Tax-free shopping with secure card capture

Tax-free Shopping (TFS) allows international travelers to claim back the sales tax or Value-Added Tax (VAT) on their purchases from a Tax-Free Shopping provider (TFS provider) such as Global Blue. A TFS provider is an organization that refunds the shopper and takes care of the paperwork with the authorities. We can share the shopper's encrypted card number with the TFS provider so that it is easier for the provider to refund the shopper on their card. This is referred to as secure card capture.

Supporting TFS drives sales from international shoppers because of its convenience, and can be a great source of data about international shoppers. To offer TFS to your shoppers, your POS app needs to support it.

How it works

To offer the best in-store experience to your international shoppers, your TFS provider, such as Global Blue, needs to integrate with your POS app, and your POS app must be integrated with your Adyen payment terminals.
The role of Adyen in the tax-free flow is limited. Through secure card capture, we pass the credit card details of the shopper from the terminal to your POS app, and from the POS app to the TFS provider. To optimize the TFS experience and to not miss out on TFS opportunities, it is also possible to activate eligibility detection via the Adyen terminal
After you have set up TFS:

1. (Optional) Check if the purchase qualifies for TFS either:

   • From the terminal: you send a card acquisition request to get the issuer country code and the BIN.
   • From your POS app: this flow does not involve Adyen and you need to set it up with your TFS provider.

2. Ask the shopper for consent in the POS app user interface or on the payment terminal to share their encrypted card number with your TFS provider. There are two flows to ask for consent on the terminal:

   • Custom consent flow: you send an input request to ask the shopper for their consent and need to implement logic to decide, based on the input response, whether your payment request should trigger secure card capture.
   • Automatic consent flow: after you have enabled this flow with Adyen, you only need to make a payment. This triggers the consent screen to show automatically and shares the encrypted card number with the TFS provider if consent is granted.

     Merchants using Global Blue as their TFS provider are recommended to input customer consent in the POS app user interface.

3. You make a payment with taxfree.indicator set to true.

   • If the shopper has given consent, we send a notification to the TFS provider with the shopper's encrypted card number.
   • If the shopper hasn't given consent you need to change the taxfree.indicator flag from your payment request to false so that no secure card capture happens. In the automatic flow, we automatically change the flag to false. The shopper can still claim the refund with the TFS provider. However, the POS app must not pass the PSP reference in tax-free request to the TFS provider.

4. After the shopper completes the payment, you give the shopper the tax-free form issued by the POS app, and a receipt.

With the tax-free form and the receipt, the shopper can claim the VAT refund from the TFS provider. As part of this process, the shopper has to take the tax-free form to the customs desk at the airport or border, to get export validation. Customs will place a customs stamp on the form, or use an electronic system for validation. The shopper then needs to send or hand in the (electronically) validated form to the TFS provider.

Set up tax-free shopping

Before you begin offering tax-free shopping to your shoppers set up tax-free shopping:

1. Contact a TFS provider to set up a tax-free process.
2. To set up your POS app for TFS support, contact the provider of your POS system.
3. Optionally, contact your Adyen account manager or the Support Team if you want to enable the automatic consent flow.

   With this setting, the terminal automatically shows a consent input screen before showing the payment screen. See Step 3: Make a payment.
   To use the custom consent flow, the automatic consent flow must be disabled.

4. Enable receiving the issuer country:
   1. In your Customer Area, go to Developers > Additional data.
   2. Select Issuer country, Variant, Funding source, and Funding source subtype.
5. Configure a Send card number to webhook to send notifications to your TFS provider.

Set up notifications to your TFS provider

Configure a Send card number to <TFS provider> webhook. If the shopper agrees to share their card details, we send the following data fields to your TFS provider:

• The PSP reference of the transaction.
• The shopper's encrypted card number.
• The BIN of the shopper's card.

  If your TFS provider is Global Blue, use https://www.adyen.com as the URL for Server configuration for the "Send card number to Global Blue" webhook.

  We recommend adding a meaningful message to the Description that identifies it as part of the tax-free shopping flow.

Whether we send this notification is determined by the taxfree.indicator flag in the payment request. If the notification is sent, you see this on the transaction in your Customer Area. The POS tile of the transaction includes:

• Tax Free Indicator: true
• Tax Free Identifier: the ID that the TFS provider returned to acknowledge the card details.

  This notification is needed for testing and when you go live. Note that the shopper can claim the tax refund regardless of whether we notified the TFS provider of the shopper's encrypted card number.

Step 1 (optional): Acquire card details

To check whether the shopper is eligible for a tax refund and to determine the eligible tax-free service, you can check the shopper's passport and payment card, or you make a card acquisition:

1. Make a CardAcquisitionRequest without specifying an amount.

2. When you receive the response, get the following details.

   • POIData.POITransactionID.TimeStamp and POIData.POITransactionID.TransactionID: you need these details later in your payment request.

   • CardData.CardCountryCode: The issuer country code, for example 528. Also included in the AdditionalResponse.

   • From the AdditionalResponse (you receive either a string of key-value pairs or a Base64 string that you need to decode to get a JSON object):

     • cardIssuerCountryId: the issuer country code, for example 528. Also included in CardData.CardCountryCode.
     • cardBin: the BIN of the shopper's card, for example 541333.
     • paymentMethod
     • fundingSource

3. Pass the cardIssuerCountryID, expiryDate, paymentMethod, fundingSource, and the cardBin to your POS app for the eligibility check

The POS app either handles the eligibility check locally or through the TFS provider, and informs your store staff of the result.

Step 2 (optional): Ask for consent with an input request

If the purchase qualifies for TFS, ask the shopper for consent to share their encrypted card number with your TFS provider. To ask consent with an input request on the terminal:

1. Make a Confirmation input request with:

   • OutputContent.OutputText: an array of four Text fields containing:

     • A title. For example: Tax-free shopping
     • An explanation and a question. This text can be long and is scrollable. For example:
       You are eligible for tax-free shopping. Would you like the tax-free provider to refund you on your card?
     • A "No" button on the left of the display.
     • A "Yes" button on the right of the display.

   • InputData.MaxInputTime: (Integer) Time-out in seconds. This is the time that the shopper gets to answer the question.

2. When you receive the input response, check the InputResult for the shopper's answer:

   • Input.ConfirmedFlag: true indicates the shopper gives their consent.
   • Input.ConfirmedFlag: false indicates the shopper doesn't give their consent.

3. Pass the shopper's answer to the POS app.

Step 3: Make a payment

If the purchase qualifies for TFS, you make a payment request with the taxfree.indicator flag set to true. Include a reference to the card acquisition if you have acquired the card details in Step 1.

1. Make a PaymentRequest with:

   Parameter	Description
   PaymentData.CardAcquisitionReference	Data from the card acquisition: TimeStamp: the time stamp returned in the POIData.POITransactionID of the card acquisition response. TransactionID: the transaction ID returned in the POIData.POITransactionID of the card acquisition response.
   SaleData.SaleToAcquirerData	The taxfree.indicator flag set to true.

   Pass the SaleToAcquirerData in one of the following formats:

   • Option 1: a JSON object converted to a Base64-encoded string.

     {
         "additionalData": {
             "taxfree.indicator": "true"
         }
     }

     After encoding, pass this in your request:

     "SaleToAcquirerData": "ewogICAgImFkZGl0aW9uYWxEYXRhIjogewogICAgICAgICJ0YXhmcmVlLmluZGljYXRvciI6IHRydWUKICAgIH0KfQ=="

   • Option 2: a form-encoded key-value pair:

     "SaleToAcquirerData": "taxfree.indicator=true"

   The example below shows how to make a payment request with taxfree.indicator set to true.

   When asking for consent automatically is enabled, the terminal asks the shopper for their consent for secure card capture.

   

   The shopper provides their answer and completes the transaction.

   When asking for consent automatically is enabled, in the payment response note the following in the AdditionalResponse:

   • If the shopper gave consent, the taxfree.indicator flag remains set to true.
   • If the shopper did not give consent, the taxfree.indicator flag is set to false. The card details and the PSP reference should not be shared with the TFS provider by the POS app.

2. Pass the pspReference , MaskedPan, cardIssuerCountryID, expiryDate, paymentMethod, fundingSource, and the cardBin to your POS app to finalize the TFS process.

After the transaction, your staff provides the shopper with the tax-free form issued by the POS app, and a receipt.

Testing the tax-free flow

In most cases, your TFS provider organizes an end-to-end test between themselves, Adyen, you, and your POS system provider.

In general, to test the happy flow, you need to use a card with a BIN that is eligible for tax refunds. Otherwise, the TFS provider returns a message that a tax refund is not possible.

1. Make sure that you configured Send card number to <TFS provider> notifications for your test account.
2. Discuss with your TFS provider which card numbers (PAN) on your test card you are allowed to use for tax refund testing. (The PAN includes the BIN.)
3. (Optional) During the card acquisition step, use one of the allowed test card PANs and the associated currency.
   The POS app should now show that the card is eligible for a tax refund. This depends on how the eligibility check is set up with your TFS provider and POS system.
4. Send a payment request with taxfree.indicator set to true, and complete the payment on the terminal. Find the PSP reference of the Transaction in the transactionID.
5. Issue a tax-free form from your POS app based on the specifications provided by the TFS provider.
6. In your Customer Area, look up the transaction by PSP reference and check that the POS tile contains an ID in the Tax Free Identifier field. If this field is empty, contact your TFS provider to discover what went wrong.

See also