Following the bi-annual association chargeback mandate changes released last month, Mastercard enacted new rules regarding their chargeback management guidelines. Quavo experts have spent time processing each reason code and identified the rule changes that will affect financial institutions, so you don’t have to.
Merchant Category Code (MCC) 5542 is the standard merchant code used to identify transactions made at an automated fuel dispenser, additionally known as an unsupervised gas pump. Here, a consumer pays at the pump. The mandate update to MCC 5542 is specific to Mastercard transactions.
So, what changed with Mastercard transactions with an MCC 5542?
There has been a liability shift from the issuers to the merchants. Meaning, merchants have implemented ways to determine if a card is an EMV (Eurocard, Mastercard, Visa) chip card. Merchants have had ample time to secure technology to recognize EMV cards at automated fuel dispensers and are now responsible for preventing fraud.
Due to the liability shift from issuers to merchants, there is now an opportunity to implement recovery chargebacks in fraud situations at these automated fuel dispensers. Before this liability shift, there were zero recovery rights, resulting in a potential loss for issuers because merchants had protection through the association that did not allow fraud claims to occur against an automated fuel dispenser.
What does this mean for my financial institution?
Issuers are no longer wholly liable for fraudulent transactions that take place at automated fuel dispensers. Merchants have had ample time to implement the proper technology to prevent fraudulent activity from occurring at automated fuel dispensers. In addition, issuers now have recovery rights, and chargebacks are now performed to recover from the merchant – if fraud is found.
Staying compliant is complicated. Quavo’s QFD™ and ARIA™ fraud and dispute management platforms automatically keep you and your team compliant. Find out more from one of our fraud and dispute experts today.
Written by Julia Lum
Quavo Expert: Ben Anderson
