asterCard International's "Member Service Provider Rules Manual," dated April 2005, is now available. The manual contains excerpts of MasterCard-member publications that provide information about standards applicable to MasterCard merchants and/or member service providers (MSPs).

MasterCard provides this manual for the benefit of any MSP that formed or is contemplating forming an agreement with a MasterCard, Cirrus or Maestro member for the purpose of supporting the member's acquiring and/or issuing program.

Every MSP that does not have access to "Bylaws and Rules" and other MasterCard publications should download a copy of the MSP manual, which is available online at: http://mastercardmerchant.com/docs/msp_entire.pdf . The MSP manual contains a section of excerpts from "Bylaws and Rules," which include the proper use of MasterCard's various marks. It also addresses the procedures governing merchants' acceptance of MasterCard-branded cards.

Some of the procedures listed are: prohibited practices such as setting minimum or maximum purchase amounts; merchant obligations such as honoring all MasterCard-branded cards without discrimination; the authorization and presentment of transactions; and the importance of properly securing card account and transaction data.

MasterCard has provided the rules concerning MSPs, including ISOs. Carefully review and follow these. The manual contains the provisions required for properly signing up merchants, minimum merchant monitoring requirements, fines for merchant noncompliance and prohibited practices.

It includes provisions for registering and maintaining registration as an ISO. For example: The member must ensure that an ISO is registered as an MSP and receive written confirmation of the registration before the member receives program services from the ISO.

Before applying to register the ISO as an MSP, a member must conduct an on-site inspection of the ISO's facilities to ensure that the ISO has necessary and appropriate facilities, equipment, inventory and, if necessary, a license or permit to perform program services.

MasterCard incorporates portions of its "Chargeback Guide" in the manual and addresses procedures governing merchant acceptance of MasterCard-branded cards, such as how to complete a transaction, deal with suspicious cards, and properly process credits and returns.

It also addresses special procedures that pertain to particular types of transactions, such as hotel/motel, cruise line and car rental transactions.

Use chargeback information to properly set up your merchants to minimize chargeback potential. In Integrity Bankcard Consulting Inc.'s work with ISOs and their merchants, we often see that they receive excessive chargeback fines, only because ISOs did not properly set up merchants according to the rules and procedures for processing their specific types of transactions.

MasterCard offers portions of the "GCMS Reference Manual" and addresses cardholder-activated terminal requirements and acceptance procedures for the treatment of payment and unique transactions. The Association also includes portions of the "Security Rules and Procedures" and addresses security responsibilities, particularly those regarding merchants. These sections describe programs that MasterCard administers, such as merchant audit, monitoring and registration to protect cardholder information and reduce chargebacks and fraud.

The manual provides the details and requirements of the Excessive Chargeback Program, which applies to all merchants. MasterCard designed the program to reduce excessive chargebacks and credits to cardholder accounts and fraud.

For instance, if a merchant has a minimum of 15 chargebacks and a ratio of chargeback transactions to total sales transactions of at least 1%, or a ratio of chargeback dollar volume to sales dollar volume of at least 2.5% for two consecutive calendar months, then MasterCard might, at its discretion, declare that the merchant, or a specific location of the merchant, is an Excessive Chargeback Merchant.

The rules for identifying and regulating merchant violations, the Excessive Counterfeit Merchant Program provisions, which are procedures and requirements to follow in the event that any member, merchant or ISO becomes aware of a possible account data compromise are also included in this section.

In the manual MasterCard lists its Site Data Protection (SDP) program requirements to protect the merchants, members, ISOs and the system against the threat of cardholder information "hack and attack." It also includes information on the proper use of the "Member Alert to Control High-risk Merchants" (MATCH) list.Finally, the manual contains excerpts from the "Maestro Global Rules" and the "Cirrus Worldwide Operating Rules."

We should commend MasterCard for publishing this information and making it available to the ISO community. ISOs that diligently follow these published rules should receive no "surprise" fines.

ISOs should use this manual as a reference guide. By reviewing it, they can also conduct evaluations of their operations to find any areas where they lack the proper processes and procedures to prevent surprise fines.

David H. Press is Principal and President of Integrity Bankcard Consultants. Phone him at 630-637-4010, e-mail him at dhp@integritybankcard.com or visit www.integritybankcard.com .