Mastercard SPME §6.3.1 · Jun 2022 → May 2023

Counterfeit Card Notification

breaking

The entire section on Counterfeit Card Notification, including details on Acquirer counterfeit volume ratio (ACVR) monitoring, liability thresholds, and relief criteria, has been removed from the manual.

Sources Mastercard SPME · Jun 2022 · page 60 PDF Mastercard SPME · May 2023 PDF Fraud Monitoring current

Also in §6.x this release breaking §6.3 Mastercard Counterfeit Card Fraud Loss Control Standards substantive §6 Control of instructions substantive §6.2 Mastercard Fraud Loss Control Program Standards substantive §6.2.2 Acquirer Fraud Loss Control Programs

Why these edits? The removal of the entire Counterfeit Card Notification section, including the monitoring of Acquirer counterfeit volume ratios (ACVR) and related liability thresholds, impacts the obligations around fraud monitoring that were previously guided by section 6.2 and closely related to 6.3.1.

Mastercard SPME §6.3.1

This section was substantively restructured between versions (0% text overlap). Compare the texts directly below.

Before · Jun 2022 · page 60

Security Rules and Procedures—Merchant Edition • 22 February 2022

Franchise Management Program staff uses the Acquirer counterfeit volume ratio (ACVR) to evaluate all Customers’ volumes of acquired counterfeit. The ACVR is a Customer’s dollar volume of acquired counterfeit as a percentage of the total dollar volume acquired by that Customer. Franchise Management Program staff monitors the 20 Customers with the highest ACVRs on a quarterly basis. Mastercard notifies each Customer with liability of its own ACVR, the worldwide average, the reported counterfeit, and the amount of Customer liability calculated on a quarterly basis. Mastercard uses funds obtained from Acquirers that exceed established annual thresholds to provide the following support:

Recover the costs associated with the administration of this Program,
Fund the development of new fraud control programs, and
Supplement the Mastercard liability limit for the reimbursement of Issuers’ counterfeit losses. 6.3.3.1 Acquirer Counterfeit Liability An Acquirer is liable for any counterfeit volume that is above a threshold of 10 times the worldwide ACVR. Franchise Management Program review teams will provide a report to Acquirers whose ACVR exceeds 10 times the worldwide average with recommendations on how to reduce the volume of acquired counterfeit Transactions. If an Acquirer implements all of the programs recommended by Franchise Management Program staff, or takes necessary action to curb counterfeit, Mastercard will review the actions taken and may adjust the cumulative liability that would otherwise be imposed by the Program. Counterfeit experience inconsistent with the implementation of the required programs will result in further Customer Franchise Reviews by Mastercard. For more information about the Franchise Management Program, refer to Chapter 13 of this manual. 6.3.3.2 Acquirer Liability Period The Acquirer’s ACVR liability is computed for the period from 1 January through 31 December. ACVR liability is determined after final submission of counterfeit reimbursement claims for each 12-month cycle. 6.3.3.3 Relief from Liability To qualify for relief from liability, an Acquirer must meet the following criteria:

After · May 2023

Halyard Pay · 2 files

Fraud Monitoring · rules.yaml

program: Fraud Monitoring
authority: Mastercard SPME §3.7
fraud_to_sales_ratio_threshold: 0.015
min_count_per_month: 100
monitoring_cadence: monthly
escalation_actions:
  - escalate_to_human_review
  - notify_acquirer
lookback_period_months: 1
remediation_review_interval_days: 30
agent_owner: fraud_ops_agent
+ 
+ # Removed references to monitoring of Acquirer counterfeit volume ratios (ACVR) and associated thresholds
+ # as the corresponding Mastercard SPME section 6.3.1 guidance was removed. Fraud monitoring focuses solely
+ # on the existing fraud-to-sales ratio threshold and internal case management.

Fraud Monitoring · policy.md

Fraud Monitoring

Halyard Pay monitors merchant fraud activity on a monthly basis to detect patterns that

exceed Mastercard's acceptable fraud-to-sales thresholds. A merchant whose rolling

monthly fraud-to-sales ratio meets or exceeds 1.5% (0.015) and whose fraud count

reaches at least 100 transactions in that same month triggers mandatory escalation

under this policy.

When this policy applies

This policy applies to all merchants processed through Halyard Pay's acquiring platform

where Mastercard is the applicable card network. It governs both card-present and

card-not-present transaction streams.

Required actions

Compute the merchant's rolling fraud-to-sales ratio each calendar month.
If the ratio meets or exceeds the threshold AND the minimum count is reached,

escalate the merchant account to human review immediately.

Notify the acquiring compliance officer and document the case ID with supporting

transaction data.

Track case progress until the account returns to threshold compliance or is

terminated.

Mastercard has removed prior requirements regarding monitoring the Acquirer counterfeit volume ratio and related liability thresholds, eliminating the previous monitoring and reporting obligations tied to counterfeit volume ratios.

Source authority: Mastercard SPME ~~§3.7.~~73.7.

policies/fraud_monitoring/policy.md — after applying change

Fraud Monitoring

Halyard Pay monitors merchant fraud activity on a monthly basis to detect patterns that

exceed Mastercard's acceptable fraud-to-sales thresholds. A merchant whose rolling

monthly fraud-to-sales ratio meets or exceeds 1.5% (0.015) and whose fraud count

reaches at least 100 transactions in that same month triggers mandatory escalation

under this policy.

When this policy applies

This policy applies to all merchants processed through Halyard Pay's acquiring platform

where Mastercard is the applicable card network. It governs both card-present and

card-not-present transaction streams.

Required actions

Compute the merchant's rolling fraud-to-sales ratio each calendar month.
If the ratio meets or exceeds the threshold AND the minimum count is reached,

escalate the merchant account to human review immediately.

Notify the acquiring compliance officer and document the case ID with supporting

transaction data.

Track case progress until the account returns to threshold compliance or is

terminated.

Source authority: Mastercard SPME ~~§3.7.~~73.7.

Source authority: Mastercard SPME §6.3.1.

--- a/policies/fraud_monitoring/rules.yaml
+++ b/policies/fraud_monitoring/rules.yaml
@@ -9,3 +9,7 @@
 lookback_period_months: 1
 remediation_review_interval_days: 30
 agent_owner: fraud_ops_agent
+
+# Removed references to monitoring of Acquirer counterfeit volume ratios (ACVR) and associated thresholds
+# as the corresponding Mastercard SPME section 6.3.1 guidance was removed. Fraud monitoring focuses solely
+# on the existing fraud-to-sales ratio threshold and internal case management.

--- a/policies/fraud_monitoring/policy.md
+++ b/policies/fraud_monitoring/policy.md
@@ -22,4 +22,6 @@
 4. Track case progress until the account returns to threshold compliance or is
    terminated.
 
-Source authority: Mastercard SPME §3.7.
+Mastercard has removed prior requirements regarding monitoring the Acquirer counterfeit volume ratio and related liability thresholds, eliminating the previous monitoring and reporting obligations tied to counterfeit volume ratios.
+
+Source authority: Mastercard SPME 73.7.