1. 1. PA-DSS: Ensures merchant POS (point of sale) systems are compliant. 2. ii. (1) An issuer subject to this part shall retain evidence of compliance with the requirements imposed by this part for a period of not less than five years after the end of the calendar year in which the electronic debit transaction occurred. 2. The exemptions under 235.5 for small issuers, cards issued pursuant to government-administered payment programs, and certain reloadable prepaid cards do not apply to the limitations on payment card network restrictions. Except to the extent that enforcement of the requirements imposed under this title is specifically granted to another government agency under paragraphs (a)(1)(i) through (a)(1)(iv) of this section, and subject to subtitle B of the Consumer Financial Protection Act of 2010, the Federal Trade Commission has the authority to enforce such requirements. In light of an issuer's review of its policies and procedures, and their implementation, the issuer may determine that updates to its policies and procedures, and their implementation, are necessary. (a) In general. Except as provided in paragraph (a)(4)(ii) of this section, for purposes of determining eligibility for the exemption for small issuers described in paragraph (a)(1) of this section, issuer asset size that is calculated as of the end of the calendar year 2020 shall be determined based on the lesser of: (A) The assets of the issuer, together with its affiliates, as of the end of the calendar year 2019; and. Show 2. ." The final rule will encourage competition between networks and incentivize them to improve their fraud-prevention capabilities. Automated clearing house (ACH) operators. Under these circumstances, the entity authorizing the use of the debit card, and not the account-holding institution, is considered the issuer. 5(c) Exemption for Certain Reloadable Prepaid Cards. In the case of a prepaid card, the cardholder generally is either the purchaser of the card or a person to whom the purchaser gave the card, such as a gift recipient. (o) Processor means a person that processes or routes electronic debit transactions for issuers, acquirers, or merchants. If a cardholder uses a debit card at a merchant located outside the United States to debit an account held in the United States, the electronic debit transaction is not subject to this part. (2) Redeemable upon presentation at multiple, unaffiliated merchants for goods or services. In addition, funds received by an issuer from a payment card network as a result of chargebacks, fines paid by merchants or acquirers for violations of network rules, or settlements or recoveries from merchants or acquirers to offset the costs of fraudulent transactions or a data security breach do not constitute incentives or payments made by a payment card network. Because of an increase in debit card transactions that are processed through a payment card network during a calendar year, an issuer receives an additional volume-based incentive payment from the network for that period. An issuer complies with the requirements of paragraph (a) of this section only if each interchange transaction fee received or charged by the issuer for an electronic debit transaction is no more than the sum of. While the cardholder may receive the card directly from the program manager or at a retailer, the BIN sponsor authorizes the cardholder to use the card to perform electronic debit transactions that access the funds in the pooled account and the cardholder's relationship generally is with the BIN sponsor. The condition with respect to ATM fees does not apply to cards that do not provide ATM access. The retailer does not affirmatively indicate or represent that gift cards are available, such as by displaying any signage or other indicia at the checkout lane suggesting the general availability of gift cards. 1005.17 Requirements for overdraft services. | Consumer (See 235.4(b)(1)(ii) and commentary thereto.). Paragraph 4(b)(2)(iii). This web site is designed for the current versions of 235.3 Reasonable and proportional interchange transaction fees. Section 235.3 Reasonable and Proportional Interchange Transaction Fees, 3(b) Determining Reasonable and Proportional Fees. In general. In a traditional debit card arrangement, the bank or other entity holds the cardholder's funds and authorizes the cardholder to use the debit card to access those funds through electronic debit transactions, and the cardholder receives the card directly or indirectly (e.g., through an agent) from the bank or other entity that holds the funds (except for decoupled debit cards, discussed below). 2. Consumer Financial Protection Circular 2022-06 Debit card fees are regulated by the Durbin Amendment, which is part of the 2010 Dodd-Frank legislation. A payment card network does not restrict a merchant's ability to route transactions over available payment card networks in violation of 235.7(b) by offering payments or other incentives to encourage the merchant to route electronic debit card transactions to the network for processing. Under 235.2(g)(2), a designated ATM network includes any network of ATMs identified by the issuer that provides reasonable and convenient access to the issuer's cardholders. i. Section 235.7(a) does not prohibit an issuer from including an affiliated payment card network among the networks that may process an electronic debit transaction with respect to a particular debit card, as long as at least two of the networks that are enabled on the card are unaffiliated. 2. 1. (iii) The only means of access to the underlying funds, except when all remaining funds are provided to the cardholder in a single transaction. 4. The term debit card includes a card, or other payment code or device, that is used in connection with deferred debit card arrangements in which transactions are not immediately posted to and funds are not debited from the underlying transaction, savings, or other asset account upon settlement of the transaction. Other reimbursements could include payments made to issuers as a result of fines assessed to merchants for noncompliance with Payment Card Industry (PCI) Data Security Standards or other industry standards. (2) Any network of ATMs identified by the issuer that provides reasonable and convenient access to the issuer's customers. i. 2. The entity permitting the use of its BIN is referred to as the BIN sponsor and the entity that uses the BIN to issue cards is often referred to as the affiliate member. BIN sponsor arrangements can follow at least two different models: i. No effect on network rules governing the routing of subsequent transactions. Except as provided in paragraph (d) of this section, 235.3, 235.4, and 235.6 do not apply to an interchange transaction fee received or charged by an issuer with respect to an electronic debit transaction if, (1) The electronic debit transaction is made using a debit card that has been provided to a person pursuant to a Federal, State, or local government-administered payment program; and. For purposes of the net compensation determination, fees paid by an issuer to a payment card network with respect to electronic debit transactions or debit card related activities include, but are not limited to, membership or licensing fees, network administration fees, and fees for optional network services, such as risk management services. (b) Prohibition of net compensation. 2. Selective authorization cards, (e.g., mall cards) are generally intended to be used or redeemed for goods or services at participating retailers within a shopping mall or other limited geographic area. Card 10/11/2022 Agency: Federal Reserve System Dates: Effective July 1, 2023 Effective Date: 07/01/2023 Document Type: Rule Document Citation: 87 FR 61217 Page: (1) Compliance with the requirements of this part shall be enforced under, (i) Section 8 of the Federal Deposit Insurance Act, by the appropriate Federal banking agency, as defined in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 4. Prepaid card model. 2. Similarly, the term debit card includes a device with a chip or other embedded mechanism, such as a mobile phone or sticker containing a contactless chip that links the device to funds stored in an account, and enables an account to be debited. (2) Does not include an account held under a bona fide trust agreement that is excluded by section 903(2) of the Electronic Fund Transfer Act and rules prescribed thereunder. Choosing an item from The short answer is yes, but there are certain rules and regulations to understand. 1. citations and headings Either the BIN sponsor or the prepaid card program manager may keep track of the underlying funds for each individual prepaid card through subaccounts. Therefore, an issuer should consider whether its policies and procedures are effective for each method used to authenticate the card (e.g., a chip or a code embedded in the magnetic stripe) and the cardholder (e.g., a signature or a PIN), and for different sales channels (e.g., card-present and card-not-present). Using the word gift or present on a card or accompanying material, including documentation, packaging and promotional displays; B. Surcharging General Why are merchants allowed to apply payment surcharges? This other entity may be a payment card network or processor (if the entity directing and sending the information is a merchant or an acquirer) or an issuer or processor (if the entity directing and sending the information is a payment card network). (p) Route means to direct and send information and data to an unaffiliated entity or to an affiliated entity acting on behalf of an unaffiliated entity. A person issues a debit card by authorizing the use of debit card by a cardholder to perform electronic debit transactions. View the most recent official publication: These links go to the official, published CFR, which is updated annually. If an issuer qualifies for the exemption in paragraph (a)(1) in a particular calendar year, but, as of the end of that calendar year no longer qualifies for the exemption because at that time it, together with its affiliates, has assets of $10 billion or more, the issuer must begin complying with 235.3, 235.4, and 235.6 no later than July 1 of the succeeding calendar year. Revisiting the Durbin Amendment Because the temporary non-reloadable card may only be obtained in connection with the reloadable card, the exemption in 235.5(c) applies so long as the card is not marketed as a gift card or gift certificate. (d) Exception. 1. The term interchange transaction fee is limited to those fees that a payment card network establishes, charges, or receives to compensate the issuer for its role in the electronic debit transaction. Board BOARD OF GOVERNORS OF THE FEDERAL RESERVE Reloadable. The term electronic debit transaction includes the use of a card as a form of payment that may be made in exchange for goods or services, as a charitable contribution, to satisfy an obligation (e.g., tax liability), or for other purposes. (3) Prohibited exclusivity arrangements by networks. iv. Therefore, rather than directing the transaction information to a separate issuer, the entity authorizes and settles the transaction based on the information received from the merchant. 235.7 Limitations on payment card restrictions. This content is from the eCFR and may include recent changes applied to the CFR. fees An issuer or payment card network is prohibited from inhibiting a merchant's ability to route or direct an electronic debit transaction over any of the payment card networks that the issuer has enabled to process an electronic debit transaction for that particular debit card. (3) Change in status. The contract between the issuer or program manager and the retailer establishes the terms and conditions under which the cards may be sold and marketed at the retailer. Prohibiting a merchant from encouraging or discouraging a cardholder's use of a particular method of debit card authorization, such as rules prohibiting merchants from favoring a cardholder's use of PIN debit over signature debit, or from discouraging the cardholder's use of signature debit. Web1. If the transaction posts to a line of credit, then the transaction is a credit transaction. A cardholder makes a purchase at a merchant. The Code of Federal Regulations (CFR) is the official legal print publication containing the codification of the general and permanent rules published in the Federal Register by the departments and agencies of the Federal Government.

Pine Hills Apartments For Rent, Are Exempt Reporting Advisers Regulated By The Sec, He Likes Me But Has A Girlfriend, Who Is Running Against Tate Reeves, Mahindra Emax 25 Problems, Articles D