Recurring Payments

What are Recurring Payments? Recurring payment plans exist when a cardholder authorizes a merchant to charge his or her credit or debit card on a regular basis (e.g., monthly, quarterly or annually). Payment amounts can be fixed or they can vary and the plan exists until it is canceled by the cardholder. A good example of a recurring payment plan would be an auto insurance policy that has been set up so that the insured's credit card is charged monthly and the service will be provided indefinitely, or until it is canceled by the consumer. All merchant processing accounts support this feature.

Benefits for Merchants:

• Providing additional payment processing options. Customers like having payment options at the checkout.
• Increasing enrollment in online payment processing. It is a great time-saving tool.
• Reducing customer service calls. By automatizing the process merchants ensure less payment-related issues.
• Improving cash flow. Recurring payment card processing plans ensure that less mistakes will be made and less payments will be returned.
• Reducing delinquencies. Setting up the payment schedule beforehand ensures less delinquencies.
• Improving collections. Since the payments are processed automatically, they are easier to collect.
• Increasing customer retention. Consumers, too, enjoy the convenience of recurring payment plans.

Benefits for Cardholders:

• Convenience of setting up the payments once. It's fast, easy and simple. You don't have to go over it again.
• Time savings. Once the plan is set up, you are done. Payments are made automatically thereafter.
• Stress relief. You don't have to keep on checking when the bill is due and worry about being late on a payment.
• Cost savings. No more post stamps to stick on payment envelopes.
• Earning points on rewards program. Some merchants qualify for various credit card reward programs.

Depending on the type of merchant account that you have, recurring payment plans may be set up differently. Ask your credit card processing provider for assistance if you are not sure how it is done.

Merchant Payment Account Easy Payment Service

Visa's Easy Payment Service (VEPS) for merchant payment account users enables face-to-face retailers from more than 98 percent of Merchant Category Codes (MCCs) to accept credit cards and other bank cards without the need for a signature and only need to print out a receipt upon a request from the customer.

The VEPS program offers retailers the potential to speed up the check-out process at the point of sale, improve customer satisfaction and provide operating efficiencies for merchant payment account users. It can also help increase customer retention by helping cardholders use their bank cards quickly, securely and easily.

Merchant Payment Account Easy Payment Service Advantages

For qualifying payments, the VEPS program:

• Eliminates the need for card acceptors to obtain a signature.
• Eliminates the transaction receipt requirement, unless specifically requested by the cardholder.
• Eliminates the necessity for retailers to store sales receipts and bans issuers from placing retrieval requests.
• Provides strong chargeback protection against fraudulent transactions and for the receipt requirement.

Which Transactions Qualify

Transactions qualify for the VEPS service if they comply with all of the following criteria:

• The transaction takes place at a qualified merchant payment account user.
• It is a purchase (as opposed to credit) transactions with a valid card.
• It is a card-present environment (for amounts of $25 and lower) or unattended environment ( for $15 and under).
• Payments are authorized.
• Applies to all MCCs except those explicitly excluded (list is provided below).
• All card types are eligible, including magnetic-stripe, chip-and-PIN and proximity payments.
• The POS device must read and transmit unaltered magnetic-stripe, chip, or contactless payment information.
• The information must be transmitted in the authorization message.

Unqualified Merchants

The following business types are not qualified for VEPS:

• Wire Transfer Money Orders.
• Insurance Services.
• Automated Fuel Dispensers.
• Travel Related Arrangement Services.
• Catalog Merchants.
• Combination Catalog and Retail Merchants.
• Outbound and Inbound Telemarketing Merchants.
• Continuity / Subscription Merchants.
• Manual and Automated Cash Disbursements.
• Financial Institutions - Merchandise and Services.
• Betting, including Lottery Tickets, Casino Gaming Chips, Off-Track Betting, and Wagers at Race Tracks.
• Intra-Government Purchases.
• International Automated Referral Service.
• GCAS Emergency Services.
• Intra-Company Purchases.

There are no program registration requirements. If a merchant payment account user is eligible, they should just run the transaction as they normally would, skipping the signature, and offering the sales receipt as an optional service.

(Read more.)

E-Commerce Merchant Account Chargeback Requests

A chargeback, as previously stated, is the reversal of a portion, or the entire amount, of a card transaction that is being disputed, resulting in a refund to the issuer and debit to the e-commerce merchant account provider or the retailer in the amount listed to the dispute. Chargebacks can be initiated as a result of a processor's or retailer's failure to provide a complete and on-time response to a sales ticket retrieval request or for the failure of the retailer to follow applicable credit card processing procedures.

If the card issuer has sufficient evidence that supports a dispute of a transaction, the e-commerce merchant account provider will not require the submission of a ticket retrieval request prior to initiating a chargeback request. An image of the sales receipt supporting the chargeback request must be submitted to the processor within five business days of the issuer initiating it, except for disputes related to authorizations where the evidence is saved as an electronic record. The content of a processor's or retailer's response to a retrieval request may constitute sufficient evidence needed to resolve the dispute.

Each chargeback request needs to contain the following pieces of information:

• Details of any correspondence between the customer and the retailer documenting the authenticity of the chargeback request; or
• Sufficient evidence supporting the dispute.

Additionally required information regarding some types of transactions may include the following:

• For airline e-commerce merchant account transactions, the original ticket if a paper ticket was produced, a copy of the original ticket with adequate proof that the consumer did not use the ticket or evidence of the sale of an electronic ticket (such as the confirmation code);
• Assignment of claim by a consumer that received a refund; and
• Other documentation that may be requested by the processor.

Upon receiving the chargeback request from the issuer, each processor or retailer is required to repay the amount of the resulting Chargeback to the Association (Visa or MasterCard). If the evidence proves that the chargeback was indeed improper, they should request a re-presentment.

If Visa or MasterCard does not receive sufficient evidence supporting the chargeback request from the card issuer within the time-frame stated (five business days) or if the Association does receive a request that is not compliant with the above requirements, a chargeback may not be processed or if it had done so already, the Association may process a re-presentment.

(Learn more here.)

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