Form FR 3064a FR 3064a DEBIT CARD ISSUER SURVEY

FR 3064a
OMB No. 7100-0344
Approval expires December 31, 2014

DEBIT CARD ISSUER SURVEY

Survey Period:
Calendar Year 2011

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General Instructions
About this Survey
Section 235.8(b) of the Federal Reserve Board’s Regulation II requires that issuers covered by the
interchange fee standards in Regulation II file reports with the Board. This survey serves as this report.
The survey solicits information from calendar year 2011 regarding (1) volumes and values of debit card
transactions; (2) volumes and values of chargebacks and returns to merchants; (3) the costs incurred in
connection with the authorization, clearance, and settlement of debit card transactions; (4) other costs
incurred in connection with particular debit card transactions; (5) costs incurred by debit card issuers to
prevent fraud in debit card transactions; (6) interchange fees charged or received by debit card issuers in
connection with debit card transactions; and (7) the incidence and loss associated with fraudulent debit
card transactions. For purposes of this survey, three-party systems are not included.
In addition, Section 235.8(c) of the Federal Reserve Board’s Regulation II requires that issuers covered
by the interchange fee standards in Regulation II retain records that demonstrate compliance with the
requirements of Part 235 for not less than five years after the end of the calendar year in which the debit
card transaction occurred.
Your Participation
To achieve the most reliable results, it is important that you respond completely and accurately. Please
leave no survey item blank.
There are three possible ways to answer a survey question:
Enter a Value: The actual numeric value of the data element.
Enter a Zero: When the calculated value equals zero. Please do not enter a non-numeric
value, e.g. “NA” or “NR,” when the value equals zero.
Enter “NR” (Not Reported): If your institution engages in the activity of the type being
measured but you are unable to report a figure that reflects that activity.
Please do not enter “NA.”
If for any reason you cannot provide complete data or you have questions please contact
Edith Collis at 202-452-3638 or e-mail [email protected] for assistance.
The survey will be made available online at https://www.federalreserve.gov/debitcardsurveys.
Please complete the survey by April 16, 2012.
Response Confidentiality and Burden
The Federal Reserve Board regards the individual organization information provided by each respondent
as confidential (5 U.S.C. § 552(b)(4)). The Board, however, may publish aggregate or summary
information in a way that does not reveal your individual organization’s confidential information. If it
should be determined subsequently that any information collected on this form must be released, the
respondents will be notified.
Public reporting burden for this collection of information is estimated to be 160 hours per response,
including the time to gather data in the required form and to review instructions and complete the
information collection. Send comments regarding this burden estimate or any other aspect of this
collection of information, including suggestions for reducing the burden, to Secretary, Board of Governors
of the Federal Reserve System, 20th and C Streets, N.W., Washington, D.C. 20551, or via email to
[email protected]; and to the Office of Management and Budget, Paperwork Reduction Project
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(7100-to-be-assigned), Washington, D.C. 20503. The Federal Reserve may not conduct or sponsor, and
an organization (or a person) is not required to respond to, a collection of information unless it displays a
currently valid OMB control number.

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Section I:

Respondent Information

1. Name of the debit card issuer covered in this response

2. Contact person(s) by section of the survey for which responsible
Name

Email

Section

Phone

Name

Email

Section

Phone

Name

Email

Section

Phone

Name

Email

Section

Phone

3. Do you have a general-use prepaid card program?
If yes, please complete “Section V: General-Use Prepaid
Card Transactions.”

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[ ] Yes

[ ] No

Section II: All Debit Card Transactions
(including general-use prepaid card transactions)
Please enter totals only for transactions and associated costs related to debit cards linked to U.S.-domiciled
accounts involving a merchant located in the United States during the calendar year (CY) 2011.
Include:

All debit card transactions (including general-use prepaid card transactions).
Both consumer and business card transactions.

Do Not Include: ATM or credit card transactions.

1. CY 2011 debit card transactions (including generaluse prepaid card transactions)
1a.

Value ($)

Volume

Value ($)

Settled purchase transactions (excluding preauthorizations, denials, adjustments, and returns)

Card-present vs. card-not-present transactions
1b.

Volume

Allocate “1a. Settled purchase transactions”
between the following categories:

1a:

1a:

1b.1 + 1b.2 = 1a

1b.1

Card-present transactions

1b.2

Card-not-present transactions

Volume

General-use prepaid card transactions vs. all
other debit card transactions
1c.

Allocate “1a. Settled purchase transactions”
between the following categories:
1c.1 + 1c.2 = 1a

1c.1

General-use prepaid card
transactions

1c.2

All other debit card transactions

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1a:

Value ($)

1a:

General-use prepaid card exemption:
Volume

Exempt vs. non-exempt general-use prepaid
card transactions
1d.

Allocate “1c.1 General-use prepaid card
transactions” between the following categories:

1c.1:

Value ($)

1c.1:

1d.1 + 1d.2 + 1d.3 = 1c.1

1d.1

All general-use prepaid card transactions
between January 1 and September 30, 2011.

1d.2

General-use prepaid card transactions
exempt from the interchange fee standards
between October 1 and December 31, 2011.

1d.3

General-use prepaid card transactions not
exempt from the interchange fee standards
between October 1 and December 31, 2011.

2. CY 2011 chargebacks and returns
2a.

Volume

Value ($)

Total chargebacks to acquirers
Report all chargebacks sent in CY 2011 regardless of the
date the original purchase transaction took place.

2b.

Allocate “2a. Total chargebacks to acquirers”
between the following categories:
2b.1 + 2b.2 = 2a

2c.

2b.1

Fraud-related chargebacks

2b.2

All other chargebacks (not related to
fraud )

Total returns to acquirers
Report all returns sent in CY 2011 regardless of the date
the original purchase transaction took place.

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2a:

2a:

Specific Instructions for Question 3:
Include:

All costs of authorization, clearance, and settlement of all purchase transactions, chargebacks,
returns, and other non-routine transactions (e.g. errors).
All fixed and variable cost components.
Transactions monitoring costs that are a part of authorization.
Both costs associated with interbank settlement and account posting.
In-house costs, network processing fees, and third-party processing fees.
Examples of in-house costs: All fixed and variable cost components of labor,
equipment/hardware, and software associated with authorization, clearance and settlement of
debit card transactions.
Examples of third-party processing fees: Billed processing fees net of any rebates received
tied to the authorization, clearance, and settlement of debit card transactions. This should
include billing for returns, chargebacks, and other error processing.
Examples of network processing fees: Switch fees and any other billed network fees net of any
rebates received tied to the authorization, clearance, and settlement of debit card transactions.

Do Not Include: Any costs that are not specifically related to the authorization, clearance, and settlement of
purchase transactions, chargebacks, and other non-routine transactions. For example, do not
include costs related to corporate overhead, account relationships, rewards programs, nonsufficient funds handling, non-sufficient funds losses, cardholder inquiries, card production and
delivery, fraud prevention costs that are not incurred as part of authorization, and fraud losses. In
the case of general-use prepaid card transactions, do not include costs associated with funds loads
or account set-up and maintenance.
For fees paid for third-party services such as processors and networks and network fees:
Report actual costs net of any rebates received.
For capital expenditures associated with authorization, clearance, and settlement:
Report costs that are depreciated or amortized during 2011 using the U.S. Generally Accepted Accounting
Principles (GAAP) or the International Financial Reporting Standards (IFRS).
For costs shared with other card programs or activities:
Allocate the costs based on the number of transactions. For example, if your institution has shared costs for
debit and credit card operations, allocate those costs to debit card operations based on the proportion of debit
card transactions to total debit and credit card transactions.

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Dollars ($)

3. CY 2011 costs of authorization, clearance, and
settlement
3a.

Costs of authorization, clearance, and
settlement

3b.

Allocate “3a. Costs of authorization,
clearance, and settlement” between the
following categories:

3a:

3b.1 + 3b.2 + 3b.3 = 3a

3c.

3b.1

In-house costs

3b.2

Third-party processing fees

3b.3

Network processing fees

Does your institution outsource processing to a
processing affiliate under the same holding
company?

[ ] Yes

[ ] No

[ ] Yes

[ ] No

If yes, costs should be included as in-house costs in 3b.1.

3d.

Does your answer in “3a. Costs of
authorization, clearance, and settlement”
include an allocation of the debit card portion of
shared costs?
If yes, please comment on what types of costs are shared:

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Specific Instructions for Question 4:
Include:

All relevant costs that are associated with debit card transactions.
All fixed and variable cost components.
Examples for cardholder inquiries: Inquiries about transactions details, errors, and
potential fraudulent activity.
Examples for cardholder rewards: Rewards paid out to cardholders during 2011 even if
those rewards were not earned in 2011.
Examples for nonsufficient funds handling: Costs of collection activities and reporting the
account to credit agencies.

Do Not Include: Any costs that are NOT associated with debit card transactions.
Examples for cardholder inquiries: Inquiries regarding account balances, rewards
programs, credit card transactions, and ATM transactions.
Examples for cardholder rewards: Rewards program administration costs and affinity
partner revenue-sharing, and rewards earned by cardholders in 2011, but not paid out in
2011.
Examples for non-sufficient funds handling: Amount of or losses from such transactions.

For capital expenditures associated:
Report costs that are depreciated or amortized during 2011 using the U.S. Generally Accepted Accounting
Principles (GAAP) or the International Financial Reporting Standards (IFRS).
For costs shared with other card programs or activities:
For cardholder inquiries: Allocate the costs based on the number of inquiries. For example, if your institution
has a shared call center for debit and credit cards, allocate those costs to debit card transactions based on
the proportion of inquiries related to debit card transactions relative to total cardholder inquiries.
For cardholder rewards and non-sufficient funds handling: Allocate the costs based on the number of
transactions. For example, if your institution has shared costs for debit and credit card operations, allocate
those costs to debit card operations based on the proportion of debit card transactions to total debit and
credit card transactions.

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4. CY 2011 costs associated with a particular
debit card transaction that are not
authorization, clearance, and settlement costs
Cardholder inquiries

Dollars ($)

4a.

Costs of cardholder inquiries associated with
particular debit card transactions that are not
authorization, clearance, and settlement costs

4b.

Allocate “4a. Costs of cardholder inquiries
associated with particular debit card transactions that
are not authorization, clearance, and settlement
costs” between the following categories:

4a:

4b.1 + 4b.2 = 4a

4b.1

Costs related to possible fraudulent
debit card transactions

4b.2

Costs not related to possible fraudulent
debit card transactions

Cardholder rewards
4c.

Dollars ($)

Costs of cardholder rewards associated with
particular debit card transactions that are not
authorization, clearance, and settlement costs

Non-sufficient funds handling
4d.

Dollars ($)

Costs of non-sufficient funds handling
associated with particular debit card transactions that
are not authorization, clearance, and settlement
costs

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5. CY 2011 fraud prevention and data security
costs
5a.

Total fraud prevention and data security
costs

Less: 5a.1

Transactions monitoring costs tied to
authorization

Less: 5a.2

Your answer to “4b.1 Costs related to
possible fraudulent debit card
transactions”

5b.

Dollars ($)

4b.1:

Fraud prevention and data security costs
net of transactions monitoring and
cardholder inquiry costs
5b = 5a – 5a.1 – 4b.1

5c.

Fraud prevention activities
Below are some common fraud prevention activities that
an issuer may engage in. The list is not meant to be
exhaustive but rather serves as a way to track the
prevalence of existing fraud prevention techniques.
Check all that apply.

[ ] Transaction monitoring
[ ] Merchant blocking
[ ] Data security
[ ] PIN customization
[ ] Other
Other fraud prevention activities:
In order to track both existing and emerging fraud prevention and detection techniques, please list
activities not listed above and provide a brief description.

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Dollars ($)

6. CY 2011 interchange fee revenue
6a.

Total interchange fee revenue received
(gross interchange fee revenue)
6a.1

Interchange fees reimbursed to acquirers as
a result of chargebacks
Report reimbursements for all chargebacks sent
in CY 2011 regardless of the date the original
purchase transaction took place.

6a.2

Interchange fees reimbursed to acquirers as
a result of returns
Report reimbursements for all returns sent in CY
2011 regardless of the date the original purchase
transaction took place.

7. CY 2011 fraudulent transactions

Number

7a.

Total number of fraudulent transactions

7b.

Allocate “7a. Total number of fraudulent
transactions” between the following categories:

7a:

To the extent possible, include each fraudulent transaction
in only one category consistent with how your institution
categorizes the loss associated with the fraudulent
activity.

7b.1

Card-not-present

7b.2

Counterfeit

7b.3

Lost and stolen

7b.4

Other
Please describe the types of fraudulent transactions included in “7b.4 Other”:
To the extent possible, list the type of fraud and the number of transactions associated with
that fraud.

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8. CY 2011 fraud losses: all types
8a.

Dollars ($)

Gross value of fraudulent transactions

Less: 8a.1

Fraud-related chargebacks to
acquirers net of representments
Report all chargebacks sent in CY 2011
regardless of the date the original purchase
transaction took place.

Less: 8a.2

Losses absorbed by cardholders
Report all losses absorbed in CY 2011
regardless of the date the original purchase
transaction took place.

8b.

Losses incurred by issuer
8b = 8a – 8a.1 – 8a.2

9. CY 2011 fraud losses: card-not-present
9a.

Gross value of fraudulent transactions

Less: 9a.1

Fraud-related chargebacks to
acquirers net of representments
Report all chargebacks sent in CY 2011
regardless of the date the original purchase
transaction took place.

Less: 9a.2

Losses absorbed by cardholders
Report all losses absorbed in CY 2011
regardless of the date the original purchase
transaction took place.

9b.

Losses incurred by issuer
9b = 9a – 9a.1 – 9a.2

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Dollars ($)

10. CY 2011 fraud losses: counterfeit

Dollars ($)

10a. Gross value of fraudulent transactions
Less: 10a.1 Fraud-related chargebacks to
acquirers net of representments
Report all chargebacks sent in CY 2011
regardless of the date the original purchase
transaction took place.

Less: 10a.2 Losses absorbed by cardholders
Report all losses absorbed in CY 2011
regardless of the date the original purchase
transaction took place.

10b. Losses incurred by issuer
10b = 10a – 10a.1 – 10a.2

11. CY 2011 fraud losses: lost and stolen

Dollars ($)

11a. Gross value of fraudulent transactions
Less: 11a.1 Fraud-related chargebacks to
acquirers net of representments
Report all chargebacks sent in CY 2011
regardless of the date the original purchase
transaction took place.

Less: 11a.2 Losses absorbed by cardholders
Report all losses absorbed in CY 2011
regardless of the date the original purchase
transaction took place.

11b. Losses incurred by issuer
11b = 11a – 11a.1 – 11a.2

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12. CY 2011 fraud losses: other

Dollars ($)

12a. Gross value of fraudulent transactions
Less: 12a.1 Fraud-related chargebacks to
acquirers net of representments
Report all chargebacks sent in CY 2011
regardless of the date the original purchase
transaction took place.

Less: 12a.2 Losses absorbed by cardholders
Report all losses absorbed in CY 2011
regardless of the date the original purchase
transaction took place.

12b. Losses incurred by issuer
12b = 12a – 12a.1 – 12a.2

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Section III: All Single-Message (PIN) Debit Card
Transactions
(excluding general-use prepaid card transactions)
Exact copy of Section II above but for single-message (PIN) debit
programs (except 1c and 1d would be removed) only.
Section IV: All Dual-Message (Signature) Debit Card
Transactions
(excluding general-use prepaid card transactions)
Exact copy of Section II above but for dual-message (signature) debit
programs (except 1c and 1d would be removed) only.
Section V: General-Use Prepaid Card Transactions
Exact copy of Section II except 1c will be modified to include a
breakout of signature and PIN transactions as below, and 1d would be
removed.
Volume

General-use prepaid card transactions
processed over PIN vs. signature payment card
networks
1c.

Allocate “1a. Settled purchase transactions”
between the following categories:
1c.1 + 1c.2 = 1a

1c.1

Single message (PIN) transactions

1c.2

Dual message (signature)
transactions

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1a:

Value ($)

1a:

Glossary of Terms
Acquirer: A person that contracts directly or indirectly with a merchant to provide settlement for the
merchant’s electronic debit transactions over a payment card network. An acquirer does not include
a person that acts only as a processor for the services it provides to the merchant.
Cardholder inquiries associated with debit card transactions: Cardholder communication
with a debit card issuer related to specific debit card transactions, such as inquiries about
transactions details, errors, and potential fraudulent activity. These do not include inquiries that are
not related to specific debit card transactions, such as account balances, rewards programs, credit
card transactions, and ATM transactions.
Cardholder rewards: Incentive payments given to cardholders as a result of particular debit card
transactions.
Card-not-present fraud: Fraud related to card-not-present transactions.
Card-not-present transaction: Settled purchase transaction where the purchaser does not
physically present the card to the merchant, such as an Internet, telephone, or mail order transaction.
Card-present transaction: Settled purchase transaction that is not a card-not-present transaction.
Chargeback to acquirer: The reversal of the dollar value of a particular transaction, in whole or in
part, by the card issuer to the acquirer. A chargeback may be for, but not limited to one of, the
following reasons: customer disputes, fraud, processing errors, authorization issues, and nonfulfillment of copy requests.
Costs of authorization, clearance, and settlement: These costs include transactionsmonitoring costs, in-house costs, third-party processing fees, and network processing fees. These
costs do not include, for example, costs related to corporate overhead, account relationships, rewards
programs, non-sufficient funds handling, non-sufficient funds losses, cardholder inquiries, card
production and delivery, fraud-prevention costs that are not incurred as part of authorization, and
fraud losses. These costs do not include costs associated with funds loads (or deposits) or account
set-up and maintenance. These costs should be provided for purchase transactions, chargebacks,
and other non-routine transactions.
Counterfeit fraud: Fraud identified as having occurred through the use of a counterfeit reproduction
of a debit card.
Debit card: Any card or other payment code or device, issued or approved for use through a payment
card network to debit an account, regardless of the means of authorization, and regardless of whether
the issuer holds the account. A debit card includes any general-use prepaid card. It does not include
(1) any card or other payment code or device that is redeemable upon presentation at only a single
merchant, or an affiliated group of merchants for goods or services, or (2) a check draft or similar
paper instrument, or an electronic representation thereof.
Debit card transaction: Use of a debit card (including a general-use prepaid card) by a person as a
form of payment in the United States to initiate a debit to an account. It does not include transactions
initiated at an ATM.
Dual-message (signature) transaction: Transaction type by which authorization information is
carried in one message and clearance information is carried in a separate message.

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Exempt general-use prepaid card transaction: Transaction using a general-use prepaid card
that is exempt from the interchange fee standards in Regulation II, specifically (1) a transaction made
using a general-use prepaid card that has been provided to a person pursuant to a federal, state, or
local government-administered payment program through which the cardholder may use the debit
card only to transfer or debit funds, monetary value, or other assets that have been provided pursuant
to such program; (2) a transaction made using a general-use prepaid card that is (i) not issued or
approved for use to access or debit any account held by or for the benefit of the cardholder (other
than a subaccount or other method of recording or tracking funds purchased or loaded on the card on
a prepaid basis), (ii) reloadable and not marketed or labeled as a gift card or gift certificate, and (iii)
the only means of access to the underlying funds, except when all remaining funds are provided to
the cardholder in a single transaction.
Fraud-related chargeback: The value of a fraudulent debit card transaction that is charged back to
acquirers.
Fraud-related chargebacks to acquirers net of representments: The value of fraudulent
debit card transactions that are charged back to acquirers less the value of representments made by
acquirers to debit card issuers.
General-use prepaid card: A card or other payment code or device that is (1) issued on a prepaid
basis in a specified amount, whether or not that amount may be increased or reloaded, in exchange
for payment and (2) redeemable upon presentation at multiple unaffiliated merchants for goods or
services.
Gross value of fraudulent transactions: The total value of fraudulent debit card transactions
before any recoveries or chargebacks.
In-house costs: Costs of authorization, clearance, and settlement functions that are not outsourced to
third parties. Include costs incurred by the card issuer or its affiliated processor (i.e. a processor in
the same holding company).
Losses absorbed by cardholders: The value of losses that an issuer recovers from its
cardholders. Include any chargebacks to cardholder accounts.
Lost and stolen fraud: Fraud identified as having occurred through the use of a lost or stolen debit
card.
Network processing fees: Total fees charged by payment card networks for services that are
required for the network processing of transactions. They do not include any fees for optional
services related to transaction processing that may be provided by a payment card network or an
affiliate of a payment card network. They do not include any network fees that are not directly linked
to the processing of transactions, such as membership or license fees.
Non-sufficient funds handling costs: Costs of handling of events in which an account does not
have enough funds to settle an authorized debit card transaction between the time of authorization of
that transaction and the settlement of that transaction.
Return to acquirer: A transaction, in whole or in part, that is returned to an acquirer for the return of
goods and services by the cardholder.
Settled purchase transaction: A debit card transaction that has been settled. Exclude
transactions that are pre-authorizations, denials, adjustments, and returns.

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Single-message (PIN) transaction: Transaction type by which authorization and clearance
information is carried in one message.
Third-party processing fees: Fees paid to external service providers for services related to the
authorization, clearance, and settlement of debit card transactions that are performed by those
service providers on behalf of the debit card issuer. Service providers may include payment card
networks or affiliates of payment card networks to the extent that such parties provide optional
services related to transaction processing. They do not include other fees charged by a payment
card network for services that are required for the network processing of transactions or fees charged
by an affiliated processor (i.e. a processor in the same holding company).
Three-party systems: Systems where debit transactions are processed by an entity that acts as
system operator and issuer, and may also act as the acquirer.
Total fraud-prevention and data-security costs: Costs related to activities aimed at identifying
and preventing debit card fraud, costs related to the monitoring of the incidence of, reimbursements
received for, and losses incurred from debit card fraud, costs related to responding to suspected and
realized debit card fraud in order to prevent or limit losses, costs incurred in securing the data
processing and communications infrastructure of debit card operations, and costs incurred in the
development or improvement of fraud-prevention technologies.
Total interchange fee revenue received: Total value of fees received that are established,
charged, or received by a payment card network and paid by a merchant or an acquirer for the
purpose of compensating an issuer for its involvement in the debit card transaction.
Total number of fraudulent transactions: The total number of all fraudulent debit card
transactions identified by the issuer. Include fraudulent transactions charged back to acquirers.
Transactions monitoring costs: Costs related to programs that monitor transactions in order to
assist in the authorization process by providing information to the issuer before the issuer decides to
approve or decline the transaction. These costs include the costs of neural networks and fraud-risk
scoring systems.
United States: The states, territories, and possessions of the U.S., the District of Columbia, the
Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing.

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