State of the art

Cloud Token Processing

Effective 2023, Visa and Mastercard have introduced the Secure Credential Framework / Customer Performance Development Regulations, which are aimed at all domestic and intraregional e-commerce transactions. The card schemes will now charge an additional surcharge, ranging between 2.00 and 6.5 bps. These new regulations consequently penalise all transactions without Network Tokenization, based on the jurisdiction of the merchant company. Please review the attached publications in this regard.

The introduction of network tokens is, by all means, the saving grace for business ventures that have built their business model around recurring billing. This update removes the ocurrance for a range of decline codes- including the codes for expired card, pick up card, and invalid account number. We have conducted a few case studies based on larger e-commerce clients and have calculated an uplift potential ranging between 15-20%

Scheme regulations

Introduction of secure credential framework regulations

Background

Visa’s Secure Credential Framework (SCF), which launched in April 2022, is a balanced package of measures and related rules to improve support for Visa EMV® Payment Tokens used in a card-not-present (CNP)1 environment and encourage the adoption and usage of Visa EMV Payment Tokens by merchants for e-commerce transactions.

Implications

Visa’s vision for the future of digital payments is an ecosystem of high-quality cardholder credentials resulting in digital commerce performance that is closer to that of face-to-face chip transactions: will result consequently in lower fraud, higher authorization rates and improved consumer experience. As more consumers rely on online shopping, this vision has never been more important.

Anticipated fees 

Fee In Scope Out of Scope Rate Effective Date
Acquirer Secure Credential CNP Behavioral Fee All domestic or intraregional CNP PAN autorization approvals processed without Visa EMV Payment Tokens or Visa Secure All domestic or intraregional CNP authorization approvals that are processed:

– Using Visa EMV Payment Tokens
-Using Visa Secure
– With a merchant location in Turkey or France

 2.5 bps per transaction 1 October 2023

Introduction of Customer Performance Development Fund

Background

In 2021, Mastercard announced a Customer Performance Development Assessment with several criteria aimed at enabling better user experience, innovations, and security in the payment ecosystem. Mastercard recognizes issuers and acquirers for the progress made to enhance the overall security, user experience, and technology of the payment ecosystem and to provide a conducive environment for their merchants and cardholders to complete purchase transactions with peace of mind. Now, it is postponing the fund and pricing changes. Mastercard acknowledges the effort needed to implement improvements and aims to support the customers’ ongoing developments by postponing the introduction of the Customer Performance Development Assessment and some other pricing changes referred to in this announcement. Mastercard will review and adapt Customer Performance Development Assessments on an ongoing basis following the development of the payments ecosystem, in line with Mastercard strategy.

Implications

The Issuer Approval Rate performance measure aims at driving incremental sales and better end user experience in the e-commerce space. The criterion is separately calculated for credit, debit, and prepaid products. The transaction basis for the calculation of this performance measure is the approved authorization transactions and cleansed declined transaction.

The transaction basis is defined as:

  • All Approved authorization purchase transactions (with Authorization Response Code [DE 39] equal to 00,08, 10, 85, or 87)
  • Excluding all transactions where DE 39 is not equal to 00, 08, 10, 85 or 87 and with an amount exceeding for consumer cards USD 100,000 and for commercial cards exceeding USD 1 million

Anticipated fees

Fee In Scope Out of Scope Rate Effective Date
Issuer Performance Development – Approval rate eCommerce – Credit, Debit and Pre-Paid Authentication Approval Rate Not supporting Remote Commerce Programs Tokenization 2 to 6.5 bps 1. April 2023

Your Advantages

  • Improvement of Authorisation Ratios

  • 90% reduced PCI Scope

  • Minimised Security Exposure

  • Facilitating processing across multiple acquirers

Offered Features

  • Cloud based payment processing

  • Safeguard most sensitive data

  • Streamline Cloud Tokenization Platform

  • Automated card data udates

Network Token – Transaction Flow

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Interested in – risk free  – state of the art – one source – global payment solutions?