Halyard Pay · Policy Updates Powered by Carver Agents

Mastercard SPME §5.1.3 · May 2023 → Sep 2023

Payment of Rewards

substantive

The section changed from a general statement about optional reward payments to detailed rules about administrative fees for processing captured cards, specific fee amounts for USD and EUR zones, procedures for fee reimbursement using Fee Collection messages, and conditions for reward payment chargebacks.

Sources Mastercard SPME · May 2023 · page 62 PDF Mastercard SPME · Sep 2023 · page 58 PDF Chargeback Handling current
Also in §5.x this release substantive §5.1.1 Card Retention by Merchants substantive §5.1.2 ATM Card Retention substantive §5.11.7 of the Mastercard Rules manual (“the Illegal or Brand-damaging Transactions Rule”).
Why these edits? The update introduces specific rules about reward payment chargebacks, including conditions under which chargebacks related to reward reimbursements may occur, which directly impacts how chargebacks are handled.
Mastercard SPME §5.1.3
This section was substantively restructured between versions (5% text overlap). Compare the texts directly below.
Before · May 2023 · page 62

The Acquirer may, at its option, pay the Merchant or financial institution teller a reward for capturing a Card in accordance with local practice. The person capturing the Card receives the reward. 5.1.3.1 Reward Payment Standards The Acquirer must follow these Standards when paying a reward:

After · Sep 2023 · page 58

Security Rules and Procedures—Merchant Edition • 1 August 2023

The recovering Customer may collect an administrative fee of USD 15 for expenses incurred in processing the captured Card. A recovering Customer in the Europe Region may collect an administrative fee of EUR 15 for such expenses. The capturing Customer may add this fee to the amount of the reward reimbursement or collect the fee independently, using the Fee Collection/1740 message. 5.1.3.3 Reimbursement of Rewards The following specifications apply to reward reimbursement:

  • Upon dispatching the Card to the Issuer, the Acquirer will obtain reimbursement for the reward paid and the USD 15 or EUR 15 fee by processing the Fee Collection/1740 message.
  • If a Customer returns a Card to an Issuer and a reward is not paid, the recovering Customer may, at its discretion, collect a USD 15 or EUR 15 fee by processing a Fee Collection/1740 message record.
  • Upon receipt of the Interchange Card Recovery Form (ICA-6), the Issuer should match it to the Fee Collection/1740 message record based on the Acquirer Member ID, account number, and recovery date comparisons. 5.1.3.4 Reward Payment Chargebacks A reward reimbursement draft may be charged back only when the incorrect Customer is charged. The senior vice president of the Franchise Department will resolve any dispute concerning reward reimbursement. Card Recovery and Return Standards 5.1.3.3 Reimbursement of Rewards Security Rules and Procedures—Merchant Edition • 1 August 2023 Chapter 6 Fraud Loss Control Standards This chapter may be of particular interest to personnel responsible for fraud loss control programs, counterfeit loss procedures and reimbursement, and Acquirer counterfeit liability.
Halyard Pay · 2 files
program: Chargeback Handling


- authority: Mastercard SPME §10.1 and §11.5


+ authority: Mastercard SPME §10.1, §11.5, and §5.1.3.4


acknowledgement_business_days: 1


lifecycle_states:


  - first_presentment


  - chargeback


  - second_presentment


  - pre_arbitration


  - arbitration


evidence_requirements:


  first_presentment:


    - transaction_receipt


    - authorization_record


  chargeback:


    - merchant_rebuttal_letter


    - delivery_confirmation


    - customer_communication


  second_presentment:


    - compelling_evidence


    - signed_cardholder_agreement


  pre_arbitration:


    - full_dispute_record


    - prior_correspondence


  arbitration:


    - full_dispute_record


    - arbitration_filing


agent_owner: chargeback_agent


 


- # Updated to reflect refined definitions and thresholds relating to laundering, excessive chargebacks, fraudulent transactions, and bankruptcy as defined in Mastercard SPME §11.5 (2023 edition).


- # These criteria impact evaluation triggers and risk assessment during chargeback handling.


+ # Revised to incorporate Mastercard SPME §5.1.3.4 regarding reward payment chargebacks, clarifying that chargebacks for reward reimbursements are only permissible if the incorrect Customer was charged.


+ # This update aligns chargeback handling with new specific conditions on reward reimbursements affecting evidence assessment and dispute resolution.

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, manages the entire dispute lifecycle for its merchants, from initial first presentment through arbitration, in compliance with Mastercard's requirements.

Lifecycle overview

Disputes move proceed through defined stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Adherence to strict Halyard Pay strictly follows evidence requirements and deadlines at each stage is critical to avoid automatic rulings against the acquirer. to minimize unfavorable rulings.

Required actions

  1. Acknowledge each incoming chargeback chargebacks within one business day.

  2. Collect the necessary evidence based on the current lifecycle appropriate to the dispute stage.

  3. Submit second presentments when merchant liability is disputable, providing with strong supporting evidence. documentation.

  4. Only escalate Escalate to pre-arbitration and arbitration only after issuer rejection of rejects the second presentment.

  5. Maintain full case comprehensive documentation for audits and reporting. audit and reporting purposes.

## Reward Payment Chargebacks

Mastercard permits recovery of administrative fees associated with card capture events and specifies that chargebacks related to reward reimbursements are permitted only if the incorrect customer is charged. Halyard Pay incorporates these provisions, ensuring that reward payment chargebacks are carefully monitored and only disputed in valid cases, aligning with SPME §5.1.3.4.

Monitoring and Risk Factors

Halyard Pay monitors merchant risk factors including such as chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define specific grounds for elevated scrutiny or match listing, including but not limited to laundering (presentation of invalid transaction records), such as laundering, excessive chargebacks (over 1% chargeback-to-sales ratio with minimum USD 5,000 monthly), excessive fraud (8% fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or morewith minimum fraud transaction volume), questionable merchant classification, and bankruptcy.

These refined definitions inform guide Halyard Pay's chargeback and risk management policies to ensure for compliance and mitigate risk exposure. mitigation.

Source authority: Mastercard SPME §§10.1, §§5.1.3.4, 10.1, 11.5.

policies/chargeback_handling/policy.md — after applying change

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, manages the entire dispute lifecycle for its merchants, from initial first presentment through arbitration, in compliance with Mastercard's requirements.

Lifecycle overview

Disputes move proceed through defined stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Adherence to strict Halyard Pay strictly follows evidence requirements and deadlines at each stage is critical to avoid automatic rulings against the acquirer. to minimize unfavorable rulings.

Required actions

  1. Acknowledge each incoming chargeback chargebacks within one business day.

  2. Collect the necessary evidence based on the current lifecycle appropriate to the dispute stage.

  3. Submit second presentments when merchant liability is disputable, providing with strong supporting evidence. documentation.

  4. Only escalate Escalate to pre-arbitration and arbitration only after issuer rejection of rejects the second presentment.

  5. Maintain full case comprehensive documentation for audits and reporting. audit and reporting purposes.

## Reward Payment Chargebacks

Mastercard permits recovery of administrative fees associated with card capture events and specifies that chargebacks related to reward reimbursements are permitted only if the incorrect customer is charged. Halyard Pay incorporates these provisions, ensuring that reward payment chargebacks are carefully monitored and only disputed in valid cases, aligning with SPME §5.1.3.4.

Monitoring and Risk Factors

Halyard Pay monitors merchant risk factors including such as chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define specific grounds for elevated scrutiny or match listing, including but not limited to laundering (presentation of invalid transaction records), such as laundering, excessive chargebacks (over 1% chargeback-to-sales ratio with minimum USD 5,000 monthly), excessive fraud (8% fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or morewith minimum fraud transaction volume), questionable merchant classification, and bankruptcy.

These refined definitions inform guide Halyard Pay's chargeback and risk management policies to ensure for compliance and mitigate risk exposure. mitigation.

Source authority: Mastercard SPME §§10.1, §§5.1.3.4, 10.1, 11.5.

Source authority: Mastercard SPME §5.1.3.

--- a/policies/chargeback_handling/rules.yaml
+++ b/policies/chargeback_handling/rules.yaml
@@ -1,5 +1,5 @@
 program: Chargeback Handling
-authority: Mastercard SPME §10.1 and §11.5
+authority: Mastercard SPME §10.1, §11.5, and §5.1.3.4
 acknowledgement_business_days: 1
 lifecycle_states:
   - first_presentment
@@ -26,5 +26,5 @@
     - arbitration_filing
 agent_owner: chargeback_agent
 
-# Updated to reflect refined definitions and thresholds relating to laundering, excessive chargebacks, fraudulent transactions, and bankruptcy as defined in Mastercard SPME §11.5 (2023 edition).
-# These criteria impact evaluation triggers and risk assessment during chargeback handling.+# Revised to incorporate Mastercard SPME §5.1.3.4 regarding reward payment chargebacks, clarifying that chargebacks for reward reimbursements are only permissible if the incorrect Customer was charged.
+# This update aligns chargeback handling with new specific conditions on reward reimbursements affecting evidence assessment and dispute resolution.
--- a/policies/chargeback_handling/policy.md
+++ b/policies/chargeback_handling/policy.md
@@ -4,20 +4,24 @@
 
 ## Lifecycle overview
 
-Disputes move through defined stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Adherence to strict evidence requirements and deadlines at each stage is critical to avoid automatic rulings against the acquirer.
+Disputes proceed through stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Halyard Pay strictly follows evidence requirements and deadlines to minimize unfavorable rulings.
 
 ## Required actions
 
-1. Acknowledge each incoming chargeback within one business day.
-2. Collect the necessary evidence based on the current lifecycle stage.
-3. Submit second presentments when merchant liability is disputable, providing strong supporting evidence.
-4. Only escalate to pre-arbitration and arbitration after issuer rejection of the second presentment.
-5. Maintain full case documentation for audits and reporting.
+1. Acknowledge incoming chargebacks within one business day.
+2. Collect evidence appropriate to the dispute stage.
+3. Submit second presentments when liability is disputable, with strong supporting documentation.
+4. Escalate to pre-arbitration and arbitration only after issuer rejects the second presentment.
+5. Maintain comprehensive documentation for audit and reporting purposes.
+
+## Reward Payment Chargebacks
+
+Mastercard permits recovery of administrative fees associated with card capture events and specifies that chargebacks related to reward reimbursements are permitted only if the incorrect customer is charged. Halyard Pay incorporates these provisions, ensuring that reward payment chargebacks are carefully monitored and only disputed in valid cases, aligning with SPME §5.1.3.4.
 
 ## Monitoring and Risk Factors
 
-Halyard Pay monitors merchant risk factors including chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define specific grounds for elevated scrutiny or match listing, including but not limited to laundering (presentation of invalid transaction records), excessive chargebacks (over 1% chargeback-to-sales ratio with minimum USD 5,000 monthly), excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more), questionable merchant classification, and bankruptcy.
+Halyard Pay monitors merchant risk factors such as chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define grounds for elevated scrutiny or match listing, such as laundering, excessive chargebacks (over 1% chargeback-to-sales with minimum USD 5,000 monthly), excessive fraud (8% fraud-to-sales ratio with minimum fraud transaction volume), questionable merchant classification, and bankruptcy.
 
-These refined definitions inform Halyard Pay's chargeback and risk management policies to ensure compliance and mitigate risk exposure.
+These refined definitions guide Halyard Pay's chargeback and risk management policies for compliance and risk mitigation.
 
-Source authority: Mastercard SPME §§10.1, 11.5.+Source authority: Mastercard SPME §§5.1.3.4, 10.1, 11.5.