Table of Contents
Overview
Visa and Mastercard have introduced a mandate around contactless Magstripe (MSD) transactions. This article goes into the details of this mandate and how this affects integrators and merchants using NMI's Gateway.
Mandate
Visa MSD Contactless Rules
- Effective April 13, 2019, if qVSDC (EMV Contactless) is deployed on or after April 13, 2019, the terminal must not support the MSD transaction path.
- Effective October 19, 2019, contactless acceptance devices must not support the MSD transaction path.
Mastercard MSD Contactless Rules
- Prior to 18 October 2019, a newly deployed contactless-enabled Terminal may support Magnetic Stripe Mode contactless payment functionality.
- Effective 18 October 2019, a newly-deployed POS Terminal that supports contactless acceptance must support only EMV mode contactless. Magstripe mode contactless must not be supported.
How Does This Affect Me
If you are using one of the following solutions, please review what steps are required to continue processing contactless transactions via EMV. Please note that from 2022, acquiring banks and processors in the US may start rejecting magstripe contactless transactions.
To support the migration from MSD contactless to EMV-based contactless functionality, Visa announced that as of April 1st 2023, they will implement a $0.10 fee for each MSD contactless transaction, subsequently you may see this reflected in your merchant processing fees.
Payment SDK for Windows & Linux
Please review our website to review what devices and solutions we have available with EMV certifications at this link, and contact our Support team for further information on any additional steps required.
Direct Connect (formerly ChipDNA Direct/CardEaseXML)
On October 18th all payment devices connected to the NMI gateway should cease taking magnetic stripe data contactless transactions. If the relevant EMV contactless certification isn't available in time for the mandate and the merchant wants to continue taking magstripe contactless, please reach out to the relevant processor to request a waiver be put in place. If a waiver isn't in place, the merchant should disable magstripe contactless capabilities until the certification is available. If the merchant continues processing magstripe contactless after the mandate without a waiver, the liability will be shifted on the merchant.
This may require integration changes or changes to the integrating applications terminal management system (TMS). If EMV contactless is required, the relevant certification needs to be in place. Please liaise with your account manager if EMV contactless is required.
Boarding
For merchants who process their own account boardings via WebMIS, Express Boarding, or SOAP, merchant accounts and terminal groups should no longer be set up with the capability to process contactless magstripe transactions.
The following values should no longer be used in the Payment Type field for merchant account and terminal group boardings:
Magnetic Stripe ContactlessMagnetic Stripe With Contactless
The Bank Info section of merchant account boardings should also be completed with the relevant options set so as not to indicate that the merchant account is capable of processing contactless Magstripe transactions.
Please don’t hesitate to contact support@nmi.com with any queries you may have regarding the changes to the boarding process detailed above.