BSC Store Operators White Paper Guidance document from U.S. Transactions Corp. (updated Oct. 2020)
White paper guidance document for GSA (Dept. of
Defense) Purchasing Card sales (update Oct. 2020)
BSC Store operators
In order to provide more uniformity across all BSCs in the way purchases appear on Pcard Cardholder spend files:
A. DBA Name (Doing Business As) – each BSC store’s merchant account (i.e., credit card processing account) will always have two (2) name designations. The Legal Name of the business, and the DBA (Doing Business As) name. This would allow all 155 BSC stores to name their location “AbilityOne BSC – Location”
See attached example on Appendix 1 for how the DBA name for all BSCs can be standardized regardless of the legal name of the NIB Agency.
B. MCC Codes – each BSC merchant account is assigned an MCC (Merchant Category Code) when their account is set up with the service provider (credit card processor). Only one MCC code is allowed per account and it is generally not changed once it is established. The MCC code generally corresponds to the SIC industry category code of the business.
One of the two categories below should be used for consistency across all BSC stores:
– 5111 – Wholesale stationery, office supply, writing and printing paper
– 5943 – Stationery, office or school supply store
The reason that it is important for the BSC to utilize a business activity-appropriate MCC code to its account is because the government purchasing card holder spending activity is monitored and controlled based upon where they use the Pcard for spending. A Pcard administrator for the government agency can prohibit a cardholder from making purchases with certain businesses that do not fall into appropriate MCC categories. Therefore using MCC codes that are different than the above may create problems for the Pcardholder
Some processor service providers may advise the BSC to use an MCC code that corresponds to charities or not-for-profit organizations since NIB Agencies are so legally defined. However, there is no “cost” advantage for the BSC store to use a MCC code corresponding to charities because there is no lower charity interchange fee for Pcards (only for consumer credit cards). Using a charity MCC code would also potentially confuse the federal agency because the Pcard holders would generally not be authorized to make charitable contributions with their Pcards. The Pcard administrator is looking to see that Pcard holders are using the card for intended and government authorized purchases which in this case would be stationery and office supplies, not charitable contributions.
See attached example on Appendix 1 for how the MCC category code is assigned to a BSC location.
II. Detailed Reporting – Level-3 information
Level-3 data consists of Line item information from the invoice for purchases made by the Pcard holder. In simple terms, when the BSC store provides Level-3 data to the payment processor as part of the credit card authorization and settlement, it means that a replication of the itemized invoice is being sent to the Pcard holder’s bank (in the case of Department of Defense, the Pcard holder’s bank is U.S. Bank). When U.S. Bank receives this data, they are able to provide detailed line item reporting of purchased items back to the Pcard administrator of the government agency. Line item detail is the best validation for the government agency that the Pcard holder is purchasing items that are appropriate and authorized. See Appendix 2 for a detail of fields in Level-3 data. See Appendix 3 for an example of a Pcard transaction which was processed with Level-3 data.
III. Lower Cost for the BSC – Level-3 information
The standard credit card swipe or chip reader (EMV) terminal at the store register is not equipped or certified to provide Level-3 data. Standard POS software is also not certified to provide Level-3 data.
In either case additional IT programming is involved in order to transfer line item invoice details from the POS system/software to the Payment processor.
Anecdotally, we believe about 60% of the BSC stores are set up to provide Level-3 line item details from their POS system to the payment processor. The other 40% of BSC’s are not providing Level-3 data.
Why does this matter from a cost perspective?
Those BSC’s who provide Level-3 data to the payment processor are paying about 0.8% less in fees to the merchant service provider.
So factually, the more [proper and complete] data which the BSC can provide to the payment processor, the lower the fees /cost that the BSC will pay.
See attached Appendix 4 for the interchange rate for Pcards (Level-3 vs. Level-1 data).
IV. Modernization and Security – EMV Terminals
For card present transactions that would be performed at the BSC store locations, the most secure and modern method of acceptance would be to utilize an EMV device. EMV stands for Eurocard, MasterCard, Visa, but is used as the acronym to designate when a credit card is processed using the chip reader instead of the traditional card swipe method where the magnetic stripe on the back of the card is “read”.
Appendix 5 explains the background why EMV devices are the most secure and therefore the best for cardholder protection as well as protection for the BSC.
While there is no mandate for any BSC location to utilize an EMV device vs. a card swipe device, the risk to the BSC location associated with breach of cardholder data is much higher. Since BSC stores are dealing with federal government Pcards, it is recommended that the most modern and secure technology and method is utilized to accept payment at the BSC location.
While there are many EMV devices on the market (priced in the range of $200 to $800+ per unit) these EMV devices are only able to transmit Level-1 or Level-2 data to the payment processor.
As of July 2019, there is only 1 source for procuring EMV devices which have the ability to provide Level-3 data to the payment processor.
As of July 2019, all BSCs that currently utilize an EMV device (approximately 15%-20% of the 155 BSCs in the U.S. utilize an EMV device) are providing only Level-1 and Level-2 data. There are no BSC locations with EMV devices that transmit Level-3 data to their payment processor.
See Appendix 5 for EMV equipment sourcing with Level-3 data capability.
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