VISA/MC Cash Advance

Are banks required to provide cash advance services? We are looking into stopping our cash advance service for all customers and non-customers due to some operational issues. I know we can't charge a fee to do one but wasn't sure if we are required to provide the service.

Agreements with credit card companies (Visa, Mastercard) require financials to provide these services. So if you have an agreement with a credit card company, you are most likely required to do cash advances for customers and non-customers.

I tried to get us out of the cash advance business recently. Unfortunately, our agreement with VISA to provide branded debit cards requires that we offer cash advance services. Our account representative told us all of their agreements require that.

So if I have MasterCard debit cards, I can refuse to do VISA advances but not MC advances?

I know this is an old post, but we are dealing with the same question. If we offer Visa and our agreement is with Visa, are we required to do cash advances on Mastercards. I am being told the H & R Block refund cards are Mastercards and we offer Visa. It is noncustomers who are coming in with MC wanted CA for $5,000 +. Can we refuse?

If you don't have a merchant agreement with and don't take Mastercards, you don't take Mastercards.

No, No, a thousand times no. Even though you issue only Visa cards, the fact that you are able to do MC cash advances means you have a contract with MC through your service provider or you have agreed to abide by MC cash advance rules.

MC does not allow you to discriminate against non customers in providing cash advances. You can't refuse (although there are some provisions allowing you to limit the dollar amount you'll advance if you can't handle the cash volume), and you can't charge a fee.

There's always the good ol' "Sorry, our machine is out of order" routine.

I hope you're joking.

Why? Who cares what Visa, MC, Walmart, Target want?

I think management will care when VISA/MC/etc. cancels your FI's contract and you no longer can offer branded cards.

I would not be wasting any time on responding to such posts by an ignoramus ----err, I mean an anonymous poster.

I'll admit to being ignorant (thus, an ignoramus) of any measurable risk that Visa or MC is going to both a) detect such a practice and b) yank a contract as a result.

Yes, Lord forbid you offer actual banking services to members of your bank's community, whether contractually bound or not.

Hopefully a mod will lock this thread since the original question was asked and answered.

And such is the state of the world in which contractual obligations can be ignored at will for individual purpose or gain. And we wonder why the banking world is so highly regulated.

I think an argument could be made though that:

We have a "Cash Advance" system at our bank. For our customers, we probably process ONE (or less) per month. On the flip side, we are located in a very suburban area and process 30-40 per month for NON-customers. We've tried the old tactic of "you should open an account here" but truth be told, 90% wouldn't qualify for an account. We've tried the "have you used our ATM for a cash advance" but they either don't want to pay the fee, or don't have a PIN number.

The end result is we as tellers are taken away from helping our customers when helping these non-customers. And anyone that has processed a cash advance knows it's not just a 2 minute transaction.

It sucks. We HATE it. I'd love to get rid of the Cash Advance machine altogether. But it's the price of doing business. So we smile and grumble and advance.

Since H&R Block cards where mentioned, we have refused to complete a cash advance for both customers and non-customers, as there is no way to identify who is the owner of the card. The card is simply made out to H & R Client. I feel that we do not have a problem refusing to provide cash advances on these cards since there is no possible way to know who the card was issued to. Does anyone see a problem with this practice?

Unfortunately you are incorrect. You must treat these cards as you do any other. I'm sure Brian or someone will add to this with further details.

http://www.hrblock.com/financial-services/emerald-card-services/

Save Money and Avoid Fees

Make purchases, pay bills114 and get cash at ATMs.117 No setup fee, no monthly activity fee, no overdraft fee, no fees on purchases, or customer service calls. Keep more of your hard-earned money to use on whatever you want.

There seems to be some issues with their website as well after clicking on avoid fees they list fees including to add money at a bank but it does not specify which bank.

If you can not determine who the card is payable to send them back to block to get a card in their name. You can always tell them to review their fees on the card for a cash advance over the counter(@ 25.00 for a cash advance that will stop most).

How can you process a cash advance with no name on the card?

I do not have much experience with this but we were always instructed to get ID for cash advances.

I'm hardly a Visa/MC expert, but it seems very risky to approve a large cash advance if I cannot link the card to the individual standing at the teller line.

If I'm mistaken, can someone please point out where I should be looking?

If this is the same item.

For Merchants

http://www.mastercard.com/ca/merchant/en/solutions/unembossed.html


How Does it Work?

You should not process any MasterCard Unembossed transactions if you do not have an electronic terminal, or if it is out of use. If you accept a MasterCard Unembossed transaction and you do not have an electronic terminal, or it is out of use; you may carry additional liability. MasterCard Unembossed cards include an “ELECTRONIC USE ONLY” legend on the card front to inform consumers that merchants will be processing their transactions using their electronic terminals.

ww.visa.ca/merchant/products-and-services/prepaid-cards/prepaid-faq.jsp

Where can unembossed Visa Prepaid cards be used?

They may be used at any Visa merchant location worldwide that has an electronic terminal. Where no online-capable electronic terminal exists, or where an online authorization is not available (e.g., parking lot, movie kiosk), use of the Visa Prepaid card is not possible. If a merchant without an electronic terminal manually key-enters the transaction, the merchant runs the risk of receiving a "Missing Imprint" or "Card Not Present" chargeback.

Click Here

See this thread from last year.

Thank for posting the link Skittles. If I understand this correctly, a non-customer comes in for a cash advance, as an FI that is offering MC branded debit cards, we must provide the cash advance, but can require the non-customer to provide a photo ID?

Card Agreement
Using your Card
. Each time you use your Card, you authorize us to reduce the value available on your Card by the amount of the transaction plus applicable fees. You may use your Card to purchase or lease goods or services wherever MasterCard debit cards are accepted as long as you do not exceed the daily transactional limit on your Card. You are responsible for all authorized transactions initiated by use of your Card. If you permit someone else to use your Card or Card number we will treat this as if you have authorized such use and you will be responsible for any transactions made by that person. If you use your Card number without presenting your Card (such as for a mail or telephone, or Internet purchase), the legal effect will be the
same as if you used the Card itself. Your Card cannot be redeemed for cash.
You may use your Card to access cash at an ATM, except it may not be used at ATMs located outside the United States. You may not use your Card for any illegal transaction. You are not allowed to exceed the available amount on your Card through an individual transaction or a series of transactions

http://www.hrblock.com/bank/pdfs/card_account_terms_and_conditions.pdf

What good would that be if you can not determine who the card belongs to?

I do not get this process but I do not believe that these cards are debt cards as they appear to be a prepaid access card.

^ I agree Ed. It makes no sense to me. I didn't get a chance to review our contract with MC yet, but if we are obliged to offer this service, I'm not comfortable with refusing to honor our contract.

I would not be comfortable with refusing or granting at this point but prepaid and debit cards have different requirements.

Waiting for Brian to chime in.

Not Brian but I'll chime in.

The Mastercard Manual Cash Disbursement Acceptance Procedures do not require you to check the name on a card. The instructions are to verify the first four and last four digits of the cardnumber, the photograph on the card (if any), that the card is signed, and request personal, unexpired identification that bears the cardholders signature and photograph and compare that signature with the one on the card.

It is the matching signatures that identify who has the right to use the card which is why you should always sign your card.

As far as the H&R Block cards not being redeemable for cash that would be set up on the issuer side by blocking transactions coded as cash disbursements. It is not the merchants job to know if the type of transaction is allowed on any particular type card.

Just wondering.... The banks that charge a teller fee, do they also charge that on cash advance customers?

Short answer is no - it isn't allowed by the Visa or Mastercard on manual cash disbusrment transactions. If you click on the link Skittles provided earlier in this thread the topic of surcharges is covered in that discussion.

Just to add my two cents to Derwood's posts. You generally won't find cash advance information directly in your Visa or MC contracts; you most likely will find language binding you to their Operating rules. A search through those will provide you the information you need on issues such as acceptance and surcharging.

Good to know I was missed. I've been at Top Gun in sunny Scottsdale all week, but I am back to reality in Illinois. A portion of my webinar The Maze of Debit Card Compliance will touch on cash advances. VISA/MC both have non-discrimination clauses in their operating rules you must provide cash advances to all VISA/MC branded cards regardless of customer/non-customer, embossed/unembossed. As has been stated. certain prepaid cards may not be able to be used at an ATM or to perform a cash advance, but this is restricted by the issuer, not the acquirer.

Brian,
Could you clarify if "unembossed" also includes cards without a printed name? We are having customers bring in cards without any name at all on the card and request a cash advance.

superlinda

Unembossed does include cards without a printed name. As is noted in previous posts, for cards without a printed name you still request photo ID, compare the signature to the back of the card and obtain a valid authorization using your card terminal. If you obtain a valid authorization and have the cardholder sign the sales receipt, you are protected from any fraud related chargebacks.