The Adoption of the Euro in Lithuania

Suggested routing: Authorization Contact, Clearing Contact, Principal Contact, Settlement Contact

Applies to: P Acquirers P Issuers P Processors

Summary: On 23 July 2014, the European Central Bank and the Bank of Lithuania announced that the country of Lithuania will adopt the euro as their official currency effective 1 January 2015. Action Indicator: M Mandate

Effective Date: 1 January 2015

Background As announced by the European Central Bank and the Bank of Lithuania on 23 July 2014, the country of Lithuania will adopt the euro as their official currency effective 00:00 local Lithuanian time on 1 January 2015.

The Bank of Lithuania announced that the irrevocable fixed exchange rate will be set at 3.45280 Lithuanian litas to the euro. The Bank of Lithuania has also announced that upon adoption of the euro, all payments and transactions made by financial institutions in Lithuania should be conducted in euros.

Customer Impact MasterCard currently supports the euro currency alphanumeric currency code EUR/978. MasterCard will continue to support the Lithuanian litas—alphanumeric currency code LTL/440—after Lithuania adopts the euro for certain financial transactions as noted in the following paragraphs.

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 Lithuanian litas before 00:00 local Lithuanian time on 1 January 2015 for up to 30 days after the transaction date. After 00:00 local Lithuanian time on 1 January 2015, merchants should not conduct any new transactions in the Lithuanian litas.

The Adoption of the Euro in Lithuania Global Operations Bulletin No. 8, 1 August 2014 109 ©2014 MasterCard. Proprietary. All rights reserved. Production Review—Due 29 July Acquirers and processors should not submit any authorizations or clearing records to MasterCard conducted between the merchant and cardholder in the Lithuanian litas after 00:00 local Lithuanian time on 1 January 2015. 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 LTL/440 until further notice. For more information on reversal processing, refer to chapter 15 of the GCMS Reference Manual.

Chargebacks and Second Presentments For information regarding chargebacks and second presentments, please refer to Chapter 1 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 Lithuanian litas intracurrency settlement service—settlement service ID EU00044001—after the last settlement cutoff in December 2014. The exact date of the last settlement will be provided in a future Global Operations Bulletin. 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 Effective for the GCMS processing date of 17 December 2014, GCMS will begin supporting a fixed currency conversion cross rate between the Lithuanian litas and the euro.

The fixed cross rate of 3.45280 Lithuanian litas to the euro will be included in the T057 Currency Conversion Rate File delivered to members on 16 December 2014 after 14:00 St. Louis time/20:00 UTC/22:00 local Lithuanian time.

Dual Message System Effective 17 December 2014, 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.

The Adoption of the Euro in Lithuania 110 Global Operations Bulletin No. 8, 1 August 2014 ©2014 MasterCard. Proprietary. All rights reserved. Production Review—Due 29 July Single Message System Effective 16 December 2014 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 Issuer 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 LTL/440 for fraudulent transactions until further notice

For More Information Customers with questions about the support of the euro in Lithuania should contact:

Settlement Inquiries

Phone: 1-636-722-7676

Fax: 1-636-722-2383

Email: [email protected]