Clarifying Visa’s merchant wallet definitions and rules

Visa has published an update to clarify their definitions and rules for merchant wallets (digital wallets consumers use to buy goods and services from merchants)

These rules only affect you if you offer a merchant wallet (such as a store card) for customers to buy goods and services from your business only.

Digital wallets that can be used to pay across multiple businesses (such as Apple Pay and Google Pay) are not classified as merchant wallets.

Merchant wallet types

If you offer a merchant wallet, Visa will classify you as a Digital Wallet Operator. Visa’s definition of that wallet will depend on how customers use it.

Scenario 1: customers use the wallet to buy goods and services from a single brand, using one Merchant Category Code (MCC)

In this scenario, you must process all transactions as a purchase.

Scenario 2: customers use the wallet to buy goods and services from multiple brands, using one MCC

If customers fund the wallet before making a purchase, you must process these transactions as a purchase.

If customers use the wallet to process “back-to-back funding” (also known as “purchase-driven load”, “live-load” or “real-time load”) to automatically transfer value connected to a specific purchase using their stored payment details, you’ll need to comply with Staged Digital Wallet Requirements.

This means that Checkout.com will need to register you as a Staged Digital Wallet merchant, and, where customers use their card to top up the wallet, you’ll need to process the transaction as AFT.

Scenario 3: customers use the wallet to buy goods and services from multiple brands, using multiple MCCs

For this scenario you’ll need to follow Staged Digital Wallet or Stored Value Digital Wallet requirements, depending on how your wallet works.

This means that Checkout.com will need to register you as a Staged Digital Wallet / Stored Value Digital Wallet merchant, and, where customers use their card to top up the wallet, you’ll need to process the transaction as AFT.

If you have any questions or need further support, please email us at [email protected] or reach out to your dedicated Customer Success Manager.

Appendix A - Visa merchant wallet definitions

• Digital Wallet Operator: The operator of a merchant wallet, Staged Digital Wallet, or Stored Value Digital Wallet
• Merchant Wallet: A digital wallet that consumers use to buy goods and services from merchants
• Staged Digital Wallet: A type of merchant wallet that processes ‘back-to-back’ funding transactions. This allows the customer to pay when there are not sufficient funds in the wallet by funding the balance with their card. Note that Visa classifies all digital wallets capable of “back-to-back funding” transactions as Staged Digital Wallets, even if the wallet also enables pre-loaded funds to be stored
• Stored Value Digital Wallet: A type of merchant wallets that works like a prepaid card by assigning a separate “account” to the customer, which they pre-load with funds before being able to transact.

Appendix B - Merchant wallet classifications and treatment