Halyard Pay · Policy Updates Powered by Carver Agents

Mastercard SPME §8.4.6 · May 2023 → Sep 2023

Mastercard Determination

substantive

The section was expanded to specify conditions under which Mastercard evaluates fraudulent transactions at Questionable Merchants, detailing thresholds for issuer fraud volume, recovery through existing remedies, and card functionality. It also clarifies Mastercard's rights regarding information requests, payment limits, and the processing of fraud recoveries between Acquirers and Issuers.

Sources Mastercard SPME · May 2023 · page 88 PDF Mastercard SPME · Sep 2023 · page 83 PDF Chargeback Handling current
Also in §8.x this release breaking §8.6.7 Franchise Management Program (FMP) Questionnaire-based Review substantive §8.3.4 Additional ECM and HECM Requirements substantive §8.4 Questionable Merchant Audit Program (QMAP) substantive §8.4.1 QMAP Definitions substantive §8.4.2 Mastercard Commencement of an Investigation substantive §8.4.4 Mastercard Notification to Acquirers substantive §8.4.7 Chargeback Responsibility substantive §8.6.2 Investigation Process substantive §8.6.6 MATCH Reporting substantive §8.7.3 Mastercard Notification to Acquirers substantive §8.7.4 Mastercard Determination substantive §8.7.5 Assessments, Recovery Amounts, and Fees
Why these edits? The updated Mastercard Determination section clarifies conditions for issuer fraud volume thresholds and outlines the process for fraud recovery payments between Acquirers and Issuers, directly affecting chargeback handling and recovery processes.
Mastercard SPME §8.4.6
This section was substantively restructured between versions (7% text overlap). Compare the texts directly below.
Before · May 2023 · page 88

Mastercard will determine if a Merchant is a Questionable Merchant. If Mastercard determines that the Merchant is not a Questionable Merchant, Mastercard will so notify each Issuer and Acquirer that provided information pertinent to the investigation. Such notice will be provided by email message to the Security Contact listed for the Customer in the Company Contact Management application available on Mastercard Connect™. In addition, Mastercard will delete the MATCH listing of the Merchant for MATCH reason code 00. If Mastercard determines that the Merchant is a Questionable Merchant, Mastercard will: Mastercard Fraud Control Programs

After · Sep 2023 · page 83

Security Rules and Procedures—Merchant Edition • 1 August 2023

  1. If the Issuer’s total volume of reported fraudulent Transactions occurring at the Questionable Merchant during the Case Scope Period was less than USD 2,000, or
  2. For which the Issuer received recovery through any existing remedy in the Mastercard system, including chargeback, recovery process, or the Issuer’s own collection process, or
  3. Performed with a Card with only magnetic stripe functionality. Mastercard reserves the right to request additional information as a condition of determining whether a Transaction satisfactorily meets the eligibility requirements for Issuer partial recovery. In addition, Mastercard will not pay claims in excess of the amount collected from the Acquirer(s) for that purpose. Mastercard will debit the fraud recovery amount from the Acquirer account and credit the Issuer account (less any administrative fee). Mastercard will process Issuer fraud recoveries according to MCBS.
Halyard Pay · 2 files
program: Chargeback Handling


- authority: Mastercard SPME §10.1 and §11.5


+ authority: Mastercard SPME §10.1, §11.5, and §8.4.6


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.


+ # Added criteria reflecting Mastercard's updated fraud volume thresholds for issuance recovery and conditions governing recovery payments


+ # between Acquirers and Issuers as outlined in Mastercard SPME §8.4.6 (August 2023 edition), impacting chargeback and recovery workflows.


+ 


+ fraud_recovery_conditions:


+   issuer_volume_threshold_usd: 2000


+   transactions_eligible_for_recovery_if:


+     - issuer_reported_fraud_volume_less_than_threshold: true


+     - issuer_received_recovery_via_existing_remedy: true


+     - transaction_performed_with_magnetic_stripe_only_card: true


+   mastercard_privileges:


+     - may_request_additional_information_for_recovery_eligibility


+     - will_not_pay_claims_exceeding_amount_collected_from_acquirers


+   recovery_process:


+     actions:


+       - debit_acquirer_account


+       - credit_issuer_account_less_admin_fee


+     processing_reference: MCBS

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 ensuring compliance with Mastercard's requirements. policies.

Lifecycle overview

Disputes move progress through defined stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Adherence to strict Strict adherence to evidence submission requirements and deadlines at each stage is critical essential to avoid automatic rulings against the acquirer.

Required actions

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

  2. Collect the necessary and submit relevant evidence based on the current lifecycle corresponding to the dispute stage.

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

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

  5. Maintain full case thorough documentation for audits audit and reporting.

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 specify grounds for elevated increased 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 monthlysales), and excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more).

## Fraud Recovery and Issuer Thresholds

Mastercard specifies conditions under which issuers may recover fraud losses, including situations where fraud volume reported by an issuer during the case period is below USD 2,000, where issuers have already recovered amounts via chargeback or other processes, or where transactions involved only magnetic stripe cards. Mastercard handles the transfer of recovery amounts by debiting acquirers and crediting issuers (less applicable fees), questionable merchant classification, and bankruptcy. ¶ These refined definitions inform subject to administrative processes. Halyard Pay's Pay incorporates these procedures into its chargeback and risk management policies to ensure compliance and mitigate risk exposure. fraud recovery workflows to align with Mastercard policies.

Source authority: Mastercard SPME §§10.1, §§8.4.6, 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 ensuring compliance with Mastercard's requirements. policies.

Lifecycle overview

Disputes move progress through defined stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Adherence to strict Strict adherence to evidence submission requirements and deadlines at each stage is critical essential to avoid automatic rulings against the acquirer.

Required actions

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

  2. Collect the necessary and submit relevant evidence based on the current lifecycle corresponding to the dispute stage.

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

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

  5. Maintain full case thorough documentation for audits audit and reporting.

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 specify grounds for elevated increased 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 monthlysales), and excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more).

## Fraud Recovery and Issuer Thresholds

Mastercard specifies conditions under which issuers may recover fraud losses, including situations where fraud volume reported by an issuer during the case period is below USD 2,000, where issuers have already recovered amounts via chargeback or other processes, or where transactions involved only magnetic stripe cards. Mastercard handles the transfer of recovery amounts by debiting acquirers and crediting issuers (less applicable fees), questionable merchant classification, and bankruptcy. ¶ These refined definitions inform subject to administrative processes. Halyard Pay's Pay incorporates these procedures into its chargeback and risk management policies to ensure compliance and mitigate risk exposure. fraud recovery workflows to align with Mastercard policies.

Source authority: Mastercard SPME §§10.1, §§8.4.6, 10.1, 11.5.

Source authority: Mastercard SPME §8.4.6.

--- 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 §8.4.6
 acknowledgement_business_days: 1
 lifecycle_states:
   - first_presentment
@@ -26,5 +26,20 @@
     - 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.+# Added criteria reflecting Mastercard's updated fraud volume thresholds for issuance recovery and conditions governing recovery payments
+# between Acquirers and Issuers as outlined in Mastercard SPME §8.4.6 (August 2023 edition), impacting chargeback and recovery workflows.
+
+fraud_recovery_conditions:
+  issuer_volume_threshold_usd: 2000
+  transactions_eligible_for_recovery_if:
+    - issuer_reported_fraud_volume_less_than_threshold: true
+    - issuer_received_recovery_via_existing_remedy: true
+    - transaction_performed_with_magnetic_stripe_only_card: true
+  mastercard_privileges:
+    - may_request_additional_information_for_recovery_eligibility
+    - will_not_pay_claims_exceeding_amount_collected_from_acquirers
+  recovery_process:
+    actions:
+      - debit_acquirer_account
+      - credit_issuer_account_less_admin_fee
+    processing_reference: MCBS

--- a/policies/chargeback_handling/policy.md
+++ b/policies/chargeback_handling/policy.md
@@ -1,23 +1,25 @@
 # 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.
+Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, manages the dispute lifecycle for its merchants, ensuring compliance with Mastercard's policies.
 
 ## 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 progress through stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Strict adherence to evidence submission requirements and deadlines is essential to avoid rulings against the acquirer.
 
 ## 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 and submit relevant evidence corresponding to the dispute stage.
+3. Submit second presentments when liability is disputable, with compelling evidence.
+4. Escalate only after issuer rejection of second presentment.
+5. Maintain thorough documentation for audit and reporting.
 
 ## 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 including chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes specify grounds for increased scrutiny or match listing, such as laundering, excessive chargebacks (over 1% ratio with minimum USD 5,000 monthly sales), and excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more).
 
-These refined definitions inform Halyard Pay's chargeback and risk management policies to ensure compliance and mitigate risk exposure.
+## Fraud Recovery and Issuer Thresholds
 
-Source authority: Mastercard SPME §§10.1, 11.5.+Mastercard specifies conditions under which issuers may recover fraud losses, including situations where fraud volume reported by an issuer during the case period is below USD 2,000, where issuers have already recovered amounts via chargeback or other processes, or where transactions involved only magnetic stripe cards. Mastercard handles the transfer of recovery amounts by debiting acquirers and crediting issuers (less applicable fees), subject to administrative processes. Halyard Pay incorporates these procedures into its chargeback and fraud recovery workflows to align with Mastercard policies.
+
+Source authority: Mastercard SPME §§8.4.6, 10.1, 11.5.