Small Ticket Payments Get Boost from Federal Reserve Decision on Regulation E

The Federal Reserve modified the receipt requirement of Regulation E so that merchants are no longer required to make a receipt available for debit card purchases of $15 or less. Previously, Regulation E required that a paper receipt be made available to consumers for all debit card transactions conducted in physical environments, including those unattended areas where consumers may not expect a receipt. In many of these environments, the cost and operational challenges of receipt printing has limited the deployment of card acceptance terminals. The Fed’s decision will help increase payment card acceptance in unattended cash and coin-heavy merchant segments.

As part of Visa’s ongoing commitment to drive additional payment choices for consumers in more places, Visa worked closely with the Federal Reserve to advise them of the challenges receipt requirements have posed to card acceptance and usage in cash and coin-heavy merchant segments.

“We applaud the Federal Reserve Board’s decision to change this ruling for debit card transactions. Eliminating this receipt requirement opens the door for consumers to use their debit cards for a wider variety of small ticket transactions, including locations where the card terminal is not attended by a merchant, such as vending machines and parking meters,” said Elizabeth Buse, Executive Vice President, Product Development and Management at Visa USA. “Our research shows that consumers want the option to use their debit cards in more of these locations.”

Consumers continue to turn to payment cards instead of cash for small ticket purchases due to the convenience, speed and efficiency offered. Visa research indicates that consumers want the option to use their payment cards at more traditionally cash-heavy locations, including environments where the card terminal is not attended, such as: parking (23 percent), public transit (21 percent), vending machines (18 percent) and laundry (16 percent).1

Added Buse: “With the change to the Regulation, Visa can now move forward on piloting solutions in cash and coin-heavy segments that most interest our cardholders. Visa remains focused on making these everyday purchases faster, secure and more convenient for cardholders.”

Visa’s work with the Federal Reserve on advancing changes to Regulation E is a key component of Visa’s small ticket strategy, which includes Visa’s Small Ticket Payment Service and the No Signature Required Program. Visa’s No Signature Required Program has made small ticket payments more convenient for merchants and their customers, by eliminating the signature requirement for qualifying transactions less than $25 across 17 merchant categories. To further encourage acceptance, Visa’s Small Ticket Payment Service offers acquirers decreased credit and debit interchange rates on consumer card transactions of $15 or less in 14 merchant categories.

For more details on the Federal Reserve Board’s decision to change the receipt requirements of Regulation E, visit www.federalreserve.gov. Additional information on the benefits of Visa card acceptance for merchants can be found at www.visa.com/merchant.