Insights

‘No Signature Required’ Programs Expand

In an effort to increase the number of “Small Ticket” and “Quick Service” merchants and increase overall card usage, card networks are expanding the “No Signature Required” (NSR) programs while offering chargeback protection for these transactions. According to a Visa survey, “69 percent of participants surveyed cited either convenience or speed as the primary reason for using their credit or debit card.” Increased convenience by not having to sign for a transaction leads greater card usage and faster checkout for the consumer. This convenience is also enjoyed by merchants and card networks through increased transactional revenue.Visa and MasterCard estimate that about 98% of card present transactions in the U.S. are initiated while customers are standing in the checkout lane. These online authorizations, coupled with advanced fraud detection technologies, are allowing the card associations to lift signature requirements for most low-value sales. The card associations have not seen any increase in fraud as a result of the NSR programs.

Visa, MasterCard, Discover and American Express state that at least 29% of all transactions that occur at the point of sale in the U.S. will soon qualify for no signature required programs. As a merchant, if you are interested in taking advantage of these programs, contact your payment processor, and work with your IT staff to implement receipt “signature suppression” within your point-of-sale systems.

Here are the latest available rules by card network:

VISA

Effective July 1, 2010, Visa will expand its No Signature Required program from 26 merchant segments to about 98% of 800+ merchant segments in the U.S.

  • Transactions must be on U.S. issued cards of $25 or less from eligible MCCs (Merchant Category Codes)
  • Card must be magnetic swiped or contactless…face-to-face environment (or unattended environment if $15 or less)
  • Transaction receipt does not need to be given to customer unless requested
  • Excluded industries include:
    • Wire Transfer Money Orders
    • Automated Fuel Dispensers
    • Most Direct Marketing Firms
    • Most Financial Institution Transactions
    • Intra-Government Purchase
  • Transactions that meet these characteristics will qualify for chargeback protection under reason codes 60 (Requested Copy Illegible or Invalid), 79 (Requested Transaction Information Not Received), and 81 (Fraudulent Transaction – Card Present Environment)
  • Visit http://usa.visa.com/download/merchants/visa-programs-low-dollar-transactions.pdf for additional information

MASTERCARD

Effective April 16, 2010, MasterCard added 12 more MCCs to their Quick Payment Service (QPS) program. Here are the details of the QPS program:

  • Transactions must be on U.S. issued cards up to the limit and industries noted in the table below
  • Card must be magnetic swiped or contactless in a face-to-face environment
  • Transaction receipt does not need to be given to customer unless requested
  • Transactions that meet these characteristics will qualify for chargeback protection under reason codes 01 (Non receipt of requested item), 02 (Illegible Item), and 37 (No cardholder authorization)
  • Visit http://www.mastercard.com/us/merchant/solutions/quick_pay_service.html for additional info
  • Eligible MCCs include:
MCC MCC Description

Chargeback Limit

5411 Grocery Stores, Supermarkets

$25.00

5735 Record Shops

$25.00

5942 Book Stores

$25.00

5994 News Dealers and Newsstands

$25.00

7216 Dry Cleaners

$25.00

7841 Video Entertainment Rental Stores

$25.00

7738 Quick Copy Service

$25.00

7542 Car Washes

$25.00

4121 Limousines and Taxicabs

$50.00

5541 Service Stations (with or without Ancillary service)

$25.00

5499 Miscellaneous Food Stores—Convenience Stores, Markets, and Specialty Stores

$25.00

5814 Fast Food Restaurants

$25.00

4131 Bus Lines

$25.00

4784 Bridge and Road Fees, Tolls

$25.00

9402 Postal Services—Government Only

$25.00

5912 Drug Stores, Pharmacies

$25.00

7523 Automobile Parking Lots and Garages

$50.00

7832 Motion Picture Theaters

$35.00

4111 Transportation—Suburban and Local Commuter, Passenger, including Ferries

$25.00

4112 Passenger Railways

$25.00

DISCOVER

Effective October 2009, nearly all merchants have been allowed to participate in Discover’s NSR program. Here are the details of the NSR program:

  • Transactions must be on U.S. issued cards of $25 or less for most MCCs excluding money transfers, lottery tickets, and cash advances
  • Card must be magnetic swiped or contactless in a face-to-face environment
  • Transaction receipt does not need to be given to customer unless requested
  • Transactions that meet these characteristics will qualify for chargeback protection under reason codes IS (Missing Signature – Processing Error Dispute), UA11 (No Signature – Swiped Card Transaction – Fraud Disputes)

AMERICAN EXPRESS

American Express also has a NSR program similar to the rest of the networks for transactions less than $25. Here are the limited details available for this program:

  • Transactions must be on U.S. issued cards of $25 or less for most MCCs
  • Card must be magnetic swiped or contactless in a face-to-face environment
  • Transaction receipt does not need to be given to customer unless requested

 

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