Paying/Returning Debit Card Transactions

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Question:

Where can we find information about paying/returning debit card transactions? Would we have to find out from MasterCard? Management wants something in writing about why we have to pay those when a customer is already in the negative. They are worrying that we could pay something over our legal lending limit and then get in hot water with our regulators.

Answer:

Answer by Randy Carey:If a debit card payment is authorized at the point of sale, the bank has no return rights under the Visa or MasterCard rules solely due to the fact that the transaction might overdraw the account at the time of presentment. If you are only feeding available balances into your card system, this should limit your exposure. I can't imagine a debit card transaction that would be large enough to jeopardize a legal lending limit.

Answer:

Answer by John Burnett:If the debit card transaction is PIN-authorized, your network contract makes you responsible for the transaction, too.

First published on BankersOnline.com 4/19/10