Revised Dates to Support the Adoption of the Euro in Latvia Suggested routing: Authorization Contact, Clearing Contact, Principal Contact, Settlement contact

Topic(s): Currency, Settlement

Applies to: P Acquirers P Issuers P Processors

Summary: On 9 July 2013, the European Central Bank and the Bank of Latvia announced that the country of Latvia will adopt the euro as its official currency effective 1 January 2014. The Bank of Latvia also announced that all payments and transactions made by financial institutions in Latvia should be conducted in euros beginning at 00:00 local time on 1 January 2014. Action Indicator: M Mandate

Effective Date: 1 January 2014

Overview As published in Global Operations Bulletin No. 8, 1 August 2013 and announced by the European Central Bank and the Bank of Latvia on 9 July 2013, the country of Latvia will adopt the euro as its official currency effective 00:00 local Latvian time on 1 January 2014.

The European Central Bank announced that the irrevocable fixed exchange rate is set at 0.702804 Latvian lats to the euro. The Bank of Latvia has also announced that upon adoption of the euro, all payments and transactions made by financial institutions in Latvia should be conducted in euros.

This article clarifies certain dates regarding support of the euro in Latvia.

Customer Impact MasterCard currently supports the euro currency alphanumeric currency code EUR/978. MasterCard will continue to support the Latvian lats—alphanumeric currency code LVL/428—after Latvia adopts the euro for certain financial transactions as noted in the following paragraphs.

Revised Dates to Support the Adoption of the Euro in Latvia Global Operations Bulletin No. 11, 1 November 2013 59 ©2013 MasterCard. Proprietary. All rights reserved. Production Review—Due 29 October Financial Transactions Cleared Through the Single and Dual Message Systems The following information pertains to transactions cleared through the Single Message and Dual Message Systems.

First Presentments MasterCard will accept first presentment transactions that are acquired in the Latvian lats before 00:00 local Latvian time on 1 January 2014 for up to 30 days after the transaction date. After 00:00 local Latvian time on 1 January 2014, merchants should not conduct any new transactions in the Latvian lats.

Acquirers and processors should not submit any authorizations or clearing records to MasterCard conducted between the merchant and cardholder in the Latvian lats after 00:00 local Latvian time on 1 January 2014. For more information, refer to chapter 3 of the GCMS Reference Manual.

Customers can continue to submit first presentment reversals of original transactions that are submitted under the currency code LVL/428 until further notice. For more information on reversal processing, refer to chapter 15 of the GCMS Reference Manual.

Chargebacks and Second Presentments For information about chargebacks and second presentments, please refer to Chapter 1, “Processing Procedures,” of the Chargeback Guide.

Settlement MasterCard has established a euro regional settlement service (regional settlement service ID EU00000008) that can be used by financial institutions to settle local euro transactions. The settlement agent for the service is Deutsche Bank and the service will follow the Trans-european Automated Real-time Gross Settlement Express Transfer system (“TARGET”) bank holiday calendar.

MasterCard will suspend the Latvian lats intracurrency settlement service after the settlement cutoff on 30 December 2013. MasterCard customers participating in this intracurrency service will no longer settle transactions to this service after this date.

Support of Fixed Currency Conversion Cross Rate—Revised Dates Effective for the GCMS processing date of 4 December 2013, GCMS will begin supporting a fixed currency conversion cross rate between the Latvian lats and the euro.

Revised Dates to Support the Adoption of the Euro in Latvia 60 Global Operations Bulletin No. 11, 1 November 2013 ©2013 MasterCard. Proprietary. All rights reserved. Production Review—Due 29 October The fixed cross rate of 0.702804 Latvian lats to the euro will be included in the T057 Currency Conversion Rate File delivered to customers on 3 December 2013 after 14:00 St. Louis time/20:00 UTC/22:00 local Latvian time.

Dual Message System—Revised Date Effective 4 December 2013, at approximately 10:00 St. Louis time/16:00 UTC time, Dual Message System authorizations will begin supporting the new fixed currency conversion fixed rate.

Single Message System—Revised Date Effective 3 December 2013, at approximately 15:00 St. Louis time/21:00 UTC time, the Single Message System will begin supporting the new fixed currency conversion fixed rate.

Fraudulent Transactions Issuers must report fraudulent transactions to the System to Avoid Fraud Effectively (SAFE). Issuers must submit in the original transaction amount and currency code as received in the original first presentment record. SAFE will continue to accept currency LVL/428 for fraudulent transactions until further notice.

For More Information Customers with questions or concerns about the currency codes changes can contact the Customer Operations Services team using the Contact Information provided in this bulletin or:

Settlement Inquiries

Phone: 1-636-722-7676

Fax: 1-636-722-2383

Email: [email protected]

Revised Dates to Support the Adoption of the Euro in Latvia Global Operations Bulletin No. 11, 1 November 2013 61 ©2013 MasterCard. Proprietary. All rights reserved. Production Review—Due 29 October