Dates Visa MasterCard Discover American Express. Acquirers, subprocessors. support EMV International ATM liability shift 2

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1 Network Updates Spring 2015 We are committed to working closely with you on achieving your business goals. As a part of this commitment, we carefully monitor Network changes and summarize them for your convenience. Following is the summary of information from American Express, Discover Network, MasterCard Worldwide and Visa U.S.A. regarding changes or updates to interchange rates, operating rules and regulations and other changes that may impact your company. We encourage you to call your Relationship Manager or our Contact Center at the number located on your monthly statement with any questions you may have regarding this information. Except where otherwise noted, all changes are effective April 17, EMV (Updates are in bold) Update on Card Schemes Acceleration of Chip Migration (EMV) The Program: MasterCard, Visa, American Express and Discover have released their roadmaps to EMV (Europay, MasterCard and Visa). These roadmaps begin the discussion of their plans to accelerate the migration to EMV chip technology in the United States. The card schemes roadmaps will help prepare the U.S. payment system for the arrival of mobile payments by building the necessary infrastructure to accept and process chip transactions. Dates Visa MasterCard Discover American Express April 2013 Acquirers and subprocessors must support EMV Acquirers and subprocessors must support EMV International ATM liability shift 2 Acquirers, subprocessors and direct connect merchants must support EMV data elements Acquirers and subprocessors must support EMV, including mobile October 2013 Merchant Account Data Compromise (ADC) relief (Phase I) Acquirers, subprocessors and direct connect merchants must support EMV data elements for Pulse transactions April rd Party ATMs must support EMV October 2015 US Liability Shift 1 US Liability Shift 2 Merchant ADC Relief (Phase II) October 2016 ATM Liability Shift 2 October 2017 Automated Fuel Dispenser Liability Shift 1 ATM Liability Shift 1 Automated Fuel Dispenser Liability Shift 2 1 Liability for counterfeit transaction shifts to party who does not have support for EMV. 2 Liability for various counterfeit transaction shifts to party who has least-secure support for EMV 3 Includes the US and its territories as well as the Caribbean, Central/South American region US Liability Shift 2 US Liability Shift 2,3 Automated Fuel Dispenser Liability Shift 2 Automated Fuel Dispenser Liability Shift 2,3 Copyright 2015 Vantiv, LLC. All rights reserved. Vantiv, the Vantiv logo, and all other Vantiv product or service names and logos are registered trademarks or trademarks of Vantiv, LLC in the USA and other countries. indicates USA registration.

2 The Visa, MasterCard, Discover and American Express EMV programs Incentives for those merchants who upgrade to EMV chip-enabled terminals To encourage EMV adoption, Visa, MasterCard, Discover and American Express have each announced a waiver from annual PCI DSS validation. Contact your relationship manager for more information on the PCI DSS validation waiver. At least 75% of merchant s transactions originate from dual interface chip terminals and are capable of processing end-to-end chip transactions. The merchant has not been involved in a breach of cardholder data (merchants previously involved in a breach may qualify if they have completed subsequent PCI DSS validation). All merchants must continue to comply with PCI DSS. Program enrollment is required. For MasterCard, eligible merchants are Level 1 and Level 2 merchants MasterCard will allow for account data compromise relief October 2013 if 75% of transactions initiated at EMV compliant terminals - 50% relief October 2015 if 95% of transactions initiated at EMV compliant terminals - 100% relief 2

3 Beginning October 2015, Visa, MasterCard, Discover and American Express will implement a liability shift for domestic and cross-border counterfeit transactions. Visa October 2015 Point-of-Sale liability for counterfeit fraud is assigned to party that is responsible for transaction not being done using EMV October 2017 Automated Fuel Dispenser merchants have extended timeframe in consideration of cost/complexity October 2017 ATM liability for counterfeit fraud is assigned to party that is responsible for transaction not being done using EMV MasterCard April 2013 International ATM liability shift based on hierarchy of which party has the most secure option enabled. October 2015 Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. Standard rules apply when both are equal. October 2016 ATM Liability Shift October 2017 Automated Fuel Dispenser Liability Shift American Express Discover October Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. October Automated Fuel Dispenser Liability Shift October Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. October Automated Fuel Dispenser Liability Shift Information related to liability shifts and PCI-DSS validation waiver is a summary and is subject to the appropriate network s operating regulations. Contact your Relationship Manager for more detail. 3

4 Support of EMV Debit Solutions by Regional PIN Debit Networks (Updates are in bold) The following Regional PIN Debit Network announcements have been made regarding EMV debit solutions. Vantiv is working with the regional networks to implement and certify required changes as the networks specifications become available. Debit Network Announced support of the Visa U.S. Common Debit EMV Solution Announced support of the MasterCard U.S. Common Debit EMV Solution Accel March 2014 March 2014 STAR February 2014 April 2014 Pulse March 2014 May 2014 NYCE April 2014 June 2014 CU24 April 2014 CO-OP April 2014 Shazam April 2014 July 2014 AFFN April 2014 Presto! June 2014 August 2014 Alaska Option* July 2014 July 2014 MoneyPass November 2014 *On October 6, 2014, Alaska Option announced that the company would be dissolved and that the process would take approximately six months to complete. To learn more about EMV and what Vantiv is doing to help merchants prepare visit our new EMV microsite. 4

5 MasterCard MasterCard Introduces New 2 Series MasterCard BIN Range The Program: MasterCard is adding new primary account BIN ranges to be processed in the same manner as existing range The Change: The payments ecosystem must be ready to support the 2 Series MasterCard BINs by October 14, All Vantiv platforms will support the MasterCard 2 Series BIN range. The Impact: Merchants must be able to accept the new MasterCard BIN range in both card-present and card-not present payment acceptance channels. MasterCard Introduces New Legal Gambling MCCs (U.S. Region Only) The Program: MasterCard is adding three new Merchant Category Codes to identify legal gambling. The Change: Gaming merchants must be registered with MasterCard prior to submitting transactions using any of the new legal gambling MCC values. These MCCs will only be valid in transactions submitted by U.S. merchants. MCC Merchant Type Interchange 7800 Government-Owned Lotteries Government Licensed Casinos (Online Gambling) Government Licensed Horse/Dog Racing Emerging Market Full and Merchant UCAF Merit I Merit III Public Sector Consumer Standard Commercial Data Rate Commercial Face-to-Face Commercial Large Ticket Commercial Standard Full and Merchant UCAF Merit I Consumer Standard Commercial Data Rate Commercial Large Ticket Commercial Standard The Impact: Legal Gambling transactions from MCCs 7801 and 7802 must contain the Unique Indicator in the Transaction Category Code. ** MasterCard is adding MCCs 7801 and 7802 to the list of MCCs that may not use CVC2 in Lieu of Imprint for card present transactions. Merchants classified as 7801 and 7802 must provide a manual card imprint on a signed sales slip to remedy a reason code 4837 chargeback. 5

6 MasterCard Introduces New Digital Goods MCCs The Program: A digital good is one that is stored, delivered, and used in electronic format. Examples are books, periodicals, magazines, music files, games, game pieces, and software applications. The delivery of a purchase of a digital good may occur as a one-time or subscription basis. The Change: MasterCard will add four new Merchant Category Codes for digital goods. MCC Merchant Type Interchange Digital Goods Audiovisual Media Including Books, 5815 Full and Merchant UCAF Movies, Music Merit I 5816 Digital Goods: Games Commercial Data Rate 5817 Digital Goods: Software Applications (Excludes Games) Commercial Large Ticket Consumer and 5818 Digital Goods-Multi-Category Commercial Standard The Impact: Eligible merchants should be properly identified with applicable new MCCs. Merchants who sell physical goods such as books, games, magazines will continue to use existing MCC classifications. 6

7 MasterCard Expands Contactless Aggregation Rules to include Bridge/Road Fees, Tolls The Program: MasterCard currently permits Transit (Suburban and Local Commuter Passenger, including Ferries and Bus Lines) merchants who accept contactless payments to aggregate transactions. Transaction aggregation helps support a fast-paced transaction environment for consumers to pay for transit fares and to permit entry. The Change: MasterCard will enable Bridge and Road Fee/Toll merchants (MCC 4784) to participate in transaction aggregation. The Impact: Participating merchants may combine multiple taps (visits by the consumer) into a single transaction amount. Transit and Bridge and Road Fee/Toll merchants are permitted to combine up to 14 days of MasterCard product transactions from the initial authorization or up to an aggregated amount of $15.00, whichever comes first. For Maestro transactions the aggregation timeframe is up to three days. MasterCard will permit authorization requests to be submitted for any amount not exceeding the established chargeback protection amount ($15.00) in addition to the current Post-Authorized Aggregated transaction criteria: Transit or Bridge and Road Fee Toll merchant category code PayPass POS entry mode Transit transaction type indicator (MasterCard or Maestro Post-Authorized Aggregated) Information about acceptance environment (card and cardholder presence, terminal attendance, terminal capability, identification of normal request or Preauthorized request) MasterCard Digital Enablement Service Enhancements The Program: Magnetic Secure Transmission (MST) technology is accomplished by manipulating the magnetic field of the mag-stripe reader to transmit magnetic stripe data from a mobile device. A signal is received by the magnetic read head of the card reader. The received signal emulates the same magnetic data fields as a traditional magnetic stripe card transaction. The Change: MasterCard is modifying existing edits to enable the processing of tokenized transactions initiated by the use of Magnetic Secure Transmission (MST) technology. The Impact: This technology enables merchants with only mag-stripe readers to accept tokenized transactions from mobile devices. Products that currently support this technology are wallets such as Loop Pay and Coin Supported on all phone types Transactions are card present with a POS entry-mode of 90 (swiped) 7

8 MasterCard to Support Multiple Clearing Records for Single Card-Not-Present Authorization The Program: Similar to Visa s Multiple Clearing Records for Single Card-Not-Present Authorization Program that was communicated in the Winter 2014 newsletter, MasterCard is developing a similar transaction processing solution for T&E and Ecommerce merchants that ship goods from various sites over multiple days. The Change: MasterCard will introduce new settlement values in an existing field for merchants to identify the multi-clearing indicator. The multi-clearing indicator will be used in conjunction with the approval code, and Banknet Reference Number for Issuers to accurately manage a cardholder s open-to-buy limits. The Impact: The new Multi-Clearing Enhancement allows merchants the option to submit multiple clearing transactions for a single authorization, versus waiting to submit a single clearing transaction once all items are ready for shipment. Example Scenario: Items in Cart 1 pair of jeans $50 Original Auth Shipping Day Total Auth Clearing Amount 2 $210 $50 1 pair of shoes $60 $210 3 $210 $60 1 jacket $100 6 $210 $100 Multi-clearing Indicator Previously approved authorization, partial amount, multi-clearing Previously approved authorization, partial amount, multi-clearing Previously approved authorization, partial amount, final-clearing Merchants interested in supporting MasterCard s Multiple Clearing Records for Single Card-Not-Present Authorizaiton Program should contact their Relationship Manager. MasterCard Cross Border Fee Increase The Program: As previously communicated in the Winter Newsletter, MasterCard currently assesses their Acquirer POS Cross Border Fee on all credit and debit (signature and PIN) transactions occurring at U.S. merchant locations when the Issuer is located outside of the U.S. MasterCard s Cross Border Fee is assessed at different rates depending on the transaction currency. The Change: MasterCard will update the Acquirer POS Cross Border Fees. The Impact: Effective April 1, 2015 the following rate modifications will be implemented: The Cross Border rate will increase by 0.20% to 0.60% on transactions when the Issuer location is non-u.s. and the merchant transaction currency is U.S. dollars The Cross Border rate will increase by 0.20% to 1.00% on transactions when the Issuer location is non-u.s. and the merchant transaction currency is not U.S. dollars 8

9 MasterCard Modifies Emerging Markets Rate for Education and Government MCCs The Program: MasterCard offers an Emerging Markets interchange rate to select transportation, insurance, cable TV, education and government MCCs. The Change: MasterCard is modifying the consumer debit and prepaid Emerging Markets rate specifically for Education and Government MCCs. The Impact: The new rate will apply to the following MCCs: o o o o o o o o o MCC 8211 (Schools, Elementary and Secondary) MCC 8220 (Colleges, Universities, Professional Schools, and Junior Colleges) MCC 8299 (Schools and Educations Services not elsewhere classified) MCC 9211 (Court Costs Including Alimony and Child Support) MCC 9222 (Fines) MCC 9223 (Bail and Bond Payments) MCC 9311 (Tax Payments) MCC 9399 (Government Services not elsewhere classified) MCC 9402 (Postal Services Government Only) All Emerging Markets interchange rate qualifying requirements will continue to apply. *The maximum allowable convenience fee charged to the cardholder must be no more $4.95 per transaction or no more than 1.00% of the transaction amount. MasterCard AVS Fee Increase The Program: The Address Verification Service is a service offered by MasterCard that helps merchants to identify the probability of fraud risk, allowing for suspect transactions to be flagged for potential additional fraud screening or manual review. Transactions where the address information presented by the merchant matches the address data maintained by the card issuer are less likely to be fraudulent than those transactions where AVS was not present at all. The Change: Effective August 2015, MasterCard is increasing the AVS fee for all transaction types. The Impact: Merchants will notice an increase to MasterCard AVS fees on their invoice beginning in August. 9

10 MasterCard Increases Merchant & Full UCAF Interchange Rates The Program: MasterCard reviews their interchange rate programs and adjusts them periodically to encourage widespread issuance and acceptance of MasterCard card products. The Change: MasterCard is adjusting the Merchant & Full UCAF Rates which apply to e-commerce transactions that participate in MasterCard s Secure Code service. The Impact: Merchants will realize an increase in the following Merchant and Full UCAF interchange categories: Interchange Fee Program Full UCAF Core Full UCAF Enhanced Full UCAF World Full UCAF World High Value Full UCAF World Elite Full UCAF Debit and Prepaid Merchant UCAF Core Merchant UCAF Enhanced Merchant UCAF World Merchant UCAF World High Value Merchant UCAF World Elite Merchant UCAF Debit and Prepaid Visa Visa Introduces New Digital Goods MCCs The Program: A digital good is one that is stored, delivered, and used in electronic format. Examples are books, periodicals, magazines, music files, games, game pieces, and software applications. The delivery of a purchase of a digital good may occur as a one-time or subscription basis. The Change: Visa will add four new Merchant Category Codes for digital goods. MCC Merchant Type Interchange Program 5815 Digital Goods Media: Books, Movies, Music 5816 Digital Goods: Games 5817 Digital Goods: Applications (Excludes Games) Any CPS interchange program in Large Digital Goods Merchant which the MCC is eligible 5818 (Merchants that process over 25 million Visa transactions annually) The Impact: Eligible merchants should be properly identified with applicable new MCCs. Merchants who sell physical goods such as books, games, magazines will continue to use existing MCC classifications. 10

11 Visa Introduces New Legal Gambling MCCs (U.S. Region Only) The Program: Visa is adding three new Merchant Category Codes to identify legal gambling. The Change: Gaming merchants must be registered with Visa and a valid MVV is required for all purchase and refund (credit voucher) transactions submitted with any of the new legal gambling MCC values. These MCCs will only be valid for transactions submitted by U.S. merchants. MCC Merchant Type Interchange Program Government-Owned Lotteries Government Licensed Casinos (Online Gambling) Government Licensed Horse/Dog Racing CPS/Retail 2 Debit and Credit CARD PRESENT CPS/Retail -Debit, prepaid (consumer), commercial prepaid, and business debit EIRF Debit and Credit- Credit or Commercial card Not eligible for CPS/Small Ticket CARD NOT PRESENT EIRF Debit and Credit Not eligible for CPS/Small Ticket CARD PRESENT CPS/Retail -Debit, prepaid (consumer), commercial prepaid, and business debit EIRF Debit and Credit- Credit or Commercial card Not eligible for CPS/Small Ticket CARD NOT PRESENT EIRF Debit and Credit Not eligible for CPS/Small Ticket MVV or Quasi Cash Indicator Requirements MVV (auth and settlement) MVV (auth and settlement) Quasi Cash Ind (auth and settlement) MVV (auth and settlement) Quasi Cash Ind (auth and settlement) The Impact: Eligible gaming merchants should be properly identified with applicable new MCCs. 11

12 Visa Changes to Chip Card Authentication Processing The Program: Visa chip card issuers who elect to participate in Visa s online chip authentication service, may choose for Visa to decline a transaction on their behalf, when online card authentication can not be performed. The Change: A decline may occur if Visa doesn t support the cardholder verification value, or some or all chip data was missing from the transaction in order for Visa to validate the cryptogram. The Impact: Merchants who support the acceptance of contact or contactless chip transactions may see an increase in authorization declines if full chip data is not sent and the Point-of-Service Entry Mode value is one of the following: 05 (Integrated circuit card read; CVV or icvv checking is possible) 07 (Contactless device-read originated using VSDC chip data rules) 95 (Integrated circuit card read; CVV or icvv checking may not be possible) Visa Corporate & Purchasing Card Interchange Program Name Changes The Program: Visa has announced they are modifying the names of certain interchange rate programs. The Change: The following interchange rate program names will be changed as follows: Current Program Name Corporate Card - Retail Corporate Card - Electronic with Data Purchasing Card Retail Purchasing Card Electronic w/data Effective April 17, 2015 Program Name Corporate Card - Card Present Corporate Card - Standard with Data Purchasing Card Card Present Puchasing Card Standard w/data The Impact: Merchants will see new interchange category descriptors for corporate and purchasing cards. Visa Eliminates Corporate & Purchasing Card Electronic Rate Programs The Program: Visa is eliminating certain corporate and purchasing interchange programs. The Change: Visa Corporate and Purchasing Card Electronic interchange rate programs will be eliminated. Current- Program Name Corporate Card - Electronic Purchasing Card Electronic Effective April 17, Program Name Corporate Card - Standard Puchasing Card Standard The Impact: Transactions that currently qualify for these rates will now qualify at the Corporate and Purchasing Card Standard rates. 12

13 Visa Eliminates Corporate & Purchasing Card B2B Rate Programs The Program: Visa has announced the elimination of certain interchange programs. The Change: Corporate and Purchasing Card B2B interchange rate programs will be eliminated. Current Effective April 17, 2015 Purchasing Card-B2B Purchasing Card-Card Present Purchasing Card-Card Not Present Corporate Card-B2B Corporate Card-Card Present Corporate Card-Card Not Present The Impact: Transactions that currently qualify for these rates will now qualify at the Corporate and Purchasing Card Card Present or Card Not Present rates. B2B merchants may see an increase or decrease in their fees as a result of these changes. Visa Introduces New Purchasing Card Fleet Rate Program The Program: Visa is introducing a new interchange rate program for Purchasing Card Fleet transactions. The Change: Purchasing Card Fleet transactions will be eligible for a new interchange rate program. Current Effective April 17, 2015 Purchasing Card-Retail Purchasing Card-Fleet The Impact: Purchasing Card Fleet transactions that currently qualify for Purchasing Card Retail will now qualify at the new Purchasing Card Fleet rate. Visa Expands and Renames the Purchasing Large Ticket Interchange Program The Program: Visa will expand the existing Purchasing Large Ticket interchange program to include Corporate card products. Visa will also rename the Purchasing Large Ticket program to the Commercial Product Large Ticket program and will be available to properly qualified purchasing and corporate card transactions. The Change: Corporate card transactions will be eligible for the Commercial Product Large Ticket interchange rate. Current Effective April 17, 2015 Purchasing Large Ticket Commercial Product Large Ticket The Impact: CPS qualified corporate card transactions that include Level 2 and 3 data, and the transaction amount is equal to or greater than $8,725, will be eligible for the new interchange rate. 13

14 Visa Adds New Government-Owned Lotteries MCC to CPS/Retail 2 Interchange Program The Program: Currently, Government-owned lottery transactions are eligible for the CPS/Retail 2 interchange program. The Change: Visa will add the new MCC 7800 (Government-owned lotteries) to the existing CPS/Retail 2 interchange program. The Impact: Consumer credit card (Traditional, Rewards, Signature and Infinite spend-not-qualified) and nonregulated debit and prepaid card transactions will be eligible for CPS/Retail 2. Visa Signature Preferred and Visa Infinite Spend qualified transactions will continue to qualify for existing Signature Preferred and Infinite Spend interchange programs. Visa Introduces New Straight Through Processing Platform The Program: Visa s Straight Through Processing platform enables a Visa buyer to initiate an invoice payment to a participating supplier (merchant). Buyer initiated payments are directed to Visa for authorization and settlement message generation using the Cybersource transaction processing platform. Visa delivers a remittance notice to a supplier containing payment details, buyer information and the associated invoice/reference number for reconciliation. New Straight Through Processing Interchange Qualification Criteria: - Corporate or Purchasing card (GSA and non-gsa) - U.S. issuer, U.S. merchant - CPS qualified for a card-not-present or e-commerce program - Market Specific Authorization Data Indicator must be J in authorization and settlement messages Transaction Amount Effective April 17, 2015 $ or less U.S. STP Tier 1 $7, $14, U.S. STP Tier 2 $15, $49, U.S. STP Tier 3 $50, $99, U.S. STP Tier 4 $100, or greater U.S. STP Tier Purchasing and corporate card transactions will continue to receive the following programs: Visa Partner Program (VPP) Member Supplied Interchange (MSI) Limited Acceptance-Debit Only GSA Government-to-Government Merchants interested in participating in Visa s New Straight Through Processing platform should contact their Relationship Manager. 14

15 Visa Acquirer International Service Assessment (AISA) Fee Increase The Program: As previously communicated in the Winter Newsletter, Visa currently assesses their Acquirer International Service Assessment (AISA) on transactions occurring at U.S. merchant locations when the Issuer is located outside of the U.S. The Change: Visa will update the U.S. Acquirer International Service Assessment (AISA) fee types and corresponding rate structure. The Impact: Effective April 1, 2015 the following rate modifications will be implemented: Increase the AISA rates by 0.40% to 0.80% on transactions when the Issuer location is non-u.s. and the merchant transaction currency is U.S. dollars Charge an incremental rate of 1.20% when the Issuer location is non-u.s. and the merchant transaction currency is not U.S. dollars Visa Updates Consumer Credit Performance Threshold Tiers The Program: Visa will update the eligibility requirements for retail and supermarket credit transactions to qualify for certain incentive interchange programs. Performance Thresholds (Consumer Credit) Minimum Transaction Count Payment Volume Minimum Current1 New2 Current1 New2 Maximum Chargeback Ratio3 (unchanged) PCI Compliance (unchanged) Threshold I 60.0 million 67.0 million $3.9 billion $4.2 billion 0.020% Required Threshold II 37.0 million 41.4 million $2.0 billion $2.2 billion 0.020% Required Threshold III 9.9 million 10.3 million $535 million $565 million 0.020% Required 1 Eligibility requirements are based on activity from the 12 months ending 30 September Eligibility requirements are based on activity from the 12 months ending 30 September Chargeback ratios are calculated as a percentage of a merchant s gross transaction count. The Impact: Merchants may see changes in Threshold categories based upon updated eligibility requirements. 15

16 Discover Discover Introduces New Digital Goods MCCs The Program: A digital good is one that is stored, delivered, and used in electronic format. Examples are books, periodicals, magazines, music files, games, game pieces, and software applications. The delivery of a purchase of a digital good may occur as a one-time or subscription basis. The Change: Discover will add three new Merchant Category Codes for digital goods. MCC Description Interchange Program 5815 Digital Goods: Books, Movies, Music Any interchange program in 5816 Digital Goods: Games which the MCC is eligible 5817 Digital Goods: Applications (Excludes Games) The Impact: Eligible merchants should be properly identified with applicable new MCCs. Merchants who sell physical goods such as books, games, magazines will continue to use existing MCC classifications. Discover Introduces New Legal Gambling and T&E MCCs (U.S. Region Only) The Program: Discover is adding three new Merchant Category Codes to identify legal gambling and three new Travel & Entertainment (T&E) Merchant Category Codes. The Change: These MCCs will only be valid for transactions submitted by U.S. merchants. MCC Description Interchange Program 7800 Government Owned Lotteries 7801 Government Licensed Online Casinos Mid Submission Level 7802 Government Licensed Horse/Dog Racing 3600 Saddlebrook Resort Tampa PSL Hotels/Car Rentals 3601 Tradewinds Resorts PSL Hotels/Car Rentals 3821 Caribe Royale PSL Hotels/Car Rentals The Impact: Eligible gaming merchants should be properly identified with applicable new MCCs. 16

17 Discover Network Reference ID (NRID) Requirements The Program: Discover requires the Network Reference ID (NRID) to be included with sales data for all Discover transactions. The Change: Discover will begin to qualify transactions at the Base Submission Level if the NRID is not included with the sales data. Impact: Merchants that do not include the NRID will realize transaction qualification at the Base Submission Level interchange category. Discover Designates Three IIN Ranges as Payment Token Ranges The Program: As industry demand for more safe, simple, and smart ways to pay increases and cardholders continue to migrate to electronic forms of payment, Discover will prepare their system to support the tokenization of sensitive primary account numbers. The Change: Discover will prepare its systems to support payment token data, which will support various mobile wallets, key fobs, and other contactless payment devices. Discover is designating three existing IIN ranges as Payment Token Ranges, to be used exclusively to generate Payment Tokens. Consumer Credit Rewards Cards Consumer Credit Premium Cards Commercial Cards The Impact: Merchants that accept or plan to accept contactless transactions should be aware of these existing IIN ranges being newly defined as token ranges. Discover Assessment Fee Increase The Program: Discover regularly analyzes and evaluates their fee structures in order to adapt pricing to allow for ongoing system development and enhancements. The Change: Discover is increasing their Assessment Fee, which is assessed based on gross Discover sales volume. The Impact: Merchants will notice an increase in Discover Assessment fees. 17

18 Discover Modifies Exempt Debit and Prepaid Interchange Rates The Program: Discover is modifying the following exempt debit and prepaid interchange rates: Interchange Fee Program- Debit PSL- Supermarket/Warehouse Clubs PSL- Retail PSL-Restaurants PSL- Card Not Present/E-commerce Key Entry Mid Submission Level Interchange Fee Program- Prepaid Mid Submission Level The Impact: Merchants will see an increase in their interchange fees for the above interchange categories. American Express American Express OptBlue Authorization Reversal Messages to become Mandatory The Program: American Express currently supports reversal messages to support the reversal of authorizations based on certain circumstances. The Change: American Express will begin to mandate the submission of authorization reversal messages (Reversal Advice Request and Response) for merchants participating in the Opt Blue program. Opt Blue merchants will utilize the current authorization reversal messages as they are not changing. The Impact: American Express OptBlue Merchants must submit authorization reversal messages for the following conditions: Cancellation of an authorization request if an authorization response message was never received (e.g., transaction timed out; authorization response not received from American Express) Cancellation of an approved authorization when the merchant does not settle the transaction 18

19 Chargebacks Visa Modifies Chargeback Protection for U.S. Automated Fuel Dispenser Transactions The Program: Visa is increasing the chargeback protection amount from $75 to $100 for Automated Fuel Dispenser (AFD) transactions. The Change: Visa will change the issuer liability limit for Automated Fuel Dispenser (AFD) transactions from $75 to $100 when a $1 status check is submitted in the authorization request. This change is applicable to all Visa consumer and commercial products except Fleet Purchasing, which will remain at $150. The Impact: Issuers will have the ability to initiate a chargeback for amounts over $100 using chargeback reason code 72 (No Authorization). The interchange qualification requirements for AFD will remain the same in which the clearing amount must be equal to or less than $125 for all card types when a $1 status check is performed Visa Verified by Visa Liability Shift Rules for U.S. Issued Visa Commercial Card Transactions The Program: Visa will add U.S. issued commercial cards to Verified by Visa liability shift eligibility rules. The Change: Issuers will no longer have the ability to chargeback a transaction conducted using a U.S. issued Visa commercial card with an e-commerce indicator (ECI) of 5 (Secure) or 6 (Attempt) using one of the following chargeback reason codes: 75 - Transaction Not Recognized 83 - Fraud: Card-Absent Environment 19