his is the fifth article in a series written in response to numerous reader requests for definitions of the various interchange levels. We are working with several industry experts to explain the interchange "buckets" and how transactions are assigned to the processing levels. For the most current rates, please refer to the table distributed with the August 25, 2003 issue of The Green Sheet.

Custom Payment Service (CPS) Hotel/Car Rental - Card Present Rate To qualify for this rate, a transaction must be conducted in a face-to-face environment as a swiped transaction. Multiple authorizations are allowed with industry-specific data that include authorization increments and reversals needed to meet amount tolerance requirements. (The settled amount must be within 15% of the authorized amount. One authorization reversal is allowed to achieve this.)

The total authorization amount and the estimated length of hotel stay or car rental must also be submitted. The full magnetic stripe must be read and transmitted; a signature must be obtained.

The transaction must clear within two days and include the following industry-specific data: purchase date (must be the same as the hotel check-in and -out dates/car check-out and return dates); market-specific authorization data; indicator from authorization; folio number/rental agreement number; total authorized amount and indicators for any ancillary charges, if applicable.

CPS Hotel/Car Rental - Card Not Present Rate

The transaction must meet ALL requirements for CPS Hotel/Car Rental - Card Present except the signature and full swipe of the magnetic stripe contents is not required. The indicator for Preferred Customer is required in the authorization and settlement records. The merchant also forfeits chargeback rights on "invalid Travel & Entertainment (T&E) transactions." All hotel and auto rental Merchant Category Codes (MCCs) are eligible for this category.

CPS Hotel/Car Rental - e-commerce Preferred Rate

The requirements for this category are the same as for CPS Hotel/Car Rental Card Not Present except the card and the cardholder are not at the merchant location and the transaction takes place in a secure Internet environment using Verified by Visa. The magnetic stripe cannot be read; the chip is not required to be read; the authorization request is approved; and the receipt is not signed.

Visa CPS/Passenger Transport Rate

To qualify for the CPS/Passenger Transport rate a transaction must have only one authorization. The magnetic stripe is not required, though it can be present. A cardholder signature and contract must be on file.

The transaction must clear within eight days and include the following industry-specific data: multiple clearing messages identified by the ticket sequence number and count; purchase date that is the same as the authorization date; ticket number; itinerary information number; and restricted ticket indicator number. CPS Passenger Transport - e-Commerce Preferred Rate

The requirements for this category are the same as for CPS/Passenger Transport except the card and the cardholder are not at the merchant location and the transaction takes place in a secure Internet environment using Verified by Visa. The magnetic stripe cannot be read; the chip is not required to be read; the authorization request is approved; and the receipt is not signed.

MasterCard Travel Industries Premier Service (TIPS) Rate

This category is for merchants who are certified with MasterCard to participate; a Preferred Customer indicator is required. The transaction must be electronically authorized and the cardholder signature and magnetic stripe swipe are not required.

The merchant will forfeit chargeback rights on "fraudulent transaction-no imprint" chargebacks. The transaction must be settled within 24 hours. It is limited to merchant-specific registered Hotel/Car rental MCCs and all cruise line transactions.

MasterCard Passenger Transport Rate

To qualify for this rate, a transaction must have only one authorization. The magnetic stripe is not required. The category applies only to consumer cards. It requires the 635/636 Passenger Transport Format 1 and Format 2 records. It applies to airlines and passenger railway MCCs (3000 - 3350, 4511, 4112).

MasterCard Convenience Purchases Rate

This category applies to several types of merchants. Transactions must meet Merit III or Automated Fuel Dispenser (AFD) requirements including magnetic stripe data. It is for fast food, convenience stores, gas, AFD and movie theaters (5814, 5499, 5541, 5542, 7832).

Transactions must be settled within 24 hours of authorization. The card must be present and swiped for authorization, and the magnetic stripe must be read. Transactions initiated with a transponder will qualify without the magnetic stripe data.

The category applies to transactions below an amount of $25; transactions above $25 qualify for Merit III. It applies to all AFD (MCC 5542) transactions (no break-even applied) as long as the merchant is a registered, qualified petroleum merchant and the CAT Level 2 terminal indicator is sent in the authorization message.