Information on Merchant Accounts,
Ecommerce and Credit Card Processing

January 21st, 2010 by Jamie Estep

You cannot require an ID for a Visa transaction???

Filed in: Fraud, Merchant Accounts | 9 comments

After reading an article this morning, the author states that merchant’s are prohibited from asking for an ID to process a transaction. Sounding completely ridiculous, I decided to further investigate.

I stumbled on a Visa operating regulation that I was not aware of. “You cannot require an ID in order to complete a Credit transaction.” Furthermore, you cannot decline or refuse a transaction if your customer refuses to provide an ID.

Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures.

The author was completely wrong as far as MasterCard goes, who takes a different approach to the situation…

For unique transactions processed in a face-to-face environment (with the exception of truck stop transactions and card-read transactions where a non-signature CVM is used), request personal identification of the cardholder in the form of an unexpired, official government document. Compare the signature on the personal identification with the signature on the card.

American express is a little vague, but still states that the identity should be verified…

Verify that the customer is the Card-member. Cards are not transferable.

It’s actually hard for me to believe that Visa goes this far in trying to protect their cardholder’s convenience at the expense of their merchants being exposed to potential fraud. I strongly recommend checking the ID of every card holder. No regulation prevents a merchant from asking for an ID, and I can’t imagine a customer seriously refusing under any normal circumstance. Merchants are not allowed to ask for an ID on “PIN” debit transactions where a customer enters their PIN number into a pinpad. For signature debit, where the card is processed like a credit card, treat the transaction just like credit and ask for an ID.

If anyone would like to see the various card regulations, they can be found here:
MasterCard Chargeback Guide

Discover’s site requires registration, and I was unable to register with the Discover numbers of the 4 merchant accounts that we have. If anyone has a copy of Discover operating regulations, I would love to see them.

9 Responses to “You cannot require an ID for a Visa transaction???”

  1. linkwheel January 25, 2010 at 1:01 am

    The whole idea is for smooth transaction between the card-user/merchant hence a novel method be used keeping this view in mind…i am sure we can get one…

  2. Jay Sumlin January 28, 2010 at 9:01 am

    I truly understand the merchants frustration regarding the whole credit card mess. Fees,regulations,charge backs,disputes. We in the credit card processing business need to listen rather than to focus on selling our goods. Try helping the business owner, advertise their business on the radio or local print media. This is what I do for my merchants after all you benefit too. My clients are always happy to see me or talk to me on the phone, a wonderful change after I started this. Google Jay Sumlin and read some of my tips.

  3. eldahman January 31, 2010 at 5:40 am

    Very good post keep going man

  4. Alex Hager February 2, 2010 at 3:56 am

  5. jestep February 3, 2010 at 11:58 am

    Yes, thanks.

    Looks like Discover leaves any language about checking an ID out of their manual. They do require the ID verified if the card is not signed, so I would assume they have a similar although more ambiguous approach as American Express.

  6. Nick Bentley February 8, 2010 at 1:31 pm

    There was a story on CNN about this, and they said when contacted all three said you couldn’t require ID as a condition for a transaction.
    I just don’t get this, how can you sell someone high end electronics like laptops or the like without ID? Of course it’s up to the merchant to not sell the item, but Visa (at least) making it a requirement…
    I’ve never heard of anyone losing their merchant account over it though. Also, there’s places like liquor stores which have to require ID anyway, for them at least there’s no legal way to comply with this policy.

  7. Merchant Data Systems April 21, 2010 at 11:49 am

    That’s a good question, Nick. You would think that IDs are required for high-end items as well… Best Buy typically does this at least, but I’ve made some fairly hefty purchases at other locations without the requirement of an ID. Very odd…

  8. minority attorney April 23, 2010 at 8:34 am

    Please allow me to explain the “why” of the ID issue. The “real reason” the Indentification , Credit Cards, and et al.; Once upon a time, back in the 1970’s, 80′,90’s and even today, we have clerks, and perhaps even entire stores ( via management) that only ask SELECT customers for their identification. How do you think they made that distinction? They only asked people of color for their ID. Meedless to say, this practice created a “lot” of complaints to state EEO agencies that handle Title II complaints ( Public accomadation).
    As a person of color myself, I have watched the clerks , at stores, pass people through the check out, and then when my turn came: “May I see your ID please?” When they haven’t even run the card through.
    I cannot tell you how many times, I have been asked for ID when no one else has. After a couple of federal complaints, the credit card companies washed their hands of the problem, by ASKING their merchants not to ask for ID, as a condition, of sale, yet not quite prohibiting the practice either.
    I always refuse to tender ID. I have had verbal”knock down darg outs at : “Goodwill, Lowes, Wal Mart, a farm store chain called Orschliens , and one “Dollar Store”.
    Lowes was particularly disturbing because , in that case, I stood in line and watched three white males, make their purchases with out ID and using a credit card, sure enough my turn came up, and for 14.99 ; they asked me for ID. I admit I almost lost it. Though bias still exists, it is really hard to swallow.
    Her I am in a business suit, a law degree, and behavior that would not indicate in any way, that I am using someone else’s credit card. The diiferences between me, and the three white males ahead of me are: 1) color, 2) gender, 3) clothing ( they had work cothes on as I had a suit and heels.)
    I remeber in the 80’s I heard a clerk as a youndg black man if his name was really “McCracken”; I suppose her bias went to that Black people should not have “Scot/Irish” surnames.
    Have I made my point yet?

  9. vinod byreddy May 16, 2010 at 1:12 pm

    From my understanding of MasterCard Chargeback Guide, master card discourages asking for personal identification except for unique transactions which includes money transfer, gambling etc. The guide says:
    Members should cite Rule 5.6.3.
    A Merchant must not refuse to complete a Transaction solely because a
    Cardholder who has complied with the conditions for presentment of a Card
    at the POI refuses to provide additional identification information, except as
    specifically permitted or required by the Standards. A Merchant may require
    additional identification from the Cardholder if the information is required to
    complete the Transaction, such as for shipping purposes.