his is the sixth 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 our August 25, 2003 issue of The Green Sheet.

Visa Custom Payment Service (CPS) Retail Key-Entry Rate

To qualify for this rate, the card, cardholder, merchant and terminal are all present at the time of the transaction. The magnetic stripe cannot be read and the account number is key-entered; the authorization request is approved and the receipt is signed. Only one authorization per clearing record is allowed, the cardholder must be present and a signature must be obtained. Mail/telephone or e-commerce transactions are not allowed in this rate category. Transactions must clear in two days. Address Verification Service (AVS) is performed at authorization, in order for receipt of a full-match response on the cardholder's billing zip code.

Visa Consumer Electronic (EIRF) Rate

These are keyed, electronically-authorized or swiped transactions that are not otherwise CPS-qualified. This usually happens when the full, unaltered contents of the magnetic stripe are not transmitted during the authorization. Call-referral voice authorizations will qualify for this rate. The transaction must be settled within three days of the transaction date.

Visa CPS Card Not Present (CNP) Rate

To qualify for this rate, neither the card nor the cardholder is present at the merchant location; the merchant accepts payment by mail or telephone. The authorization request must be approved. The receipt does not need to be signed and the cardholder's address may need to be verified. One authorization per clearing transaction is allowed and one reversal is permitted to make the total authorization amount equal to the clearing amount. The transaction must clear in two days and include: the purchase date, which is the ship date (up to 7 days from authorization), the customer service telephone number, the URL or an e-mail address (as applicable), the order number, mail/telephone order, e-commerce indicator and total authorized amount.

Most transactions require AVS to be performed, while some do not. AVS is required to qualify for CPS/CNP if the transaction is the first transaction of a recurring payment, or the time between payments is longer than one year. AVS is not required if the transaction is not the first transaction of a recurring payment, or the time between payments is less than one year.

MasterCard Key-Entered Rate

To qualify for this rate, the card is present but the magnetic stripe fails to read properly. Only retail and restaurant Merchant Category Codes (MCCs) are eligible for this interchange rate. The transaction must meet all Merit III requirements, except for the transmission of the entire, unaltered contents of the magnetic stripe. An electronic authorization and keyed transaction-entry mode of '01' are required. The transaction must be settled within 24 hours of the authorization. Direct marketing/cardholder-activated (CAT) MCCs and travel agents are not eligible for this interchange rate.

MasterCard Merit 1 Rate

To qualify for this rate, the card is NOT present. An electronic authorization is required, and the transaction must be settled within two days.