Mastercard SPME §8.7.5 · Jun 2022 → May 2023
Assessments, Recovery Amounts, and Fees
This update expands the Acquirer Non-Performance Assessments by adding penalties for third and subsequent violations within twelve months, significantly increasing maximum fees. It also introduces mitigation guidelines for assessments if merchants are recoded within specified timeframes. The Issuer Interchange Recovery section was expanded with more detail on calculation and processes for crediting issuers and debiting acquirers.
There are three components to assessments, recovery amounts, and fees:
- Issuer Filing Fee
- Acquirer Non-Performance Assessments
- Issuer Interchange Recovery (collected from the Acquirer(s) and credited to the Issuer(s)) 8.7.5.1 Issuer Filing Fee If Mastercard determines that a claim is not substantiated, Mastercard will bill each reporting Issuer a filing fee of BRL 25,000 per Merchant, Payment Facilitator, or Staged Digital Wallet Operator. 8.7.5.2 Acquirer Non-Performance Assessments Mastercard may bill an Acquirer for non-performance assessments for each impacted Merchant ID (MID) for a substantiated claim as described in the table below: Miscoded Brazil GCMS Domestic Transaction Volume Non-Performance Assessment Less than BRL 5,000,000 Up to BRL 10,000 More than BRL 5,000,000 but less than BRL 30,000,000 Up to BRL 50,000 More than BRL 30,000,000 Up to BRL 150,000 Non-performance assessments may be escalated as described in the below tables. For the second violation within twelve months: Mastercard Fraud Control Programs
Security Rules and Procedures—Merchant Edition • 7 February 2023
For the third violation within twelve months: Miscoded Brazil GCMS Domestic Transaction Volume Non-Performance Assessment Less than BRL 5,000,000 Up to BRL 30,000 More than BRL 5,000,000 but less than BRL 30,000,000 Up to BRL 150,000 More than BRL 30,000,000 Up to BRL 450,000 For the fourth and subsequent violations within twelve months: Miscoded Brazil GCMS Domestic Transaction Volume Non-Performance Assessment Less than BRL 5,000,000 Up to BRL 40,000 More than BRL 5,000,000 but less than BRL 30,000,000 Up to BRL 200,000 More than BRL 30,000,000 Up to BRL 600,000 Acquirer Non-Performance Assessments may be mitigated at the Corporation’s discretion, using the below guidance:
- Mitigated by 50% if the Qualifying Merchant is recoded with an appropriate MCC within 5 calendar days of the Corporation’s notification.
- Mitigated by 25% if the Qualifying Merchant is recoded with an appropriate MCC within fifteen calendar days of the Corporation’s notification. 8.7.5.3 Issuer Interchange Recovery (Collected from the Acquirer(s) and Credited to the Issuers(s)) Mastercard will calculate and assess Acquirers for Issuer Interchange Recovery by applying adjustments to the interchange rate submitted for each Transaction processed through GCMS within a substantiated claim. The interchange adjustment will be made based on the calculated differential between the interchange rates submitted for each Transaction processed through GCMS within a substantiated claim and the interchange rates that should have been submitted based on the validity or accuracy of the MCC data, at the product level. In instances where the Acquirer is unable to identify the appropriate MCC or fails to recode the Qualifying Merchant with an appropriate MCC within the required time frame, Mastercard may calculate the interchange adjustment based on the differential between the interchange rate submitted for each Transaction Mastercard Fraud Control Programs 8.7.5.3 Issuer Interchange Recovery (Collected from the Acquirer(s) and Credited to the Issuers(s)) Security Rules and Procedures—Merchant Edition • 7 February 2023 processed through GCMS within a substantiated claim and the highest Brazil interchange rates by product. Mastercard will debit each responsible Acquirer the Issuer Interchange Recovery amount for each substantiated claim and credit each impacted Issuer through the settlement process for each substantiated claim. Actual recovery provided to each impacted Issuer will vary depending on the extent and duration of the violation, the number of Transactions and Transaction Volume processed through GCMS by each Issuer, and will be paid solely out of the amounts Mastercard collects from the responsible Acquirer(s) for the Issuer Interchange Recovery amount. Mastercard Fraud Control Programs 8.7.5.3 Issuer Interchange Recovery (Collected from the Acquirer(s) and Credited to the Issuers(s)) Security Rules and Procedures—Merchant Edition • 7 February 2023 Chapter 9 Mastercard Registration Program This chapter may be of particular interest to Customer personnel responsible for registering Merchants, Submerchants, and other entities with Mastercard. The Mastercard Registration Program (MRP) formerly was referred to as the Merchant Registration Program.
Chargeback Handling
Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the ¶ acquirer, is responsible for managing the full dispute lifecycle on behalf of its ¶ merchants from initial first presentment through arbitration. Each stage of the ¶ lifecycle has specific evidence requirements and strict response deadlines imposed ¶ by Mastercard network rules.
Lifecycle overview
Disputes progress through a defined set of states: first presentment, chargeback, ¶ second presentment (re-presentment), pre-arbitration, and arbitration. Failure to ¶ respond within the applicable timeframe at any stage results in an automatic ruling ¶ against the acquirer.
Required actions
-
Acknowledge each incoming chargeback within one business day of receipt.
-
Gather required evidence for the relevant lifecycle state.
-
Submit a second presentment (re-presentment) where merchant liability can be
¶contested, including compelling evidence. -
Escalate to pre-arbitration and arbitration only after second presentment is
¶rejected by the issuer. -
Maintain complete case records for audit and regulatory reporting.
## Acquirer Non-Performance and Assessment Penalties
Acquirers must be aware that Mastercard imposes escalating non-performance assessments for substantiated claims, with penalties increasing for repeated violations within a twelve-month period. These assessments vary according to the merchant’s transaction volume tiers and may be mitigated if corrective action, such as merchant recoding with the appropriate MCC, is taken within specified timeframes after notification.
Mitigation guidelines include:
- 50% reduction if recoding occurs within 5 calendar days of notification.
- 25% reduction if recoding occurs within 15 calendar days of notification.
These penalties underscore the importance of accurate merchant data management and responsive action to avoid higher fees and ensure compliance.
Source authority: Mastercard SPME §10.1.§§8.7.5, 10.1.
Chargeback Handling
Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the ¶ acquirer, is responsible for managing the full dispute lifecycle on behalf of its ¶ merchants from initial first presentment through arbitration. Each stage of the ¶ lifecycle has specific evidence requirements and strict response deadlines imposed ¶ by Mastercard network rules.
Lifecycle overview
Disputes progress through a defined set of states: first presentment, chargeback, ¶ second presentment (re-presentment), pre-arbitration, and arbitration. Failure to ¶ respond within the applicable timeframe at any stage results in an automatic ruling ¶ against the acquirer.
Required actions
-
Acknowledge each incoming chargeback within one business day of receipt.
-
Gather required evidence for the relevant lifecycle state.
-
Submit a second presentment (re-presentment) where merchant liability can be
¶contested, including compelling evidence. -
Escalate to pre-arbitration and arbitration only after second presentment is
¶rejected by the issuer. -
Maintain complete case records for audit and regulatory reporting.
## Acquirer Non-Performance and Assessment Penalties
Acquirers must be aware that Mastercard imposes escalating non-performance assessments for substantiated claims, with penalties increasing for repeated violations within a twelve-month period. These assessments vary according to the merchant’s transaction volume tiers and may be mitigated if corrective action, such as merchant recoding with the appropriate MCC, is taken within specified timeframes after notification.
Mitigation guidelines include:
- 50% reduction if recoding occurs within 5 calendar days of notification.
- 25% reduction if recoding occurs within 15 calendar days of notification.
These penalties underscore the importance of accurate merchant data management and responsive action to avoid higher fees and ensure compliance.
Source authority: Mastercard SPME §10.1.§§8.7.5, 10.1.
Source authority: Mastercard SPME §8.7.5.
--- a/policies/chargeback_handling/policy.md +++ b/policies/chargeback_handling/policy.md @@ -1,26 +1,28 @@ # Chargeback Handling -Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the -acquirer, is responsible for managing the full dispute lifecycle on behalf of its -merchants from initial first presentment through arbitration. Each stage of the -lifecycle has specific evidence requirements and strict response deadlines imposed -by Mastercard network rules. +Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, is responsible for managing the full dispute lifecycle on behalf of its merchants from initial first presentment through arbitration. Each stage of the lifecycle has specific evidence requirements and strict response deadlines imposed by Mastercard network rules. ## Lifecycle overview -Disputes progress through a defined set of states: first presentment, chargeback, -second presentment (re-presentment), pre-arbitration, and arbitration. Failure to -respond within the applicable timeframe at any stage results in an automatic ruling -against the acquirer. +Disputes progress through a defined set of states: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Failure to respond within the applicable timeframe at any stage results in an automatic ruling against the acquirer. ## Required actions 1. Acknowledge each incoming chargeback within one business day of receipt. 2. Gather required evidence for the relevant lifecycle state. -3. Submit a second presentment (re-presentment) where merchant liability can be - contested, including compelling evidence. -4. Escalate to pre-arbitration and arbitration only after second presentment is - rejected by the issuer. +3. Submit a second presentment (re-presentment) where merchant liability can be contested, including compelling evidence. +4. Escalate to pre-arbitration and arbitration only after second presentment is rejected by the issuer. 5. Maintain complete case records for audit and regulatory reporting. -Source authority: Mastercard SPME §10.1. +## Acquirer Non-Performance and Assessment Penalties + +Acquirers must be aware that Mastercard imposes escalating non-performance assessments for substantiated claims, with penalties increasing for repeated violations within a twelve-month period. These assessments vary according to the merchant’s transaction volume tiers and may be mitigated if corrective action, such as merchant recoding with the appropriate MCC, is taken within specified timeframes after notification. + +Mitigation guidelines include: + +- 50% reduction if recoding occurs within 5 calendar days of notification. +- 25% reduction if recoding occurs within 15 calendar days of notification. + +These penalties underscore the importance of accurate merchant data management and responsive action to avoid higher fees and ensure compliance. + +Source authority: Mastercard SPME §§8.7.5, 10.1.