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What is Custom Payment Service  ?

Custom Payment Service (CPS) – Special interchange rate classification provided by VISA USA to merchants who perform certain steps for transactions to reduce fraud risk.

Visa CPS (or Custom Payment Service) outlines the criteria your transactions need to meet in order to gain access to the lowest possible interchange rates. To help protect merchants and consumers, Visa has defined several criteria that merchants must meet when submitting transactions through the network. These criteria are designed to help incentivize good behavior by merchants, to help reduce potential chargebacks and customer disputes. By following CPS guidelines, you can not only help protect yourself but you will also be rewarded with lower rates by Visa! So, what are these criteria we hear you asking? The criteria will differ based on how you take the card – you either process the sale in-person, through the phone/mail, or you process eCommerce (internet) sales. See each CPS criteria below.

Retail (In-Person) CPS

The requirements for receiving low CPS rates when processing in a retail, in-person environment are pretty basic. To get the lowest rates, you’ll need to ensure you meet the following criteria:

  1. Both the cardholder and card are present, and a signature is obtained.
  2. Only a single electronic authorization is submitted, with the merchant name, city, and state included in authorization.
  3. Transaction record includes complete magnetic stripe information (card must have been swiped).
  4. Transaction must be settled within 1 day of authorization.
  5. The authorized amount must match the settled amount. (This does not apply to certain industry types such as Bars/Taverns or Health Spas that accept tips).

Phone/Keyed-Entry CPS

Even if you’re not physically in front of the card, there are still several practices you can follow to ensure you receive the lowest possible CPS/Card-Not-Present rates when keying-in Visa sales. Visa has a great PDF Guide that you can review to learn more about CPS rates in a card-not-present environment, but below are the main takeaways.

  1. Each transaction can have only one authorization per settlement.
  2. The settlement must meet the following criteria:
    • Final settlement amount must be within 15% of the original authorization amount, provided the additional amounts only reflect shipping fees and sales tax.
    • Settlement may be obtained up to 7 days prior to shipment of merchandise.
    • The settlement is permitted to contain one reversal in order to update the authorization amount to equal the final settlement amount.
  3. The authorization must settle within 2 days.
  4. The transaction must process through either a POS (Point-of-Sale) or terminal , which provides an order number along with at least one of the following 3 ways to reach the merchant’s customer service:
    • Telephone number
    • Website URL
    • Email Address
  5. The transaction must include Address Verification at the time of the transaction.

eCommerce (Internet) CPS

Even when processing sales automatically through your website, you can still engage in practices that will both protect you and your customers as well as ensure the lowest possible rates. When accepting online sales, you’ll need to meet the below criteria in order to gain access to Visa CPS rates for your eCommerce transactions.

  1. Each transaction can have only one authorization per settlement.
  2. The transaction must include Address Verification at the time of the transaction.
  3. The authorization must include a Purchase date which is equal to the shipping date and within 7 days of authorization.
  4. The transaction must settle on or within 1 day after purchase/shipping date.
  5. The settled amount must equal the authorized amount.
  6. The transaction must include an order number along with a customer service phone number.
  7. When setting up your online gateway, the “MOTO/ECI Indicator” should be set to a value of 7.

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