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#340766 - 03/30/05 05:34 PM Notice to Debit Card holders re: International Fee
Anonymous
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How are other banks notifying their debit card customers of the Internation Fee? Also, if we choose not to pass the fee on to the customer, are we still required to disclose.

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General Discussion
#340767 - 03/30/05 08:38 PM Re: Notice to Debit Card holders re: International Fee
Chiquita Banana Offline
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The banana bin
I would think that if you're not passing the charge through to your customers, you wouldn't need to disclose.

We are going to charge our customers. On the surface, it doesn't come out to a lot of money...but those transactions do add up.

We have decided to do statements stuffers to notify of the changes and begin assessing the fee in Mid-May.
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#340768 - 03/30/05 08:44 PM Re: Notice to Debit Card holders re: International
CelticsPride Offline
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The Boston "Gahden"
I believe that Visa is requiring notice even if you are going to absorbe the cost.
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#340769 - 04/05/05 01:08 AM Re: Notice to Debit Card holders re: International Fee
reinkesd Offline
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reinkesd
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Connecticut
Some of my clients have taken the approach to change the disclosure to read "you may be charged a fee", that way they can go either way. Plus, not all international transactions will incur a fee. The fee is only incurred when the currency of the issuer does not match the currency of the transaction.

VISA will be providing a new report, VSS-140, that outlines the transactions and a fee indicator which will be 'Y' or 'N' so you'll know which ones have been charged.

MasterCard is apparently following suit (before they get slapped with a SUIT like VISA did) and unbundling their fees as well. I believe the difference with MasterCard is that their fee was optional from the beginning whereas VISA hit the customer with it in all situations, then hid it in the transaction.

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#340770 - 05/04/05 04:46 PM Re: Notice to Debit Card holders re: International Fee
Coffee Roaster Offline
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Southeast Michigan
Any update on MasterCard?

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#340771 - 05/04/05 08:02 PM Re: Notice to Debit Card holders re: International Fee
Anonymous
Unregistered

We were notified by our debit card processor (Fifth Third) that Mastercard is breaking out the fee but they (Fifth Third) is re-bundling the fee with the transaction. I have been trying to get someone to explain the logic of that.

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#340772 - 05/05/05 03:46 PM Re: Notice to Debit Card holders re: International Fee
Anonymous
Unregistered

Regarding need to disclose - remember there were two parts to the VISA Internation Transaction issue - one was the fees the other has to do with the exchange rate that VISA will use to convert the transaction to American $$'s so even if you will not pass the fee on to the customer you need to disclose VISA's converions method.

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#340773 - 05/12/05 02:42 PM Re: Notice to Debit Card holders re: International Fee
JimK Offline
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Alexandria, VA
We provided an notice/change in terms form in the periodic statement. However, it seems this is not all that needs to be done. There are disclosure requirements under Regs. Z and E. Reg Z: disclose fee in Schumer box; in the intial disclosure; identify on periodic statement; future change in terms notice if the fee changes. Reg E: include fee in the EFT disclosures and disclose on statement.
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#340774 - 06/07/05 06:29 PM Re: Notice to Debit Card holders re: International Fee
Anonymous
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Reg E: include fee in the EFT disclosures and disclose on statement.

I disagree. Reg E 205.7(b)5 states - Any fees imposed by the financial institution for electronic fund transfers or for the right to make transfers.

The fee is not imposed by the financial institution, but by VISA.

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#340775 - 06/07/05 06:48 PM Re: Notice to Debit Card holders re: International
Andy_Z Offline
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Who collects the fee from the consumer, the institution or VISA?
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#340776 - 06/07/05 06:57 PM Re: Notice to Debit Card holders re: International
rainman Offline
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Andy, I assume that was a rhetorical question for you . . . but for the benefit of others, VISA charges the institution. It's up to the institution to decide whether to pass the charge along to the cardholder. If the institution does pass the charge through, it's a charge by the institution, not by VISA.
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#340777 - 06/07/05 07:12 PM Re: Notice to Debit Card holders re: International
Anonymous
Unregistered

Rainman, i'm piggy backing on this thread to get clarification for one i asked earlier that andy responded to. in light of VISA's changes to ISA's, is the bank obligated to rebate (to the customer) the 1% fee that VISA will return (to the bank) for single currency cross-border transactions?

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#340778 - 06/08/05 01:34 PM Re: Notice to Debit Card holders re: International
banjo Offline
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Joined: Feb 2005
Posts: 299
Our bankcard department tells me the fee will be included in the transaction amount.

The commentary to Reg E 205.9(b)(3)-2 states "Fees in interchange system. An account-holding institution must disclose any fees it imposes on the consumer for EFTs, including fees for ATM transactions in an interchange or shared ATM system. Fees for use of an ATM imposed on the consumer by an institution other than the account-holding institution and included in the amount of the transfer by the terminal-operating institution need not be separately disclosed on the periodic statement."

If we are passing on the fee that Visa charges us, does the fee have to be broken out on the periodic statement?

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#340779 - 06/08/05 07:59 PM Re: Notice to Debit Card holders re: International
rainman Offline
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My understanding (perhaps uninformed) is that VISA is charging the ISA separate from the transaction, and giving the issuer the choice on whether to pass it on.

If the fee were included in the transaction amount, the issuer wouldn't have much choice as to whether to pass on the fee, because it would already be charged to the account. If the issuer did not want to pass on the fee, it would have to manually (or by computer program) calculate the amount of the fee based on the transaction amount in order to refund it or disclose it separately. That doesn't make a whole lot of sense to me.

If, however, your premise (that the fee is included in the transaction amount) is correct, then I agree it doesn't have to be disclosed on the statement. HOWEVER, your initial disclosures would need to be clear about how and when the fee is charged and that it will be included in the transaction amount, and it still seems open to disputes and litigation - which is what VISA is trying to avoid in the first place.

Anon, everything I've heard says that VISA is charging the fee for all cross-border transactions, irrespective of currency. Has that changed?
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#340780 - 06/08/05 09:05 PM Re: Notice to Debit Card holders re: International
Anonymous
Unregistered

Mr. Anon here. No, according to the information I've received (as of 6/6/05) that has not changed. Cross border is cross border, regardless of currency.

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#340781 - 06/09/05 10:06 PM Re: Notice to Debit Card holders re: International
bhop Offline
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bhop
Joined: Jun 2005
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San Antonio, TX
I have been unable to confirm if we must disclose that the fee is separate. Is it acceptable to simply state that there may be a fee associated with a foreign transaction?

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#340782 - 06/10/05 04:36 PM Re: Notice to Debit Card holders re: International
RFitzpatrick Offline
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Pacific NW
Quote:

Anon, everything I've heard says that VISA is charging the fee for all cross-border transactions, irrespective of currency. Has that changed?




I think they have removed the fee for most same currency transactions. This from VISA Online:


Changes to the International Service Assessment (ISA)

Effective CPD June 9, 2005, Visa will no longer assess the ISA on cross-border, single-currency U.S. Dollar (USD) Plus transactions.
Effective CPD June 9, 2005, Visa will continue to assess the ISA on cross-border, single-currency U.S. Dollar (USD) Visa transactions and will allocate back to U.S. Issuers 100 percent of the assessed ISA for all cross-border, single-currency U.S. Dollar (USD) Visa purchases, credit vouchers, cash disbursement originals and corresponding reversal transactions.
In addition, VisaNet systems will not populate the ISA transaction indicator for all cross-border, single-currency U.S. Dollar (USD) transactions.
These VisaNet processing changes apply to all cross-border transactions on U.S.-issued cards when the following conditions apply:
The transaction is conducted solely in USD (source and destination currency is USD), OR
The transaction is submitted in the currency of the following countries where the currency is equal in value to the USD: Bermuda, Panama and Bahamas.
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#340783 - 06/10/05 06:48 PM Re: Notice to Debit Card holders re: International
Anonymous
Unregistered

Don't forget there were two parts to Visa's disclosure - one regarding the fee the other regarding the rate and date used to calculate the exchange will be selected by Visa and may not be the lowest available.

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#340784 - 06/10/05 07:26 PM Re: Notice to Debit Card holders re: International
rainman Offline
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Posts: 3,237
Okay, now I'm really confused.

Quote:

Effective CPD June 9, 2005, Visa will no longer assess the ISA on cross-border, single-currency U.S. Dollar (USD) Plus transactions.
Effective CPD June 9, 2005, Visa will continue to assess the ISA on cross-border, single-currency U.S. Dollar (USD) Visa transactions and will allocate back to U.S. Issuers 100 percent of the assessed ISA for all cross-border, single-currency U.S. Dollar (USD) Visa purchases, credit vouchers, cash disbursement originals and corresponding reversal transactions.




I read this to say that the ISA won't be charged on single currency VISA plus transactions, but will be charged on VISA transactions that are not plus transactions. I'm not sure what the difference between a VISA plus transaction and a regular VISA transaction is . . . any help here?

Quote:

In addition, VisaNet systems will not populate the ISA transaction indicator for all cross-border, single-currency U.S. Dollar (USD) transactions.




I read this to say that they won't show the ISA indicator for any single currency transaction, even though they [apparently] are charging the fee for non-VISA plus transactions?

Anybody got a handle on what this announcement means . . . in english?
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#340785 - 06/10/05 09:01 PM Re: Notice to Debit Card holders re: International
Buddy the Elf Offline
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I was very confused by this too, Rainman. Here's clarification from a conference call we had this morning with Visa: they will not be assessing the ISA fees for transactions done where the issuer is the US and the transaction is in US dollars but the merchant may be cross-border. There won't be an ISA indicator for these types of transactions so they will be completely bypassed for ISA. So, say I do a transaction and I've got a card issued by a bank in New York. The merchant that I do business with is located in France but the entire transaction was conducted in US Dollars with no currency exchange. This transaction would NOT be assessed ISA fees. So really, the only time there would be ISA fees would be if I was in France and made a purchase in ...whatever France's currency is and it was exchanged into US dollars when it posted to my account.

Now Visa is trying to figure out how to reimburse issuers for all of the transactions that were assessed the ISA fee in error since April 1.
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#340786 - 06/10/05 10:03 PM Re: Notice to Debit Card holders re: International
rainman Offline
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Thanks for the clarification. Of course lots of issuers will have to do ANOTHER change in terms, because they sent out notices that the ISA would be assessed for all foreign transactions, no matter what currency was used. So now we're really back to the idea of a currency conversion fee, not an "international service assessment."

I swear, VISA is worse than any regulator!
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#340787 - 06/10/05 10:50 PM Re: Notice to Debit Card holders re: International
RFitzpatrick Offline
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Joined: Apr 2002
Posts: 424
Pacific NW
Quote:

Of course lots of issuers will have to do ANOTHER change in terms, because they sent out notices that the ISA would be assessed for all foreign transactions, no matter what currency was used.




In a notice from our core processor today about the change, they state that you may elect to communicate the new fee policy to your cardholders; however, it is not a Visa mandate to do so.
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