In the first episode of the Transit Payment series of articles I outlined some key transit payment concepts including validation and authorisation, first ride risk, deny list processing and acceptance of different form factors. In this episode I take a closer look at some of the challenges that occur with Tokenised PANs (tPAN), with a focus on debt recovery.
A tap at a reader is limited to an Offline Data Authentication (ODA). The deferred authorisation is sent only after commencement of the journey. If the authorisation is subsequently dishonoured, the merchant will seek to re-present the charge. The hitch is that debt recovery transactions are card not present (CNP), and the tPAN is not valid for CNP transactions. In other words, the issuer will likely reject tPAN debt recovery transactions without further reference to the funding PAN (fPAN).
No, this would unnecessarily impact customers. Aside from this, there is no way to reliably identify that the form factor presented is a tPAN or an fPAN. The format of both is identical with a mod-10 check digit, and a BIN range that uniquely identifies the Issuing Institution. The key is that procedures are in place to ensure that debt recovery transactions can be performed successfully.
The Schemes have taken the lead to ensure that there are solutions in place for debt recovery transactions where the original transaction references the tPAN. Merchants/Merchant Processors should confirm they are aligned with Scheme rules to ensure that debt recovery transactions can be successfully processed.
Although not the only possible solutions, the following 2 options are likely to be offered by the Schemes to ensure that debt recovery transactions are successfully processed by Issuers:
- The Scheme mandates that its issuers respond with the fPAN in the Auth Response message where the authorisation is declined. The Merchant should send the CNP debt recovery transaction referencing the fPAN.
- The Schemes are presently rolling out PAR (Payment Account Reference). The PAR acts as a permanent reference to the fPAN without ever having to disclose it per option 1. Where it is supported, the Merchant should send debt recovery transactions referencing the PAR.
Although PAR provides an additional security layer, it may be an extended period before all Issuers have it implemented. On this basis, it is important that all players in the Transit Payments space are clear on the required procedures and obligations for processing debt recovery transactions.
Should you wish to discuss any of the above or how C Smart International may be able to assist your organisation with a Transit Payments initiative please contact Steve Lukic at firstname.lastname@example.org