Spring 2024: Card processing network changes for merchants

PayPal Braintree understands the importance of staying ahead of the curve and navigating complex shifts in the payments landscape, and we’ve identified the key updates you need to know for Spring 2024.

These rules affect every entity within the payments ecosystem, from banks to merchants to PSPs like Braintree.

It’s critical to comply with these changes, otherwise businesses potentially risk facing additional fees, decreased authorization rates, and processing interruptions.

What are the key Spring 2024 updates businesses should be aware of?

Braintree has identified key card network updates from Visa and Mastercard that will affect businesses across the globe this spring. Regions in scope for each update are identified. These updates go into effect April 2024.

Visa updates

• Processing Integrity fees (CEMEA, CA, APAC, EU, LAC). Visa will add two new fees to help monitor compliance for its Processing Integrity Program: one for misuse of the authorization system and one for unmatched clearing.

• Intra-Europe EEA commercial interchange fees (EU). Visa will update intra-Europe EEA interchange fees for certain commercial cards.

• Introduction to CVV2 pricing (Canada). Visa will introduce a fee of $0.0025 for each CVV2 match/no match in Canada.

• Updates to Visa Secure data fields mandate (Global). Visa will now require three new 3D Secure data fields to help improve the authentication process and authorization rates.

• Resolve online pricing changes for Europe (EU). Visa is updating pricing for their dispute tool, Visa Resolve Online (VROL), in Europe by adding and increasing fees for certain processes.

• Non-domestic currency settlement fee (EU). Visa will increase the non-domestic settlement volume fee from 0.05% to 0.10%. This fee applies to businesses that process cross-border Visa payments in the EU and receive settlement in different currencies.

Mastercard updates

• Expanding digital enablement (US). Mastercard will change the pricing of its Digital Enablement Fee to $0.40 USD for card-not-present (CNP) transactions greater than or equal to $1,000 USD.

• Revised excessive authorization attempts (Canada). Mastercard will add a threshold for excessive authorization attempts of 35 declined attempts within a 30-day period, after which point businesses will incur a fee of $0.50 per declined transaction. This threshold will be introduced in Europe in August 2024.

• CVV2 compliance requirements (APAC). Mastercard will eliminate the verification for both card-on-file (COF) and guest checkout experiences in the APAC region, instead relying on tokenization to securely complete transactions.

• Extending Network Access and Brand Usage Fee (US). Mastercard is adding a non-domestic fee of $0.0295 to the Network Access and Brand Usage fee. The current domestic fee of $0.0195 remains unchanged.

• Revising Acquirer Brand Volume Fee (US). Mastercard is a raising the acquirer brand volume fee from 0.13% to 0.14% and the fee is applicable to all sales transactions.

• Revisions to Arbitration Case Filing Fees (US). Mastercard is raising arbitration

Ongoing themes and updates businesses should be aware of

Breaking this information down further, there are a few key themes and future updates that businesses should be aware of:

Additional Fees coming to AP

Visa will introduce a Digital Commerce fee in certain APAC markets to help improve CNP transactions and performance. Specifically, a fee of 0.75 basis points (0.0075%) will be applied to domestic and cross-border CNP transactions starting July 1, 2024. The fee includes bundled access to a number of services, including VDCU, VAU, DAF and CVV2. This fee is very similar to the Digital Commerce Services fee that launched in the US in October, however, the bundled services are different between regions. Mastercard will raise the rates of cross-border assessments in the AP region. Fee is being raised from 45bps to 125bps.

Mastercard Raising Fees in EU

Effective July 1, 2024, Mastercard is raising two fees for select EU countries: Interregional cross-border fee and interregional card not present (CNP) fee. The Interregional cross-border fee will be raised to 75bps. The interregional CNP fee will be raised from 5 to 15bps.

Mastercard adding fee to tokenized transactions

Effective 7/1/24 (AP) and 10/7/24, Mastercard will add fees of 2bps domestic and 10bps cross-border to all approved tokenized transactions. This fee is applicable to AP and EU countries.

What action do businesses have to take?

Businesses may have to make certain changes to their payment processes to avoid new fees and maintain card network compliance. For example, businesses might consider leveraging 3DS solutions and the benefits of network tokenization to help improve payment security and authorization rates. Businesses can also work with their payments processors to better understand Visa’s retry rules and fees and minimize the impact of card network changes.

How Braintree helps businesses navigate network updates and mandates

PayPal Braintree aims to support businesses, collaborating with card networks, acquirers, and organizations like the Merchant Risk Council (MRC) to streamline the payments process for everyone involved. Braintree aims to create an equitable payments ecosystem where both businesses and card payment networks can meet their goals and improve customer experiences.

As the payments landscape evolves, PayPal will continue to advocate for simplified fee structures and transparency, so businesses can maintain compliance and minimize the impact of card network updates.

Are you ready for the latest changes from Visa and Mastercard? Learn more about how to optimize payments with PayPal Braintree and review the key 2024 updates on our Developer Docs.