October 2019 Operating Regulation Changes

In October 2019, a series of operating regulatory changes from Discover® , Visa®, and Mastercard® will be made. This article describes the upcoming changes and when these changes will come into effect.


UnionPay IIN Range:
Effective October 18 2019, a new IIN range for UnionPay issuance will be available. The IIN (Issuer Identification Number) refers to the first eight digits of the card number, and is used to identify the type of card used. The new IIN range for the UnionPay network is 62292600 – 62379699.

Chargeback Disputes:
Effective October 18 2019, Discover will make changes to two Chargeback dispute time frames:


  • The time frame to initiate a Representment request will be reduced from 45 to 30 days after the Chargeback Dispute notice date. 
  • The time frame to initiate an Arbitration request will be reduced from 30 to 10 days from the Pre-Arbitration Inquiry decision notice date.

These changes will come into effect for disputes with an initial dispute notice issue date on or after October 18, 2019. For a more detailed explanation of the chargeback dispute process, see the infographic below.



Private Label Pricing: 
Effective October 18 2019, changes to the Private Label Specialized Fee Program will be made. Internal transfer pricing for Private Label Specialized product purchase and credit voucher transactions will be lowered from 25.0% to 10.0%. 

Estimated, Initial, and Incremental Authorization Processing: 
Effective October 18 2019, 3 new merchant types will be eligible to send estimated, initial, and incremental authorizations when the final amount is unknown by the merchant. The 3 new merchant types are: 

  • Grocery stores and supermarkets- CNP only (5411);
  •  Electric vehicle charging (5552); and
  • Parking logs, parking meters, and garages (7523). 

Estimated/initial authorizations are used when the merchant does not know the final amount of a transaction (e.g. when checking into a hotel). Incremental authorizations are used when the estimate/initial authorization amount is insufficient or needs to be revised. 

Credit Voucher and Merchandise Return Authorization Messages: 
Under Visa’s updated acceptance rules, businesses are allowed to send authorization messages on credit voucher and merchandise return transactions, and effective October 19 2019, all merchants in the USA, Canada or Latin America will be required to send authorization messages on credit voucher and purchase returns. These authorization messages will be represented in the Processing Code Field by a value of 20.  

The authorization messages will enable the card issuer to validate the cardholder account and decline potentially fraudulent cards. It will also improve the cardholder experience by enabling cardholders to view the credit or return on their online banking statement right away, minimizing return inquiries. 


Safety Net Acquirer Fee: 
Effective October 18 2019, a new rate for the Safety Net Acquirer Fee will be implemented. Safety Net is a service mandated by Mastercard which identifies fraud and notifies acquirers so that they can work with merchants to take action to mitigate the fraud and prevent further fraudulent activity. The new fee rate for this service is $0.0007 and will be billed per authorization.

Interchange Compliance Downgrade Program Fee:
Effective October 18 2019, a new rate for the Mastercard Interchange Compliance Downgrade program will be implemented. A new Interchange Compliance Downgrade Fee of $0.15 will be charged per downgraded transaction, with the goal of promoting more accurate interchange qualification behavior.

U.S. Assurance Framework:
Effective October 18, 2019, a new U.S. Assurance Framework to increase cardholder security will be implemented, part of which includes an increase in UCAF (Universal Cardholder Authentication Field) rates (see table below). 

UCAF Interchange Program Existing Rate (Merchant/Full) New Rate
Core Credit (Merchant/Full) 1.68% + $0.10 1.89% + $0.10
1.78% + $0.10
Enhanced (Merchant/Full) 1.83% + $0.10 2.04% + $0.10
1.93% + $0.10
World (Merchant/Full) 1.87% + $0.10 2.05% + $0.10
1.97% + $0.10
World High Value (Merchant/Full)
World Elite (Merchant/Full) 
2.30% + $0.10 2.50% + $0.10
2.40% + $0.10
Unregulated Consumer Debit (Merchant/Full) 1.15% + $0.15 1.65% + $0.15
1.25% + $0.15
Unregulated Consumer Prepaid (Merchant/Full) 1.15% + $0.15 1.76% + $0.20
1.25% + $0.15

Additionally, as part of the framework, a new compliance program called Excessive Fraud Merchant (EFM) will be implemented to help measure compliance at the merchant level. Merchants in the U.S. who meet all of the following conditions will be identified for the program: 

  • Minimum of 1,000 Mastercard e-commerce transactions 
  • Monthly net fraud greater than $50,000 USD
  • Monthly net fraud greater than 50 basis points 
  • Mastercard 3DS payment percent less than 10% of total Mastercard payment. 

Refunds/ Return Transaction Rates: 
Effective October 18, 2019, the Consumer Interregional Purchase Return/Refund rate will be set at 1.00%, and the Commercial Interregional Purchase return/Refund rate will be set at 1.80%. 

The infographic below provides a summary of the upcoming regulatory changes mentioned in this article.


Brazil: A World of Opportunity

As one of the top ten richest countries in the world, with one of the fastest-growing eCommerce markets, Brazil represents a great opportunity for businesses in the United States to access a rapidly expanding market.

Why Brazil?

With over 209 million consumers and a GDP of 1.87 trillion USD, Brazil is the ninth richest country in the world, and one of the fastest-growing eCommerce markets worldwide. Currently, Brazil has 66.4 million consumers who shop online, drawing in a revenue of 21 billion USD from eCommerce purchases. Between 2018 and 2022, online sales are expected to grow by almost 11 percent annually, with revenue from eCommerce consumers expected to exceed 31 billion USD by 2022, representing a tremendous opportunity for merchants and ISOs in the United States.  

Barriers to Entry

If you are an enterprise-level business conducting international eCommerce, Brazil is a viable and profitable market to tap, however, significant barriers to entry are frequently encountered. Some of the most common barriers faced by businesses trying to expand into the Brazilian market include understanding local laws, regulations and tax requirements, lacking a physical presence, cultural barriers, and finding the right partner(s) to gain access.

Benefits of a Brazilian presence

In Brazil, 69% of online payments are made by credit card, however, the vast majority of these transactions are via local credit cards, with only 20% of Brazilian consumers possessing international credit cards. With the majority of the Brazilian market not having access to international credit cards, providing payment acceptance for domestic payment methods is crucial. By having a legal and physical presence in Brazil, this facilitates your business’s ability to offer solutions for domestic payment methods, enabling your business to make the most of this burgeoning consumer class. 

A local presence can also assist your business in attaining an in-depth understanding of compliance with local laws and regulations, ensuring secure and reliable processing and settlements. Similarly, knowledge of tax requirements in Brazil can help simplify the complexities of the taxation system, allowing your business to price your products and services competitively. Lastly, local knowledge of the culture and economy can also help facilitate cultural assimilation and eliminate cultural barriers, optimizing your business’s presence in the Brazilian market. 

Payscout Brazil

Payscout Brazil is a licensed Payment Service Provider (PSP) established in São Paulo in 2013. Our physical presence in Brazil affords your business access to a full range of domestic and international payment methods, including domestic credit and debit cards, Visa, Mastercard, Boleto Bancário, Bradesco Comércio Eletrônico, Banco do Brasil Comércio Eletrônico, Banrisul, and Banricompras. Payscout Brazil provides both POS and eCommerce solutions, along with its best-in-class fraud solution, Gumshoe, which offers the risk mitigation and stability essential for cross-border and eCommerce international payments. 

To learn how you can access this booming market of over 200 million consumers, visit payscout.com/brazil or contact sales@payscout.com!