Visa has reminded acquirers that they will prohibit miscoding POS purchase transactions as ATM cash disbursements and submitting POS purchase transactions into the Plus network.
PROHIBITED USE OF CASHLESS ATMS
Cashless ATMs mimic standalone ATMs for the payment applications without cash disbursements involved. Instead, merchants use the devices for purchase transactions, miscoded as ATM cash disbursements. The purchase transactions are then submitted to Visa’s plus network to process the transaction.
Besides, the primary users of Cashless ATMs are the merchants, which cannot obtain payment services – whether due to legal or regulatory prohibitions, Visa rules, or the rules of other networks. Recently, Visa is ‘aware of a scheme’ in which point-of-sale (POS) terminals are used to process purchases. However, the business codes the transaction as an ATM withdrawal instead of processing the sale as a purchase.
ATM Transaction Requirements
Transactions designated as ATM cash disbursements may only be used to dispense cash in the type of currency or local currency or travelers cheques displayed on the ATM. Therefore, the acquires must ensure that Plus Network and Visa transactions include complete, accurate, and valid data. The miscoding transactions as ATM cash disbursements violate these requirements.
Furthermore, any obfuscation of information from miscoding POS purchase transactions violates these requirements. This miscoding information includes non or misidentification of merchant outlet or using altered or fictitious location information.
Third-Party Agent Registration and Oversight
Visa requires acquires to register all independent sales organizations or third-party servicers with Plus before starting the contracted services related to the Plus network on their behalf. Any entity engaged in ATM placement or soliciting merchants for Visa payment acceptance must be registered with Visa.
Besides, before a prospective ATM operator enters into an ATM operator agreement, an acquirer must perform a background inspection and investigation to determine that operator does not have any derogatory background information about any of its principals.
There are non-compliance assessments and/or penalties for acquires if Visa finds any material non-compliance from their third-party agents.
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