In response to the unprecedented circumstances related to the COVID-19 pandemic, payment networks (Visa, MasterCard, etc.) have postponed some proposed policies, rules, and fee changes which can affect credit card acceptance activities. Learn more below.


Postponed Fee Changes from Card Networks

In response to the unprecedented circumstances related to the COVID-19 pandemic, payment networks (Visa, MasterCard, etc.) have postponed some proposed policies, rules, and fee changes which were communicated in the Merchant Services Summer Newsletter.

  • Visa has delayed the U.S. interchange fee restructuring until April, 2021. Visit Visa’s COVID-19 response update for further details
  • Mastercard and Discover will postpone upcoming effective dates for interchange and processing rule changes from April 18, 2020 to July 18, 2020
  • American Express has not communicated any pricing or rule changes

A Cleaner Payment Environment

COVID-19 has raised community awareness around limiting exposure to publicly contacted surfaces and emphasized the importance of proper hygiene practices. Point-of-Sale (POS) merchants are encouraged to clean and disinfect their card reader terminals, kiosks, and vending machines frequently.

Tips for a cleaner payment experience:

   Do

  • Turn off terminal and disconnect it from the power source before cleaning
  • Use cleaners with 70% - 90% strength Isopropyl alcohol to clean the terminal
  • Apply the disinfectant to a soft cloth before cleaning the terminal, or use a disinfecting wipe
  • Wipe down terminal surfaces and pay careful attention to the keypad, display, and anywhere that might be touched

   Do not

  • Attempt to perform any service, adjustments, or repairs on the terminal
  • Use abrasive cleaners or solvents that can harm rubber parts and damage the terminal
  • Spray cleaning solution directly on the terminal
  • Allow any disinfectant or water into the terminal’s openings where cards are dipped or swiped, or where cables connect

Contactless Payments

COVID-19 is driving the demand for payments that reduce physical contact at the point of sale. More merchants are accepting contactless payments now than before the outbreak. The good news for Stanford is that our EMV capable Point-of-Sale (POS) terminals can already process contactless payments using Near Field Communication (NFC) technology. Both contactless card and mobile wallet enabled smartphones communicate payment information directly when hovering closely over the NFC-enabled POS terminals. Benefits of contactless payments:

  • Fast: Enables faster and more convenient transactions
  • Secure: Transactions are protected by encryption technology and minimize fraud
  • Safe: Avoids physical contact with the POS device

Preventing Double Refunds

Review Topic Overview: Issuing Refunds to Credit and Debit Cards for more information.

Double refunds mean a customer is provided with two refunds for the same transaction. It also means double the revenue loss when a merchant encounters either one of the situations:

  • Chargebacks are filed after a refund is issued. The customer contacts the merchant to request a refund. The merchant honors the request, but the funds are not returned immediately. The customer thinks the refund request was ignored and files a chargeback. Both the chargeback and the refund are processed, meaning the customer gets twice the amount of money.
  • Chargebacks are filed before a refund is issued. The consumer contacts the bank to initiate a chargeback. Then, the consumer contacts the merchant and expresses dissatisfaction. To try to appease the customer and avoid a chargeback, the merchant provides a refund. However, the merchant is unaware of the fact that a chargeback has already been filed.

Recommendations to help prevent double refund situations:

If a chargeback is illegitimate, and a refund was not warranted, then the merchant should deny the refund request as well as take note of the case number and watch for the chargeback to dispute it when it arrives.

If a chargeback results from a valid consumer complaint, then the merchant should accept the chargeback as a loss.

If the merchant issues a refund, but the customer files a chargeback anyway, then the chargeback can be disputed. The merchant simply needs to prove to the issuer that a refund has already been processed.


Refund Approval Process

Due to the pandemic, shelter-in-place orders have led to a myriad of canceled programs and events. This created a historically high demand for refunds. Refund fraud is always a risk and the influx of activity has seen a corresponding rise in new fraud reports. Now is a good time for merchants to take a moment to verify and ensure your refund process is documented and meets current internal controls.
 
The process must include a separation of duties between staff approving refunds. A higher level of authority must approve each refund processed. The approver should confirm that the refund is valid, check the amount, and that the intended individual cardholder is correct and appropriate. In addition, proper supporting evidence of the refund must be documented and maintained according to university record retention policy.
 
Examples of actions that may lead to refund fraud often occur when a customer requests a refund to be made to:

  • A personal card instead of the corporate card originally used
  • A different person instead of the original cardholder
  • A different payment method such as check or wire instead of card

Preparing for Reopening

Here are some guidelines to help merchants prepare for campus reopening this Fall.

  • Examine each POS terminal thoroughly to look for possible tampering or substitution
  • Verify POS terminals are ready to process sales:
    • Perform the required updates when the devices are powered on
    • Reconfigure customer signature options
    • Run a test transaction to ensure the device is functioning properly
  • Consider installing a stand with a transparent physical barrier at the checkout
  • Review receipt management procedures and offer email/text receipt options if possible
  • Provide hand sanitizers or wipes for customers to use wherever key touch is unavoidable
  • Encourage “contactless” payments wherever possible
  • Do not place overlays (e.g. plastic wrap) around the devices for protection as it can result in skimming fraud
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