Virginia Tax Refund Debit Card Frequently Asked Questions for the Virginia Banking Community

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1 Virginia Tax Refund Debit Card Frequently Asked Questions for the Virginia Banking Community Background and Scope Effective January 2013, tax refunds will be issued through a direct bank deposit or through a new prepaid debit card. Virginia taxpayers will no longer have the option to receive a paper refund check. The Commonwealth of Virginia issued more than 1.2 million income tax refund checks this past year. The elimination of paper checks will result in a significant savings in printing and mailing costs and provide additional taxpayer access to funds with improved security features. The Department of the Treasury has contracted with Xerox State & Local Solutions, Inc. to administer the tax refund debit card program for the Commonwealth with low or no fees to the cardholders. If the card is used properly, the cardholder can avoid paying any fees for accessing their tax refund monies. Many taxpayers will be able to avoid check cashing fees and retain the full value of their tax refund amount. In partnership with Xerox State and Local Solutions, Inc., Comerica Bank is the BIN Sponsor (Bank Identification Number) of the Virginia Tax Refund Debit Card program and serves as the financial institution disbursing cardholder funds. Administrative Offices for Comerica Bank are located in Detroit Michigan. Xerox State and Local Solutions, Inc. has also entered into a contract with the MoneyPass network for routing and process surcharge free ATM cash withdrawals transactions. All other cardholder fees are managed within the Xerox GO Program processing environment. The Virginia tax refund prepaid debit card is a branded MasterCard debit card, which offers full account protection under MasterCard Operating Rules and is FDIC insured. The cardholder account provides the same banking freedom as any other branded debit card account to include dispute rights, protection from fraud and any unauthorized access to the cardholders account. Cardholders may use the card at ATMs, merchants, credit unions and/or teller windows by using both PIN (personal identification number) and/or signature transaction types. Card accounts must be activated before the account can accept online transactions from the licensed MasterCard community of merchant and financial institution endpoints. Cardholder fees are published in the card kits mailed to the taxpayer along with the personalized embossed debit card. These same cardholder materials are located on the Department of Taxation s web site at The customized Virginia tax refund prepaid debit card is referred to as the Virginia Tax Refund Way2Go Card and is a registered trademark of Xerox State and Local Solutions, Inc. It is anticipated that the industry will refer to it as the Way2Go Card ; and the Card account processing environment is referred to as the GO Program. General Information Questions: 1. What does the Virginia Tax Refund debit card look like? Response: It will look like the card shown below. 1

2 2. Is the debit card ready to use once the taxpayer receives it? Response: Before the taxpayer can use the card, it must first be activated by calling the Go Program at to create a Personal Identification Number (PIN).The funds on the debit card are available as soon as the card is activated. 3. When will the Debit Card Program launch and when will the Banks see the first tax refund debit cards? Response: Tax refund debit cards will be issued beginning January 22, Deposits are posted to the Card account in the next ACH window. Debit cards will be issued and mailed on the same date the Card account is opened. Funds will be available as soon as the taxpayer receives and activates the Card account. The Go Program platform and toll free customer service center will begin taking calls when the first cards are issued. This is a cardholder service number and is not intended for bank use. 4. Who should banks contact if they have questions about this new refund debit card? Response: Financial institutions should contact their specific Acquirer who manages their online transaction processing. This ensures that information provided is unique to their contract and license s agreement as an authorized member of the MasterCard network. Direct inquiries to MasterCard are not recommended since the Acquirer supporting the individual banking entity may be approved for other services than this particular card program. The Go Program Call Center staff is not authorized to address bank-related questions. Additional questions about this program can be directed to: Department of the Treasury, Bob Schmitt, (804) , bob.schmitt@trs.virginia.gov or Tina Wilhelm, (804) , christina.wilhelm@trs.virginia.gov. 5. Will the customer s name be embossed on the debit card? Response: Yes these debit cards conform to the MasterCard guidelines and are personalized with the taxpayer's name. If the Card account is a jointly filed tax return, both taxpayers will be issued unique cards, embossed with name and a permanent account number (PAN), for accessing the Card account funds. Only one card activation is required to access the account balance; however, both cards can be activated to allow joint access to funds. 6. How will cardholders know the available balance on the debit card? Response: The available card balance is provided to the caller at the time the card is activated. Cardholders can also check the account balance: On-line by creating an account at By calling the Go Program at By the balance that is printed on the receipt from an ATM. 7. Where can the debit card be used? Response: The debit card can be used at: MasterCard member Banks and Credit Unions MoneyPass ATMs Retail locations (both store front businesses and on-line businesses) that accept MasterCard 2

3 8. Are there fees imposed to the cardholder to use the debit card? Response: In some cases, yes. Cardholders will receive a fee schedule that accompanies their debit card. Financial institutions and ATM owners are not authorized to impose fees. These fees are imposed by the card issuer. 9. Can cardholders deposit the available balance from the debit card into a personal bank account? Response: Yes. There are two options: If the cardholder s bank or credit union displays the MasterCard logo, then a deposit can be completed through a teller assisted transaction. The cardholder will need to request a cash withdrawal for the available amount on the debit card. Cardholders must know the available balance on the card and inform the teller of a cash withdrawal and cash deposit. The cardholder can transfer the funds on-line from their account or through the Go Program IVR into their personal bank account. Cardholders have one free online or IVR transfer and subsequent transfers will be charged a fee. 10. What should the cardholder do once the debit card has a zero balance? Response: Once the card has a zero balance the card is automatically closed and there is nothing more to do. The card can be disposed of. Questions Regarding Bank Teller Cash Withdrawals: 11. How does the cardholder get cash from a bank teller? Response: The cardholder can get cash from any bank or financial institution that displays the MasterCard logo. All MasterCard banks are required to provide teller assisted cash withdrawals. The cardholder will ask the teller at the window for a cash withdrawal from the card. The bank or financial institution will require cardholders to provide proof of identity prior to making the transaction. The cardholder must know the available balance on the card before making the request since bank personnel are not authorized to check account balances on these cards due to privacy and security policies. In order for the transaction to occur, either the bank teller or the cardholder will swipe the card and then the cardholder will be prompted to enter their PIN. The specific process used will depend on the specific bank procedures. Once the transaction is approved, the teller will provide the cash to the cardholder. Teller assisted cash withdrawals can be for any amount up to the available account balance. This method is an easy way for a cardholder to get funds in amounts that are not in $20 increments as required by most ATMs. 12. The Virginia Tax Refund Debit Cards Go Program Fee Schedule states that bank teller cash withdrawals service fee is one free and $2 each thereafter. How is the bank supposed to know how many times the card has been used? Response: Fees applied to the cardholder s debit Card account are controlled by Xerox State and Local Solutions, Inc. transaction processing platform. The banks will not need to know how many times the teller transaction is used; if it is free, or the second transaction that would have a fee applied. Banks are reimbursed an interchange fee for teller transactions acquired at their bank and will not collect any cardholder fees for the cash disbursement. MasterCard will manage, track and collect appropriate fees from licensed endpoints and settle daily with each entity for transactions processed. 3

4 13. How are cardholder fees managed and can Virginia banks apply additional fees for cash withdrawal transactions at bank teller windows? Response: The Go Program platform and technical environment is certified and linked to the MasterCard network switch for receiving and authorizing online transactions from the banking environment. All cardholder fees for both ATM cash withdrawals and bank teller window transactions are applied at the time of the transaction request, tracked and recorded in the Card account based on the agreed upon fee schedule of the Commonwealth s contract with Xerox State and Local Solutions, Inc. Bank teller cash withdrawals No other bank fees can be applied to the teller-assisted transaction. 14. If a customer uses their MasterCard charge card to get a cash advance, the bank charges a fee. Why can t they charge a fee when they give taxpayer cash from this debit card? Response: MasterCard Operating Rules prohibits the charging of an additional fee to cardholders who are not a holder of a bank account at the specific branch or endpoint. MasterCard Operations Bulletin, NO. 1 dated January 2013 Subject Face-to-Face Cash Disbursement Transactions Reminder for retail Branch Contacts and Compliance states: Background Many state governments, as well as the federal government, rely on prepaid MasterCard card programs to disburse a variety of benefit programs and other payments, such as Social Security benefits and income tax refunds. These programs are growing rapidly both the number of programs and the number of cardholders enrolled. Employers are also increasingly using MasterCard prepaid programs as a payroll solution. Many cardholders in these programs will choose to withdraw cash at either a MasterCard customer location or at the offices of the customer s authorized cash disbursement agent. Accordingly, these institutions may see increased traffic in branch locations as cardholders of these programs access their cash at teller windows. Customer Requirements MasterCard reminds customers and their authorized cash disbursement agents that prepaid MasterCard cards are entitled to all the services that the MasterCard Standards require. This includes the requirement to provide face-to-face cash disbursement services at all locations to all MasterCard cardholders, wherever teller services are available. No additional fees may be charged by the teller for this service. MasterCard strongly advises customers and their authorized cash disbursement agents to review their internal procedures to ensure compliance with MasterCard cash disbursement Standards. These procedures are summarized in the article Reminder Face-to-Face Cash Disbursement Transaction Standards published in Global Operations Bulletin No. 9, 1 September Clarification to same question regarding fee paid by the bank: Banks have to pay a 2% fee to MasterCard. Why can t they charge a fee when they give taxpayer cash from this debit card? Response: Bank s do pay a processing fee to both their Acquirer and/or MasterCard for the processing of a cash advance for cardholder s of their specific banking environment. This may or may not be 2%, which is dependent on volumes and the licensing agreement in place with their Acquirer. High volume institutions pay lower fees based on the expense of the service and activity levels. For the Virginia debit MasterCard, the bank performing the cash disbursement will receive compensation from MasterCard for servicing the cardholder s transaction since the Issuing Bank and Xerox State and Local Solutions, Inc. will pay MasterCard for acquiring the teller transaction. The bank providing the teller-assisted cash withdrawal will pay their Acquirer for the standard operating fee and/or network routing fee for authorizing the transaction between the processing centers. 4

5 Teller-assisted transactions will be no different than current requirements by MasterCard for any other not on-us transaction. 16. A cash advance is the only method available for a teller assisted transaction to occur. Will a PIN number have to be used? If so, how are they to enter it if our machine is out of the customers reach? Response: Cash advance is a term used in the past, for a bank to advance small cash loans to a customer of the bank and is normally performed as a credit card transaction where no PIN is required. Separate procedures for personal identification is required, validated and often a copy of the information is made by the teller as part of the documentation to disburse cash at the window. Many banks have since enhanced their operations to accommodate for PIN based cash transactions with proper identification. In this setting, the PIN device is attached to an extendable cord which is handed through the window to the cardholder for secure entering of their PIN. Either way is acceptable and should not be any different than current procedures used for cash advances to other card programs. A PIN number is not required for a cash disbursement at teller windows. MasterCard adds a code to the online transaction for processors and networks to identify a teller transaction and processes the transaction accordingly and to apply the appropriate fees to the cardholder. 17. Technical capabilities of Banks: if the bank does not have the technology to issue cash advances via a machine on the teller line; can they just send the customer to the ATM? Response: No. Bank teller agents may not direct the Virginia cardholder to an ATM for conducting the cash withdrawal. See the MasterCard Operations note in question #5. Different fees apply to ATM transactions vs. teller transaction so the cardholder may incur a transaction fees at the ATM that may not be applied at the teller window..also ATM transactions are not appropriate if the remaining amount on the card is less than $20.00 or the taxpayer is trying to obtain cash not in multiples of $ Questions Regarding ATM Cash Withdrawals: 18. What ATM fees and surcharges may a bank charge for use at any of their ATMs? Are the rules different if the ATM is on the MoneyPass network or not? If fees and surcharges are not permitted, do you know if the bank has to reprogram its ATMs or does the MoneyPass network or MasterCard network update automatically? Response: The MoneyPass network is the preferred ATM network for the Virginia Way2Go Card due to its existing contract with Xerox State and Local Solutions, Inc. for routing surcharge fee free ATM transactions. The BIN number of the Virginia card base is , assigned by Comerica Bank, and it is loaded into all of the MoneyPass ATM software nationwide. The ATM transaction conducted by the cardholder is validated by MoneyPass ATM software as surcharge free, using the BIN number, and then routed to the Xerox Go Program for processing. The GO Program transaction processing environment will validate inbound ATM transaction being received from the MoneyPass network and apply transaction fees in accordance with the agreed upon fee schedule in the card materials. If an ATM owner does not participate in the MoneyPass network, ATM transactions routed to the GO Program platform may apply a surcharge fee BUT by law must notify the cardholder of the intended surcharge fee and the cardholder must have an option to cancel and select a transaction method that does not impose this fee. The Commonwealth encourages as many ATM owners as possible to participate in surcharge free access for Commonwealth cardholders as possible. We welcome all Virginia bankers and 5

6 ATM owners who wish to provide surcharge free access to load the BIN to provide this access to Virginia constituents prior to January 15, Our policy now is for any foreign card that is captured at our ATMs the card is destroyed. Will the same apply for these cards? Response: Most banks no longer capture cards. If a card is captured, it must be handled in accordance with MasterCard Operating Rules and the financial liability and protection of the funds on the Card account will be the responsibility of the ATM owner while in their possession of the Card. The Bank should contact their Acquirer as to procedures to be used. It is recommended that the ATM owner not capture the card to avoid this risk and financial liability. Cardholder if engaged should call the Debit Card Call Center and report the card capture so that the account is suspended until the issue is resolved. 20. Can the bank set a limit on the amount per transaction or per day that a card user may withdraw from an ATM? Many banks set such limits on ATM withdrawals. Again, if banks are prohibited from setting such a limit, do they need to reprogram their ATMs, or are the MoneyPass network or MasterCard network able to do that automatically? Response: No, the ATM owners may not set any special ATM limits for Virginia cardholders. Any current limits the ATM owners have in place should equally apply to any card program or cardholders obtaining an ATM cash withdrawal. There should be no additional programming required by the ATM owners for our program since the Bank s Acquirer should manage their business rules in accordance with MasterCard Operating Rules for equality. 21. What if the cardholder enters the wrong PIN or has forgotten the PIN? Response: For security reasons, the card will be locked after three (3) incorrect PIN entries. If the cardholder forgets the PIN, the cardholder will need to call the Go Program at to establish a new PIN. 22. Many bank ATMs will confiscate a debit card if the customer inputs the wrong PIN number three times in a row and the card is destroyed. This policy is intended to limit card theft losses. Is there any prohibition on such a policy? Response: The banking industry stopped confiscating plastics five or six years ago since they had to return the card back to the Issuer through signature delivery and this was a significant expense. As noted previously, the Go Program should maintain responsibility of the Card account and protection of the Card access. The GO Program platform will track the PIN attempts and lock the account from access at any ATM, not just the current ATM being used. Our experience has shown that the majority of banks no longer capture the card if the PIN is entered incorrectly three times since the authorizing engine will lock the card for repeated incorrect PIN attempts. Again it is a financial risk for ATM owners to capture the card and be responsible for the Card account funds while in their possession. We recommend that the ATM owner let the GO Program manage the oversight of PIN attempts and the process for locked and unlocked accounts. For security and privacy reasons, this procedure is not further documented. 23. How does a cardholder access funds if the balance is less than $20, or not in increments of $20? Response: ATMs usually dispense money in increments of $20. If the balance on the card is below $20 the cardholder can access the funds by: Visiting any bank or credit union that displays the MasterCard logo and requesting a teller-assisted cash withdrawal. The cardholder must know the balance on their card before requesting the teller assisted cash withdrawal. Using the balance on the card towards a purchase at a retail location. 6

7 Cardholders should be directed to contact the Go Program at or if they have any questions or issues with the following: Activating the debit card Assistance using the debit card If the debit card is lost, stolen or damaged If the debit card was never received To dispute an unauthorized charge To check account balance To inquire about transaction fees 7