PIN transactions thru Visa

Posted By: CAKE

PIN transactions thru Visa - 08/10/12 05:03 PM

It used to be that if a debit card transaction was signature, it followed the Visa rules and a pinned transaction fell under the guidelines of Reg E. Since pinned transactions are now being routed through Visa, would a cardholder dispute fall under the Reg E rules or the Visa requirements?
Posted By: bankinginky

Re: PIN transactions thru Visa - 08/10/12 06:03 PM

It is my understanding that if the transaction routes through Visa, even if pinned, Visa rules apply. If the transaction is routed through a network such as NYCE or PULSE, Reg E would apply.
Posted By: Derwood

Re: PIN transactions thru Visa - 08/10/12 06:12 PM

If it meets the definition of an "Electronic fund transfer” as defined in § 1005.3. of Reg E a debit card transaction whether pinned or signature based is covered by Reg E. It is also covered by the rules governing whichever network the transaction was processed through. The Reg E coverage does not cease due to the transaction being subject to Visa (or any other network) rules, those rules are in addition to the Reg E coverage.

In some cases the network rules are even more consumer friendly than Reg E and in those cases the network rules should be followed.
Posted By: BrianC

Re: PIN transactions thru Visa - 08/10/12 06:16 PM

Actually, for PIN transactions routed through VISA, both Reg E and VISA rules would apply. In the event there is a conflict between these rules, the more consumer friendly rule wins.

For example, Reg E allows you to take 10 business day prior to providing provisional credit, but VISA requires provisional credit in 5 business days. The more friendly rule is 5 so you comply with both requirements by providing credit in 5.

Reg E allows you to withold $50 of the provisional credit in the case of a lost/stolen card, VISA provides Zero Liability protection. Again, VISA is more consumer friendly and you must provide the Zero Liability coverage.

Reg E requires that your investigation be completed in 90 calander days. VISA has no time limit on your investigation. Since Reg E is more consumer friendly, you must follow its investigation schedule.
Posted By: Carolina Fan

Re: PIN transactions thru Visa - 08/10/12 09:30 PM

Slightly off topic - but I've noticed more of our PIN transactions routing through Visa at lower interchange than through Star or NYCE. Can somebody point me to where this is permitted? I was under the impression that PIN routed through a PIN network, and non-PIN routed through Visa (assuming the card is Visa branded). Thanks.
Posted By: Derwood

Re: PIN transactions thru Visa - 08/10/12 10:00 PM

Visa has had the ability to handle pinned transactions for some time including but not limited to their Check Card II product that is being eliminated.

The Visa Spring 2012 Release documentation stated that “All Visa debit issuers and processors must be capable of validating and authorizing PIN-authenticated Visa debit (PAVD) transactions,” including point-of-sale (POS) transactions, as of April 13, 2012.
Posted By: BrianC

Re: PIN transactions thru Visa - 08/10/12 10:01 PM

VISA has it's own PIN network in addition to its signature based network. If you have that gateway available on your card, the merchant is free to use it.

Reg II requires that you have two unaffiliated networks available on your card (one signature and one PIN.) It also gives the merchant the right to route a transaction down the network that has the lowest interchange rate.

See Reg II 235.7 and the commentary to follow
Posted By: Carolina Fan

Re: PIN transactions thru Visa - 08/13/12 09:49 PM

Thanks. I had missed that and appreciate the specifics.