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#1729745 - 08/10/12 05:03 PM PIN transactions thru Visa
CAKE Offline
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Joined: Apr 2005
Posts: 25
It used to be that if a debit card transaction was signature, it followed the Visa rules and a pinned transaction fell under the guidelines of Reg E. Since pinned transactions are now being routed through Visa, would a cardholder dispute fall under the Reg E rules or the Visa requirements?

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eBanking / Technology
#1729789 - 08/10/12 06:03 PM Re: PIN transactions thru Visa CAKE
bankinginky Offline
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Joined: Sep 2010
Posts: 18
It is my understanding that if the transaction routes through Visa, even if pinned, Visa rules apply. If the transaction is routed through a network such as NYCE or PULSE, Reg E would apply.

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#1729791 - 08/10/12 06:12 PM Re: PIN transactions thru Visa CAKE
Derwood Offline
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Posts: 179
If it meets the definition of an "Electronic fund transfer” as defined in § 1005.3. of Reg E a debit card transaction whether pinned or signature based is covered by Reg E. It is also covered by the rules governing whichever network the transaction was processed through. The Reg E coverage does not cease due to the transaction being subject to Visa (or any other network) rules, those rules are in addition to the Reg E coverage.

In some cases the network rules are even more consumer friendly than Reg E and in those cases the network rules should be followed.
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#1729792 - 08/10/12 06:16 PM Re: PIN transactions thru Visa CAKE
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,019
Illinois
Actually, for PIN transactions routed through VISA, both Reg E and VISA rules would apply. In the event there is a conflict between these rules, the more consumer friendly rule wins.

For example, Reg E allows you to take 10 business day prior to providing provisional credit, but VISA requires provisional credit in 5 business days. The more friendly rule is 5 so you comply with both requirements by providing credit in 5.

Reg E allows you to withold $50 of the provisional credit in the case of a lost/stolen card, VISA provides Zero Liability protection. Again, VISA is more consumer friendly and you must provide the Zero Liability coverage.

Reg E requires that your investigation be completed in 90 calander days. VISA has no time limit on your investigation. Since Reg E is more consumer friendly, you must follow its investigation schedule.
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#1729911 - 08/10/12 09:30 PM Re: PIN transactions thru Visa CAKE
Carolina Fan Offline
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Joined: Aug 2006
Posts: 7
North Carolina
Slightly off topic - but I've noticed more of our PIN transactions routing through Visa at lower interchange than through Star or NYCE. Can somebody point me to where this is permitted? I was under the impression that PIN routed through a PIN network, and non-PIN routed through Visa (assuming the card is Visa branded). Thanks.

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#1729921 - 08/10/12 10:00 PM Re: PIN transactions thru Visa Carolina Fan
Derwood Offline
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Joined: Nov 2009
Posts: 179
Visa has had the ability to handle pinned transactions for some time including but not limited to their Check Card II product that is being eliminated.

The Visa Spring 2012 Release documentation stated that “All Visa debit issuers and processors must be capable of validating and authorizing PIN-authenticated Visa debit (PAVD) transactions,” including point-of-sale (POS) transactions, as of April 13, 2012.
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"The mountains are calling and I must go." - John Muir

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#1729922 - 08/10/12 10:01 PM Re: PIN transactions thru Visa CAKE
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,019
Illinois
VISA has it's own PIN network in addition to its signature based network. If you have that gateway available on your card, the merchant is free to use it.

Reg II requires that you have two unaffiliated networks available on your card (one signature and one PIN.) It also gives the merchant the right to route a transaction down the network that has the lowest interchange rate.

See Reg II 235.7 and the commentary to follow
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Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
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#1730455 - 08/13/12 09:49 PM Re: PIN transactions thru Visa CAKE
Carolina Fan Offline
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Joined: Aug 2006
Posts: 7
North Carolina
Thanks. I had missed that and appreciate the specifics.

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