Zero Floor Limits Are Coming to Cyprus – Contactless in Real Time.
10 Jun 2019
Zero Floor Limits Are Coming to Cyprus
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Changes are on the way for merchant payment services in more Europe regions, including Cyprus. Currently, the card authorisation ‘Floor Limit’ for contactless in Cyprus is 20 Euros. This will change to a ‘zero floor limit’ on 18th October 2019, falling into line with Floor Limit authorisation for magnetic stripe and contact chip cards. Businesses should check with their payment solutions provider to ensure the system they use is automatically upgraded.
What is a Floor Limit?
A merchant is required to obtain online authorisation for a card transaction amount if it is above a set limit, which is intended to help protect cardholders against fraud and reduce disputes. Up until now, the floor limit is zero for all magnetic stripe and contact chip transactions in the Europe region.
The expansion of zero floor limits for contactless to more countries in the Europe region aims to provide issuers with better visibility into transaction amounts, which are not ‘transparent’ in an offline environment. In line with the Revised Directive on Payment Services (PSD2), including Europe Directives tied to strong customer authentication (SCA), business must be aware that introduction of a ‘Zero Floor Limit’ means that every card transaction will now need to be authorised online by the card issuer.
How are businesses affected?
With every payment now authorised online in ‘real time’, a contactless payment may take slightly longer to process. The ‘beep’ heard when a contactless card is tapped against a card reader does not mean that the payment has been authorised and a merchant needs to wait for the authorisation message to be displayed before the transaction is completed with the customer. Processing can also depend upon the speed of services supplied by an internet provider.
As early as August 2017, PayPoint updated their card payment terminals remotely to prepare for the initial Visa Zero Floor Limits. As of 13 April 2019, Visa expanded its policies applied to the use of contactless-only acceptance devices to now include more countries and additional merchant sectors. However, a merchant is required to honour all cards presented for payment. As contactless is one entry mode for accepting transactions, those devices able to accept contactless must continue to honour other methods, i.e. magnetic stripe, contact chip.
The change of floor limit is part of the ongoing upgrading of security features to be implemented as merchant payments across all retail and ecommerce sectors shift towards total contactless payments.