Instructions No. (1) of 2022

Regarding Membership in the National Switch 194 System

Based on the provisions of Law No. (9) of 2010 concerning Banks, particularly Article (40) thereof, and based on the provisions of Law No. (17) of 2012 concerning the National Payments Settlement Law, particularly the provisions of Articles (7) and (11) thereof, and based on what the Board of Directors of the Palestine Monetary Authority approved in its meeting No. (22/243) dated 2022/01/12, and according to the powers delegated to us, and in pursuit of the public interest, we have issued the following Instructions:

Article (1) Definitions

The words and phrases contained in these Instructions shall have the meanings assigned to them below, unless the context indicates otherwise:

• The System: The National Switch 194 system operated and managed by the Palestine Monetary Authority.
• Member: The bank or payment service company participating in the System.
• Acquirer Member: The Member that accepts electronic transactions through ATMs or Point of Sale (POS) terminals.
• Issuer Member: The Member that issues payment cards.
• Person: A natural or legal person.
• Customer: The person holding the payment card.
• Merchant: The person contracted with the POS service provider for the purpose of accepting payment transactions at POS terminals.
• Point of Sale (POS): An electronic device for accepting payment transactions, provided by the POS service provider.
• Baraq System: The electronic real-time settlement system at the Palestine Monetary Authority.

Article (2) Objective and Scope of Application

1. The provisions of these Instructions aim to regulate membership in the System and the rules for executing transactions through it.
2. The provisions of these Instructions apply to all transactions of Members and financial movements executed through the System and the fees incurred therefrom using debit cards and prepaid payment cards at ATMs and POS terminals within Palestine.

Article (3) Membership

1. Membership in the System is mandatory for all banks licensed to operate in Palestine.
2. Membership in the System is mandatory for all payment service companies that provide POS services.
3. A payment service company that issues prepaid payment cards may be a member of the System directly or by connecting to the System through one of the Members.

Article (4) Member Obligations

The Member must comply with the following:

1. Provide the appropriate technical environment and infrastructure for connection to the System, and pass the inspection process approved by the Palestine Monetary Authority.
2. Provide the necessary bank guarantees as determined by the Palestine Monetary Authority.
3. Execute transactions on the System in accordance with the instructions and guidelines issued by the Palestine Monetary Authority.
4. Comply with the technical and technical inspection plans and procedures requested by the Palestine Monetary Authority.
5. Take all necessary measures and precautions to protect data, information security, and reduce operational risks.
6. Provide a single direct connection point from the Palestine Monetary Authority to connect to the System.
7. Ensure that ATMs, POS terminals, and cards comply with the provisions of the instructions issued by the Palestine Monetary Authority.
8. Provide a dedicated screen for System operations displayed on ATMs owned by the Member, showing at a minimum the name of the System, the services it provides, and a notice of the fees to be deducted.
9. Provide the services determined by the Palestine Monetary Authority through the System.
10. Provide all reports requested by the Palestine Monetary Authority for all movements executed outside the System.
11. Send an electronic file of financial claims for accepted movements executed on the Member's ATMs and POS terminals, including all types of operations and services provided in the System, within the deadlines specified by the Palestine Monetary Authority.
12. The Acquirer Member must claim all accepted financial movements from the Issuer Member and executed through the System in the clearing file issued by it within a maximum period of (30) days from the date of execution of the movement.
13. Inform the Palestine Monetary Authority of the reasons for exceeding the permitted period for claiming movements as stated in paragraph (12) of this Article.
14. Provide the Palestine Monetary Authority with any new addition to the Bank Identification Number (BIN) identifying the card issuer within a maximum period of (3) working days from the date of issuance.
15. Bear all costs and obligations arising from its membership in the System.
16. Take all measures to maintain System availability of not less than 99.9%.

Article (5) Obligations of the Acquirer Member / POS Service Provider

In addition to what was stated in Article (4) of these Instructions, the Acquirer Member providing POS services must comply with the following:

1. Obtain prior written approval from the Palestine Monetary Authority to provide POS services.
2. Include in the agreement signed with the merchant a condition to place POS terminals in a visible location for the customer, in addition to obliging the customer to enter the card PINs themselves, except for contactless cards or applications, when paying via POS.
3. Ensure that the merchant complies with all terms of the agreement, especially regarding commissions.
4. Include in the agreement signed with the merchant that any violation of the provisions of paragraphs (3 and 4) of this Article leads to the cancellation of POS services for the merchant.

Article (6) Connection Through a Member

A payment service company issuing prepaid payment cards that is not a member of the System must connect to the System through one of the Members, provided it complies with the following:

1. Obtain prior written approval from the Palestine Monetary Authority for connection through one of the Members.
2. Sign an agreement with one of the Members to connect to the System, and provide a copy to the Palestine Monetary Authority.
3. Notify the Palestine Monetary Authority in writing at least (30) days in advance in case of stopping or canceling the agreement referred to in paragraph (1) of this Article.

Article (7) Permitted Currencies

In addition to the Palestinian currency upon its issuance, the Jordanian Dinar, the US Dollar, the Shekel, or any other currency that the Palestine Monetary Authority may permit in the future are the currencies that the Member must provide to its customers for the purpose of executing transactions through the System.

Article (8) Financial Movements Executed Through the System

1. The Member must deduct or hold the value of the financial movement executed through the System from the customer's account.
2. The Member may deduct the commission value from its customer's account in accordance with the provisions of these Instructions.

Article (9) Disputes Between Members

1. The Member may submit a dispute on behalf of its customer through the System within a maximum period of (90) days from the date of execution of the movement on the System, and the Member receiving the dispute may accept or reject the submitted dispute if the specified period is exceeded.
2. The Member must respond to the received dispute using the means provided by the System, reinforced with a reference number and any related documents and information as required according to the provisions of paragraph (3) of these Instructions.
3. The period available to respond to any disputes raised on the System with acceptance or rejection is within a maximum period of (14) working days from the date of submission of the first dispute or the second claim, and the Member receiving the response may accept or reject the submitted response if the specified period is exceeded.
4. The Palestine Monetary Authority may execute the dispute on behalf of the Member in emergency cases and in case of failure of the dispute system at the receiving Member, using the authorization form attached in Annex No. (1).
5. The Issuer Member must credit the refunded amount to its customer's account within a maximum of one working day from the date of acceptance of the dispute.
6. In case the dispute between the parties is not settled through the System's procedures, any of the relevant Member parties may request to refer the dispute to a special technical arbitration committee formed by the Palestine Monetary Authority within a maximum period of (30) days from the date of submission of the second dispute.
7. The arbitration results are final, accepted, and not subject to appeal.

Article (10) Cash Withdrawal Fees

Cash withdrawal fees from ATMs are as follows:

1. (200) two hundred Jordanian fils for each cash withdrawal transaction in Jordanian Dinar currency.
2. (25) twenty-five cents for each cash withdrawal transaction in US Dollar currency.
3. (1) one Shekel for each cash withdrawal transaction in Shekel currency.

Article (11) Balance Inquiry Fees

Balance inquiry fees using ATMs are as follows:

1. (100) one hundred Jordanian fils for each balance inquiry transaction in Jordanian Dinar currency.
2. (12) twelve cents for each balance inquiry transaction in US Dollar currency.
3. (50) fifty agorot for each balance inquiry transaction in Shekel currency.

Article (12) POS Transaction Commission

1. The upper limit for the Merchant Discount Rate (MDR), which is the value paid by the merchant to the Acquirer Member providing POS services for local payment transactions executed on POS terminals through debit or prepaid payment cards, is 0.5% of the transaction value.
2. A interchange commission is allocated between the Acquirer Member providing POS services and the Card Issuer Member in favor of the Issuer Member at a rate of 0.2% on the transaction executed on POS terminals.
3. The customer shall not bear any fees or amounts for using their card at POS terminals, and the Acquirer Member providing POS services must obligate the merchant to this effect, and this must be included in the agreement concluded between them and the merchant.

Article (13) Deduction of Fees

1. The Palestine Monetary Authority shall deduct cash withdrawal fees or balance inquiry fees mentioned in these Instructions from the Members' settlement accounts in accordance with the provisions of Instructions No. (3) regarding Membership in the Baraq System at the end of the System working day, and they shall be recorded within the multilateral net balances by deducting or adding to the Member's card settlement account and adding to the Acquirer Member's settlement account.
2. The Palestine Monetary Authority shall deduct the interchange commission mentioned in Article (12) paragraph (2) of these Instructions from the Members' settlement accounts in accordance with the provisions of Instructions No. (3) regarding Membership in the Baraq System at the end of the System working day, and they shall be recorded within the multilateral net balances by deducting or adding from the Acquirer Member providing POS services' settlement account and/or the settlement agent's account.

Article (14) Fixed Membership Fees

1. The Member bank must pay a fixed monthly subscription fee of (1100) one thousand one hundred US dollars.
2. The Member payment service company must pay a fixed monthly subscription fee of (500) five hundred US dollars.
3. The Palestine Monetary Authority shall collect the fixed monthly subscription fees for the System specified in items (1) and (2) of this Article at the beginning of each month for the following month, as follows: a. The Member who has direct membership in the Baraq System: The deduction is made from its settlement account in the Baraq System. b. The Member who does not have direct membership in the Baraq System: The deduction is made from its settlement bank account in the Baraq System.

Article (15) System Logo

1. The ownership of the System logo belongs exclusively to the Palestine Monetary Authority, as shown in the figure below: ![National Switch 194 System Logo]
2. The design of this logo must comply with the technical and formal standards specified for it and issued by the Palestine Monetary Authority, as stipulated in Annex No. (2).
3. The logo must be displayed on ATMs and POS terminals.
4. The Member is prohibited from advertising in a misleading or deceptive manner using this logo.

Article (16) System Working Hours

1. The Member must comply with the System working hours and clearing and cash settlement procedures according to the instructions issued by the Palestine Monetary Authority.
2. The clearing session and financial settlement execution take place once every working day.
3. Cash settlement for System transactions is executed collectively on the first working day following official holidays in the Baraq System.
4. The Palestine Monetary Authority may determine another deadline for executing clearing and cash settlement or execute exceptional clearing and cash settlement operations or cancel them on the working day, provided that Members are notified thereof.
5. The Palestine Monetary Authority may temporarily stop the System's operation during working hours as it deems appropriate, provided that Members are notified thereof.

Article (17) Financial Guarantees for Non-Bank Members

1. The Member payment service company must sign an agreement with a bank member in the Baraq System to be the settlement bank for the company, and provide it to the Palestine Monetary Authority.
2. The payment service company must notify the Palestine Monetary Authority in writing at least (30) days in advance in case of stopping or canceling the agreement referred to in paragraph (1) of this Article.
3. Member payment service companies must provide bank guarantees issued by the settlement bank they designate, in which they commit and authorize the Palestine Monetary Authority with an unconditional and irrevocable authorization to restrict the company's obligations in the System resulting from executing settlement on the Baraq System on its account with the Palestine Monetary Authority.

Article (18) Settlement of Clearing Results

1. The financial debtor and creditor positions of Members are determined based on the net multilateral financial positions.
2. The final financial results of Members are calculated based on the data from the electronic clearing files received from the Member, and the Member bears sole responsibility for the accuracy of this data and correcting it in case of any error.
3. The clearing results are settled in the Baraq System according to the principle of settlement of all payments or rejection of all payments based on the multilateral net settlement.
4. The Member must provide sufficient liquidity to execute settlements for clearing results and fund any deficit in its designated accounts in the Baraq System, according to the operational schedule specified by the Palestine Monetary Authority.
5. The Palestine Monetary Authority is implicitly authorized to deduct from and add to the Member's settlement account in the Baraq System.

Article (19) Business Continuity Procedures

1. The Member must obtain prior approval from the Palestine Monetary Authority in case of the need to temporarily stop its private network connection or operation with the System, with the Member necessarily complying with the following: a. Identifying the reasons and justifications. b. Identifying the execution date of the measure and the time period for the interruption in service provision. c. Notifying its customers through appropriate means about this measure and the expected time for resuming service provision.
2. In case of sudden and emergency interruption of the Member's private network connection or operation, the Member must inform the Palestine Monetary Authority immediately upon becoming aware of the event, and after the event ends, provide the Palestine Monetary Authority with the reasons, handling mechanism, and measures taken to prevent the event from occurring in the future.
3. In addition to the System availability procedures, the Member must take all measures ensuring the continuity of its business, including processing incoming requests and sending files required for the clearing process within the specified period.

Article (20) Suspension of Membership

1. The Palestine Monetary Authority may suspend membership in the System if the Member does not comply with the provisions of these Instructions.
2. If the Palestine Monetary Authority deems such a measure necessary to protect the System and the interest of the banking sector.
3. In either of the cases stated in items (1) and (2) of this Article, the results of clearing operations are included in calculating the liquidation result for that session as the Palestine Monetary Authority deems appropriate.
4. The suspension of the Member's membership does not exempt it from the obligations incumbent upon it or that may arise from its membership in the System at any time period and without a specific date for this obligation.

Article (21) Repeal

1. Instructions No. (5) of 2015 concerning National Switch fees are repealed.
2. Instructions No. (8) of 2016 concerning amending Instructions No. (5) of 2015 concerning National Switch system fees are repealed.
3. Instructions No. (4) of 2017 concerning Membership in the National Switch 194 System are repealed.
4. Everything inconsistent with the provisions of these Instructions is repealed.

Article (22) Execution and Enforcement

All competent authorities must execute the provisions of these Instructions insofar as they concern them, and they apply from the date of their issuance.

Issued in Ramallah on 2022/01/13

Firas Malham Governor [Signature]

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Annex No. (1)

Authorization Form for Executing a Dispute through the National Switch PNS

To: Palestine Monetary Authority, Payments Systems Department, National Switch Management Unit

We hereby authorize you to execute our dispute on the following movement executed through the National Switch on our customers' accounts:

Status: ☐ First Chargeback ☐ Re-presentment

Bank Name: .................................................... Department: ....................................................

Card No.	TRX. Tme	TRX Date	Acquirer Bank	Issuer Bank	TRX Type	Amount /Currency	Massage type	UTRNNO	AUTH ID	REFNUM

For the following reasons (please select the appropriate dispute reason)

Chargeback Reason Codes

Reason Code	Description
4515	Cardholder Denies Transaction Finalized
4801	Requested transaction data was not received within maximum time frame
4802	Requested information illegible or missing within maximum time frame
4807	Warning bulletin
4808	Requested/ required authorization not obtained
4812	Account number was not on file
4831	Transaction amount differs
4834	Duplicate processing
4837	Fraudulent transaction: no cardholder authorization
4840	Fraudulent processing of transaction
4841	Canceled recurring transaction
4842	Late presentment
4846	Correct transaction currency code was not provided
4849	Questionable card acceptor activity
4850	Installment Transaction Dispute
4853	Cardholder Defective/Not as Described
4854	Cardholder dispute not elsewhere classified (U.S. only).
4855	Non-receipt of merchandise
4859	Services not rendered
4860	Credit not processed
4863	Cardholder does not recognize Potential fraud
4870	Chip Liability Shift
4871	Chip/PIN Liability Shift
4890	Identifies a syntax error return
4899	Domestic Chargeback Dispute

Re-presentment Reason Codes

Response Code	Description
2001	Invalid Acquirer Reference Data on chargeback: no documentation required or provided
2002	Non-receipt of required documentation to support chargeback within maximum time frame
2003	Correct transaction date provided
2004	Invalid Acquirer Reference Data on chargeback: documentation was received
2005	Correct card acceptor location/description provided
2008	Issuer authorized transaction
2011	Credit previously issued
2700	Chargeback remedied see corresponding documentation
2701	Duplicate chargeback
2702	Past chargeback time limit
2703	Requested transaction document provided (requires hardship variance)
2704	Invalid member message text
2705	Correct MCC provided
2706	Authorization advised suspicious
2707	No authorization request required nor attempted
2708	Account was not listed on the applicable warning bulletin as of the transaction date
2709	Documentation received was illegible
2710	Scanning error unrelated documents or partial scan
2713	Invalid Chargeback
2870	Chip Liability Shift
2871	Chip/PIN Liability Shift

Attached Documents:

Explanations:

Data of the Authorized Person for Follow-up by the Bank: Mr: Job Title: Phone Number: Mobile Number:

Bank Signature and Stamp

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National Switch System 194 National Switch System

National Switch System 194 National Switch System

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National Switch System 194 National Switch System

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