22 November 2020
Introduction
This article addresses «Purchase with cashback» service, also known as POS Cashback, which is relatively new to our region. Let us describe its essence and the special features of its implementation in the context of all technological units — cards, POS terminal, processing centers of the acquirer and the issuer in respect to one or another Payment system.
Cashback: card-related and terminal-related
It should be told in brief of the terminological anecdote that happened to «Cashback» service in our region. At present, «cashback» is commonly a term meaning crediting of a certain amount to the card holder’s card account after a certain time as a reward for using the card for payment in one or several categories of services and goods. In such a case, the reward credited to the card is cashless, meaning that no physical «cash» is involved. Therefore, the term cashback is, in a strict sense, hardly suitable for the said card service.
At the same time, speaking about POS Cashback service, the subject of this article, the cardholder actually receives physical cash, so there is no terminological inexactitude in this case.
General Information
In today’s Russian Federation, the service is provided by the following payment systems: Visa («Cash at POS» and «Visa Cashback»), Mastercard («Purchase with Cash Back (PWCB)») and Mir National Payment Card System («Cashback upon purchase»). Taking into account the terminology differences, in this article, we will use the generic term «POS Cashback». The essence of the service is the cardholder’s option to require a certain amount of physical cash when using a card for a purchase in a retail and service outlet. In this case, the maximum amount of physical cash depends on the Rules of one or another PS (we will touch upon this hereinafter), and the purchase is mandatory. It means that the physical cash receipt without purchase is forbidden.
Limitations of the service
POS Cashback is permitted for contact and contactless chip cards. MStripe (Magnetic Stripe) and Manual PAN (manual input of card data) input modes are forbidden. Real-time authorization is mandatory. Methods of cardholder verification (CVM methods) in the context of PS are the following:
Visa: depending on the card interface: offline or online PIN, as well as CDCVM (Consumer Device CVM, verification through a mobile device). «Signature» and «NoCVM» CVM methods are forbidden.
Mastercard: online PIN only. All other CVM methods are forbidden.
Мир: depending on the card interface: offline or online PIN, as well as CDCVM (Consumer Device CVM, verification through a mobile device). «Signature» and «NoCVM» CVM methods are forbidden.
However, all three PS only permit local, «domestic» cashback.
A receipt of the POS terminal has to specify separately the amount of purchase and the amount of cashback.
Limits
For the POS Cashback, the following limits of POS terminals are fixed:
CVM Required Limit = 0
Floor Limit = 0
In other words, the cardholder verification and the online exchange have to be executed, which was mentioned in the previous section.
At the level of the POS application, an additional limit is introduced, usually not specified in the EMV core: Maximum cashback limit, in case of exceedance of which the terminal has to stop the transaction. It is 5,000 rubles in the case of Mastercard and «Mir» and a national equivalent of USD 200 in the case of Visa.
Cashback, EMV exchange
The special features of POS Cashback transactions common for all PS at the level of APDU exchange are the following.
POS terminal has to send the following elements to the card in the Generate AC (Mastercard, Mir) command or in the Get Processing Options (Visa) command:
Tag 9F02 (Authorized Amount, amount of transaction) includes the total transaction amount (Amount of purchase + amount cashback).
Tag 9F03 (Amount, Other) is the amount of cash. I.e., if the amount of purchase is 500 rubles, and the cashback amount is 50 rubles, 550 is to be transmitted in tag 9F02, and 50 is to be transmitted in tag 9F03.
In addition to that, Mastercard clearly determines that the value of Tag 9C (Transaction Type) is 09 (PWCB), the National Payment Card System permits the transfer 9C to be both 09 and 00, and Visa — to be 00.
For the Visa contact cards and all types of Mastercard and «Mir» cards, the issuer can permit Cashback in Tag 9F07 (Application Usage Control (AUC)) of the card.
For example, AUC = FF80, where:
Byte 1 bit 8 = 1 — Valid for domestic cash transactions: the local (i.e., national or domestic) cashback transactions are permitted.
Byte 1 bit 7 = 1 — Valid for international cash transactions: the international cashback transactions are permitted.
Byte 1 bit 6 = 1 — Valid for domestic goods: the local goods payment transactions are permitted.
Byte 1 bit 5 = 1 — Valid for international goods: the international goods payment transactions are permitted.
Byte 1 bit 4 = 1 — Valid for domestic services: the payment of the local services transactions is permitted.
Byte 1 bit 3 = 1 — Valid for international services: the payment of the international services transactions is permitted.
Byte 1 bit 2 = 1 — Valid at ATMs: ATM transactions are permitted.
Byte 1 bit 1 = 1 — Valid at terminals other than ATMs: permitted for use in the other devices (for example, in the self-service terminals, etc.).
Byte 2 bit 8 = 1 — Domestic cashback allowed: local cashback is permitted.
Byte 2 bit 7 = 0 — International cashback not allowed: international cashback is not permitted.
However, if bit 8 of byte 2 of the card’s AUC = 0 (i.e., cashback is NOT permitted), there is the option to modify the EMV profile of the POS terminal as follows.
TAC-Denial (Terminal Action Codes-Denial, terminal action codes for denial of transaction without attempt to send for authorization): set bit 5 of byte 2 (Requested service not allowed for card product) = 0.
TAC-Online (Terminal Action Codes-Online, terminal action codes for transaction sending for authorization): set bit 5 of byte 2 (Requested service not allowed for card product) = 1.
TAC-Default (Terminal Action Codes-Default, terminal action codes for denial if there is no connection): set bit 5 of byte 2 (Requested service not allowed for card product) = 1.
Therefore, bit 8 of byte 2 of AUC will be ignored, and, if a connection channel is available, the POS Cashback transaction will be sent to the issuer for authorization. Bit 5 of byte 2 of TVR (Requested service not allowed for card product), will, of course, be = 1 in such a case.
The only exceptions are the card profiles where IAC-Denial (Issuer Action Codes-Denial, card action codes for denial regardless of the connection channels availability) has bit 5 of byte 2 (Requested service not allowed for card product) = 1. In this case, the POS Cashback transaction will be inevitably denied offline.
We should particularly consider the contactless Visa cards that have significant differences in the work mechanisms. Although tag 9F07 (AUC) is available in the profile of Visa contactless card, in accordance with Visa Contactless Payment Specification (VSPS) this object can be only transferred in the Read Records command, which is optional (i.e., such command can be absent at all within the exchange between the POS and the card).
Besides that, the contactless Visa card has Tag 9F6C (Card Transaction Qualifiers (CTQ)), within which, in particular, there is Byte 1 bit 2, and, if it is = 1 it is «Switch interface for Cashback Transactions» — switch the interface to the contact chip for the POS Cashback transactions. However, such a mechanism is not in use in real life, and a POS Cashback transaction using a Visa contactless card is usually successfully sent to the issuer for authorization.
Cashback, online exchange
Within ISO 8583, the POS Cashback service has the following special features (the fields of authorization ISO message within the chain from the acquirer to the issuer).
DE — Data Element. I.e., an ISO message data element.
SF — SubField.
SE — SubElement.
FC — Field Component.
VISA
Field 4 is the total transaction amount.
Field 55.9F02 (Authorized Amount) is the total transaction amount.
Field 55.9F02 (Other Amount) is the amount of cash.
Field 61.1 (Other Amount) is the amount of cash.
Mastercard
DE1 3, SF2 1 = 09 (PWCB)
DE 4 (Amount, Transaction)is the total transaction amount.
DE 48, SE3 61, SF 2 = 1 (Terminal support Purchase only Approval is the sign that the POS terminal supports the approval of only the purchase amount if the cashback is denied by the issuer).
DE 52 (PIN Block Data) is the encrypted PIN block.
DE 54 (Amount, Additional):
- SF 1 (Account Type)
- SF 2 (Amount Type) = 40 (Cashback)
- SF 3 (Currency Code) is the currency code
- SF 4 (Amount) = D (Debit)
- SF 5 (Additional Amount) is the amount of cash.
DE 55.9F02 (Authorized Amount) is the total transaction amount.
DE 55.9F02 (Other Amount) is the amount of cash.
DE 55.9С (Transaction Type) = 09 (Cashback).
«Mir» (National Payment Card System)
Field 3, SF 1 = 09 (Purchase with cashback).
Field 4 - (Amount, Transaction) is the total transaction amount.
Field 54, SF1 1, FC5 2 = 40 (Cashback).
Field 54, SF 1, FC 3 = 643 (Rubles).
Field 54, SF 1, FC 4 = D (Debit).
Field 54, SF 1, FC 5 is the cash amount.
Field 55.9F02 (Authorized Amount) is the total transaction amount.
Field 55.9F02 (Other Amount) is the cash amount.
Field 55.9C (Transaction Type) — 09 (Purchase + Cashback), or 00 (Purchase).
Field 61, SF 2 — 0 (POS does not support partial authorization), or 1 (POS supports partial authorization).
In this case, the issuer can either approve the transaction in full, i.e., send the response code 00 in the response message, or approve the purchase only and deny the cashback. In this case, the following response codes can be sent to the acquirer:
N3 (Cash Service not avaliable) — cashback is not available.
N4 (Cash exceeds limit) — the permissible cashback limit is exceeded.
Those codes are special features of Visa PS. It should be noted that the acquirer’s host usually converts both of those response codes into 87 (Purchase Amount Only, No Cash Back Allowed) – only purchase is approved, and the cashback is denied, and send it to the POS terminal in this form. At the same time, Mastercard and «Mir» National Payment Card System only use response code 87 in case of approval of purchase only.
Within the service, the technical reversal of the entire transaction is permitted. Reversal or Refund initiated by the merchant on the cardholder’s demand is only permitted in relation to the amount of purchase.
This is the range of special features of the POS Cashback service.
See you next time!
