone help with this? Thanks.

The Non-Visa Debit Transaction Disclosure Requirements (7.1.1.4) was updated 2/1/2018 and the "and on an annual or more frequent basis thereafter" was removed.

Thanks!