Category: e-commerce & m-commerce

Stellar latest digital currency project

Run through a non-profit organisation, Stellar is a decentralized protocol for sending and receiving money in any pair of currencies, be they dollar, yen or bitcoin. The system works through the concept of gateways that let people get in and out of the network. Users hold a balance with a gateway, which is any network participant that they trust to accept a deposit in exchange for credit on the network. To cash out, a user invokes the promise represented by a gateway’s credits, returning them in exchange for the corresponding currency.

Like Ripple, Stellar comes with its own built-in digital currency, which will be given away for free to people who sign up via Facebook, to nonprofits and to current bitcoin and Ripple holders. Initially there will be 100 billion ‘stellars’ (five per cent of which will be kept back to fund the nonprofit) with the supply increasing at one per cent a year. Although stellars will have a market-determined value, their main purpose will be to provide a conversion path between other currencies. This means that when two parties exchange money through the distributed exchange, stellars sit in the middle. Example, a user might submit a transaction which converts EUR credits to stellar and then converts those stellar to AUD credits. Ultimately, the user will have sent EUR, the recipient will have received AUD, and two exchange orders will have been fulfilled.

Developers are being invited to jump in and work with the open-source code and build applications on top of Stellar. The project has secured the backing of payment industry darling Stripe, which has handed over $3 million in exchange for two per cent of stellars. Stellar is highly experimental, but it’s important to invest effort in basic infrastructure when the opportunity arises. Stellar could become a much better substrate for a lot of the world’s financial systems.

 

Posted in Internet Payment Gateway Tagged with: AUD credits, bitcoin, code, credit, credits, currencies, deposit, digital currency, EUR credits, Facebook, gateways, network, payment industry, transaction

Behavioural biometrics Startup raised $10M in Funding

BioCatch, an Israeli startup that uses behavioural biometrics to authenticate visitors to banking and e-commerce sites, has raised $10 million in a funding round. BioCatch aims to eliminate passwords and authentication dongles for online banking and shopping, replacing them with a system that recognizes users by how they physically use their computer or tablet. The firm’s technology collects and analyses over 400 bio-behavioral, cognitive and physiological parameters based on how people type and move a cursor around to create unique profiles for visitors to sites.

In addition, the system creates invisible challenges for visitors to sites. For example, when a user moves the cursor towards a button, they are deliberately knocked slightly off course and subconsciously have to correct in what the company says is a way unique to them. This, argues BioCatch, is more secure than traditional authentication methods, demonstrating an 80% reduction in false positives for detecting the same amount of fraud. It also significantly reduces friction for the customer because the system automatically kicks in when they visit a site using the technology. BioCatch says that it has signed up several unnamed banks and e-commerce sites, and that it will use the new funding to push on in North American and Europe as well as to expand R&D efforts. Funding will also allow to continue strengthening BioCatch offering and expand global reach in strategic markets, while keeping the world’s largest and most influential institutions safe and secure.

 

Posted in Best Practices for Merchants, e-commerce & m-commerce Tagged with: banking, banking and e-commerce, behavioural biometrics, BioCatch, biometrics, computer, e-commerce, funding, online banking, R&D, tablet

Migrating To Ecommerce

Local businesses with brick-and-mortar stores have not been early adopters of ecommerce. But, with the proliferation of mobile devices and with changes in how consumers research and buy products, most local businesses now have websites, many of them mobile optimized. Smart brick-and-mortar retailers invest in local search engine optimization to ensure that their stores are found when a local shopper searches on products that they sell. More aggressive retailers also invest in pay-per-click advertising on Google to ensure that their store names, phone numbers, and addresses are visible to a local shopper that is researching on a smartphone. Google is by far the primary search engine used by mobile shoppers. Google favors mobile friendly online stores and rewards mobile sites with high search rankings. The next logical step for local retailers is investing in on online store.

There are several reasons:

1. Having an online store will help local retailers optimize Google rankings for specific products and brands.

2.  Being able to show that an item is in stock may eliminate competitive shopping.

3. Eventually local retailers could sell products to consumers outside the retailers’ immediate area, and thus expand their business.

Many local businesses are hesitant to open an online store. Here is why:

1. Local businesses are typically unfamiliar with running an ecommerce business.

2. Have little ability to ship or fulfill online orders.

3.  Cannot accommodate sales tax collection outside their local area.

4. Avoid the investment required.

To be sure, adding an online store is not for every local business. But, if a local retailer offers a unique set of products, she may want to evaluate the concept.

 

 

Posted in Best Practices for Merchants, e-commerce & m-commerce Tagged with: brands, brick and mortar, brick-and-mortar stores, consumers, ecommerce, google, Mobile Devices, mobile optimized, mobile sites, online orders, online stores, pay-per-click, products, sales tax, search engine, search engine optimization, smartphone, websites

Mobile POS Chip-and-PIN

Mobile commerce platform provider ROAM, an Ingenico company has expanded its mPOS solutions to include chip-and-PIN acceptance with the RP750x mobile card reader. The reader allows mPOS players to get to market quickly with their own custom-branded solution, providing merchants with a powerful set of features that include device and fraud management, remote application configuration, and an mPOS application that can be localized for any language and currency in any country. Features include: Backlit display, EMV PIN pad, magnetic stripe reader, NFC reader and smart card reader. Configurable through the cloud, enabling direct shipment from factory to any country. Connects with smartphones, tablets and feature phones via Bluetooth or audio jack. Customizable for branding and form factor. Just Slightly larger than a credit card, a compact form factor. PCI PTS 3.1 with SRED, EMV Level 1 and 2, Visa-ready (Compliant with the latest industry standards).

Posted in Best Practices for Merchants, Credit Card Reader Terminal, e-commerce & m-commerce, EMV EuroPay MasterCard Visa, Financial Services, Mobile Payments, Mobile Point of Sale, Near Field Communication, Payment Card Industry PCI Security, Point of Sale, Smartphone, smartSD Cards, Visa MasterCard American Express Tagged with: bluetooth, Chip and PIN, cloud, compliant, credit-card, currency, EMV, fraud, magnetic stripe reader, Merchant's, mobile card reader, Mobile commerce platform, mPOS solutions, nfc, PIN pad, smart card reader, Smartphones, tablets, visa

Mobile Device App for your Business

Mobile Business App.

Customers should be able to easily find you wherever they are, from any device. Mobile presence is more or less essential for business success in today’s world, whether you just have a mobile-optimized website, or a full-scale dedicated mobile application for your business.

With smartphones and tablets, people have a computer in their pockets when they’re out and about are where people are engaging with content, so business want a mobile strategy.

The problem many businesses have with mobile strategy development is determining what is most effective, both in terms of reach and cost. Creating a mobile app isn’t the right path for every company, but if it’s something you’re considering, check the following questions before you invest.

Android, HTML5 or iOS?

No matter what platform you choose, it’s important not to take on too much too soon, regardless of your technical skill level. There are a lot of different solutions for app development. Keep it simple and work on it. Once you’ve made the decision to develop an app and figured out your end-goal for it, determine what platform you want to use. When businesses choose to create an app for only Android or iOS, they end up missing half the market, but building an app on both major platforms requires two different sets of technical skills. While an app creator can make it much easier to develop an app on multiple platforms, including Windows Phone and Blackberry, maintaining a multiplatform presence will end up costing you more. HTML5 Web-based apps may not be as visible as those in major platform app stores, but they are compatible on mobile browsers of any operating system, as well as desktop browsers.

Make an own app, or become part of an existing?

If you want to create your own native app, make sure you have a plan to continually update and work on it. Don’t underestimate the ongoing maintenance. Constantly engage with the app, and as you’re planning it in the first place, think about what you want to add over time.

Many businesses begin the app development process without considering the amount of time and money they will need to invest in the process. Becoming part of an existing app for example, a directory-type app that lists businesses in your industry  can be an easier, less expensive way to claim your segment of the mobile market. The app creator can do the heavy technical work while also providing you with the opportunity to connect with its larger network of users.

What do you want to gain from your business app?

Is it to bring people into your store or to get them to visit your website?  Many businesses waste a lot of resources because they think people will just come to their app. It’s trendy to say that you have a mobile app, but if your goal is just to have that mobile presence, you’ll create something that no one will ever see. Small businesses should set a clear goal to focus on before beginning app development. Having a mobile presence is more or less essential for business success in today’s world. Whether you just have a mobile-optimized website, or a full-scale dedicated mobile application for your business, your customers should be able to easily find you wherever they are, from any device.

Posted in Best Practices for Merchants, e-commerce & m-commerce, Financial Services, Mobile Payments, Mobile Point of Sale, Smartphone Tagged with: Android, android or ios, app, app development, blackberry, business, device, html5, iOS, mobile, mobile application, mobile browsers, mobile presence, mobile strategy, mobile-optimized website, multiplatform, pockets, Smartphones, tablets, web-based apps, windows phone

Low Value Payments Platform In US

Amsterdam, Netherlands-based Cardis has been piloting its technology in Europe with Raiffeisen Bank in Austria and Sberbank in Russia. They are now focused on the U.S., as this is the fastest growing mobile payments market in the world, where there’s a huge opportunity. Integration of technology with a large U.S. processor and with a major U.S. retail brand, which will be launching a mobile site and mobile app using Cardis solution.

Cardis International is planning an April launch in the U.S. for its technology, which enables merchants to accept low-value contactless or mobile payments without incurring high processing charges. Cardis is able to bring down the processing cost of low-value payments, the company said, by aggregating multiple transactions into a single payment.

The problem

Contactless card and NFC-based mobile payments are typically for low amounts, and yet still use a card processing infrastructure that was designed 40 years ago when the average credit card transaction was $100.

Traditional card processing systems require each transaction to be individually processed through the payment system, including authorization, clearing and settlement. The resulting variable costs of processing each transaction are independent of the transaction amount and too high for low-value payments, particularly in low-margin industries such as quick-service restaurants. QSR restaurants often have a 3 percent profit margin, yet, for low-value contactless payments, the processing cost could be as high as 6-7 percent of the transaction value.

Mobile and contactless cards offer consumers a convenient form factor. But they don’t solve the problem that low-value card payments are very expensive for merchants.

As an ever-increasing percentage of transactions have become cashless, card processing fees have become a significant cost. Costs that are based on the number of transactions, rather than their value. With average per person expenditures of $5 or under, feels each swipe fee much more than a business where customers spend $50 or more. But not accepting credit/debit cards for low-value transactions isn’t an option as many of customers don’t carry cash anymore.

Aggregation

Cardis’ solution is to act as an aggregator of low-value payments, sending a single batched transaction through to a processor instead of multiple low-value transactions. As there is no per transaction processing of individual low-value purchases, the cost-per-transaction is significantly reduced.

Cardis provides its technology as a software plug-in to payment service providers for contact-based and contactless card payments, mobile wallet transactions and NFC payments.

There are two models. For card payments, it will aggregate multiple purchases by an individual cardholder at a single merchant on a post-paid basis up to a specific amount, for example $20. To guarantee payment to the merchant, since the aggregated transaction is processed at a later date, it will pre-authorize an amount, for example $15, the first time the customer makes a purchase at that merchant.

Alternatively, merchants can opt for Cardis’ prepaid system. This involves the consumer setting up a prepaid account hosted by Cardis’ sponsoring bank that is topped up via ACH (automated clearing house) transfers. Using the Cardis prepaid account on a smartphone provides the digital equivalent to cash.

With its post-paid solution, merchants will save 30-50 percent per transaction compared to conventional card processing fees, while its prepaid solution saves merchants 80 percent per transaction. With the post-paid solution, it will only aggregate a customer’s purchases at a single specific merchant. But, as the prepaid solution aggregates the customer’s purchases across multiple merchants, this enables to offer a much lower processing fee to the merchant.

Cardis provides an audit trail enabling consumers to track individual transactions that are aggregated using its technology. Consumers don’t lose any of their card protection rights and guarantees by agreeing to let a merchant aggregate their payments through Cardis. They can always charge back any disputed transactions.

Cardis sees opportunities for digital content providers such as online music stores and games providers to use its aggregation technology. It can integrate solution with existing digital wallets.

Raiffeisen

In 2012, Austria’s Raiffeisen Bank launched a pilot of Cardis technology for NFC-based Visa V Pay debit card payments in partnership with Visa Europe. Raiffeisen’s MobileCard mobile payment product uses a secure element stored on an NFC-enabled MicroSD card inserted in a mobile phone. Although Cardis supports secure elements stored on SIM cards as well as on MicroSD cards and on the cloud, Raiffeisen opted for MicroSD cards, as this is an easier solution to implement.

Raiffeisen cardholders participating in the pilot use MobileCard on average three times a week, with an average transaction value of ($5.70). Merchants accepting MobileCard are seeing 40 percent to 70 percent lower merchant processing fees for an average transaction value of  ($5.43) to ($13.60).

Spindle

In October 2013, Spindle, a U.S. mobile commerce company, signed an agreement with Multi-max, a manufacturer of vending machines for mid-size and small offices throughout North America, Europe and Asia. Spindle will integrate its MeNetwork mobile commerce technology into Multi-max’s line of K-Cup vending machines for rollout across the U.S.

The MeNetwork solution will incorporate all card-based payment acceptance services, as well as mobile marketing services. Spindle’s partner Cardis will provide low-value payment processing services for purchases at K-Cup vending machines.

Posted in Credit card Processing, Credit Card Security, Digital Wallet Privacy, e-commerce & m-commerce, Electronic Payments, Gift & Loyalty Card Processing, Internet Payment Gateway, Mobile Payments, Mobile Point of Sale, Near Field Communication, Payment Card Industry PCI Security, Smartphone, smartSD Cards, Visa MasterCard American Express Tagged with: accept, ach, aggregated, aggregation, aggregator, authorization, automated clearing house, average transaction, batched, card payments, card processing infrastructure, card processing systems, card-based payment acceptance, cardholders, clearing, contactless, contactless payments, cost-per-transaction, credit card transaction, debit card payments, Digital wallets, high processing charges, low-value payments, merchant aggregate, Merchant's, microSD, mobile app, mobile commerce, mobile payment, Mobile Payments, mobile site, mobile wallet transactions, nfc-based, payment service providers, pre-authorize, prepaid, processed, Processing, processing cost, processing fees, processor, settlement, smartphone, transactions, transfers

Get Compliant, PCI DSS 3.0 Standards

PCI DSS 3.0 standard, which took effect January 1^st, introduces changes that extend across all 12 requirements, aimed to improve security of payment card data and reducing fraud. There will be some shakeups for many organizations when it comes to their day-to-day culture and operations. Transitioning to meet the new requirements will help e-business build a stronger, safer, lower-risk environment for their customers.

While the growing number of digital payment avenues offers convenience to customers, it also offers a larger attack surface for criminals.

As cloud technologies and e-commerce environments continue to grow, creating multiple points of access to cardholder data and online retailers will only become more appealing targets for hackers. Cybercriminals are cunning and determined. They understand payment card infrastructures as well as the engineers who designed them.

A scary proposition and it’s exactly why the payment card industry is so determined to help keep e-commerce organizations protected. Meeting the new standard, businesses will be better armed to fight evolving threats. Changes will also drive more consistency among assessors, help business reduce risk of compromise and create more transparent provider-customer relationships.

Transitioning to PCI DSS 3.0 will involve some work, but doing that work on the front end is going to save much work down the line. Adopting the new standard ultimately will drive your e-commerce business into a secure and efficient era.

Cultural Changes – One of the main themes of 3.0 is shifting from an annual compliance approach to embedding security in daily processes. Threats don’t change just once a year. They’re constantly evolving and that means e-commerce organizations must adopt a culture of vigilance. Only through a proactive business-as-usual approach to security can you achieve true DSS compliance. Realistically, this could mean the need to provide more education and build awareness with staff, partners and providers, so that everyone understands why and how new processes are in place.  

Operational Changes – The 3.0 standard addresses common vulnerabilities that probably will ring a bell with many of you. These include weak passwords and authentication procedures, as well as insufficient malware detection systems and vulnerability assessments, just to name a few. Depending on your current security controls program, this could mean you’ll need to step up in these areas by strengthening credential requirements, resolving self-detection challenges, testing and documenting your cardholder data environment and making other corrections.

Overview Changes – How much work lands on your plate will depend on your current security program. Examining your current security strategies and program is a good idea. Below are the areas requiring your attention, which this series will explore in more detail in future installments.

Service Provider Changes –  Some organizations made unsafe assumptions in the past when it comes to third-party providers. Some have paid the price, from failed audits to breaches. One reason that the new standard is designed to eliminate any confusion over compliance responsibilities. Responsibilities, specifically for management, operations, security and reporting all will need to be spelled out in detailed contracts. In addition to improved communication, an intensified focus on transparency means that you should have a clear view of your provider’s infrastructure, data storage and security controls, along with subcontractors that can impact your environment. So if your organization isn’t exactly clear on which PCI DSS requirements you manage and which ones your providers handle, prepare to get all of that hammered out.

The Compliance Rewards – The path to preparing for the 3.0 deadline in January 2015 sounds like it’s a lot of work. So to get started request your QSA’s opinion on how the changes will impact your organization, by doing the gap assessment and you’ll be able to address any shortcomings.    

Meeting the new 3.0 requirements isn’t just about passing audits. In fast paced payment IT landscape, staying smart and protected is part of our commitment to our customers. Beefing up security game not only reduce audit headaches, but also enjoy stronger brand reputation as a safe and reliable e-commerce business.

Posted in Best Practices for Merchants, Credit card Processing, Credit Card Security, e-commerce & m-commerce, Electronic Payments, Financial Services, Payment Card Industry PCI Security, Small Business Improvement, Visa MasterCard American Express Tagged with: 3.0, attack surface, authentication, breaches, businesses, cardholder data, complance, compliant, credential, cybercriminals, digital payment, DSS, e-business, e-commerce, embedding, hackers, lower-risk, online retailers, passing audits, payment card infrastructures, PCI, processes, reducing fraud, requirements, risk of compromise, security controls, security of payment card data, security program, standards

Integrate Cloud-Based e-commerce Platforms

Integrate Cloud-Based Platforms

E-commerce businesses increasingly rely on cloud-based applications, such as hosted shopping carts, analytics platforms, cloud-based accounting, customer service tools, and more.

To operating smoothly, a merchant’s cloud-based apps should integrate with each other, to save time and to otherwise prevent data loss and ensure accurate reporting.

It’s important, therefore, to have an integration mindset when choosing and using software-as-a-service solutions.

Some tips:

Ask Around

As with evaluating any vendor for your company, go beyond the company’s website. Ask the vendor about other customers. Get references. Contact those companies and ask how the platform is working. Is it easy to set-up? Does it integrate seamlessly with other apps? How long does it take to transfer data from one app to the other? These are just some of the questions you need to ask when evaluating an app. Also check social media sites for any discussions pertaining to the program. Read what people are tweeting. Check relevant LinkedIn groups.

Check the Company’s Integrations Page or API

When evaluating a software-as-a-service (SaaS) solution, first determine if it integrates with the platforms that you’re already using. Pre-built integrations will save much time. Alternatively, if a company has an application programming interface (API), use it to integrate the app with your existing systems.

If you can’t find the integration you need or if you want to avoid the API option, contact the vendor directly and ask if it can make its platform sync with your existing solutions. Don’t underestimate the power of reaching out to your vendors.

Use Cloud App Integration Services

Another option is to use SaaS integration services. You have plenty of choices, depending on what you need to connect. If you just need to integrate two apps, like Dropbox to Gmail, for instance, you can use (IFTTT) If This Then That –  a service that lets you assign triggers and actions to each app through a drag-and-drop interface. When one program does something, it will automatically trigger another app to perform an action. For example, you can create a recipe wherein all your Gmail attachments are automatically saved to your Dropbox folder. IFTTT is free to use, to integrate up to 80 apps.

A similar service, Zapier, lets you do the same thing, but on a larger scale. It supports more than 250 applications, including Salesforce, Zoho CRM, Xero accounting, Campaign Monitor email, and more. Zapier is free for five integrations. It also offers Basic, Business, and Business Plus plans that cost $15, $49, and $99 per month, respectively.

IFTTT and Zapier work well to integrate two cloud applications. However, if you’re running a combination of cloud and on-premise applications, or if you have an ecosystem of apps and data sources that have to connect and exchange data, you need more sophisticated options.

That’s where services such as Dell Boomi and SnapLogic come in. Like IFTTT and Zapier, these solutions use a drag-and-drop interface, but at a larger scale. They connect multiple combinations of cloud and on-premise applications.

Use Free Trials

Always test-drive your apps or integration services. Most SaaS platforms offer free trials. Take note of user-friendliness, functionality, and observe how they function with programs you already have.

Posted in Best Practices for Merchants, Credit card Processing, e-commerce & m-commerce, Financial Services, Internet Payment Gateway, Payment Card Industry PCI Security, Small Business Improvement, Visa MasterCard American Express Tagged with: api, apps and data sources, cloud applicaitons, cloud based applications, cloud based apps, cloud-based accounting, customer service, dropbox, e-commerce, ecommerce, exchange data, existing systems, gmail, integration, SAAS, salesforce, shopping carts, social media, software-as-a-service, sync, zapier

Effective Keys for Business-to-Business Ecommerce

Business-to-business ecommerce describes Internet-enabled transactions between businesses, such as a manufacturer and a wholesaler, a wholesaler and a retailers, or a wholesaler and a business user. The B-to-B ecommerce market was expected to exceed $550 billion in the U.S. last year, offering great opportunities for distributors and manufacturers to streamline sales, boost profits, and engage with new customers.

Since the late 1990s, businesses have been using the Electronic Data Interchange (EDI) system to transfer purchase orders and similar structured information electronically, representing, if you will, a form of B-to-B ecommerce.

Separately, some B-to-B sellers have created websites on which business customers can make purchases as if they were shopping on a business-to-consumer site. This category of B-to-B ecommerce may enjoy the most growth and offer the most opportunity.

 

Important points to consider of running a B-to-B ecommerce site.

 

B-to-B Customers Are also B-to-C Customers

B-to-B sites often trail consumer sites in technology, function, capabilities, and design. Typically not good enough.

As an example, the U.S. B-to-B site for a major multinational manufacturer, which includes information for dealers in the U.S., can only be viewed on Internet Explorer, and won’t work in any other browser, including Firefox, Chrome, Opera, or Safari. And don’t even think about visiting this site on a mobile device. It just won’t work.

This is a ridiculous business decision. It forgets a fundamental fact about B-to-B ecommerce customers. They are also B-to-C ecommerce customers.

It is extremely likely that the professional shopper on an ecommerce-enabled B-to-B website has had at least some experience shopping on consumer ecommerce sites, which all have compelling product photography, good navigation, good search capabilities, and good content.

A B-to-B ecommerce site must provide the same visual and functional experience as the best B-to-C ecommerce sites.

Personalization Is Vital

B-to-B shoppers may require a greater level of personalization than B-to-C customers, since businesses may have contract prices, special payment terms, or negotiated shipping rates.

Business relationships may be very deep and complicated. It is not unusual for B-to-B ecommerce sites to require registration before showing prices or shipping rates or offering a quote. This login requirement allows the B-to-B ecommerce site to personalize almost every aspect of the transaction.

A good B-to-B ecommerce site may take a little longer to launch since the system for handling relatively complex business relationships can take some time. But once it is in place, this personalization will mean that the relationship could be longer lasting.

Sales people Are the Primary Marketing Vehicle

While it is both possible and likely that B-to-B ecommerce sites will be able to acquire new customers simply by making products easy to order online, salespeople who contact customers are probably the B-to-B ecommerce seller’s primary and best marketing channel.

Salespeople can attract new customers or deepen relationships with existing shoppers. Sometimes, it can be enough to follow up after a B-to-B sale with a call to make certain that the transaction went as expected.

Shopping Is Part of Your Customer’s Profession

One of the most significant differences between B-to-B and B-to-C ecommerce is that shopping is part of the B-to-B ecommerce customer’s daytime job.

This means that the stakes can be higher for the B-to-B seller. If the shopper has a good experience, that shopper is likely to return and reorder repeatedly – even suggesting the seller to co-workers or other divisions. But if something goes wrong, particularly something that would cause the shopper to miss deadlines at work or appear in some way to have done a poor job, that shopper will likely blame the B-to-B seller. Depending on the unhappy shopper’s influence, the B-to-B seller might lose the entire account, including many individual buyers or divisions.

This means that order handling and transactional communications must be top notch. Some B-to-B ecommerce sellers will call customers to confirm orders or shipments when the customer has ordered a large quantity, very expensive items, or requested express shipping, since these orders may represent important transactions to the customer.

What Ecommerce Can Do for your B-to-B Business

If you sell to other businesses, ecommerce should have three potential benefits for your business.

First, it may help new customers find you. Having an easy-to-find and use ecommerce site means that new customers – customers with a need – will be able to locate your business regardless of geography or prior relationships.

Second, B-to-B ecommerce may streamline sales for existing customers. Some of your current customers will appreciate the ability to order online, 24 hours a day 7 days a week. The process may also be faster than sending emails or, even worse, faxed orders.

Finally, B-to-B ecommerce may improve margins and boost profits. It may be possible to provide customers with a better ordering experience and better customer service using ecommerce while spending less on labor and order processing. Any cost savings that B-to-B ecommerce brings may drop straight to your business’s bottom line.

Posted in Credit card Processing, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Mobile Payments, Mobile Point of Sale, Small Business Improvement Tagged with: account, b-to-b, b-to-c, better ordering experience, boost profits, business-to-business, business-to-consumer, business's bottom line, communication, consumer, cost savings, customer service, e-commerce, ecommerce, ecommerce sites, electronic data interchange, faxed orders, growth, improve margins, new customers, online, order handling, order processing, personalization, profits, purchase orders, salespeople, seller, sending emails, shopper, special payment terms, transaction, wholesaler

Payment Processor and Payment Processing

A payment processor is a company often a third party appointed by a merchant to handle credit card transactions for merchant acquiring banks. They are usually broken down into two types: Back and Front-End.

Back-End Processors accept settlements from Front-End Processors and, via The Federal Reserve Bank, move the money from the issuing bank to the merchant bank.

Front-End Processors have connections to various card associations and supply authorization and settlement services to the merchant banks’ merchants. In an operation that will usually take a few seconds, the payment processor will both check the details received by forwarding them to the respective card’s issuing bank or card association for verification, and also carry out a series of anti-fraud measures against the transaction.

Additional parameters, including the card’s country of issue and its previous payment history, are also used to gauge the probability of the transaction being approved.

Once the payment processor has received confirmation that the credit card details have been verified, the information will be relayed back via the payment gateway to the merchant, who will then complete the payment transaction. If verification is denied by the card association, the payment processor will relay the information to the merchant, who will then decline the transaction.

Modern Payment Processing

Due to the many regulatory requirements levied on businesses, the modern payment processor is usually partnered with merchants through a concept known as software-as-a-service (SaaS). SaaS payment processors offer a single, regulatory-compliant electronic portal that enables a merchant to scan checks “often called remote deposit capture or RDC”, process single and recurring credit card payments (without the merchant storing the card data at the merchant site), process single and recurring ACH and cash transactions, process remittances and Web payments. These cloud-based features occur regardless of origination through the payment processor’s integrated receivables management platform. This results in cost reductions, accelerated time-to-market, and improved transaction processing quality.

Payment Processing Network Architecture

Typical network architecture for modern online payment systems is a chain of service providers, each providing unique value to the payment transaction, and each adding cost to the transaction. Merchant>Point-of-sale SaaS> Aggregator >Credit Card Network> Bank. The merchant can be a brick-and-mortar outlet or an online outlet. The Point-of-sale (POS) SaaS provider is usually a smaller company that provides customer support to the merchant and is the receiver of the merchant’s transactions. The POS provider represents the Aggregator to merchants. The POS provider transaction volumes are small compared to the Aggregator transaction volumes. The POS provider does not handle enough traffic to warrant a direct connection to the major credit card networks. The merchant also does not handle enough traffic to warrant a direct connection to the Aggregator. In this way, scope and responsibilities are divided among the various business partners to easily manage the technical issues that arise.

Transaction Processing Quality

Electronic payments are highly susceptible to fraud and abuse. Liability to merchants for misuse of credit card data creates a huge expense on merchants, if the business were to attempt mitigation on their own. One way to lower this cost and liability exposure is to segment the transaction of the sale from the payment of the amount due. Some merchants have a requirement to collect money from a customer every month. SaaS Payment Processors relieve the responsibility of the management of recurring payments from the merchant and maintain safe and secure the payment information, passing back to the merchant a payment token. Merchants use this token to actually process a charge which makes the merchant system fully PCI-compliant. Some payment processors also specialize in high-risk processing for industries that are subject to frequent chargebacks, such as adult video distribution.

 

Posted in Best Practices for Merchants, Credit card Processing, Electronic Check Services, Electronic Payments, Internet Payment Gateway, Merchant Services Account, Payment Card Industry PCI Security, Point of Sale, Visa MasterCard American Express Tagged with: aggregator, aggregator transaction volumes, back end, card associations, card data, chargebacks, credit card transactions, electronic portal, front end, front-end processors, issuing bank, merchant, merchant bank, network architecture, online payment systems, payment gateway, payment processing, payment processor, payment transaction, pci-compliant, point of sale, POS, SAAS