As we know we are in a space where seamless transactions are valued by customers. Visa and Mastercard have released a mandate that will come into effect on 15 September
This mandate is in relation to Credentials on File(CoF) and this impacts merchants who participate in recurring transactions
What are Live Credentials on File?
A stored credential is information, including but not limited to, a card number or payment token, that’s stored by a merchant or a third party on their behalf to process future purchases for the cardholder.
Why are VISA and Mastercard making these changes?
Due to the increase in the number of transactions where stored credentials are used, the Card Schemes want to be able to identify their storage and subsequent use to enable appropriate processing. This should lead to improved authorization approval rates and completed sale transactions.
Credential on File (CoF) is a requirement from Visa and MasterCard in order to provide greater visibility for all parties into transaction processing to identify initial storage and subsequent usage of stored credentials to determine the risk level. By providing these details it will increase the approval rate and improve the cardholder experience. If you offer the cardholder to store their credentials for future use or recurring it’s required to have cardholder consent.
What are the requirements to make these changes?
You, or the third party you use, must:
Obtain the cardholder’s consent for the initial storage of their credentials, and
Use appropriate data values (Stored Credential Indicators) to identify the initial storage of the credential and the subsequent usage of that stored credential.
The current setup
- For Initial payments “recurringType=INITIAL”
- For repeated payments “recurringType=REPEATED”
This parameter "recurringType" is now being split into 3 separate parameters to allow for more descriptive and informative ways of sending recurring payments.
- - CIT (customer initiated transaction)
- - MIT (merchant initiated transaction)
- - INITIAL
- - REPEATED
- - RECURRING
- - UNSCHEDULED
- - INSTALLMENT
NB: If a RECURRING payment is being actioned, then the following parameter needs to be added in order to distinguish the type of recurring transactions being processed:
- on top of "standingInstruction.type=RECURRING:
Meanings behind the standingInstruction.type parameter values:
Recurring Transactions are transactions that are processed on a regular fixed interval for a pre-agreed or advised amount, where applicable. Recurring Transactions don't have a fixed duration and will continue to be processed until the cardholder cancels the agreement.
An unscheduled credential-on-file transaction is like a recurring transaction but differs in that it does not happen at pre-agreed intervals. The classic example of such a transaction is when it is triggered by an event such as an amount threshold to ensure that a pay-as-you-go account always has a minimum available reserve
Instalment Payments are transactions that are processed on a regular fixed interval for a pre-agreed amount for a single purchase of goods or services. Unlike Recurring Transactions, Instalment Payments do.
The link below is a breakdown of how the payment request should look with the new parameter
Developer Documentation for more details
WHEN should this be done?
- The Card schemes (Visa and Mastercard) have shared their final date for these changes to be in effect which is 15 September 2022.
- Please urgently implement these changes as the closer we approach the deadline the higher the risk of chargebacks and/or other potential Card Scheme rejections.
Please do reach out to your Peach Payments Account Manger, or email us at firstname.lastname@example.org should you have any queries about this.
We look forward to Peach Payments continuing to work hand-in-hand with your business, continuing our journey of growth.
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The Peach Payments Support Team