Visa Bars Data Pass Account Sharing

In an effort to address the scrutiny Senator Rockefeller (D-WV) and the United States Senate Commerce Committee has been placing on online marketers who engage in the transfer of credit card data between customers, Visa announced that it is placing restrictions on "data pass," in which a consumer's credit card information is shared to process for additional merchants who offer online upsells without the re-entry of credit card data.

Visa's rules previously prohibited merchants from sharing a cardholder's account number and other Visa transaction information with any entity that is not directly involved in completing the transaction, preventing fraud, or as required by law. However, the sharing of credit card data in order to process for other offers has been a long-standing marketing practice that is otherwise permitted in defined circumstances in telemarketing. Nevertheless, these marketing practices have come under enormous scrutiny by politicians and regulators who are alleging that consumers do not appreciate that they are enrolling in a new offer when they do not provide their credit card data. Thus, to preclude the sharing of credit card data pass for upsells and the like, Visa will now require merchants to prompt consumers to re-enter their full card information to accept a subsequent offer from another merchant--a move designed to make consumers more aware that they are initiating a second purchase. It is unclear whether this restriction is limited to the online channel.

Marketers that are engaged in credit card sharing should carefully review both their Visa and MasterCard merchant agreements and consult counsel to determine if their practices are in compliance with the new restrictions.

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