What does the Electronic Commerce Indicator (ECI) signify in a Visa clearing record?

The Electronic Commerce Indicator (ECI) signifies whether a transaction is being conducted in an electronic commerce environment, particularly for card-not-present transactions, such as those made over the Internet. This indicator is essential for verifying and categorizing these types of transactions, as it helps identify how they should be processed and what specific requirements or regulations may apply.

The ECI informs payment processors, acquirers, and issuers about the nature of the transaction, which can affect liability, interchange rates, and how fraud prevention measures are implemented. By categorizing transactions accurately as part of Visa's clearing record, the ECI plays a crucial role in maintaining the integrity and functionality of electronic payments.