Since January 2018, all surcharges for paying with private credit or debit cards have been banned with the adoption of EU’s revised Directive on Payment Services (PSD2). The prohibition on payment surcharges has far-reaching implications for merchants and consumers alike, increasing the need to reliably detect corporate BIN numbers. In this article, we examine the EU directive in greater detail and explain how merchants can analyze BIN/IIS numbers to levy fees on payments with corporate credit and debit cards and comply with PSD2’s requirements.
The landmark Payment Services Directive (PSD1) was introduced in 2007 by the Directorate-General for Financial Stability, Financial Services, and Capital Markets Union (DG FISMA), and the payment services industry has undergone a profound change since then.
To remain relevant and increase pan-European competition and participation in the payments industry, a proposal to create safer and more innovative European payments, initially called Directive (EU) 2015/2366 and now known as PSD2, was adopted by European Parliament in 2015.
“This legislation is another step towards a single digital market in the EU. It will promote the development of innovative online and mobile payments, which will benefit the economy and growth. With PSD2 becoming applicable, we are banning surcharges for consumer debit and credit card payments,” said Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services, and Capital Markets Union. “This could save more than €550 million per year for EU consumers. Consumers will also be better protected when they make payments.”
Merchants who were used to surcharging their customers to directly recoup the cost of being paid by credit or debit card have found themselves in a difficult situation after PSD2 went into force in January 2018.
With surcharging all customers being out of the question and the cost of accepting cards unlikely to change, many merchants have decided to impose across-the-board price increases to make up for the lost revenue. Others have decided to stop accepting credit and debit cards altogether, hoping that customers would find their products and services attractive enough to settle for a less convenient payment method.
Arguably the best solution is to continue surcharging for payments with corporate credit and debit cards—since this is not prohibited by PSD2—and avoid surcharging only for private cards. The reason why merchants often pay more than they must is that they lack the means of accurately identifying corporate cards, a problem that can be elegantly solved.
We provide a comprehensive database of IIN/BIN numbers to make it possible for merchants to instantly, painlessly, and accurately identify personal or commercial cards.
Example of an entry from our database. Pay attention to the 13th parameter. It could be either PERSONAL or COMMERCIAL:
432733;VISA;METABANK;DEBIT;BUSINESS;UNITED STATES;US;USA;840;HTTPS://WWW.METABANK.COM/;1.866.550.6382;;COMMERCIAL;N
1. "432733" - BIN,
2. "VISA" - Card Brand,
3. "METABANK" - Issuing Organization,
4. "DEBIT" - Type of Card (DEBIT, CREDIT, or CHARGE CARD),
5. "BUSINESS" - Category of Card,
6. "UNITED STATES" - issuing country ISO name,
7. "US" - issuing country ISO A2 code,
8. "USA" - issuing country ISO A3 code,
9. "840" - issuing country ISO number,
10. "HTTPS://WWW.METABANK.COM/" - issuing organization website,
11. "1.866.550.6382" - issuing organization phone number,
12. Reserved for PAN length,
13. "COMMERCIAL" - defines if the BIN is PERSONAL or COMMERCIAL,
14. "N" - defines if the BIN is regulated or non-regulated.
With our BIN database, you can accurately identify all corporate cards and enjoy the peace of mind that comes with knowing that you can continue to levy fees on payments without breaching EU laws.
This feature is only available under the Extended License.
