Since 2019, credit cards have been gradually taking over as the preferred payment method, and business will suffer if they are not accepting credit card payments. Many customers and merchants are aware of credit card payments, but what CAF is and how it affects small and large businesses is a significant concern. In this article, business owners will learn about Mastercard merchant UCAF and MastercardDSRP.
Only 20% of transactions are made in cash, and the average person only carries $67 in cash at any given moment. The Federal Reserve Bank of San Francisco survey found that 32% of participants prefer to use a credit card as their primary means of payment.
Business owners should consider allowing customer to pay utilizing credit cards. Enabling your business to accept credit cards will likely boost sales and improve your overall ability to accept a wider variety of payment methods.
What is Mastercard UCAF Meaning?
UCAF is short for Universal Cardholder Authentication Field referring to data gathered during online purchases, particularly paid through Mastercard’s “SecureCode” program.
What is MastercardDSRP?
MastercardDSRP is a secure and safe transaction method that use EMV-based cryptography to protect merchants’ accounts. All DSRP transactions are direct to the Mastercard network. UCAFMastercard payment options are important, but not required. But, adding the payment option gives business edge in the competitive market.
What are MastercardUCAF and SecureCode?
The “3D Secure” technology used by Mastercard is called SecureCode. Business owners can prevent fraud and unlawful purchases by integrating an additional degree of customer authentication. Unfortunately, 3D Secure is uncommon in United States, especially among small businesses due to lack of knowledge about what it brings to the businesses’ reputation. Effectively integrating this product help businesses minimize interchange costs and reduce fraudulent activities.
In simple words, Mastercard SecureCode is the anti-fraud technique for online transactions. Before Mastercard SecureCode customers had to enter unique passcode for online transactions. But, MasterUCAF brings convenience to the customers, contributing to reputation of the business. Moreover, proper implementation of this system reduce the cart abandonment.
eCommerce websites can qualify for Full UCAF Mastercard exchange or Merchant UCAF categories by using SecureCode correctly. The following are the top two benefits of joining MasterCard SecureCode:
- The program safeguards against “cardholder unapproved” chargebacks for all completely compliant MasterCard transactions. This is a huge advantage because, according to MasterCard, more than 70% of all chargebacks resulting from online purchases are marked with reason code 4837 (No Cardholder Authorization) or 4863 (Cardholder Not Recognized).
- SecureCode increases consumer confidence and trust for an eCommerce website. It indicates that the team behind eCommerce website is commited to offer secure and anti-fraud environment to consumers.
MasterCard offers businesses an option to participate in SecureCode program and allow them to post a free advertisement on its eCommerce website.
How Does Mastercard Source Code Works?
Over time, the way businesses can use MasterCard SecureCode have been changing. The original goal of this program is to authenticate every transaction made with the participating card. But now, both issuers and merchants have started to take the selective approach, using screening techniques to isolate only the high-risk transactions, which are subsequently validated, while the others are not.
Regardless of the businessowners’ strategy, the SecureCode authentication procedure involves the following steps:
- The customer enters card details to finish a transaction in the checkout form.
- The cardholder is encouraged to enter their pre-selected SecureCode in a new window on the card issuer’s website.
- The card’s issuer verify the code to ensure that the consumer has permission to use the card.
- The customer returns to the retailer’s website to finalize the sale.
Customers should register the card with the program to use SecureCode authentication. They can register on the merchant or card issuer’s website.
What are Interchange Fees?
For online purchases and card-not-present transactions, Mastercard offers a special rate. Due to the risk of fraudulent activities, these transactions are riskier. Therefore, it has a higher interchange rate. However, business owners can reduce this rate by combining the SecureCode features of Mastercard with the Universal Cardholder Authorization Field (UCAF). Because the cardholder has to enter a unique code to complete the transaction, Mastercard SecureCode reduces the credit card fraud risks.
UCAF qualifies for a lower interchange rate since the risk of fraud is minimal. The “Full UCAF” and “Merchant UCAF” categories are two distinct UCAF subcategories. When both the merchant and the cardholder enable SecureCode, full UCAF interchange rates are applicable. Otherwise, merchants have to pay merchant UCAF interchange rates.
Both non-rewards (“core”) credit cards and reward credit cards have full and merchant UCAF rates. Rewards cards fall under the “improved” or “world” categories. The following are the current UCAF interchange rates for credit cards used by consumers:
| Volume Rate | Fee Per Transaction | |
| Merchant UCAF | 1.95% | $0.10 |
| Full UCAF | 1.95% | $0.10 |
| Merchant UCAF – Enhanced | 2.10% | $0.10 |
| Merchant UCAF – World | 2.20% | $0.10 |
| Merchant UCAF – World High Value | 2.60% | $0.10 |
| Merchant UCAF – World Elite | 2.60% | $0.10 |
| Full UCAF – Enhanced | 2.10% | $0.10 |
| Full UCAF – World | 2.20% | $0.10 |
| Full UCAF – World High Value | 2.60% | $0.10 |
| Full UCAF – World Elite | 2.60% | $0.10 |
UCAF Debit and Prepaid Card Rates
Before the adjustment, Mastercard’s UCAF rates were the same whether the customer used a debit or prepaid card. The rates for prepaid and debit are different. However, the Full and Merchant versions of MastercardUCAF are identical for the same card type. These are the current fees.
| Debit Rates | Volume Rate | Per-Transaction Fees |
| Merchant UCAF | 1.65% | $0.15 |
| Full UCAF | 1.65% | $0.15 |
| Prepaid Rates | Volume Rate | Per-Transaction Fees |
| Merchant UCAF | 1.76% | $0.20 |
| Full UCAF | 1.76% | $0.20 |
Rates are flexible and subject to change by Mastercard. Compared to a key-entered transaction using a core credit card, the merchant UCAF rate is 1.68% + $0.10, whereas the key-entered transaction’s rate is 1.89% + $0.10.
Requirements for UCAF Interchange
Transactions must fulfill specific criteria to be eligible for UCAF exchange categories. The transaction will be routed to other card-not-present interchange categories if all prerequisites still need to be met.
Some criteria apply to both the merchant and full MastercardUCAF categories. These prerequisites consist of the following:
- Obtaining and passing one valid electronic permission
- Key input transactions
- Settlement date within two days of the transaction date
Additionally, the SecureCode authentication codes must meet both Full and Merchant requirements.
Standards for Full UCAF
Business owners and customers should register for the SecureCode program to use the Full UCAF interchange category, and the cardholder must authenticate the transaction using their security code. The indicator for UCAF must be “2.”
Standards for Merchant UCAF
Business owners must register their business for the SecureCode program to participate in the Merchant UCAF exchange category. (But not the cardholder.)
You must include the UCAF indicator of “1” in the transaction. According to CyberSource, a UCAF indicator of “1” indicates that SecureCode / UCAF is supported on the business website.
Meanwhile, a value of “2” indicates that the website supports SecureCode/UCAF and that UCAF data was populated, signifying a successful SecureCode transaction.
How Mastercard Merchant Services Help Businesses?
Small business owners must balance many conflicting priorities when operating companies successfully and efficiently. The business owner must make it simpler for their clients to transact business to boost revenue, enhance customer service, and outperform rivals. Offering simple and adaptable options for customers to pay for goods and services by processing card payments online or in person is an essential aspect available to small businesses. Business owners need a merchant account to integrate MastercardUCAF.
Giving clients the option to pay with a card is just one aspect of setting up a merchant account, and agile business owners are aware that they must choose a payment provider that offers the best value. Although business owners can set up the UCAFMastercard system in a few days, it is simple to ignore the full potential of a merchant account.
1. Mastercard UCAF Encourages More Sales
Businesses allowing only the card payments indicate that they might be risky. When opening a merchant account, small business owners must demonstrate that they are a reliable, reputable company. Customers are more likely to trade with companies that have some credibility, and this factor alone can result in an expanded customers and more revenues. Additionally, because the contactless maximum is presently set at £100, customers can use their cards to make larger purchases in a single transaction.
2. Allow Card Payments to Customers
MastercardUCAF allows customers to pay securely with a card, either online or in person, for simple transactions. Customers find credit card payments more accessible and safer than other online payment options in the eCommerce industry. Also, more payment options will help current clients, and the legitimacy of accepting credit card payments may draw in new clients.
Since 67% of consumers now expect brick-and-mortar retailers to accept contactless payments, business owners should accept card payments to attract customers. Business owners accept credit card payments online, over the phone, or in person with a merchant account.
3. Offer Maximum Security
The Payment Card Industry Data Security Standard (PCI DSS) applies to business owners if they store, process, or transmit sensitive authentication or cardholder data. Every year, they should update PCI compliance because the financial repercussions of a security breach could bankrupt the company. All acquirers impose financial fines for non-compliance. Payment service providers know the steps for owners to comply, and a simple monthly cost guarantees they won’t need to worry.
Conclusion
The prominent feature of MastercardUCAF merchant SecureCode is that it safeguards the kinds of chargebacks that are most likely to happen. There are many reasons to choose MasterUCAF and SecureCode system. Customers want to conduct business with a reliable and reputable eCommerce businesses which include having robust security measures to protect transactions. Make sure your organization is taking active measures to ensure the safety of all of your customers.
