Scheme compliance, also known as payment network compliance or card network compliance, is the comprehensive process of adhering to the rules, requirements, and standards set by major payment card networks, including Visa, Mastercard, American Express, Discover, JCB, and other regional schemes.
At its core, scheme compliance revolves around three critical components:
These are specific directives issued by payment schemes that govern how all participants in the payment ecosystem must operate. Card network mandates cover technical specifications, security protocols, operational procedures, and reporting requirements. Every mandate comes with specific implementation deadlines and compliance criteria that must be met to maintain good standing with the payment network.
Beyond individual mandates, payment schemes operate comprehensive compliance programs that monitor ongoing adherence to their standards. These include programs like Visa's Electronic Data Quality Program, Mastercard's Data Integrity Monitoring Program (DIMP), and various fraud monitoring initiatives. Each program has specific thresholds, reporting requirements, and consequences for non-compliance.
This involves maintaining proper communication and working relationships with payment network representatives, participating in industry consultations, and ensuring your organisation stays informed about upcoming changes to network requirements.
The payments industry uses several interconnected terms that often cause confusion:
While the terminology varies by region, they all refer to the same fundamental challenge: ensuring your organisation meets the evolving requirements of payment card networks to maintain your ability to issue cards and process payments.
Payment network compliance extends far beyond simple rule-following. It represents a multi-layered discipline that touches virtually every aspect of a financial institution's operations:
Card network mandates frequently require significant technical changes to core systems. A few examples include:
Payment network compliance affects day-to-day operations through requirements for:
Scheme compliance directly impacts your bottom line through:
Payment network requirements often intersect with regional regulations, creating complex compliance scenarios where organisations must satisfy both scheme rules and local regulatory requirements simultaneously.
Think of payment network compliance as managing a complex ecosystem where technical, operational, financial, and regulatory requirements constantly evolve, each with specific deadlines and implementation criteria that can significantly impact your business if not properly managed.
The consequences of inadequate payment network compliance extend far beyond simple financial penalties. For card issuers and issuing banks, effective scheme compliance management is crucial to maintaining business continuity and a competitive edge.
Non-compliance with card network mandates can result in:
Beyond immediate penalties, poor network compliance management creates:
Traditional approaches to scheme compliance management create hidden costs that many organisations underestimate:
The financial impact extends beyond direct costs. Organisations with inefficient payment network compliance processes often discover market opportunities too late, miss revenue-generating features, or face unexpected costs from newly implemented scheme fees.