Some cards allow transactions to be routed through different payment networks. For example:
- Co-branded cards. In many cases, these support a local card scheme for domestic payments and a global card scheme for international payments. For example, Australian cards with eftpos and Visa or Mastercard, or Belgian cards with Bancontact and Maestro. There are also prepaid cards in combination with a global card scheme.
- Combo cards, which support both credit and debit payments.
- US debit cards that support both the US common debit network and a global debit network.
You could say such cards have multiple payment methods. In the financial industry, we say the card has multiple applications.
Automatic application selection
When the shopper presents a card with multiple applications, the payment terminal can ask the shopper to select one. However, this manual selection process takes time and can confuse the shopper. Also, the outcome may not be in your best interests. Therefore, we try to select an application automatically and prevent having to show the manual selection screen.
To automatically select an application, we apply some checks:
- Does the terminal support the application?
- Does the terminal support the transaction type for the application?
- Are there currently any issues with the availability of the application's payment network?
We also apply some rules:
- Rules resulting from the payment request. For example, installment payments must be routed over a credit network. So when the payment request is for installments and the shopper presents a combo card, we select the credit application.
- Scheme compliance rules with regard to showing the manual selection screen.
- Least cost routing rules that most of our merchants prefer.
Least cost routing
The interchange fees and scheme fees you pay for a transaction differ depending on the payment network that the transaction is routed to. In general, transactions processed over a local payment network are cheaper. On the other hand, some global networks charge lower fees for specific businesses.
Another consideration is whether the fee is fixed or based on a percentage of the transaction value. The next example shows that either type of fee can be cheaper, depending on the average transaction value.
|Average transaction value||Fixed fee||Percentage fee|
|$50||$0.15||1% = $0.50|
|$10||$0.15||1% = $0.10|
To route transactions over the payment network that results in the least costs in your particular situation, you can customize the automatic application selection rules.
Customize application selection rules
Your Customer Area shows the application selection rules for your account, in the priority that we apply them. You can't change the rules that depend on compliance or supported features. But you may prefer to add or remove some of the other rules and change the priority. Reasons to do so are:
- Least cost routing: Use a card network that results in the lowest fees in your situation.
- PIN verification: Use an application that doesn't require a PIN. This can depend on the transaction value.
- Manual selection screen: Make sure this screen doesn't appear when the shopper swipes a card, or when the shopper uses a contactless or contact chip card.
To update application selection rules:
- In your Customer Area go to Point of sale > Terminal settings > Payment features.
Under Card application selection, select Manage rules to expand the list of unused rules.
You can now:
- Use the plus button on an unused rule to select it.
- Use the minus button on a selected rule to deselect it.
- Drag rules to change their priority.
- Enable Magstripe to never show the manual selection screen when the shopper swipes a card.
Enable Contact & Contactless chip to never show the manual selection screen when the shopper uses a card with a chip.
- Select Save.
Manually selecting an application
In accordance with the Multilateral Interchange Fee (MIF) Regulation, the shopper must be able to prevent automatic application selection for a particular transaction.
Manual application selection is also useful for offline payments when the local payment method doesn't accept offline payments and the global card scheme does.
To manually select an application:
- When the payment terminal shows the payable amount, press the yellow Clear key on the terminal keypad before the shopper presents their card.
- The shopper presents their card to the terminal.
The terminal shows a list of payment methods that are on the card and supported by the terminal. The labels for these applications are determined by the issuer of the card.
- The shopper selects the application to use for this particular transaction.
The transaction then continues as usual.