Operating Guide For Merchant Card Processing V6-0915 | TSYS

OPERATING GUIDE FOR

MERCHANT CARD PROCESSING

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Table of Contents

1.

Operating Procedures....................................................................................... 1

a.

Introduction........................................................................................ 1

b.

General Card Acceptance Guidelines ...................................................... 1

2.

Definitions...................................................................................................... 9

3.

VISA Program Requirements........................................................................... 21

a.

Required Information........................................................................... 21

b.

Payment Service Providers.................................................................... 21

c.

Display of Marks and Acceptance Signage................................................ 22

d.

Honoring Cards................................................................................... 23

e.

Discounts at Point of Sale...................................................................... 24

f.

Convenience Fees and Surcharges....................................................... 24

g.

Prohibitions......................................................................................... 24

h.

Chip Card Acceptance...........................................................................25

i.

Merchant Use and Disclosure of BIN Information........................................ 25

j.

Disclosure and Storage of Transaction Information..................................... 25

k.

Cardholder Identification........................................................................26

l.

Authorizations......................................................................................28

m.

VisaNet Copy Request and Fulfillment Service........................................... 32

n.

Account-Number-Verifying Terminal.........................................................33

o.

Card Recovery.....................................................................................33

p.

Transaction Receipt Completion.............................................................. 33

q.

Transaction Receipt Delivery to Cardholder............................................... 34

r.

Transaction Receipt Deposit...................................................................35

s.

Credit Refunds.................................................................................... 35

t.

Returned Merchandise, Cancellation, and Adjustments................................ 36

u.

Electronic Commerce............................................................................36

v.

Special Merchant Card Acceptance Services............................................. 38

w.

Clearing and Settlement........................................................................ 52

4.

MasterCard Program Requirements.....................................................................53

a.

Display of Marks and Acceptance Signage................................................ 53

b.

Responsibility for Transactions................................................................54

c.

Cardholder Identification........................................................................54

d.

Electronic Commerce Transactions..........................................................54

e.

Scrip-dispensing Terminals ....................................................................54

f.

Prohibited Practices.............................................................................. 54

g.

Illegal or Brand-Damaging Transactions....................................................55

h.

Authorizing Transactions........................................................................55

i.

Submitting Transactions........................................................................ 55

j.

Account, Cardholder, Transaction, and Merchant Information........................ 55

k.

Transaction Processing at POS ..............................................................56

5.

VISA and MasterCard Surcharge Rules................................................................ 57

a.

Definitions.......................................................................................... 57

b.

Brand-level Surcharging........................................................................ 57

c.

Product-level Surcharging...................................................................... 58

d.

Requirements for Merchant Disclosure of a Surcharge at the POI.................. 59

e.

Notice of Brands.................................................................................. 59

f.

Surcharge Transaction Receipt............................................................... 59

6.

Discover Program Requirements......................................................................... 60

a.

Use of Discover Program Marks.............................................................. 60

b.

Disclosure of Data and Information.......................................................... 60

c.

Use and Storage of Confidential Information............................................. 60

d.

Surcharges......................................................................................... 61

e.

Discover Card Checks...........................................................................61

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f.

Termination of Discover Card Acceptance................................................. 61

g.

Authorizations..................................................................................... 61

h.

Verification of Discover Card Expiration Date............................................. 63

i.

Card Identification Data (CID) ................................................................ 63

j.

Transaction Documentation................................................................... 64

k.

Cardholder Signature............................................................................ 63

l.

Submission of Sales Data...................................................................... 65

m.

Credit Transactions for Returns...............................................................65

n.

Payments from Cardholders................................................................... 66

o.

Card-Absent Environment Transactions.................................................... 66

p.

Special Circumstances/Industry Requirements........................................... 68

q.

Cash Advance Policies.......................................................................... 73

r.

Security Features & Risk/Fraud Management.............................................74

s.

Miscellaneous......................................................................................77

7.

American Express Merchant Requirements............................................................80

a.

Card Acceptance................................................................................. 80

b.

Prohibited Uses of the Card................................................................... 80

c.

Doing Business with American Express.................................................... 80

d.

Transaction Processing......................................................................... 81

e.

Authorizations......................................................................................91

f.

Submissions........................................................................................93

g.

Settlement.......................................................................................... 94

h.

Protecting Card Member Information.........................................................93

i.

Fraud Prevention................................................................................. 97

j.

Risk Management................................................................................100

k.

Disputed Charges, Chargebacks and Inquiries..........................................102

l.

Specific Industries...............................................................................102

m.

Arbitration Agreement (as to Claims involving American Express) ................106

n.

Treatment of the American Express Brand................................................107

o.

Treatment of the American Express Marks...............................................107

p.

Treatment of American Express Card Member Information...........................105

q.

Additional Definitions...........................................................................108

8.

PayPal Program Requirements..........................................................................110

a.

PayPal Acceptance............................................................................. 110

b.

Merchant Eligibility..............................................................................110

c.

Payment Service Providers...................................................................111

d.

Sharing and Use of Transaction Data......................................................112

e.

Merchant Roles and Responsibilities...................................................... 112

f.

Special Circumstances........................................................................ 115

g.

Settlement and Reporting.....................................................................119

h.

Disputes and Excessive Dispute Incidents............................................... 119

i.

Merchant and Noncompliance Fees....................................................... 120

j.

Fraud Prevention................................................................................ 121

k.

Merchant Support............................................................................... 121

l.

Confidentiality.................................................................................... 121

m.

Data Security.....................................................................................122

n.

Marketing and Branding........................................................................123

o.

PayPal Acceptance Marks.................................................................... 124

p.

General Terms and Requirements......................................................... 125

q.

PayPal Definitions...............................................................................127

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1. OPERATING PROCEDURES

a. Introduction.

This Operating Guide describes the procedures and methods for submitting Card Transactions for payment, obtaining Authorizations, responding to Chargebacks and media Retrieval Requests, and other aspects of the operations of our services.

Processor is a full-service financial transaction processor, dedicated, among other processing services, to facilitating the passage of Merchant's Transaction Receipts back to the thousands of institutions that issue the MasterCard, Visa, American Express, Discover and PayPal Cards carried by Merchant's customers. Capitalized terms used in this Operating Guide shall have the meanings given in either the Merchant Agreement or Section 2 of this Operating Guide.

The terms of this Operating Guide form a part of and are incorporated into the Merchant Agreement. Merchant Bank and Processor reserve the right to amend the terms of the Merchant Agreement and this Operating Guide as provided in the Merchant Agreement.

This Operating Guide focuses primarily on the MasterCard, Visa, American Express, Discover and PayPal operating rules and regulations. If Bank provides Authorization, processing or Settlement of Transactions involving Cards other than MasterCard, Visa, American Express, Discover and PayPal, Merchant should also consult those independent Card Issuers' proprietary rules and regulations.

If Merchant selects to accept Cards issued by any one or more of JCB or Diners Club (except for transactions made with Diners International Cards which also carry the MasterCard mark and are processed as MasterCard transactions) as payment options, Merchant understands and acknowledges that the Card Program services for such payment options are provided by the Card Issuer involved, and not Bank, and Merchant understands that Merchant's acceptance of any of those payment options may require execution of a separate merchant card acceptance agreement with those individual Card Issuers, as applicable, and that agreement will govern the completion, processing, settlement and other procedures relating to Transactions with those Card Issuers. If Merchant experiences problems with transmission or delivery of those Card Issuers' Transactions, Merchant will be obligated to contact the appropriate service provider(s) for service. Bank has no obligations with respect to the completion, processing, settlement and other procedures relating to Transactions with those Card Issuers.

b. General Card Acceptance Guidelines.

(1) The following Card acceptance guidelines are general in nature, and the detailed requirements set forth for certain types of Visa, MasterCard, Discover, American Express and PayPal Transactions as detailed in Sections 3-8 of this Operating Guide, will control over these general guidelines.

(2) Visa has released the Visa International Operating Regulations, which may be accessed at: . The provisions of the Visa International Operating Regulations are incorporated into this Operating Guide by reference.

(3) MasterCard has published a Rules Manual, which may be accessed at:

. The MasterCard Rules Manual provides Merchants with

MasterCard Standards applicable to Merchant acceptance of MasterCard Cards and Maestro Cards. A Merchant must at all times comply with MasterCard Standards. Bank may require a Merchant to adhere to additional and/or more stringent standards than MasterCard Standards require. The provisions of the MasterCard Rules Manual are incorporated into this Operating Guide by reference. Note, however, that the MasterCard Rules Manual does not reflect changes to the MasterCard Standards implemented since the date of publication of the MasterCard Rules Manual. In the event the provisions of the MasterCard Rules Manual conflict with the provisions of the MasterCard Standards or the Merchant Agreement (including this Operating Guide), the provisions of the MasterCard Standards and/or the Merchant Agreement, in that order, shall control.

(4) Discover has released the Merchant Operating Regulations, which may be obtained by contacting Processor. The Discover Merchant Operating Regulations provide Merchants with Discover requirements applicable to Merchant acceptance of Discover Cards. The provisions of the Discover Merchant Operating Regulations are incorporated into this Operating Guide by reference.

(5) American Express has released the American Express Merchant Operating Guide which set forth the policies and procedures governing acceptance of the American Express Card. They offer best practices, helpful tips, and available tools to assist merchants' businesses. The provisions of the American Express Merchant Operating Guide are incorporated into this Operating Guide by reference. The American Express Merchant Operating Guide is available from American Express online at merchantopguide.

(6) PayPal has published Operating Regulations for In-Store Checkout, which may be obtained by contacting Processor. The PayPal Operating Regulations provide Merchants with PayPal requirements applicable to Merchant acceptance of PayPal Cards. A Merchant must at all times comply with the PayPal Operating Regulations (other than Section 3 of such Operating Regulations). Bank may require a Merchant to adhere to additional and/or more stringent standards than the PayPal Operating Regulations require. The provisions of the PayPal Operating Regulations are incorporated into this Operating Guide by reference. In the event the provisions of the PayPal Operating Regulations conflict with the provisions of the Merchant Agreement (including this Operating Guide), the provisions of the PayPal Operating regulations and/or the Merchant Agreement, in that order, shall control.

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(7) Verification of Validity of Card. The first step in safely accepting a Card is to verify that the Card is valid. Merchant should examine every Card presented to verify that it has valid MasterCard, Visa, Discover, American Express or PayPal card features.

(a) Visa.

Card Account Number ? The Account Number starts with the number 4. The first four digits match the BIN.

Embossing extends into the hologram.

Bank Identification Number (BIN) is printed under the embossed Account Number. Matches the first four digits of the

account number.

Signature Panel ? "Visa" is repeated on the back of the Card. Account Number and the Card Verification Value

(CVV2) are indent-printed on panel in reverse italic type.

Hologram ? Depicts a dove in flight. Should reflect light and change as Merchant rotates the Card. Visa Logo ? Features taller letters and brighter gold and blue colors. Microprinting borders the logo. Security Character ? Is embossed to the right of the valid dates. Product Symbol ("B" "C" or "P") is embossed to the

left of security character on some Cards.

(b) MasterCard.

Card Account Number ? The Account Number starts with the number 5. Embossing extends into the hologram. Signature Panel ? "MasterCard" is repeated on the back of the Card. Account Number and Card Validation Code 2

(CVC2) are indent-printed on panel in reverse italic type.

Hologram ? Depicts three-dimensional globes. "MasterCard" is printed repeatedly in background. Should reflect light

and change as Merchant rotates the Card.

MasterCard Logo ? Features larger letters, black outlines behind white letters, and fewer lines joining circles. Security Character ? Is embossed to the right of the valid dates.

(c) Discover.

Signature Panel ? "Discover" is repeated on the back of the Card. The Account Number is followed by the Card

Identification Data (CID).

Hologram ? Depending on the date of issuance, will feature either (i) a three-dimensional hologram, bearing a distinct

circular shape and images of a globe pierced by an arrow, water, and stars on a repetitive pattern background on the front of the Card, or (ii) a three-dimensional holographic design that is incorporated into the magnetic stripe.

Discover Logo ? Features capitalized letters of either DISCOVER or DISCOVER NETWORK (depending on the date

of issuance), in ultra-violet ink which will appear when held under ultraviolet light.

(d) American Express. Merchants must look for the following:

Pre-printed Card Identification (CID) Numbers usually appear above the Card Number, on either the right or the left

edge of the Card.

All American Express Card Numbers start with "37" or "34." The Card Number appears embossed on the front of the

Card. Embossing must be clear, and uniform in sizing and spacing. Some Cards also have the Card Number printed on the back of the Card in the signature panel. These numbers, plus the last four digits printed on the Charge Record, must all match.

Merchants do not accept a Card outside the Valid Dates. Only the person whose name appears on an American Express Card is entitled to use it. Cards are not transferable. Some Cards contain a holographic image on the front or back of the plastic to determine authenticity. Not all

American Express Cards have a holographic image.

Some Cards have a Chip on which data is stored and used to conduct a Charge. The signature on the back of the Card must match the Card Member's signature on the Charge Record, and must be

the same name that appears on the front of the Card. The signature panel must not be taped over, mutilated, erased or painted over. Some Cards also have a three-digit Card Security Code (CSC) number printed on the signature panel.

(e) PayPal.

The PayPal Payment Card is valid when it has the PayPal logo on the front and the following mandatory features on

the back: PayPal Account Holder name; Last 4 digits of the Account Number printed on the PayPal Payment Card; Valid thru mm/yy date; and Tamper proof signature panel.

The design and layout of information on the card may vary over time, but the mandatory features listed above will

always be available on the PayPal Payment Card.

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