According to MasterCard rules, do banks have to offer cash advances at ALL branch locations?

Unless it is a loan production office, the answer is, "Yes."

MasterCard Transaction Rules:

4.14 MasterCard Manual Cash Disbursement Transactions
In the U.S. Region, the Rule on this subject is modified as follows:
Subject to compliance with the Standards, each Customer within the United States Region must provide cash disbursement services to all Cardholders at all of the Customer’s offices where teller services are provided.

Bumping this thread. Confirming that 4.14 in the MasterCard Transaction Rules still requires us to "provide cash disbursement services to all Cardholders at all of the Customer’s offices where teller services are provided." The most current MasterCard Transaction Rules I can find are dated January 21, 2016 and include this language. Just making sure I'm not overlooking a more current set of rules. Thanks!

MasterCard keeps the most current versions of their rules available here.

Rule 4.14 of the November 2016 edition of the Transaction Processing Guide:

4.14 Mastercard Manual Cash Disbursement Transactions
In the U.S. Region, the Rule on this subject is modified as follows:
Subject to compliance with the Standards, each Customer within the United States Regionmust provide cash disbursement services to all Cardholders at all of the Customer’s offices where teller services are provided.

Just to round this question out a bit, Brian, what does Mastercard (note they have changed their standard spelling to drop the uppercase "c") or Visa have to say about cash advances on unembossed prepaid cards often issued by tax services or by many states to distribute state tax refunds directly?

For banks that offer cash advance services, they must provide cash advances to all cardholders, embossed and unembossed.

Mastercard:

4.14.1 Non-discrimination Regarding Cash Disbursement Services
Each Customer and each of its authorized cash disbursement agents must comply with the following requirements at each office at which any cash disbursement services are afforded:
1. Not discriminate against or discourage the use of Cards in favor of any card or device bearing or otherwise issued or used in connection with another acceptance brand; and
2. Provide cash disbursement services to all Cardholders on the same terms and regardless of the Issuer.

VISA: 5.5.1.1 Card and Cardholder Validation in a Face-to-Face Environment

The rule references requirements for processing cash disbursements. It includes anonymous prepaid transactions as being eligible for cash advances.

Verify that the signature on the Card matches the signature on the
Transaction Receipt and on any identification required and presented4
This requirement does not apply to:
● Transactions in which:
– The Card or payment device does not have a signature panel
– A PIN is used
● Anonymous Visa Prepaid Card Transactions
● Visa Commercial Card Transactions
● Vehicle-Specific Fleet Card Transactions
● Visa Easy Payment Service (VEPS) Transactions
● In the Europe Region, Small Ticket Transactions

Short answer: Yes, we must allow cash advances for these cards and follow appropriate verification procedures.

Can a bank stop offering cash advances altogether?

Additionally, are there any other compliance requirements (ex: OFAC check) to consider when offering cash advances to non-customers?

See Mastercard rule 4.14 above. If you are a Mastercard issuer, you are contractually obligated to offer cash advance services. See this Related thread notes VISA relaxed is requirements a couple of years ago.

Brian,

If people keep asking this question over and over is there any chance you will change your mind?

Ken. Almost a year to the day, but since tax refunds are soon upon us again, I decided to post the latest rules from the October 2017 VISA rules and December 2017 Mastercard rules. I plan to bookmark the thread so it is on speed dial when questions on cash advances begin surfacing again.

VISA Rule 5.9.1.1 Manual Cash Disbursement Requirements

If a Member makes Manual Cash Disbursements to other Issuers' Cardholders, it must do so in a uniform manner for all Visa products properly presented.

In the Canada Region and US Region, a Member authorized to make Cash Disbursements must make Manual Cash Disbursements to other Issuers' Visa Prepaid Cardholders at all of its Branches. A Member may make Manual Cash Disbursements through the offices of its related companies only if all of the following: ● The companies are primarily engaged in providing financial services to the public. ● The Member or the Member's holding company wholly owns the company. ● Visa has given the Member prior approval.

Although VISA no longer requires an issuer to also provide cash advance services, if it does, it must include prepaid cards (which would include unembossed tax refund cards.)

Next question about charging a fee: (we can't)

5.9.1.3 In the Canada Region and US Region, not assess an Access Fee on a Manual Cash Disbursement conducted with a domestic Visa Prepaid Card.

Mastercard Transaction Rules will also require services be afforded to prepaid access:

4.14.1 Non-discrimination Regarding Cash Disbursement Services Each Customer and each of its authorized cash disbursement agents must comply with the following requirements at each office at which any cash disbursement services are afforded:
1. Not discriminate against or discourage the use of Cards in favor of any card or device bearing or otherwise issued or used in connection with another acceptance brand; and'
2. Provide cash disbursement services to all Cardholders on the same terms and regardless of the Issuer.

Offering cash advances is still mandatory for Mastercard issuers.

In the U.S. Region, the Rule (4.14) on this subject is modified as follows: Subject to compliance with the Standards, each Customer within the United States Region must provide cash disbursement services to all Cardholders at all of the Customer’s offices where teller services are provided.

As with VISA, no fee can be charged.

4.14.3 Discount or Service Charges In the U.S. Region, the Rule on this subject is replaced with the following: With respect to the acceptance of prepaid Cards, the Customer and each of its authorized cash disbursement agents must disburse all cash disbursements at par without any discount and without any service or other charge to the Cardholder, except as may be imposed to comply with applicable law. Any charge imposed to comply with applicable law must be charged to and paid by the Cardholder separately and must not be included in the total amount of the cash disbursement.

I often have banks ask if they can send the tax refund people to the ATM. Since they are required to offer the service, they violate the above rules if they do this.

Brian,

We googled the Mastercard Transaction Rules. It appears this was updated December 21, 2017 and we were unable to locate section 4.14. Could this have been moved or changed to another section?

It's on page 111 of 297 and the amendment for the U.S. Region is on page 130 of 297 of the 12/21/17 document.

Thank you, Brian. I knew you would lead me in the right direction!

Brian,

Regarding this portion of the post above:

"As with VISA, no fee can be charged.

4.14.3 Discount or Service Charges In the U.S. Region, the Rule on this subject is replaced with the following: With respect to the acceptance of prepaid Cards, the Customer and each of its authorized cash disbursement agents must disburse all cash disbursements at par without any discount and without any service or other charge to the Cardholder, except as may be imposed to comply with applicable law. Any charge imposed to comply with applicable law must be charged to and paid by the Cardholder separately and must not be included in the total amount of the cash disbursement."

I was reading and on page 130-131, it says this:

4.14.3 Discount or Service Charges

In the U.S. Region, the Rule on this subject is replaced with the following:

With respect to the acceptance of prepaid Cards, the Customer and each of its authorized cash disbursement agents must disburse all cash disbursements at par without any discount and without any service or other charge to the Cardholder, except as may be imposed to comply with applicable law. Any charge imposed to comply with applicable law must be charged to and paid by the Cardholder separately and must not be included in the total amount of the cash disbursement.

With respect to the acceptance of any type of Mastercard Card other than a prepaid Card, a Customer or its authorized cash disbursement agent may charge a fee for performance of the cash disbursement service (herein, a “Manual Cash Disbursement Access Fee”). Any Manual Cash Disbursement Access Fee charged must be:

1. Not greater than the fee established for any other payment network.

2. Disclosed to the Cardholder before a Transaction authorization request is submitted. At the time of disclosure, the Cardholder must be afforded the opportunity to opt out of completing the Transaction.

3. Disclosed on the Transaction receipt.

4. Detailed in DE 28 (Amount, Transaction Fee) of the Authorization Request/0100 or Financial Transaction Request/0200 message.

5. Detailed in DE 54 (Amounts, Additional) of the First Presentment/1240 message.

6. Included in the total Transaction amount transmitted in DE 4 (Amount, Transaction) of authorization and clearing messages.


I understand this to say we still cannot charge a fee for cash advances on prepaid cards. However, it appears we may now be able to charge a fee for non-prepaid cards. Is that correct? If we can charge a fee, my next question is what do we instruct our tellers to look for to determine whether the card is a prepaid or not? Or would our cash advance terminal be programmed to know the difference between prepaid vs. non-prepaid and assess the fee accordingly?

Related Thread that discusses the changes to VISA rules from 2014.

VISA rules require that a debit or prepaid card will say "Debit" on the physical card somewhere. These are the cards for which you cannot charge a fee.

I read that change in 4.14.3 that we can charge an "Manual Cash Disbursement Fee" if we do so across the board (except prepaid) and disclose on the receipt.

Right?

Brian,
I have the VISA Business News issue from 6-26-2014 and it states we must still offer cash advances to prepaid cards. The paragraph is below.

Clients will not be required to support manual cash disbursements in all branches for all cardholders. Provision of manual cash will be an optional service for all products in all regions. If a Visa client opts to support manual cash disbursement requests from other issuers’ cardholders, it must provide the service for all Visa card products.
o Exception: In Canada and the U.S., manual cash disbursements must continue to be supported for Visa Prepaid cards.

Since I am not a VISA Member Bank, I do not have access to their publications beyond the publically available operating rules I recommend that you direct your question to your VISA representative.

All I have is the previously cited rule excerpt. "In the Canada Region and US Region, a Member authorized to make Cash Disbursements must make Manual Cash Disbursements to other Issuers' Visa Prepaid Cardholders at all of its Branches."

Are all VISA members "authorized to make Cash Disbursements" in the U.S. Region? This doesn't tell me that you are required to offer the service. This just states that if you do offer the service, you cannot exclude prepaid.

We are trying to decide if we can pull our cash advance machine from all branches, so I am reviewing the threads related to this question. There was a Visa Business News published on 26 June 2014 that states:

"Given the broad deployment of ATMs and the ease with which cardholders can obtain cash, in-branch teller-provided cash withdrawals are becoming less necessary. In response to client feedback, Visa has made the following rule changes, effective 15 October 2014 (except where noted, below):

• Clients will not be required to support manual cash disbursements in all branches for all cardholders. Provision of manual cash will be an optional service for all products in all regions. If a Visa client opts to support manual cash disbursement requests from other issuers’ cardholders, it must provide the service for all Visa card products.

o Exception: In Canada and the U.S., manual cash disbursements must continue to be supported for Visa Prepaid cards."

I believe the Canada/U.S. exception means that we can't pull our cash advance machines, but that we could limit our processing to only prepaid cards. Does anyone interpret this differently? Please tell me I'm wrong - I'll be thrilled.

As noted in my previous post, direct this question to your VISA representative.

We were looking at pulling Cash Advance machines as well and when I came across of this it appears that MC's rule was misinterpreted. MC doe NOT require cash advance services to be offers. MC is simply stating that should issuer choose to offer cash advance services, they should comply with Processing rules and not discriminate. As per MC Transaction Processing Rules dated 6/28/2018:
"4.14 Mastercard Manual Cash Disbursement Transactions
A cash disbursement MAY BE provided to a Mastercard Cardholder by a Customer at its offices
and through its authorized agents....

Each Customer and each of its authorized cash disbursement agents must comply with the
following requirements at each office at WHICH ANY CASH DISBURSEMENT SERVICES ARE AFFORDED."

This was also confirmed by MC. So if you are considering pulling machines out- carry on.

While the generic rule 4.14 does indeed say, "may", the U.S. Region modified rule still says, "must."

4.14 Mastercard Manual Cash Disbursement Transactions In the U.S. Region, the Rule on this subject is modified as follows:

Subject to compliance with the Standards, each Customer within the United States Region must provide cash disbursement services to all Cardholders at all of the Customer’s offices where teller services are provided.

I don't see how this can be interpreted any other way.

With the number of stimulus payments that have been sent via prepaid access card, it's time to update citations for the latest editions of V/MC operating rules.

VISA Rule 5.9.1.1 Manual Cash Disbursement Requirements

If a Member makes Manual Cash Disbursements to other Issuers' Cardholders, it must do so in a uniform manner for all Visa products properly presented.

In the Canada Region and US Region, a Member authorized to make Cash Disbursements must make Manual Cash Disbursements to other Issuers' Visa Prepaid Cardholders at all of its Branches. A Member may make Manual Cash Disbursements through the offices of its related companies only if all of the following: ● The companies are primarily engaged in providing financial services to the public. ● The Member or the Member's holding company wholly owns the company. ● Visa has given the Member prior approval.

Although VISA no longer requires an issuer to also provide cash advance services, if it does, it must include prepaid cards (which would include unembossed tax refund cards.)

Next question about charging a fee: (we can't)

5.9.1.3 In the Canada Region and US Region, not assess an Access Fee on a Manual Cash Disbursement conducted with a domestic Visa Prepaid Card.

Mastercard Transaction Rules will also require services be afforded to prepaid access:

4.15.1 Non-discrimination Regarding Cash Disbursement Services Each Customer and each of its authorized cash disbursement agents must comply with the following requirements at each office at which any cash disbursement services are afforded:
1. Not discriminate against or discourage the use of Cards in favor of any card or device bearing or otherwise issued or used in connection with another acceptance brand; and'
2. Provide cash disbursement services to all Cardholders on the same terms and regardless of the Issuer.

Offering cash advances is still mandatory for Mastercard issuers.

In the U.S. Region, the Rule (4.15) on this subject is modified as follows: Subject to compliance with the Standards, each Customer within the United States Region must provide cash disbursement services to all Cardholders at all of the Customer’s offices where teller services are provided.

As with VISA, no fee can be charged.

4.15.3 Discount or Service Charges In the U.S. Region, the Rule on this subject is replaced with the following: With respect to the acceptance of prepaid Cards, the Customer and each of its authorized cash disbursement agents must disburse all cash disbursements at par without any discount and without any service or other charge to the Cardholder, except as may be imposed to comply with applicable law. Any charge imposed to comply with applicable law must be charged to and paid by the Cardholder separately and must not be included in the total amount of the cash disbursement.

I often have banks ask if they can send the tax refund people to the ATM. Since they are required to offer the service, they violate the above rules if they do this.

Many years ago the network we used for MC cash advances cancelled our contract and shut our access to the cash advance network off because we didn't have enough (any) activity to keep our bank open and valid. Couldn't find a vendor interested in a zero activity cash advance bank. We now have an ATM so I assume if someone has a MC and a pin they can access cash now. Very small bank, rural area.

If our doors aren't open right now, only the drive thru is, are we able to not offer this service for now?