Visa Cash Advance for Noncustomer

Posted By: Dolly Nugent

Visa Cash Advance for Noncustomer - 04/24/08 09:29 PM

If I recall correctly, a bank that issues Visa debit cards is required as part of their contract with Visa, to offer cash advance services to non-customers. Am I correct?
Posted By: John Burnett

Re: Visa Cash Advance for Noncustomer - 04/24/08 09:56 PM

Correct.
Posted By: beegee

Re: Visa Cash Advance for Noncustomer - 01/27/11 05:42 PM

We are having non-customers come in with Mastercard payroll cards wanting cash advances off of them. My understanding is that we cannot refuse them.

Is this thread from 2008 still accurate?

Also - can we put any dollar limitations on these advances?
Posted By: LSmith

Re: Visa Cash Advance for Noncustomer - 01/27/11 06:56 PM

That is correct. The Visa/Mastercard rules specifically mandate that.

Reminder—Face-to-Face Cash
Disbursement Transaction Standards
Craig Roberts, Business Leader, Franchise Development, Rules, Standards, and Strategy
Suggested routing: Compliance Contact, Principal Contact
Applies To: �� Issuers �� Acquirers �� Processors
Summary: MasterCard reminds members about the Standards relating
to processing face-to-face cash disbursement transactions
and strongly advises members to review their procedures
for compliance with these Standards.
Action
Indicator: A Attention warranted
Effective Date: Effective immediately
Overview
MasterCard has become aware that some MasterCard members have
established non-compliant practices, either at their own facilities or at their
agent’s financial institution, regarding the processing of face-to-face cash
disbursements. These non-compliant procedures have been discovered
recently specifically related to payroll and government benefit payment
cards when cardholders seek to withdraw all their cash from their cards at
a teller window (sometimes termed a “cash out”).
Charging fees, refusing to disburse cash to non-customers, setting lower
maximum transaction amounts for non-customers, refusing to allow a
cardholder to withdraw all the cash available on their card, or requiring
non-customers to provide additional personal identification or information
are all examples of such practices. MasterCard members and their
authorized agents must provide cash disbursement services to all
MasterCard cardholders on the same terms regardless of the card issuer,
and without any discount or service fee.
Reminder—Face-to-Face Cash Disbursement Transaction Standards
Global Operations Bulletin No. 4, 1 April 2009
©2009 MasterCard 27
Member Requirements
This article reminds members about the Standards relating to processing
face-to-face cash disbursement transactions and attempts to answer some
of the most frequently asked questions that members have inquired about
regarding face-to-face cash disbursement requirements. MasterCard strongly
recommends that members review internal procedures to ensure
compliance with these Standards.
This article does not change any Standards and, in the event of a
discrepancy between any Standard and this article, the Standards will
exclusively apply. MasterCard will continue to exercise its sole authority to
interpret all of the Standards, including cash disbursement rules.
Posted By: A_G

Re: Visa Cash Advance for Noncustomer - 01/27/11 07:01 PM

or requiring
non-customers to provide additional personal identification or information
are all examples of such practices.


Anyone know what this means?

confused
Posted By: BrianC

Re: Visa Cash Advance for Noncustomer - 01/28/11 02:20 AM

If you ask a bank customer for a driver's license to perform a cash advance, you can't turn around and ask a non-customer for a driver's license AND a birth certificate. You must treat them the same.
Posted By: Bsa812

Re: Visa Cash Advance for Noncustomer - 02/14/12 06:57 PM

Does anyone know if this applies to tax refund cards (mastercard) that are not embossed with a customer name? I would like to know what my safe guards are if we are required to do this.
Posted By: BrianC

Re: Visa Cash Advance for Noncustomer - 02/14/12 08:28 PM

MasterCard has the same non-discrimination mandate.

Rule 8.9.1 Nondiscrimination

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 officers where teller services are provided.


Your safeguards come from complying with MasterCard's card acceptance procedures found in Rule 8.3

The highlights are:

1.Compare first four digits of card number with the four digits prinited below the embossing.
2. Make sure the card is signed.
3. Request unexpired, photo, government issued identification and make sure that the signature on the ID matches the signature on the card.
4. Obtain a valid authorization for the amount of the advance request.
5. Have the cardholder sign the receipt. Retain a copy and provide a copy to the cardholder.

As long as your procedures are followed, all you have to do is provide a copy of the signed receipt to refute any fraud related chargebacks. (Think about how many chargebacks you lose because the merchant has a signed sales receipt. In the case of a cash advance, the bank is acting as the merchant.)
Posted By: becpet

Re: Visa Cash Advance for Noncustomer - 10/19/12 07:01 PM

If we determine that the signature on the back of a non-embossed card does not match the signature on the presented ID, what can we do then? Can we refuse to do the cash advance? If not, what should we do?

Also, what if it is an embossed card but the name embossed on the card does not match the ID presented? Do we have the right to refuse the transaction?
Posted By: BrianC

Re: Visa Cash Advance for Noncustomer - 10/19/12 07:23 PM

In both instances the bank would lose a Compliance Case if the transaction were determined to be fraudulent and the bank did not follow VISA's cash disbursement procedures.

Deny the transaction in both cases.
Posted By: low profile

Re: Visa Cash Advance for Noncustomer - 04/04/13 05:06 PM

We have signed an agreement to issue Visa debit cards and it is my understanding we must service non-customer MC/Visa cash advance requests. Are we permitted to charge a fee for this service?
Posted By: Skittles

Re: Visa Cash Advance for Noncustomer - 04/04/13 06:11 PM

No. Charging for cash advances is not permitted.
Posted By: cheech

Re: Visa Cash Advance for Noncustomer - 02/14/14 01:31 PM

Can the banks set a limit for both non-customer and customer cash advances? Such as $5,000 per person per day?
Posted By: 2Confused2go on

Re: Visa Cash Advance for Noncustomer - 02/24/14 05:50 PM

Can the banks set a limit for both non-customer and customer cash advances? Such as $5,000 per person per day?
Posted By: RockChucker, CAMS

Re: Visa Cash Advance for Noncustomer - 02/24/14 07:19 PM

If you do set a limit it has to be the same for both customers and non-customers
Posted By: SSBStephanie

Re: Visa Cash Advance for Noncustomer - 02/26/14 10:27 PM

Also, if you are only under the Visa agreement (you don't have any Mastercard relationships) you are only required to do cash advances for Visa.
Posted By: Elwood P. Dowd

Re: Visa Cash Advance for Noncustomer - 02/27/14 01:37 PM

If your bank is not a party to a contract with MasterCard then you do not have to abide by the terms of their contract with other banks.
Posted By: carad

Re: Visa Cash Advance for Noncustomer - 03/26/14 08:23 PM

Originally Posted By: Skittles
No. Charging for cash advances is not permitted.


I thought that charging for cash advances was only prohibited in certain states. Is that correct?
Posted By: Derwood

Re: Visa Cash Advance for Noncustomer - 03/26/14 11:41 PM

carad - That is not correct. The prohibition on charging fees for completing a cash advance is part of the operating rules for both Visa & Mastercard. They are the ones who do not permit it.
Posted By: carad

Re: Visa Cash Advance for Noncustomer - 03/27/14 08:13 PM

Okay thank you
Posted By: cheech

Re: Visa Cash Advance for Noncustomer - 04/21/14 12:11 PM

If we only have a VISA contract can we charge for MasterCard, Discover and American Express? Can we refuse the same if we cannot charge?
Posted By: rlcarey

Re: Visa Cash Advance for Noncustomer - 04/21/14 12:22 PM

If you don't have a merchant contract for those branded cards, how can you even accept them???
Posted By: cheech

Re: Visa Cash Advance for Noncustomer - 04/21/14 12:34 PM

We have only been able to find the Visa contract. It may be in with the machine contract, we are not sure.
Posted By: SmallBank2

Re: Visa Cash Advance for Noncustomer - 05/01/14 05:05 PM

We issue Visa debit cards through a third party vendor. CO says this does not apply to our bank - is that accurate?
Posted By: Kathleen O. Blanchard

Re: Visa Cash Advance for Noncustomer - 05/01/14 05:21 PM

Check your vendor agreement. It should say that the bank will comply with all Visa operating rules. This topic is covered in the operating rules.
Posted By: Lele

Re: Visa Cash Advance for Noncustomer - 08/14/14 07:54 PM

Good information. The question I have is do we have to do cash advances at all? What if we just don't offer this service?
Posted By: manimal

Re: Visa Cash Advance for Noncustomer - 08/14/14 08:51 PM

See the very first few posts... if you offer a branded card you must offer cash advance services.
Posted By: Milby

Re: Visa Cash Advance for Noncustomer - 08/18/14 03:09 PM

True, but you can set a limit. The limit has to be applied equally to everyone (customer and non-customer). Put your limit at $1 and no one will ask for you to complete one.

But... if your people follow procedures, there is little/no risk to doing a cash advance. I wouldn't put much effort into this when it is not likely a common occurrence. I would imagine that most branches do less than one per month.
Posted By: Kathleen O. Blanchard

Re: Visa Cash Advance for Noncustomer - 08/18/14 03:10 PM

Originally Posted By: milby
True, but you can set a limit. The limit has to be applied equally to everyone (customer and non-customer). Put your limit at $1 and no one will ask for you to complete one.


Do you really feel that is complying with operating rules in good faith?
Posted By: Milby

Re: Visa Cash Advance for Noncustomer - 08/18/14 03:16 PM

Does Visa or Mastercard have a rule regarding limits? Let's see it if they do. As far as I recall, I have the ability to set a limit for cash advances. If they don't like it, they should have set a minimum for limits I can impose. If they ever do so, I address it then.
Posted By: Milby

Re: Visa Cash Advance for Noncustomer - 08/18/14 03:17 PM

And what do you feel is in good faith? $5,000? $1,000? $500? In good faith, I don't want my customers to pay predatory fees for cash advances. $1 seems reasonable in that regard.
Posted By: BrianC

Re: Visa Cash Advance for Noncustomer - 08/18/14 03:32 PM

From MasterCard Cash Advanced Processing Rules

Maximum Cash Disbursement Amounts
A Customer and each of its authorized cash disbursement agents may limit the amount of cash provided to any one Cardholder in one day at any individual office. Such limit may not be less than USD 5,000 per Cardholder in one day and uniformly must be applied to all Cardholders.
If compliance with this Rule would cause hardship to one or more (but not all) of such individual offices that are required or permitted to provide cash disbursement services, the Customer may establish a maximum cash disbursement amount of less than USD 5,000 per person in one day at each such office, provided that the maximum cash disbursement amount:
1. Is not less than USD 1,000;
2. Is not less than the maximum cash disbursement amount established for any other acceptance brand at the office; and
3. Applies only at those offices where the Customer can, if requested by MasterCard, demonstrate that a higher maximum would create a hardship.

Similarly, the limit you can impose on a VISA card would also be $5,000. Both card brands prohibit surcharges on cash advances.
As far as "dealing with VISA/MC" should they come to call, compliance violation fines start around $15,000 per violation or $1,000 per occurrence. Consider the risks of willfully violating your contract with VISA/MC before you take that step.
Posted By: BetsyS

Re: Visa Cash Advance for Noncustomer - 08/20/14 07:35 PM

From Visa's Operating 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.

Acquirer Minimum Manual Cash Disbursement Amount - U.S. Region
A U.S. Acquirer must not establish a minimum Manual Cash Disbursement amount.
Posted By: Kompliance

Re: Visa Cash Advance for Noncustomer - 06/29/18 05:27 PM

I'm going to wake this thread back up smile

We have always followed the VISA rules to provide cash advances to customers and non-customers alike, however, recently we have come across a situation that seems to be out of the ordinary.

A former customer had his deposit account charged off to Chexsystems because of overdrafts that he never repaid. But he still comes in every month to obtain a cash advance on his government benefits card. Are we allowed to refuse this transaction until he repays us his charged off debt? My gut feeling says no, but it seems ridiculous that we can refuse virtually any other bank product service for unpaid debt, but not this?
Posted By: BrianC

Re: Visa Cash Advance for Noncustomer - 06/29/18 06:52 PM

Your gut feeling is correct. You violate your contract with VISA if you refuse service. Also, since your deposit contract terminates when you charge off the account, (and these are government benefit) you have no setoff rights to grab the funds from the advances.
Posted By: Andy_Z

Re: Visa Cash Advance for Noncustomer - 06/29/18 09:46 PM

I think of it this way, the Visa agreement is separate and imposes certain requirements the bank agreed to. It has nothing to do with the charged off DDA. While you do not have the ability to setoff these funds or refuse services, 1) at least you're making something off the customer in fee income, and 2) when the person is there, you could have a banker speak with them about their account. I would do that away from the teller line. You might just be able to work out some arrangements assuming the account is still collectible.
Posted By: Kompliance

Re: Visa Cash Advance for Noncustomer - 07/02/18 05:36 PM

Thank you for the responses! At least I feel now that I have an easily explainable answer for the front line staff dealing with this former/non-customer.