IGA News

Card industry news - Contactless payment updates

Card industry news - Contactless payment updates

29 September 2017

All terminals must accept Contactless payments by 2020

Since 1st January 2016, all newly deployed card payment terminals had to be Contactless capable. This has meant that if you’ve opened a new outlet or simply added an additional terminal in an existing one, they must support Contactless payments. However, any existing terminals weren’t impacted.

As the popularity of Contactless technology continues to grow and with the advent of new Contactless payment methods, such as mobile phones, watches, stickers and wearables, the Card Schemes (Mastercard and Visa) have now mandated that all terminals must accept Contactless transactions by 1st January 2020. This means that existing terminals have to be updated if they aren’t already Contactless capable.

If you own your own terminals or rent them from a third party and you’re unable to accept Contactless payments, you’ll need to contact your supplier to ensure they’re either upgraded or replaced so that you meet the Card Schemes’ deadline.

If you rent your terminals from GlobalPay, you won’t need to take any action as all of their terminals either currently accept Contactless payments, or will have been replaced by ones that do by this date.

Zero floor limits for American Express Contactless transactions from October 1st 2017

American Express have mandated that from 1st October 2017, Contactless transactions performed on their cards must be authorised and have a zero floor limit. This follows Visa’s recent announcement of the same and is being introduced to help prevent fraud on lost or stolen cards and to give cardholders a clearer view of their account balance.

Who’s affected by this change?

If you trade in the card present, face to face trading environment and accept Contactless card payments from your customers, then you’ll be affected. Contactless card payments accepted through unattended terminals in the following Merchant Category Codes (MCC) only, are exempt from this change:

  • 4111 - Commuter Transport
  • 4112 - Passenger Railways
  • 4131 - Bus Companies
  • 4784 - Toll/Bridge Fees
  • 7523 - Parking

What does this change mean?

This means that Contactless transactions will take a little longer to complete, but how long will depend on the type and speed of your communications infrastructure.

It also means that American Express card issuers will have the ability to decline their Contactless transaction. Currently, these are either approved or the issuer requests that the transaction is performed as chip and PIN.

Once you’ve implemented the new zero floor limit for American Express Contactless transactions, it’s important that you don’t hand over any goods to your customers until you’ve received the ‘approved/authorised’ response back to your terminal. The terminal will still ‘beep’ to show that the card has been successfully read, but this shouldn’t be taken as indication that the transaction has completed successfully.

Are any other types of Contactless transactions affected?

As previously advised, Visa are also reducing their floor limit for Contactless transactions to zero from 13th October 2017.

There’s no change to the floor limits for Mastercard and Contactless transactions. They’re remaining at the £20 floor limit, so you’ll see no difference to the way these are processed. Apple Pay, Android Pay, Samsung Pay, or any other phone based Contactless transactions, will continue to be authorised as they are now, regardless of the transaction amount.

What do I need to do?

If you rent your terminals from GlobalPay, you don’t need to worry about making this change - they will automatically update them so you meet Visa’s requirement and timescales.

If you won your won terminals or rent them from a third party, you’ll need to contact your supplier and request that they make the necessary changes for you. Not updating your equipment could see your American Express Contactless transactions being rejected, as they haven’t been authorised.

If you have any further questions about the requirements discussed above, please call the IGA member helpline on 0845 305 4230.