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% + $0.101.89% + $0.101.78% + $0.10

Enhanced (Merchant/Full) 1.83% + $0.102.04% + $0.101.93% + $0.10

World (Merchant/Full) 1.87% + $0.102.05% + $0.101.97% + $0.10

World High Value (Merchant/Full) & World Elite (Merchant/Full) 2.30% + $0.102.50% + $0.102.40% + $0.10

Unregulated Consumer Debit (Merchant/Full) 1.15% + $0.151.65% + $0.151.25% + $0.15

Unregulated Consumer Prepaid (Merchant/Full) 1.15% + $0.151.76% + $0.201.25% + $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.

Let’s get your payment processing on the right track.

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