For a while now, our bank has been accepting loan payments by phone for single service households. These are typically processed via ACH debit or by debit/credit card. The processing of loan payments by phone was initially intended for consumers only, however somewhere in the last year or longer we have started to accept commercial loan payments. We have since ceased accepting ACH payments for commercial customers because all we can process are TEL payments, and a TEL SEC code is for consumers only.

We still want to be able to accept payments for commercial customers by debit or credit card. Since the card will not be present, the card issuer has chargeback rights. Worse case scenario we reverse the credit on the loan. Can anyone give me any other reasons why we shouldn't accept loan payments by debit card for commercial customers?

If it is a Visa card (most current information that I have):

A Merchant must not accept a Card to collect or refinance an existing debt unless either:

● The Transaction results from conversion of a Merchant's existing card program to the Visa Program
or Visa Electron Program.

● The Merchant is a government agency and the Transaction represents a loan payment. In this case,
the Transaction amount must not equal the loan balance unless it is the final payment.

Last time I had access to their operating rules, Mastercard allowed it, provided that the Bank has registered its terminal to identify the transaction with a specific code (MCC 6051).

You probably really need to check with your card service provider to see if they allow it and under what conditions.

Ok. Thanks for the information!