SHAZAM Supports Merchants' Right to Choose When Processing Debit Card Transactions
posted on Wednesday, April 19, 2023 in Company News
DES MOINES, Iowa (April 19, 2023) — In Oct. 2022, the Federal Reserve finalized updates to Regulation II, a rule concerning competitive routing of transactions to debit card networks. Effective July 1, 2023, the final rule clarifies the requirements for debit card issuers to enable at least two unaffiliated networks for all debit card transactions. This includes “card-not-present” transactions, such as online payments.
The ruling gives merchants greater routing choices for a wide range of debit card transactions, regardless of whether purchases are made in-store or online. Today, approximately 50 - 60% of cardholder debit transactions are PINless or card not present. Most of these transaction types are being performed as dual-message transactions across the global network “credit rails”, where debit card routing choice has not been realized. The Federal Reserve’s clarification creates an opportunity for routing between the global and national networks, allowing businesses to route transactions with more competitive merchant payment acceptance costs.
“SHAZAM has always operated with the premise Regulation II applies to all debit transactions, including card-not-present and e-commerce,” says Dave Osterman, SHAZAM Vice President Acceptance, Specialized Services. “Because of that, we have supported e-commerce transactions for many years. Merchant choice for routing is a good thing for merchants, financial institutions and the overall competitive health of the payments industry."
Many factors influence the ever-changing dynamics of the payments landscape, including regulation, technology, competition and consumer demand. As a national, member-owned debit network, SHAZAM actively takes part and advocates for our customers' best interests to drive positive change in payments through collaboration. The approach delivers a stable, secure and trusted partnership to help merchants achieve the best economic outcome.
The SHAZAM payments network supports a wide range of single (Sure Pass®) and dual-message (Elite Pass®) transactions, which offer efficient, economical and reliable routing choices for a variety of merchants. “Our network supports common everyday PIN and PINless purchases including grocery, retail, restaurants, automated fuel dispense (AFD), convenience stores, online shopping and more,” says Manish Nathwani, SHAZAM Senior Vice President of Enterprise Product & Marketing. “Additionally, our network supports recurring payments like monthly utility bills and loan payments.”
All major merchant processors across the U.S. are already connected to the SHAZAM payments network. This means companies don’t have to go through the tedious process of changing merchant processors. Instead, companies just need to ask their processor to route eligible transactions to the SHAZAM payments network, resulting in cost savings on purchases whether made in-store, at unattended devices (such as fuel pumps), or online.
Contact Brandon Richardson or Dave Osterman to set up a quick meeting to learn more.
About SHAZAM
SHAZAM is a nationwide, independent, member-owned, not-for-profit U.S. debit payment network and financial services company. Founded in 1976, SHAZAM continues to be driven by the fundamental principle of bringing value to all our participants: merchants, financial institutions and the consumers they serve. We are a strong proponent of choice and flexibility and strive to offer merchants safe, reliable, innovative, and cost-effective routing alternatives for all transaction types from PIN to PIN-less, across all merchant categories and all types of card-present and card-not-present commerce. Visit us today at shazam.net.
SHAZAM, Inc. and ITS, Inc. provide this blog for general informational purposes only. Our blog may be shared by a direct link wherein the content remains as originally presented and has not been altered. SHAZAM, Inc. and ITS, Inc. assume no responsibility for errors or omissions in the contents on the blog. By using this blog, reader agrees that the information published does not constitute nor is a substitute for legal advice which should only be sought from a qualified, licensed attorney.
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