13-Apr-2012
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| Revisions to the Visa International Operating Regulations |
Revisions to the Visa International Operating Regulations
SUBJECT: Revisions to the Visa International Operating Regulations
In Brief: At the March 2001 and June 2001 Visa International Board of Directors meetings, the Board approved principles for revisions to the Visa International Operating Regulations.
Internet Gambling
Detailed information about new and amended sections will be provided in the “Summary of Changes” in the 15 November 2001 edition of the Visa International Operating Regulations. Unless otherwise specified, these revisions will be effective upon publication.
Internet Gambling
Board Approval: June 2001
Effective Date: 15 November 2001
See L.A.C. #18/01 (IML #16/01) for additional details
An Online Gambling Transaction is the purchase of any form of gambling services over the Internet or other networks. Gambling services include, but are not limited to, the following:
§ Betting
§ Lotteries
§ Casino-style games
§ Funding a gambling account established by the Merchant on behalf of the Cardholder
§ Purchase of value for proprietary payment mechanisms for gambling
When the purchase of value for proprietary payment mechanisms, such as e-cash accounts, is used to pay for Internet gambling, these Transactions must also be classified as Online Gambling Transactions, since they contain the same risk concerns.
It is conservatively estimated that there are 1,500 to 3,500 Internet gambling companies offering online services. Recent Authorization testing of Internet gambling Merchants revealed that the majority of Internet gambling Merchants were not using the correct Authorization data required to identify the Transaction as an Online Gambling Transaction.
Effective 15 November 2001, Visa will initiate an “Internet Gambling Audit Program”. This program will audit Authorization Requests from known gambling Websites to ensure that correct Authorization data is being sent to Issuers, enabling them to make informed Authorization decisions.
The program will:
§ Periodically test Internet gambling sites by attempting a Transaction
§ Analyze the VisaNet Integrated Payment System data for correct Authorization data, specifically:
- Merchant Category Code (MCC) 7995
- POS Condition Code 59
§ Assess the participating Acquirer a fine of US $25,000 for incorrect MCC or POS Condition Code per Merchant. (The Acquirer Institution ID field [f32] in the Authorization record will be used to determine the Acquirer.)
Continued non-compliance may result in additional action such as:
§ Escalation of fines, as specified in the Visa International Operating Regulations, Volume I - General Rules, Section 1.4.E
§ Merchant revocation, as specified in the Visa International Operating Regulations, Volume I - General Rules, Section 2.8.E.2
For more information, please call or write your Visa Primary Contact.
Cordially,
Latin America and Caribbean Region
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SUBJECT: Internet Gambling Audit Program
September 24, 2001
Background
The ability to place bets via the Internet is a relatively new phenomenon that has attracted media and legal attention in some jurisdictions. As with many other services offered on the Internet, it requires new policies and procedures addressing the unique aspects of the business. In June 1998 and November 1999, the Visa International Board of Directors approved Operating Principles governing Internet gambling Transactions and Online Gambling Merchants. It is now necessary to expand and reinforce these requirements to address the current business environment.
While legal in many countries, some jurisdictions regulate, prohibit, or impose special taxes on Internet gambling. In the United States, legislation has been proposed that would make Internet gambling illegal for U.S. Cardholders and place the responsibility for monitoring Internet gaming on the Issuer. Media attention surrounding recent lawsuits brought against Visa, the possibility of brand compromise, and added costs resulting from dispute resolution make it necessary to proactively enforce the Operating Regulations relating to Online Gambling Merchants.
An Online Gambling Transaction is the purchase of any form of gambling services over the Internet or other networks. Gambling services include, but are not limited to, the following:
§ Betting
§ Lotteries
§ Casino-style games
§ Funding an account established by the Merchant on behalf of the Cardholder
§ Purchase of value for proprietary payment mechanisms
When the purchase of value for proprietary payment mechanisms, such as e-cash accounts, is used to pay for Internet gambling, these Transactions must also be classified as Online Gambling Transactions, since they contain the same risk concerns.
Currently, Visa requires Online Gambling Merchants to use the following Authorization data elements to correctly identify their Transactions as “Online Gambling”. The correct identification of these Transactions is important to allow Issuers to make appropriate Authorization decisions.
§ Merchant Category Code (MCC) – 7995
§ POS Condition Code (POS CC) – 59
§ Processing Code positions 1 and 2 – 11
§ Mail/Telephone or Electronic Commerce Indicator (Additional POS information positions 9 and 10) – 05 through 09
It is conservatively estimated that there are 1,500 to 3,500 Internet gambling companies offering online services. Recent Transaction testing of Internet gambling Merchants revealed that the majority of Internet gambling Merchants were not using the correct data elements to identify the Transaction as an Online Gambling Transaction.
Acquirer Impact
Effective 15 November 2001, Visa will initiate an “Internet Gambling Audit Program”. This program will audit Authorization traffic from known gambling websites to ensure that correct information is being sent to Issuers so they can make informed Authorization decisions.
The program will:
§ Periodically test Internet gambling sites by attempting a Transaction
§ Analyze the VisaNet Integrated Payment System data for correct Transaction data, specifically:
- MCC 7995
- POS CC 59
§ Assess the participating Acquirer a fine of US $25,000 for incorrect MCC or POS CC per Merchant. (The Acquirer Institution ID field [F32] in the Authorization record will be used to determine the Acquirer.)
Continued non-compliance of data fields may result in additional action such as:
§ Escalation of fines, as specified in Visa International Operating Regulations, Volume I¾ General Rules, Section 1.4.E
§ Merchant revocation, as specified in the Visa International Operating Regulations, Volume I¾ General Rules, Section 2.8.E.2
Before the “Internet Gambling Audit Program” implementation on 15 November 2001, Acquirers are asked to take this opportunity to review their Merchant portfolios and ensure that:
§ All requirements are met for Online Gambling Merchants (see Attachment)
§ Correct Authorization data elements are associated with any Online Gambling Merchant
Issuer Impact
This program is designed to ensure that correct Authorization data elements are used for Online Gambling Transactions so that Issuers can make sound Authorization decisions based on a variety of factors such as risk and legal concerns. If an Issuer suspects that a Transaction is an Online Gambling Transaction and does not contain the correct data elements, the Issuer can forward the Merchant name and Merchant URL to the program manager. The program manager will conduct a test Transaction to verify the use of correct data elements and take appropriate action.
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