Note: We are not attorneys or accountants. The following information is purely meant to be informative, subject to change, and we invite you to contact us with any questions. Thank you.
Card Brand Mandated Payment Reviews
When you begin processing payments for your business, you are given direct access to an array of payment types, including debit cards, credit cards, and bank accounts (if you process payments via ACH). While FPN works with merchants to maintain PCI Compliance (keeping your business and card holder information safe and secure), card brands like Visa, Mastercard, Discover, and American Express have their own mandated processes we must follow.
As required by card brands, payment providers must perform periodic reviews. Reviews usually occur at a scheduled time, but if your business’ processing volume or average ticket size change, it is possible that reviews may be accelerated. The ultimate goal of reviews is to ensure the security of transactions for both your business and the card holder.
There are several instances where a batch of payments may be held for verification prior to releasing funds for deposit. What can you do to reduce the time of a hold? Before we share some tips, here are some reasons for what card brands call a Risk Hold:
- Large transactions relative to your normal transaction volume
- Increase in chargebacks and credits issued
- Rapid acceleration of sales in a shortened period of time
- Stop Payment placed on a withdrawal, chargeback, or fee to be charged
Risk Holds Happen
When a Risk Hold occurs and requires further evaluation, it is not uncommon for us to ask for:
- Bank Statements (3 months)
- Copies of invoices for the transaction
- Card holder contact information
Cases are worked in the order that all required documentation are received. They are placed in a queue to be reviewed by an analyst who is handling everyone as urgent. To help us get you through this process as quickly as possible, please provide the requested information in a timely manner. Every delay increases the timeline for the release of funds and our goal is to get you cleared and funded as quickly as possible!
What can I do to Reduce the Likelihood of Delays?
Give FPN advance warning of a pending large transaction. When you quote a client for an order that is two, three or more times your average, call FPN. When you call, we will ask for a copy of the documentation note above. Our collection and submission of the information does not guarantee immediate release of funds, but will help our risk management team more quickly assist with the Risk Hold.
Stop Payments on Transactions
Whenever there is a dispute between a card holder and your company, it is important that you do not place a stop payment on the transaction. For that matter, you should never place a stop payment on a pending charge. By placing a hold on a pending withdrawal, your account will be subject to a NACHA (National Automated Clearing House Association) hold. This is a compliance hold that has to be cleared before funds can be released. To clear the hold, you will be required to provide a bank letter stating that the hold has been removed on that day. The letter will have to be signed by an officer and include your company name, routing and account number.
Reducing Your Risk and Processing Expenses
If you are not inserting or swiping cards, it is critical that you capture additional billing details such as the payer’s address, zip code and CVV2 number:
- 3 digits on the back of Visa, Mastercard, Discover
- 4 digits on front of American Express
There are indicators in your gateway that will tell you if the AVS data and CVV2 data match. If there is an N or a series of N’s, we are starting to see banks decline those cards and charge higher fees if authorized. The codes should match, so be sure to ask for billing address, zip code and CVV2 data whenever you hand key in a payment.
Gain The Advantage
We know keeping up with the ever-changing nuances of payments can be a lot to keep up with. This is why FPN developed The Advantage Program, a trio of solutions designed to help protect your business against chargebacks and data breaches.* Options may include:
- Get reimbursed for chargebacks up to $1,000*
- Should you suffer a data breach, you’ll be insured for up to $100,000*
Stop wasting time chasing down funds so you can focus on new customers. Contact FPN today to learn how The Advantage Program can give you peace of mind and protect your business.
* The FPN Advantage program is primarily for what card brands consider ‘card present’ transactions. Protection terms subject to change. Please contact us should you have any questions.