If you accept credit cards on your website, you have probably already received notice that MasterCard and Discover are modifying their rules concerning the processing of debit, prepaid and gift cards. VISA and American Express are expected to follow and issue their own notice.

Regardless of the payment gateway or software you use on your website, this change will affect your business if you accept credit cards through your website.

MasterCard's rule changes go into effect May 1, 2010, and Discover's rule changes go into effect April 16, 2010. However, if you use Authorize.net as your payment gateway, you have until June 30, 2011 (over one year) to implement these changes.

MasterCard and Discover are requiring that all merchants support the following:

• Balance response transactions — For prepaid and gift cards, once the card has been used, the remaining account balance will be transmitted along with the authorization response. The remaining balance must be printed on the customer receipt, displayed on the Web page or point-of-sale terminal, or both.
• Partial authorization transactions — When a customer's transaction amount exceeds the balance available on their debit, prepaid or gift card, instead of declining the transaction, a partial authorization for the amount available to the customer will be returned. This will allow the customer to pay for the remaining amount with another form of payment. This is called a split-tender transaction.
• Authorization reversals — An authorization reversal is a real-time transaction initiated when the customer decides that they do not want to proceed with the transaction, or if the merchant cannot complete the transaction for any reason. Authorization reversals free up the customer's available balance on their debit, prepaid or gift card.

Payment gateways will be required to update their systems to accommodate these changes. Some may already be capable of supporting these new transaction requirements.

What You Need to Do

Since these are new requirements, almost all software vendors will have to update their applications (including POS). If you use VirtueMart or other vendor’s storefront software, you’ll need to contact them to determine when they will support these new features and what you’ll need to do to install or upgrade your website storefront.

For storefront applications we have designed for our customers, some use our standard shopping cart and some customers use custom-written code. In all cases (other than simple Paypal integration), we will have to modify and test your storefront to include the new requirements.

We are currently looking at what changes are required and plan to develop and test a basic implementation, but since each customer’s needs are different, customization might be required to install the changes on your website. Please contact us to discuss your requirements, so we can determine the best way to upgrade your storefront.

Are these Changes Really Necessary?

Unfortunately, the answer is yes. Due to the new requirements for processing of gift cards, the card processors are making these changes mandatory for anyone who accepts credit cards on their website.

Contact us for assistance and cost estimate to upgrade your storefront to meet these new requirements. Call 402-477-8300 (or toll free 866-477-8300) or email the address shown below.