Visa and MasterCard forbid Internet merchants from using software or equipment that does not support the Electronic Commerce Indicator. Electronic Commerce is when the cardholder’s information leaves possession of the cardholder and travels through an open connection, such as the Internet, to reach the merchant. In order to designate this type of transaction, the Electronic Commerce Indicator (ECI) must be included on the payment transaction message format to show that the transaction originated form an Internet source. This indicator is assigned in the point of sale product utilized by the merchant. Credit card information sent via email does constitute a transaction needing the ECI in the transaction to the processing bank.
Visa U.S.A. introduced a penalty structure effective June 1, 2000, for acquirers who fail to identify an electronic commerce transaction with the correct electronic commerce indicators. MasterCard International introduced a penalty structure effective August 1, 2000, for acquirers who fail to identify an electronic commerce transaction with the correct electronic commerce indicators.
If a merchant’s software sends an ECI (values of 5, 6, or 7) the transactions are noted as a secure ECI transaction and must be using a secure form of processing card data. These transactions are eligible for CPS rate programs. If the software sends up an ECI value of 8 or 9, the merchant is processing the card data in a non-secure format and the transaction cannot qualify better than EIRF (i.e. the highest rate you can pay for a transaction).
All terminal products that are certified to pass an ECI send a value of 8 because this is a non secure way of processing electronic commerce transactions. But there aren’t any credit card terminals currently supported to handle ECI. This means you must use special software or a gateway only. Visa and MasterCard employ 250 employees whose sole purpose is to find web merchants who violate this policy. Violating could result in fines, your account being terminated, and/or you being blacklisted for accepting credit cards.