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#1782725 - 02/04/13 09:21 PM Cash Advances
2old2new Offline
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tn
Have any banks discontinued the service of cash advances from the teller line? Since the availability of pin# for credit cards and the popularity of ATMs, is there a continued need for cash advances from a teller? The teller assisted cash advance on all the benefit cards, is becoming a costly expense.I know about the contract agreements, etc. but we can't remember the last time we had an actual "credit card" cash advance. Thanks for any input.

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#1782738 - 02/04/13 09:34 PM Re: Cash Advances 2old2new
BrianC Offline
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Illinois
Quote:
I know about the contract agreements, etc


Then do you know that as a VISA/MasterCard issuer part of your contract is likely that you are required to offer these services and the VISA/MasterCard can fine your institution if you violate your contract?

Also, when Social Security begins issuing cards on March 1st to all of those individuals who did not sign up for direct deposit, you may see an increase in demand for this service.
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#1782985 - 02/05/13 06:10 PM Re: Cash Advances BrianC
2old2new Offline
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tn
Thanks Brian, and I am aware of those facts. I did not make my question clear. My position would be when our contract ends, we would remove the terminal and would not offer a cash advance service at all, to anyone. The ATMs would be available for such pin based transactions. Just wondering if other banks have not renewed contracts. Thanks.

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#1782995 - 02/05/13 06:27 PM Re: Cash Advances 2old2new
Kathleen O. Blanchard Offline

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If you do not renew your contract, what type of debit card will you offer to customers? Will you no longer have a Visa or Mastercard debit card? That is the contract that requires you to honor cash advance requests, there is not a separate cash advance contract.
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#1783064 - 02/05/13 08:41 PM Re: Cash Advances Kathleen O. Blanchard
2old2new Offline
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tn
Kathleen, thank you for the info. We were thinking of the contract with the company that handles our merchants and our own cash advance terminal/settlement and not the company that issues our bank's customer debit cards. Two different companies.And no, we couldn't live w/o those debit cards.. But, now we know we need to find our debit card contract, and reread it. Thanks so much.

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#1783069 - 02/05/13 08:53 PM Re: Cash Advances 2old2new
BrianC Offline
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Illinois
If you are a MasterCard Issuer, see rule 8.10.1 of the MasterCard Rules:

8.10.1 Nondiscrimination
Rule 8.10.1 of Chapter 8, “Sales Transactions and Cash Disbursements,” is modified to include the following:
Subject to compliance with the Standards, each Customer within the U.S. Region must provide cash disbursement services to all Cardholders at all of the Customer’s offices where teller services are provided.

VISA Issuers should refer to VISA Operating Rules

Each Member, excluding one participating only in the Visa Electron or Plus programs, must make Manual Cash Disbursements to other Issuers' Visa Cardholders from all of its Branches in its Country of Domicile. This includes, but is not limited to, unembossed Visa Cards, and Visa Cards with a generic dentifier or no Cardholder name. This requirement is limited only by applicable law and the Issuer's Cash Disbursement policy.
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#1783253 - 02/06/13 03:00 PM Re: Cash Advances Kathleen O. Blanchard
Southern gal Offline
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TN
Kathleen,

In cases where a tax refund card (from well-known tax prepration company) is presented for a cash advance and the card is not personalized with customer's name do banks have a right of refusal to honor cash advances? Can the customer be given the following options. (1) request a personalized card from the company so ID can be verified with photo ID in order to process the cash advance (2) If customer is unwilling to request a personalized card, they must use the ATM and the PIN number provided to them when the card was issued.

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#1783268 - 02/06/13 03:19 PM Re: Cash Advances BrianC
Dani York, CRCM Offline
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TN
If it's a Visa branded card, your answer is imbedded in Brian's previous answer. So no, you cannot make them get a personalized card, nor do I think you can deny them the cash advance. I believe Mastercard works the same.

Originally Posted By: BrianC

VISA Issuers should refer to VISA Operating Rules

Each Member, excluding one participating only in the Visa Electron or Plus programs, must make Manual Cash Disbursements to other Issuers' Visa Cardholders from all of its Branches in its Country of Domicile. This includes, but is not limited to, unembossed Visa Cards, and Visa Cards with a generic dentifier or no Cardholder name. This requirement is limited only by applicable law and the Issuer's Cash Disbursement policy.
Last edited by Dani York, CRCM; 02/06/13 03:20 PM.
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#1783279 - 02/06/13 03:39 PM Re: Cash Advances 2old2new
BrianC Offline
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Illinois
VISA Operating Rules

Member Manual Cash Disbursements
Each Member, excluding one participating only in the Visa Electron or Plus programs, must make Manual Cash Disbursements to other Issuers' Visa Cardholders from all of its Branches in its Country of Domicile. This includes, but is not limited to, unembossed Visa Cards, and Visa Cards with a generic identifier or no Cardholder name. This requirement is limited only by applicable law and the Issuer's Cash Disbursement policy.

MasterCard Rules

8.10.1 Nondiscrimination
Each Customer and each of its authorized cash disbursement agents must comply with the following requirements at each office at which any cash disbursement services are afforded:
1. Not discriminate against or discourage the use of Cards in favor of any card or device bearing or otherwise issued or used in connection with another acceptance brand; and
2. Provide cash disbursement services to all Cardholders on the same terms and regardless of the Issuer.

In other words, you cannot refuse to perform a cash advance for these cards or require that the cardholder visit the ATM. To protect yourself from risk, make sure that you follow VISA/MasterCard rules for identifying the cardholder, documenting the ID, and obtained a valid authorization with the cardholder's signature on the sales receipt. In the event the cardholder asserts fraud, all you then have to do is produce the signed receipt and any loss will belong to the issuer of the card.

I will be providing more details on VISA/MasterCard rules as well as the regulatory obligation regarding debit cards in my upcoming webinar The Maze of Debit Card Compliance on March 27th.
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#1783288 - 02/06/13 03:50 PM Re: Cash Advances 2old2new
BrianC Offline
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Illinois
Dani, thanks for highlighting the VISA info as well...You beat me to the punch while I was off pulling in the MasterCard info.
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#1783444 - 02/06/13 08:40 PM Re: Cash Advances Southern gal
mac27 Offline
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NH
According to the web site of the "well known tax peparation company" if the card is lost or stolen their customer is only liable for the first $50 if notified etc. So are we responsible for the loss? Or is Visa/mastercard? These cards have no identification on them in many cases so we cannot check ID.

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#1783465 - 02/06/13 09:11 PM Re: Cash Advances 2old2new
Dani York, CRCM Offline
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TN
The card issuer is responsible for the loss PROVIDED you have followed the steps (id them, get signature, etc---see Brian's previous posts).
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#1783466 - 02/06/13 09:11 PM Re: Cash Advances 2old2new
BrianC Offline
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Illinois
As long as you follow VISA/MasterCard procedures regarding cash disbursements, liablity for fraud rests with the card issuer.
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#1783815 - 02/07/13 06:16 PM Re: Cash Advances 2old2new
MrsSmithCRCM Offline
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Here for the moment
I just want to verify that the letter we received about being able to surcharge based on product, etc... for Visa & MC, still does not allow charging for cash advances, is that correct? I can't see anywhere in this notice that says that policy changed. I have mgmt that is reading that since merchants can surcharge, we can charge for cash advances...?

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#1783875 - 02/07/13 07:36 PM Re: Cash Advances MrsSmithCRCM
La. Lady Offline
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One of our locations asked the same question to Visa/MasterCard...their response was yes....however, we still feel uneasy.....

Certainly wish that someone "in the know" would respond
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#1783883 - 02/07/13 07:51 PM Re: Cash Advances 2old2new
Derwood Offline
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I don't see how you could institute a surcharge on a cash advance. The surcharge amount is limited to the merchant's discount rate. In the case of a cash advance the interchange flows to the merchant and results in income. There is no discount rate so you wouldn't be able to add a surcharge.
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#1784229 - 02/08/13 04:56 PM Re: Cash Advances 2old2new
pacar Offline
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Posts: 320
Isn't the surcharge rule also only aplicable to Credit Cards? So Debit and Prepaid are excluded anyway?

I'm having the same issue as "Mitten" ... we're reviewing our our practices, largely as a result of the SSA move to debit cards.

So: we do have third party arrangements for a credit card (we refer), and we do have a BIN for our debit card. VISA Brand for both. We do offer cash advance services at the branch. Above, Brian cites the VISA Rules which include a statement that reads "...limited by...the issuer's cash disbursement policy". What if our Cash Disbusement Policy is written in a way to include the topic of cash advances (credit or debit card), stating that we only do them in certain circumstances and with certain conditions applied?

I know it's splitting hairs, but these are questions I'm being asked. VISA Rules do not explicitly say "thou shall not impose a cash advance fee", but talk instead about transaction and surcharge. The argument I have to defend is that a cash advance fee is included in that broader definition, and it applies to ALL branded cards (credit, debit, prepaid, EBT).

We may just end up going down the path of removing our cash-advance terminal from the branches (we have a contract with a different providor for the merchant services)

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#1784245 - 02/08/13 05:17 PM Re: Cash Advances 2old2new
BrianC Offline
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Illinois
VISA does specifically address cash disbursements...

Manual Cash Disbursement - Surcharge Prohibition
An Acquirer must not add a surcharge to a Manual Cash Disbursement unless local law expressly requires that a Member be permitted to impose a surcharge. Any surcharge amount, if allowed, must be included in the Transaction amount and not collected separately.

I don't care whether you call it a fee or call it a surchage...VISA simply says you can't do it.

Your Cash Disbursement Policy can be customized to some degree. For example you can have it in your policy to not perform cash advances for individuals who do not have valid ID. VISA permits you to set a maximum amount. However, your cash disbursement policy cannot violate VISA Operating Rules. This means that any maximum that you establish must be applied uniformly to customers and non-customers. Your cannot discriminate between customers/non-customers, embossed/unembossed. You must perform the same services for all card types.
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#1784248 - 02/08/13 05:27 PM Re: Cash Advances 2old2new
pacar Offline
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Posts: 320
Thanks, Brian. I am up against a wall with this argument internally. Because of the new surcharge rule, Executives here are falling on the word "surcharge" stating that I'm applying the rule too broadly. "They" want to charge a cash advance fee (surcharge!) on any non-customer cash advance requrest - debit, credit, prepaid, EBT. Period.

In a different thread, you cited the fees from MasterCard. Any clues on where I can find something comperable in VISA? I'm doing a keyword search in the rules now and am coming up empty.

I figure if they are willingly not going to comply, it's my obligation to at least inform them of the risks of non-compliance. If I can't stop them, I can at elast reserve the right to say "told you so".

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#1784277 - 02/08/13 05:58 PM Re: Cash Advances 2old2new
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,074
Illinois
Good for you on performing your research!

Here's the VISA info:

General Schedule of Fines

Violation Fine
First violation of regulation Warning letter with specific date for correction and
US $1,000 fine
Second violation of same regulation in a 12-month
period after Notification of first violation
US $5,000 fine
Third violation of same regulation in a 12-month
period after Notification of first violation
US $10,000 fine
Fourth violation of same regulation in a 12-month
period after Notification of first violation
US $25,000 fine
5 or more violations of same regulation in a 12-
month period after Notification of first violation
Visa discretion
If the 12-month period is not violation-free and the
fines total US $25,000 or more
Additional fine equal to all fines levied during that
12-month period


You'll find a nicer table version of this on Page 71 of VISA International Operating Regulations

Sounds like you should invite you associates to attend my webinar on March 27th wink
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#1784323 - 02/08/13 07:11 PM Re: Cash Advances 2old2new
pacar Offline
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Posts: 320
Oh perfect!! I found some stuff in Chapter 1, but this is laid out much better. Thank you, Brian!
(and yes ... I'm checking the budget!)
Last edited by pacar; 02/08/13 07:12 PM.
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#1787194 - 02/19/13 03:36 PM Re: Cash Advances 2old2new
SLU Voice Offline
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SLU Voice
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Hammond, LA
Sorry to resurrect this thread, but I would like to know if we can deny a cash advance to a non-customer if they cannot produce sufficient identification.

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#1787195 - 02/19/13 03:41 PM Re: Cash Advances 2old2new
BrianC Offline
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BrianC
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Illinois
Absolutely and you would be wise to do so. Remember that you cannot require MORE identification from a non-customer than you do a customer.
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#1787207 - 02/19/13 04:05 PM Re: Cash Advances 2old2new
SLU Voice Offline
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SLU Voice
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Hammond, LA
Thank you, Brian. We would only require the information necessary to form a reasonable belief that the person getting the cash is who they say they are.

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#1790328 - 02/28/13 08:58 PM Re: Cash Advances 2old2new
Post-it Offline
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Post-it
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Posts: 60
Midwest
Along the same lines, can we put in our policy that we do not allow cash advances from a non-customer?

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