US Bankcard Services Industry Blog

Monday, March 29, 2010

Credit CARD Act: Processing Impact

Changes brought on by the 2009 Credit CARD (Card Accountability Responsibility and Disclosure) Act may significantly impact you, the merchant. As part of the new law, consumers who attempt to pay for transactions and hit their credit limit will have their payment card declined at the point of sale. The only time they won’t be declined is when they had already requested a higher line of credit or had enrolled/opted into their issuing banks for overdraft protection. This took effect February 22nd for credit cards and in will go into effect for debit/ check cards in July. Consumers may blame you, the retailer, or the processor but in actuality, the credit card issuers and banks are responsible for authorizations. Looks like the days of banks extending the courtesy of “floating” a purchase for their cardholders are over.