The One-Stop Guide to Card Holder Activated Terminals (CATs)

Backspace Tech
5 min readNov 17, 2023

Most Hollywood films have a scene where the hero fills his car’s tank at a petrol station where there is not a soul in sight. He gets out of the car, swipes the credit card at the mounted PoS machine, fills the gas, and drives away.

Well, that PoS machine is called an“Unmanned Terminal.” It is formally known as “Cardholder Activated Terminals (CATs)”

Let’s delve into the intricacies of this — shall we?

Before knowing about CATs, let us understand a few basics regarding the POS terminals!

POS terminal types:

Depending on the situation, the payment terminals are classified into two major types.

  1. Attended terminals
  2. Unattended/Unmanned terminals aka Cardholder activated terminals (CATs)

Attended terminals:

“Attended POS terminals” are payment terminals where a salesperson is present during the transaction. These are the terminals we typically encounter at stores, restaurants, or any place where a staff member assists us in making a purchase.

To understand better, imagine you stroll into a mall, eyeing a gorgeous pair of shoes. You decide they’re a must-have and take them to the cashier, who rings up the purchase using a POS terminal. You hand over your credit/debit card, the cashier may swipe/dip/tap it into the terminal/ you may need to sign a receipt (not a common scenario) to make the payment. Here, the cashier is there throughout the process, ensuring the transaction goes smoothly and answering any questions you may have. That’s an “attended” POS terminal in action!

Unattended terminals aka Cardholder activated terminals (CATs):

“Unattended POS terminals” are payment terminals that operate without the presence of a human attendant. These terminals are often found in self-service scenarios, like ticket machines, automatic fuel dispenser (AFD), food vending machines, etc.

Why CAT?

CAT terminals provide a personalized payment experience by

  • Enabling quick transactions without the need to wait in a long queue
  • Provides 24*7 accessibility without needing to adhere to specific store timings
  • Keeps the customer alert as they are the ones handling the whole payment initiation and authorization cycle.

Before delving into the most popular type of CAT and exploring further details, let’s uncover its origins more!

CATs are typically found in various self-service kiosks, such as gas pumps, parking meters, ticket vending machines, and other automated payment systems.

These terminals are designed to accept and process card payments initiated by the cardholder themselves. They often include a card reader, a keypad for entering the PIN or other required information, and a display screen to guide users through the transaction process. Once the card is inserted or swiped and the necessary steps are completed, the transaction is processed securely, deducting the payment amount from the cardholder’s account.

Though various card networks provide CAT, Mastercard is the only network that categorized this terminal into 7 distinct levels and framed the requisites.

CAT levels

Global landscape of CATs:

CATs are present in countries like the United States, Canada, the United Kingdom, Australia, and Europe in large numbers. The regions of Asia Pacific, the Middle East, and Africa are increasingly adopting this payment method.

Even though there is consistent usage of these terminals, they are yet to get their spotlight and

The reasons for the same could be:

In attended PoS terminals, where human presence is ensured, issues such as billing errors, card reading problems, or transaction failures can be directly addressed by raising queries with the cashier or store owner.

However, the absence of such supervision in CATs, coupled with challenges in addressing issues promptly, technological adoption barriers, and user mindset towards this payment method, has limited their prevalence. Despite this, there is a changing mindset, as observed by Mastercard in the market, as the world embraces the digital shift.

Popular type of CAT:

Even though there are many types of CAT, Cardholder Activated Terminal -3 (CAT 3) is the most predominant and popular one. It stands for Limited Amount Terminals. CAT 3 includes services in the area of:

MCC that comes under the CAT 3

Ahem!

Having covered the fundamental aspects and levels of CAT, let’s now shift our focus to the aspect of “dispute handling”.

How does the Mastercard handle the disputes arising from CATs?

If a person encounters any problems in CAT 3 like billing errors, card reading problems, transaction failures, etc, it is possible to raise a dispute through their issuer.

Causes of CAT 3 chargeback:

  • The transaction exceeds the acceptable limit or
  • The card used was not valid at the time.
  • Friendly fraud
  • The card used by the fraudster.

Mastercard guidelines for CAT 3 chargeback:

CAT 3 dispute falls under the “Authorization” category with the chargeback reason code 4808.

The issuer has 90 days to file the dispute and the Merchant has 45 days to respond to the claim in dispute.

UDM = CAT dispute management

Although CATs do have their share of challenges, addressing them is also a formidable task. With 7 distinct levels, each accompanied by its own set of terms and conditions, training the personnel in dispute resolution is a costly affair.

Feeling perplexed?

UDM is here to save the day! Whether you’re an Issuer, or Acquirer seeking a a solution for managing/automating resolution for CAT-related disputes, look no further! Our Unified Dispute Management (UDM) effortlessly handles disputes arising from CATs. As our platform is AI-assisted, it adeptly categorizes the disputes based on the various CAT levels.

The AI within the UDM eliminates the need to extensively train the operations team in every level of CAT requirements. UDM reduces your team’s workload and occurrence of human error by automating dispute filing up until its resolution.

Get in touch with us today to know more about UDM and how it can help you regulate, tailor, and modernize your CAT dispute process and responses.

P.S: What topic do you think we should explore next? Let us know in the comments.

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Backspace Tech

Backspace Tech offers Fintech-as-a-Service to automate,simplify, and disrupt the payment industry by handling chargeback requests through a plug-and-play model.