State of the Network Updates 2023

What are card network updates?

Card networks are sometimes referred to as card associations. Card associations can include different financial institutions (referred to as members), such as issuing or acquiring banks. The networks create rules that dictate how, when, and where payments are made, and all members of the payments lifecycle—including merchants—are expected to adhere to these rules. However, not every rule will apply to every merchant as rules can be region or industry specific.

Card network updates refer to updates that the networks make to their operating rules. These updates are broad in nature and may include:

• New features, such as support for more digital wallets or payment types

• Security enhancements, like requiring EMV 3DS or tokenization
• Mandates to comply with new regulations, like PSD2
• New or updated fees

When are network updates released?

While the networks release updates to their rules throughout the year, many updates are released twice per year, in spring and in fall.

How do the card associations updates impact merchants?

As we noted before, not every update may impact you. Merchants are expected to adhere to the rules that do impact them, and merchants may face fines for not complying with the rules. When a network update does apply to your business, you are often required to take the necessary actions to remain in good standing with the card network that has issued the update. Updates may also have a material benefit for your business that you will want to take advantage of—even if there isn’t a specific requirement associated with the change.

What action do merchants have to take?

Network updates vary, and so too do their requirements for merchants. In some cases, merchants do not have to do anything; in other cases, merchants may have to make integration changes or adopt new services to ensure compliance, such as implementing EMV 3DS to meet the SCA requirements of PSD2.

What is changing this spring?

You can view all the key updates for Spring 2023 here.

This spring’s release includes new and enhanced features, new and updated fees, and new mandates. Some of this spring’s changes include:

• New feature | Address Verification Service (AVS) update: Visa will simplify and streamline AVS processing by discontinuing redundant result codes, helping to more clearly identify whether AVS was performed.

• New feature | Changes to the Icelandic Króna: Visa and Mastercard will be removing the minor units (aka the numbers following the decimal point) from the Icelandic currency, the Króna. 100.00 Króna will now appear as 100 Króna.
• New mandate | Standardization of Transaction Data Elements: Mastercard is introducing new service location data fields for clearing and authorization messages to help provide clarity to where a transaction originated.
• Fee change | Card Verification Value 2 (CVV2) pricing change: Visa will begin charging an authorization fee per CVV2 result. CVV2 is the three-digit security code primarily used in card-not-present (CNP) transactions as an additional method to help validate a cardholder and the card’s presence during a transaction.

Please note that not all changes, including the ones mentioned above, will apply to all merchants. Please refer to this page for more details or reach out here for additional support.