COVID-19 Changes the Payments Industry
From the rolling back of mandates to the rise of contactless transactions, the payments industry has seen its fair share of changes since the world learned about COVID-19 earlier this year. Visa and Mastercard have postponed merchant requirements scheduled for the spring. Contactless payment minimums have been raised around the world to discourage surface contact on areas where the virus can thrive. The UK’s Financial Conduct Authority extended its deadline for Strong Customer Authentication (SCA) for six months.
Beyond complying with changes to card scheme and government requirements, at Truevo, we’re fast-tracking essential businesses and matching donations to support charities doing excellent work related to COVID-19.
Visa and Mastercard Merchant Mandates Postponed
Visa’s Free Trial and Subscription Mandate
As of April 2020, merchants offering introductory trials or subscriptions had some changes to make to their businesses. While most of Visa’s mandates are required as originally set out, some requirements are postponed to April of next year.
Most importantly, changes to the “Enhanced Statement Descriptor” are not required to be added until April 18th, 2021. The Enhanced Statement Descriptor clearly indicates a trial-period related transaction in the Merchant Name field of a Clearing record.
If merchants have difficulty meeting the requirements, they are advised to contact their Acquirer to request a waiver.
Mastercard’s Excessive Fraud Program
Revisions to this program had been set to take effect as of April 2020, but now fines in regards to the updates are suspended for 6 months. Penalties will be assessed for violations starting in October 2020. Between now and then, Mastercard is continuing to monitor merchant fraud activity in line with the program. At Truevo, we reach out to any of our merchants who exceed the imposed fraud limits.
Mastercard’s Excessive Chargeback Program
All updates to Mastercard’s Excessive Chargeback Merchant Program have come into effect except for those working in industries most affected by COVID-19. Airlines, cruise lines, railways and travel agencies have been granted an extension until August 1st, 2020.
Need more specifics on the original revisions to both Mastercard’s Excessive Fraud Merchant (EFM) and Excessive Chargeback Merchant (ECM) programs? Check here.
Contactless payment minimums raised
On April 1st, the UK raised contactless spending limits for all cards from £30 to £45. We immediately changed our point of sale systems to match this increase. Contactless minimum limits on the Truevo Smart POS are £45 in the UK and €50 in the eurozone. This change took place automatically so there was nothing our merchants needed to do to support the change.
This increase aims to limit the spread of COVID-19 by discouraging contact with surfaces like cash and payment terminals. Contactless queues also move faster than those with chip-and-pin or cash. Consumers spend less time in stores where they’re at greater risk of infection. As a result of the increased spending limit as well as consumers’ moves to reduce contact, contactless payments are booming. Mastercard, for example, has seen a 40% jump in contactless payments since the coronavirus pandemic has worsened.
Strong Customer Authentication postponed
Delaying the implementation of SCA for 6 months is intended to diminish the disruption to merchants and consumers during the pandemic. The UK’s Financial Conduct Authority will demand a two-step verification process for online transactions above €30 from 14 March 2021 to 13 September 2021. National authorities across Europe are likely to follow.
Actions Taken By Truevo
Applications for essential business fast-tracked
To prioritise businesses on the front line during the pandemic, we moved to fast-track applications for essential businesses. Our Underwriting team is putting a special emphasis on any applications for organisations such as takeout or delivery, supermarkets, utilities and communications services, among others.
Truevo’s Matching Donation Program
To support communities in need, we mounted a matching donation program. Team members may donate a portion of their salary towards two organisations and that contribution is doubled by Truevo. To date, we’ve raised €21,000. We chose organisations which work in the areas where our two main offices are based. These are CoronaCare in South Africa and the Malta Trust Foundation.
The Malta Trust Foundation has created a food aid program to support families struggling in the face of the pandemic. CoronaCare works with 10-15 different South African organisations helping those in need during the crisis.
“We have a preference for grass root or smaller organisations that are getting ”lost” in this chaos and not having a big enough voice and reach during this time,” says CoronaCare Co-Founder Daniel Harrisberg.
If you’re a merchant or partner and interested in participating in Truevo’s donation match program and doubling your efforts, please reach out to Elisabeth Beemer at firstname.lastname@example.org.