Introduction

This article describes the global mandate from MasterCard® that impacts all authorizations for MasterCard®, Debit MasterCard®, Maestro®, and Cirrus® transactions. The mandate introduces new definitions for authorization types, outlines timelines, and details enforcement measures that merchants need to follow.

Overview of Authorization Types

MasterCard® now defines authorization requests as three distinct types. Each type has specific processing rules.

• Preauthorization
• Final authorization
• Undefined authorization

Beginning October 2016, authorizations for amounts greater than zero require merchants in all regions except Europe and Middle East and Africa to code transactions as preauthorization, final authorization, or undefined authorization.

Merchants in the Middle East and Africa region code authorizations as either preauthorization or final authorization. This aligns with the existing requirement for the Europe region.

Authorization Timelines and Fees

MasterCard® has set strict timelines for clearing or reversing transactions based on the authorization type. New fees support compliance with these requirements.

Acquirers pass these fees to merchants. Review your system to understand the impact of these changes. For details on fees and effective dates, contact your Acquirer.

Frequently Asked Questions (FAQs)

• What are the new authorization types?
  MasterCard® classifies authorization requests as preauthorization, final authorization, or undefined authorization.
• Which regions are affected by the coding requirements?
  All regions are affected. Europe, Middle East, and Africa require preauthorization or final authorization coding. Other regions require preauthorization, final authorization, or undefined authorization.
• When do these requirements take effect?
  The requirements take effect starting October 2016.
• Who should merchants contact about fees and timelines?
  Merchants should contact their Acquirer for details on fees and effective dates.