Good morning! Hoping someone can shed some light on this question:

Our bank offers cash advances for customers. We have a limit of X amount that a customer can advance per day.

I'm told that because our bank has the cash advance machine, that we also have to offer this service to non-customers.

My question is: can we impose a daily limit for non-customers that is LESS that what we offer for customers?

As a general rule, we don't offer a lot of services to non-customers, but my understanding is, because we carry the VISA or MC logo, that we have to offer this service to everyone.

I am okay with offering it to everyone, but don't want to extend the same courtesy to a non-customer that I would a customer.

So for example, if our daily limit for a customer is $5000.00, could we say for a non-customer, it's only $500.00? Or $250.00?

Orig poster here:

One thing I wanted to mention:

The reason I would like our limit so low for a non-customer is if the transaction goes "bad", we have no recourse to debit the non-customer. With no relationship, once that $$$ leaves the bank, it's pretty much gone.

I should mention that currently our policy is to extend the same amount to a customer as a non-customer. So we have the potential for fraud of up to X.

I hope this makes sense?

This is going to be governed under your merchant agreement rules (i.e., mastercard or Visa). How can a cash advance transaction go "bad" if you follow merchant rules?

Review this thread.

If you follow MC/Visa rules, you are not taking on liability. Banks sign agreements that they will comply with MC/Visa rules in order to have the logo on their debit/credit cards. You have to honor the cash advances, following the rules that govern the service for the customer and those that protect the bank.

I have a question, can you do a cash advance with debit cards or credit cards only? The card has M/C logo but I was under the impression that we can only do cash advances for credit cards only, not debit cards. Please advise. Thanks!

You can perform (and are required to) cash advances on any plastic that bears the MasterCard logo including credit cards, debit cards, payroll cards, unenemployment cards, government benefit cards, etc.

There are some gift card programs out there that as a matter of cardholder agreement do not allow funds to be redeemed for cash. If you attempt a cash advance on these, it will simply be declined based on the programming on the issuer's end.

Rlcarey, Brian, and Kathleen have the right idea. Check your agreement with your providers.
Also, we do not do cash advances if the card being used does not have the customer/non-customer name on it (ie a blank one or one that says gift card).

I agree about gift cards, but there are unembossed cards that you may need to honor. From Visa Operating rules:

Effective 13 December 2012, each Member, excluding one participating only in the Visa Electron, Plus or ATM acquiring programs, must make Manual Cash Disbursements to other Issuers' Visa Cardholders from all of its Branches in its Country of Domicile.
This requirement includes, but is not limited to, unembossed Visa Cards, and Visa Cards with a generic identifier or no Cardholder name.


Also, there may be rules regarding minimum and maximum cash advances. Again, from Visa's rules:

Maximum Manual Cash Disbursement Amount
An Acquirer may establish a maximum Manual Cash Disbursement amount of not less than US $5,000 or local currency equivalent, per day, per Cardholder.

Issuer Minimum Manual Cash Disbursement Amount - U.S. Region
A U.S. Issuer must not establish a minimum Manual Cash Disbursement amount.

Great info BetsyS!

I know this is not what the original poster asked but do you have any idea on how to tell if a card qualifies or not if it is unembossed?

Thanks!

Since the card's eligibility for cash advances is determined by the issuer's program, you the acquirer, will have no way of knowing whether or not a card can be used for cash advances. The cardholder should know this based on the terms and conditions of the card.

This, of course, will not stop them from attempting it. If a card is not eligible to be used for cash advances, the issuer will have these transactions restricted on the processing end. You can try the cash advance, and if the card is not eligible, the transaction will be declined. Since you won't know unless you attempt the transaction, I don't recommend turning the cardholder away before you try to process their request.