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#75230 - 04/23/03 07:12 PM Point Of Sale Transactions
Anonymous
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Does anyone know where there is a definition of "point of sale" transactions? Are internet purchases with a debit card considered POS transactions?

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#75231 - 04/23/03 08:28 PM Re: Point Of Sale Transactions
Justin Case Offline
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My understanding is that a point-of-sale transaction is where money is exchanged for goods or services. So, yes, an internet purchase would be POS. An ATM transaction is not POS; the customer is simply withdrawing their own cash from their account.
Is that the information you are looking for?
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#75232 - 04/23/03 08:44 PM Re: Point Of Sale Transactions
Joseph DiVanna Offline
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Yes a point of sale transaction reflects the sale of merchandise not the payment method used. POS devices that are Debit card enabled simply route the transactions through the same network as an ATM. A good description of this can be found in Robert Guttmann's book Cybercash: The Coming Era of Electronic Money, page 6.
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#75233 - 04/23/03 09:13 PM Re: Point Of Sale Transactions
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Actually, a true POS transaction involves the use of a PIN and reflects the difference between the two debit choices, i.e., whether a PIN (personal identification number) is used at the point of sale. When a PIN is used the transaction becomes "online" and funds are immediately withdrawn from the cardholder's available funds (true POS transaction). When an offline debit transaction occurs, funds are not withdrawn until the transaction processes - usually 2-4 days after the sale. Debit card (POS)transactions are the fastest growing point-of-sale payment method today.

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#75234 - 04/23/03 09:58 PM Re: Point Of Sale Transactions
Justin Case Offline
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Really, as long as the transaction is an exchange of goods or services for money, it is a point of sale transaction. Off-line POS transactions are signature-based and on-line POS transactions involve a PIN. Either way it's still point of sale.
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#75235 - 04/23/03 10:36 PM Re: Point Of Sale Transactions
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The following is posted at the Indiana Department of Financial Institutions site:

What is a “point of sale” transaction?
You can use your ATM/debit card to make purchases at stores that accept such cards—this is called a point of sale transaction. These businesses usually will allow you to withdraw cash from your account while you are making a purchase with your card. In most cases, there is no extra charge for receiving cash back with a debit card purchase.

That statement does not include Credit Card transaction that also involve the exchange of good and services for money.

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#75236 - 04/24/03 01:14 PM Re: Point Of Sale Transactions
rlcarey Offline
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Ipso, while that's a good reference, I don't know that there is an "official" definition of POS. I'm not aware of one in any regulatory scheme. Even VISA calls their electronic check conversion process "POS Check Services". I just don't think we are going to get to a definitive answer on this one.
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#75237 - 04/24/03 04:26 PM Re: Point Of Sale Transactions
Anonymous
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POS is when there is a third party involved in the transaction like MasterCard or Visa.

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#75238 - 04/24/03 06:01 PM Re: Point Of Sale Transactions
complyguy Offline
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Quote:

Does anyone know where there is a definition of "point of sale" transactions? Are internet purchases with a debit card considered POS transactions?




I'm out of my range here, but I think an internet purchase as you describe could also be a POP entry. I'm basing this on NACHA Rules, subsections 13.1.42 and 13.1.43 (page OR32).

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#75239 - 04/24/03 08:13 PM Re: Point Of Sale Transactions
Anonymous
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An online purchase is not a POS transaction. In a POS enviroment a PIN is entered or a signature written in the case of a credit card. In a POS situation both the buyer and the seller are face to face...

Candido Alfonso

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#75240 - 04/24/03 08:17 PM Re: Point Of Sale Transactions
Anonymous
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If it is an online transaction it is a WEB entry class transaction not a POP. POP is "point od purchase" and this is only used for check conversion in a POS type situation. Remember NACHA only regulates ACH transactions not ATM/Debit or credit cards

Candido

This is my opinion....

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#75241 - 04/24/03 08:19 PM Re: Point Of Sale Transactions
rlcarey Offline
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Anonymous and Candido,

Not that either of you are right or wrong, but I think in order for the definition you presented to have any support, you are going to have to provide your citation in support of the definitions provided.
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#75242 - 04/24/03 08:54 PM Re: Point Of Sale Transactions
C. Alfonso Offline
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A POS transaction has to involve a processing terminal and an approved merchant that can process through it. In the credit card world a POS transaction is striclty a "swiped" tansaction where card and cardholder are present. Internet and phone initiated transactions are MOTO or non-swipe transactions thus do not qualify as POS.

In the ACH world these are POP entries when it involves check conversion at the point of sale where chckwriter is present. If it is an online check it would be a WEB entry transaction and if it is a telephone initiated payment it is a TEL entry.

A point of sale merely indicates that the consumer ios present. In the case of a debit card it would involve a pin or signature (check card). A Visa/MC logo debit card would be a MOTO transaction if it were online since it does not involve a point of sale terminal, pin or signature and the consumer is not present at the retail level.

As of today I don't know of any bank issued non Visa/MC logo debit card that can be accepted online due to the PIN situation.

This is definetly my opinion but I'm pretty sure about it. Absolutely has no legal validity though...
Last edited by calfonso; 04/24/03 08:56 PM.
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#75243 - 04/24/03 09:09 PM Re: Point Of Sale Transactions
Rubaiyat Offline
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Quote:

Not that either of you are right or wrong, but I think in order for the definition you presented to have any support, you are going to have to provide your citation in support of the definitions provided.





Here are NACHA's definitions:

Article 13 Subsection 13.1.43 "POS Entry"

A debit entry initiated at an electronic terminal as defined in Reg E of the Board of Governors of the Federal Reserve System to effect a transfer of funds from a Consumer Account of the Receiver to pay an obligation incurred in a point-of-sale transaction, or to effect a point-of-sale- terminal cash withdrawal, and reversing, adjusting, and other credit entires relating to such debit entries, transfer of funds or obligations.

Article 13 Subsection 13.1.42 "POP Entry"

A debit entry initiated by an originator pursuant to (1) a single entry authorization, and (2) a source document as set forth in subsection 3.7.1 (Source Documents), provided to the originator by the receiver at the point-of-purchase to effect a trasfer of funds from a Consumer Account of the Receiver. This type of entry may only be used for non-recurring, in-person (i.e., at the point-of-purchase) entries for which there is no standing authorization with the originator for the origination of ACH entries to the receiver's account.

Article 13 Subsection13.1.64 "WEB Entry"

A debit entry initiated by an originator pursuant to an authorization that is obtained from the receiver via the internet to effect a transfer of funds from a consumer account of the receiver.

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#75244 - 04/24/03 10:17 PM Re: Point Of Sale Transactions
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cwilliams:
So, is nacha saying that all debit or credit card entries are also POS entries, regardless of no device used (terminal), manual processing, etc.? It seems that POS come around at the same time as debit cards. Since POS entries have a very different return status, versus Credit Card entries, there must be a specific scenario that supports the POS status, like using a debit card.

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#75245 - 04/24/03 11:46 PM Re: Point Of Sale Transactions
Rubaiyat Offline
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Ipso, NACHA's definition of POS would not include credit card transactions IMHO. I believe by referencing Reg E and "consumer account" which is defined in Reg E as a checking, savings, or other asset account, this would preclude credit cards from being considered as POS transactions, at least from NACHA's perspective.

I think this is the tricky part in trying to define exactly what these terms mean. Various entities have addressed various pieces of the process (usually only the pieces that they directly control).
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#75246 - 04/25/03 12:05 AM Re: Point Of Sale Transactions
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Thanks.

So, it appears that any Debit Card transaction, e.g. online or retail, is a POS transaction when a Debit Card is used. Therefore, all those transactions fall under the no return rules, unless they also fall under an exception to those rules.

Why anyone would use a Debit Card to transact business on the internet is beyond me.

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#75247 - 04/25/03 01:03 PM Re: Point Of Sale Transactions
Rubaiyat Offline
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Actually, an online transaction would be a WEB entry rather than a POS entry. You could say that a WEB entry is a sort of sub-set of the POS entry. And WEB entries can be returned for various reasons under the NACHA rules. There are a few exceptions, for instance, a one-time WEB entry can not be returned for revoke of authorization but a recurring WEB entry may be. Stop payments can also be made, although, because of the quick timing of ACH transactions, this can sometimes be hard to do.
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#75248 - 04/25/03 02:45 PM Re: Point Of Sale Transactions
1111 Offline
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You are a fountain of knowledge!

A Debit Card transaction on the internet, a Web transaction, cannot be disputed, e.g. damaged goods, etc. like an internet Credit Card transaction, correct?

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#75249 - 04/25/03 03:55 PM Re: Point Of Sale Transactions
Rubaiyat Offline
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Better a fountain of knowledge than a fountain of something else!

Yes, under the NACHA rules, there is no provision for a dispute due to something such as damaged goods, etc. A consumer basically has 4 options for a return on a WEB transaction:

1) Stop Payment
2) Unauthorized Transaction
3) Authorization Revoked (recurring transactions only)
4) Contact the Originator (merchant) for a refund
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#75250 - 04/25/03 04:04 PM Re: Point Of Sale Transactions
Justin Case Offline
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Quote:

A Debit Card transaction on the internet, a Web transaction, cannot be disputed, e.g. damaged goods, etc. like an internet Credit Card transaction, correct?




There are Visa dispute reason codes that could be utilized in this instance. Visa doesn't distinguish between the Check Card or Credit Card when it comes to disputes. So, say a person used his Check Card to purchase a computer over the internet. When it arrives at his house, it is broken. He contacts the merchant to try to resolve the issue but the merchant is uncooperative, he can go the bank that issued his Visa Check Card and initiate a dispute utilizing the Visa regulations.
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#75251 - 04/25/03 07:22 PM Re: Point Of Sale Transactions
1111 Offline
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Quote:

There are Visa dispute reason codes that could be utilized in this instance. Visa doesn't distinguish between the Check Card or Credit Card when it comes to disputes. So, say a person used his Check Card to purchase a computer over the internet. When it arrives at his house, it is broken. He contacts the merchant to try to resolve the issue but the merchant is uncooperative, he can go the bank that issued his Visa Check Card and initiate a dispute utilizing the Visa regulations.





Your statement does not appear to agreement with cwilliams last post on this issue. Are you actually saying that Visa could care less whether or not a debit or credit card was used, disputes are all handled the same? The cwilliams post outlines my understand, e.g. a Debit Card purchase has a much higher standard when a dispute comes up and can only be disputed within the framework of the options posted by cwilliams. Is that not correct?

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#75252 - 04/25/03 08:00 PM Re: Point Of Sale Transactions
Justin Case Offline
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I guess I don't understand how NACHA rules apply to a debit card transaction. It's not ACH.

Visa has one set of Operating Regulations and Dispute Resolution Guides that apply to both check card and credit card disputes.
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#75253 - 04/25/03 08:33 PM Re: Point Of Sale Transactions
1111 Offline
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You are not alone, as this is a confusing issue. What I know for sure is that POS Debit Card transactions cannot be returned when they come in days after a transaction and there is not sufficient funds on deposit. Also, the normal dispute scenarios that practically amount to insurance when a Credit Card is used do not apply when a Debit Card is issued, so I say it's good practice not to use a Debit Card on the web!

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#75254 - 04/25/03 09:07 PM Re: Point Of Sale Transactions
Rubaiyat Offline
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I agree with all of the above. It is confusing.

I think part of the confusion is that ACH isn't a method of payment. It is a payment system. For example, a check which is converted to a POP, uses the ACH payment system to move around. The check wasn't "ACH" but the way it is paid is. The same thing goes for your debit card when you buy a CD on the internet. The debit card isn't "ACH" but the transaction uses the ACH payment system. So, on top of the NACHA rules that apply to the transaction itself, for debit cards you have VISA rules that apply to the access device because that's where the card came from.

I personally feel that electronic payments are the biggest issue we face outside the normal regulatory compliance issues. And it is only going to get worse as new payment methods are introduced.
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#75255 - 04/25/03 09:26 PM Re: Point Of Sale Transactions
1111 Offline
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If you ever run across a matrix covering this issue, please post the URL. We almost need a roadmap type documentation with even pressing debit or credit when you use a card, in some cases, makes a big difference in who gets charged what covering the transaction and how it's routed through the system and, perhaps, what options are available when there is a dispute.

It's a little strange, in that we all know almost everything relating to check processing, but we are practically clueless, except for people like you, when it comes to card transaction options when the transaction or process goes south.

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