Third-party credit vetter overrides MasterCard

Kiwis experiencing unexpected rejection of credit-card transactions online shouldn't necessarily blame their bank or overseas merchant. But they should ask how much the bank and card company know of what's going on with customer credit checks through the internet.

New Zealanders experiencing unexpected rejection of credit-card transactions on the internet should not leap too hastily to blame their local bank or, indeed, the overseas merchant.

But they might ask how much the bank and even the international card company know of what’s really going on with customer credit checks through the internet.

At least one US-based third party is providing credit checks for internet traders, using information beyond that of the balance and payment record on the card used.

Faced last year with a case of two online payment agents who simply refused all transactions from New Zealand, pleading a national bad fraud record (see NZ a fraud risk, say US online billers), MasterCard International told us such independent evaluations should not be happening.

“When the MasterCard logo is displayed by a business to show the card is welcome, the merchant must accept, without discrimination, any valid MasterCard cards presented for payment,” a spokesman said.

When I attempted two transactions last month — a purchase of a piece of software and a subscription to a US-based Usenet newsgroup host — to test whether it gave more reliable service than local ISPs, I submitted a WestpacTrust MasterCard that was well below its limit and fully paid up, as the bank later confirmed in writing.

Nevertheless, I was presented with a “decline” notice on both occasions; in the first case this was credited to the software company’s payment agent, Regsoft of Atlanta, Georgia. But the second notice was attributed neither to the provider of the service, its payment agent, Arizona-based CCBill, nor Mastercard, but to the Credit Card Network.

Over the next two weeks, WestpacTrust gave no less than three different explanations of what might have gone wrong. A bank helpdesk operator, asked about the Regsoft decline a few minutes after it happened, said a bulk update of the bank’s credit card database was going on at that time, and that meant transactions might have been falsely rejected. The update was usually scheduled for 2am to 3am, she said, but on this occasion had been delayed until 5am to 6am.

All merchants understood that this sometimes happened, she said, and customers need have no fear that their credit reputation had been unfairly impacted. I tried the transaction later that day and it went through successfully.

When the CCBill transaction bounced a week later at a similar time of day, I put this down to the same cause, retried the transaction later in the day, but this time still got rejected.

I started a frustrating email exchange with CCBill, which kept asking me to telephone its customer service department, in what looked suspiciously like machine-generated replies. After three cycles, I got an email from Joleen T, who took the details of the rejected news service transaction.

Meanwhile, Westpac public relations woman Petra Mihaljevich replied, denying flatly what the helpdesk operator had told me. Bulk updates simply did not result in declines, she said, and their staff member had been misinformed. She also said the bank had seen only the successful Regsoft transaction, and none of the CCBill attempts. WestpacTrust had not turned any transactions down.

I had one more attempt at the CCBill transaction, and sent Mihaljevich evidence of the rejection with a precise time.

This time, she said the bank had seen the attempted transaction and rejected it on the grounds of an invalid expiry date entered on the form. The CCBill system runs a preliminary check on entered information before submitting the transaction, and in the case of an invalid date or credit card number specifically warns that these are the fields in error. So it is unlikely that a genuine case of an invalid date would have been forwarded to the payment system.

Meanwhile, a reply came from a “supervisor” at CCBill, identifying himself as Mike N. Citing a record of alleged previous rejections of one or another of my cards (some equally mysterious), he said: “Although your card is good it will not always be accepted for signups on the internet.” This directly contradicts Mastercard’s policy. The Credit Card Network, he said, is an independent company which vets “all credit card transactions on the internet”.

The only company emerging in a web search for Credit Card Network is based in Seattle, and is a division of a company called Creditnet. A spokesman says that company vets credit only for its own clients, which do not include CCBill. Mike N at CCBill has declined to discuss the matter further.

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