Category: Visa MasterCard American Express
February 17th, 2014 by Elma Jane
Discover’s Free FICO Service
Executives across all industries have begun forsaking consumer input when designing products. it’s not a customer’s job to know what they want.
Julie Loeger, senior vice president of brand and acquisition at Discover, has found success by bucking this recent trend. Launched just one year ago, Discover’s it Card – a credit card that comes with no late fees, no over limit fees and no APR penalties for late payments, was crafted precisely to meet the desires of increasingly demanding credit card users.
This November, Discover once again illustrated its ability to put consumer needs front and center with the announcement that it would begin providing cardholders with free FICO credit scores as part of their monthly credit card statements.
A lot of information, and what consumers wants to do is share that information to help them achieve their financial goals and personal goals.
The result was an overwhelming positive response that led Loeger and her team to put together a program that included FICO scores, while keeping the end-product simple and straightforward.
One year after the Discover it Card was introduced, and one month after the launch of its FICO service, a regrouped with Loeger for a conversation that revealed new insights into what consumers are looking for in the market and what Discover has learned about marketing successful card products.
Posted in Financial Services, Visa MasterCard American Express Tagged with: apr penalties, card products, cardholders, credit scores, credit-card, dicover, fico, financial services, late fees, late payments, over limit fees, statements
February 14th, 2014 by Elma Jane
News from Target, increasing the number of cards compromised to 70 million and the expansion of data loss to mailing and email addresses, phone numbers and names, affirms that we are in a security crisis.
Card data is from a brand and business perspective, the new radioactive material. Add personally identifiable information (PII) to the list of toxic isotopes.
The depressing vulnerabilities these breaches reveal are a result of skilled hackers, the Internet’s lack of inherent security, inadequate protections through misapplied tools or their outright absence. Security is very very hard when it comes to playing defense.
There is a set of new technologies that could, in a combination produce a defense in depth that we have not enjoyed for some time.
Looking at the Age of Context (ACTs)
Age of Context released, a book based on the hundreds of interviews conducted with tech start-up and established company leaders. A wide-ranging survey. They examine what happens when our location and to whom we are connected are combined with the histories of where and when we shop. Result is a very clear picture of our needs, wants and even what we may do next.
Combining the smartphone and the cloud, five Age of Context technologies ACTs, will change how we live, interact, market, sell and navigate through our daily and transactional lives. The five technologies are:
1. Big Data. Ocean of data generated from mobile streams and our online activity, can be examined to develop rich behavioral data sets. This data enables merchants to mold individually targeted marketing messages or to let financial institutions improve risk management at an individual level.
2. Geolocation. Nearly every cell phone is equipped with GPS. Mobile network operators and an array of service providers can now take that data to predict travel patterns, improve advertising efficiency and more.
3. Mobile Devices and Communications. These are aggregation points for cloud-based services, sending to the cloud torrents of very specific data.
4. Sensors. Smartphones, wearables (think Fitbits, smart watches and Google Glass) and other devices are armed with accelerometers, cameras, fingerprint readers and other sensors. Sensors enable highly granular contextual placement. A merchant could know not only which building we are at and the checkout line we are standing in but even which stack of jeans we are perusing.
5. Social. Social networks map the relationships between people and the groups they belong to, becoming powerful predictors of behavior, affiliations, likes, dislikes and even health. Their role in risk assessment is already growing.
The many combinations and intersections of these technologies are raising expectations and concerns over what is to come. Everyone has a stake in the outcome: consumers, retailers, major CPG brands, watchdog organizations, regulators, politicians and the likes of Google, Apple, Microsoft, Amazon, eBay / PayPal and the entire payments industry.
We are at the beginning of the process. We should have misgivings about this and as an industry, individuals and as a society, we need to do better with respect to privacy and certainly with respect to relevance.
Provided we can manage privacy permissions we grant and the occasionally creepy sense that someone knows way too much about us, the intersections of these tools should provide more relevant information and services to us than what we have today. Anyone who has sighed at the sight of yet another web ad for a product long since purchased or completely inappropriate to you understands that personalized commerce has a long way to go. That’s part of what the Age of Context technologies promise to provide.
ACTs in Security
ACTs role in commerce is one albeit essential application. They have the potential to power security services as well, specially authentication and identity-based approaches. We can combine data from two or more of these technologies to generate more accurate and timely risk assessments.
It doesn’t take the use of all five to make improvements. One firm have demonstrated that the correlation of just two data points is useful, it demonstrated that if you can show that a POS transaction took place in the same state as the cardholder’s location then you can improve risk assessment substantially. (based off of triangulated cell phone tower data).
Powerful questions of each technology that ACTs let us ask:
Data – What have I done in the past? Is there a pattern? How does that fit with what I’m doing now?
Geolocation – What building am I in? Is it where the transaction should be? Which direction am I going in or am I running away?
Mobile – Where does device typically operate? How’s the device configured? Is the current profile consistent with the past?
Sensors – Where am I standing? What am I looking at? Is this my typical walking gait? What is my heart rate and temperature?
Social – Am I a real person? Who am I connected to? What is their reputation?
Knowing just a fraction of the answers to these questions places the customer’s transaction origination, the profiles of the devices used to initiate that transaction and the merchant location into a precise context. The result should improve payment security.
More payments security firms are making use of data signals from non-payment sources, going beyond the traditional approach of assessing risk based primarily on payment data. One firm have added social data to improve fraud detection for ecommerce payment risk scoring. Another firm, calling its approach Social Biometrics, evaluates the authenticity of social profiles across multiple social networks including Facebook, Google+, LinkedIn, Twitter and email with the goal of identifying bogus profiles. These tools are of course attractive to ecommerce merchants and others employing social sign on to simplify site registration. That ability to ferret out bogus accounts supports payment fraud detection as well.
This triangulation of information is what creates notion of context. Apply it to security. If you can add the cardholder’s current location based on mobile GPS to the access device’s digital fingerprint to the payment card, to the time of the day when she typically shops, then the risk becomes negligible. Such precise contextual information could pave the way for the retirement of the distinction between card present and card-not-present transactions to generate a card-holder-present status to guide risk decision-making.
Sales First, Then Security
The use of ACT generated and derived signals will be based on the anticipated return for the investment. Merchants and financial institutions are more willing to pay to increase sales than pay for potential cost savings from security services. As a result, the ACTs will impact commerce decision making first-who to display an ad to, who to provide an incentive to.
New Combinations
Behind the scene, the impact of the ACTs on security will be fascinating and important to watch. From a privacy perspective, the use of the ACTs in security should prove less controversial because their application in security serves the individual, merchant and the community.
Determining the optimal mix of these tools will take time. How different are the risks for QR-code initiated transactions vs. a contactless NFC transaction? What’s the right set of tools to apply in that case? What sensor-generated data will prove useful? Is geolocation sufficient? Will we find social relationships to be strong predictor of payment risk or are these more relevant for lending? And what level of data sharing will the user allow-a question that grows in importance as data generation and consumption is shared more broadly and across organizational boundaries. It will be important for providers of security tools to identify the minimum data for the maximum result.
I expect the ACT’s to generate both a proliferation of tools to choose from and a period of intense competition. The ability to smoothly integrate these disparate tools sets will be a competitive differentiator because the difficulty of deployment for many merchants is as important as cost. Similar APIs would be a start.
Getting More from What We Already Have
The relying parties in a transaction – consumers, merchants, banks, suppliers – have acquired their own tools to manage those relationships. Multi-factor authentication is one tool kit. Banks, of course issue payment credentials that represent an account and proxy for the card holder herself at the point of sale or online. Financial institutions at account opening perform know your customer work to assure identity and lower risk.
Those siloed efforts are now entering an era where the federated exchange of this user and transactional data is becoming practical. Firms are building tools and the economic models to leverage these novel combinations of established attributes and ACT generated data.
The ACTs are already impacting the evolution of the payments security market. Payment security incumbents, choose just two from the social side, find themselves in an innovation rich period. Done well, society’s security posture could strengthen.
Posted in Best Practices for Merchants, Credit card Processing, Credit Card Security, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Payment Card Industry PCI Security, Point of Sale, Smartphone, Visa MasterCard American Express Tagged with: big data, breaches, card data, cardholders, checkout lines, commerce, data loss, data sets, digital, ecommerce, geolocation, GPS, inherent security, Merchant's, Mobile Devices, mobile network, online activity, personally identifiable information, pii, POS, Security, security crisis, sensors, smartphone, social networks, transaction, transactional, travel patterns, vulnerabilities
February 3rd, 2014 by Elma Jane
National Transaction and Virtuoso Agreement Official
National transaction and Virtuoso signed a preferred supplier agreement this 30th of January. NTC’s Electronic Payment System will be offered to its more than 330 agencies with 7,200 elite advisors in 20 countries.
Virtuoso is the travel industry’s leading luxury network. Travelers who use Virtuoso’s Advisors get access to more than 1,300 of the world’s premier travel providers, as well as exclusive, experiences and products. Virtuoso’s history dates to the 1950s, when the tour company Allied Travel formed to help travel agencies with foreign, international and group trips. In 1986, Allied Travel merged with Percival Tours to form (API) Allied Percival International, joining the best travel agents in the country. In 2000, API was rebranded Virtuoso, and has since become the leading travel network in the world.
While National Transaction with over 15 years in the payment service industry, has gained experience to integrate vast range of payment services. Processing digital transactions for more than 3,000 business owners and has been the preferred merchant account provider for many industry associations including ASTA, CLIA, HBTA, ARTA OSSN and now VIRTUOSO.
Posted in Best Practices for Merchants, Credit card Processing, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Travel Agency Agents, Visa MasterCard American Express Tagged with: arta, ASTA, clia, hbta, merchant account provider, National Transaction Corporation, ossn, travel, travel agencies, travel industry's, travel network, travel providers, travelers, Virtuoso
February 3rd, 2014 by Elma Jane
The migration to cards that use chips instead of magnetic strips, known as EMV technology, is well underway in the U.S. No government regulation is needed to make it happen. But the EMV migration and the Target breach are different things. It’s true that EMV chip cards can prevent criminals from producing counterfeit cards using stolen account numbers. But EMV doesn’t stop criminals using stolen cards online. So innovators are deploying new technologies to deter other forms of fraud.
Headline-grabbing events inevitably lead to calls for new laws. But in the case of our nation’s electronic payments systems, new government mandates would stifle marketplace innovations that hold great promise for providing consumer benefits and reducing criminal activities.
Financial institutions compete for customers by providing consumer protections even beyond requirements of current law. Many retailers also offer customers speedy transactions, such as “sign and go” and “swipe and go” for small transactions, while the payments industry ensures consumers still have zero liability. These protections and flexibility are why U.S. consumers are going cashless and carry more than one billion debit and credit cards. More than 70% of retail purchases are made with electronic payments, and our member companies process more than $4 trillion in electronic payments each year.
Fraud accounts for fewer than six cents of every $100 spent on payments systems – a fraction of a tenth of a percent. U.S. companies have made significant financial and technological investments, building sophisticated fraud tools that insulate consumers from liability. To build on this, Congress should foster greater international law enforcement cooperation to fight cybercrime, particularly in countries that harbor crime rings, and replace 46 divergent state breach notification laws with a uniform national standard.
The private sector is best positioned to address the constantly shifting tactics of criminals, and it is doing so without government mandates. Do Americans really want the government in charge of the security and monitoring of our payments?
Posted in Best Practices for Merchants, Credit card Processing, Credit Card Security, Electronic Payments, EMV EuroPay MasterCard Visa, Financial Services, Visa MasterCard American Express Tagged with: counterfeit cards, cybercrime, data breach, debit and credit cards, electronic payment systems, electronic payments, emv chip cards, emv technology, fraud, liability, magnetic strips, migration, online, security and monitoring of our payments, small transactions
January 30th, 2014 by Elma Jane
As many as 40 million Target customers hacked over the holidays when thieves got into their credit and debit card. If you shopped at Target between November 27 and December 15 while thieves were hacking data, you’re unlikely to lose a dime. Federal law and industry practices protect virtually all customers from any liability for fraudulent charges. So many breaches occur in the first place. Credit and debit card fraud has nearly quadrupled in the past decade, hitting $11.3 billion in losses worldwide last year. That hurts profits and raises the cost of goods. The U.S. accounts for more than its share of fraud, and hardly a month goes by when there isn’t a breach from some large U.S. retailer, in part because the U.S. lags other countries in card security.
After the Target breach, the stolen account information flooded underground markets that operate on the Internet, selling batches of data that allow thieves to counterfeit cards and shop till they drop. The best thing that could happen is if this latest megabreach forced the industry and Congress to fix some of the system’s most troubling vulnerabilities.
Cyberthieves are growing more sophisticated, and nothing can prevent every data breach. But when a company as big as Target can be hacked for 19 days to the tune of 40 million records, consumers deserve more modern and tougher protections.
Some ideas for curbing cybercrime:
Put stronger protections on debit cards. Credit cards carry the gold standard in protection against having to pay for fraudulent charges. Federal law limits losses to $50, and most issuers take that down to zero. After a data breach, debit cards are similarly protected. But if your debit card is lost or stolen, by law you could lose up to $500, and reimbursement may depend on how quickly you report the loss. There’s no sound reason for the gap. It should be eliminated.
Set federal standards to protect data. The industry, led by Visa and MasterCard, has always provided its own security standards to keep data safe. Obviously, they’re not working. Federal standards could help, especially if backed by sanctions for flouting them. The Federal Trade Commission has some authority, but the law is nearly 100 years old, and some companies have challenged the agency in court. Since the Target breach, several senators are calling for more federal authority.
Get with the 21st century. The U.S. is far behind Europe, which almost a decade ago replaced the magnetic strip on cards with a digital chip that prevents thieves from counterfeiting cards with stolen data. That’s one reason the U.S. has become a mecca for hackers. The U.S. industry is migrating to these “EMV” cards, but it has moved slowly. The players fight among themselves over everything from who pays to the type of security. Requiring cardholders to use PIN numbers would provide the best security. Whatever the decision, the industry needs to get moving to meet a self-imposed 2015 deadline.
Posted in Best Practices for Merchants, Credit Card Security, Digital Wallet Privacy, Electronic Payments, EMV EuroPay MasterCard Visa, Financial Services, Payment Card Industry PCI Security, Visa MasterCard American Express
January 29th, 2014 by Elma Jane
More than 60 percent of online shoppers returned or exchanged at least one item. About 95 percent of customers will go back to an online merchant and make additional purchases after a positive return or exchange experience, making managing the process important for e-commerce success.
Exchanges and returns will shortly be a hot topic for online retailers as Christmas gift recipients contact sellers in the wake of an exceptional holiday selling season. These Christmas gift recipients will want to exchange and return unwanted gifts, items that are wrong size, or even items that may have been damaged in transit.
Returns and exchanges are important for building long term customer relationships, with some 95 percent of shoppers going back to online merchants that have offered a good exchange or return experience in the past, according to data from Endicia, an electronic postage solution provider. Conversely, about 85 percent of consumers will not return to an online shop after a poor return or exchange experience, again according to Endicia.
What follows are tips for offering a better exchange or return experience for online shoppers.
Create an Opportunity
Returns and exchanges are also an opportunity to make additional sales. As mentioned above, about 95 percent of shoppers will return to an online store and make an additional purchase after a positive return or exchange experience.
Similarly, about 45 percent of shoppers will actually recommend an ecommerce merchant, again according to Endicia, after a positive return experience, meaning that taking care of an existing customers could lead to new customers too.
Consider sending each shopper who returns or exchanges an item a follow-up email, asking for feedback about the experience. Identify ways to improve the return process, and business in general will improve too.
Know the Cost of Returning
A guitarist for a popular party and event band recently ordered a new guitar strap from a merchant on the Amazon marketplace. Unfortunately, there was an error in the shipment, and the merchant apparently sent a shorter strap than expected. When this guitarist contacted the seller about an exchange, he was told that a new strap would be shipped that day and that he could simply keep the smaller strap.
This solution was great for the customer, who did not have to repackage the strap or arrange for a carrier to pick it up. He was generally happy with the experience. This was probably also better for the merchant, who might have simply been able to order a new guitar strap from its distributor for about the same cost has having the strap returned.
To make this sort of business decision, it is important to understand the real cost of managing a customer return, including the cost of the shipping and the labor necessary for processing the return once it arrives back at the seller’s warehouse. If it cost as much or nearly as much to return the item as it would to simply purchase another one wholesale, consider letting the customer just keep it, saving everyone involved time and expense.
Provide Return Instructions or a Return Label in Every Order
Shoppers don’t want to wait for return labels. In fact, about 62 percent of online shoppers want a return label included in the initial shipment, according to Endicia. Including a return label is not difficult, and many online sellers may find that the ability to do so is either built directly into the retailer’s ecommerce platform or is available via an extension to the ecommerce platform.
A second option may be to offer shoppers a simple, self-service way to print a return label from your site. This self-service option does not require the customer to contact the shipper to get authorization or wait for an emailed label. According to the Endicia data, about 61 percent of shoppers will be happy with an easy way to print return or exchange labels.
State Return and Exchange Policies Clearly
Let customers know exactly what to expect from the return and exchange process. Post clear, simple-to-understand policies on a page of the site specifically designated for returns or shipping policies.
Posted in Best Practices for Merchants, Credit card Processing, e-commerce & m-commerce, Electronic Payments, Gift & Loyalty Card Processing, Internet Payment Gateway, Visa MasterCard American Express Tagged with: Amazon, ecommerce, gift recipients, marketplace, online merchant, online retailers, online sellers, online shoppers, return or exchange, returns and exchanges, self-service
January 29th, 2014 by Elma Jane
Ecommerce and mobile-based e-commerce have grown significantly this year. Cyber Monday ecommerce sales, as an example, reached $1.735 billion originating from desktop and laptop devices, according to comScore. Even Black Friday, which is better known for brick-and-mortar retail sales, saw online spending reach $1.198 billion in the United States, again according to comScore. Mobile online spending may also have grown, as some reports indicate that mobile-based site traffic was up 55 percent around Thanksgiving.
Many ecommerce merchants are enjoying a robust holiday selling season even as some brick-and-mortar stores are seeing relatively flat Christmas sales. To ensure continued growth and success, Internet retailers may want to challenge their businesses to improve in several areas in 2014.
Retailers, however, should not rest on their current success, but rather should challenge their businesses to improve in several areas, including free shipping offers, mobile optimization, personalization, data driven decision making, and cross channel sales.
Offer Free, Two-Day Shipping
The first challenge for online sellers in 2014 may be to find ways to offer free, two-day shipping to all or most shoppers. While it is likely there will still be minimum purchase and maximum weight requirements and restrictions, online shoppers are going to expect faster free shipping options thanks, in part, to the growth in services like Amazon Prime and ShopRunner.
Consider order fulfillment services, distributed warehouses, drop shipping, or even partnerships with other retailers to help meet this challenge.
Offer Personalization and Customization
Personalization and customization could be a significant competitive advantage in 2014.
Challenge your business to finally begin offering personalization and customization both onsite and in marketing. The easiest place to start may be with email marketing. Work to segment email marketing campaigns so that they address customers by name and with relevant products and offers that are based on an individual’s or group of shoppers’ stated preferences or on-site behavior.
Taking on this challenge means that the retailer’s marketing department will need to collect meaningful information about what interests shoppers and organize separate, custom campaigns around those interests.
Put Mobile Design and Marketing First
In November, IBM reported that mobile devices accounted for 31 percent of U.S. ecommerce-related web traffic around the Thanksgiving holiday this year, and that 17 percent of ecommerce transactions came from smartphones or tablets. On average, tablet users spent more than $126.00 per order, and smartphone users spent about $106 per order.
This data shows that mobile e commerce is not simply a novelty, but rather a must have for 2014.
If an e-commerce business is not optimized for mobile sales, 2014 is the year to take on that challenge, including offering a responsive design and mobile friendly payment options.
Sell Seamlessly Across Channels, Devices
Try to think of every way that a shopper might interact with an online store, and then make all of those touch points work together in 2014.
Retailers online or in physical stores need to offer shoppers a seamless, cross channel shopping experience that makes buying things easier for the customer. To continue to enjoy success in 2014, consider offering shoppers the ability to share orders across devices, applications, and even marketplaces.
In practice, this might mean that items added to a cart in an online store show up in the cart for the retailer’s iPhone app too. Or that a customer’s order history displayed on a retailer’s site shows orders placed on-site and via a marketplace like Amazon or eBay.
Use Big Data for Big Information
In 2014, find sources of good, usable Big Data, and put the resulting big information to use.
As an example consider, Weather Trends International, a Big Data company that uses historical weather information and advanced data processing to accurately predict weather 11 months in advance. This sort of Big Data information could show a snowboard and ski retailer what sort of winter major ski resorts are likely to have next year, and could inform purchasing and inventory choices.
Similarly, knowing that a particular region is going to have a warmer than normal July and August might impact how, where, and when a clothing retailer promotes shorts or bikinis on Facebook or AdWords.
Big Data is a popular trend in business and in marketing. The concept can mean different things to different businesses. For ecommerce, retailers should seek to use Big Data to gather big information, if you will, that may be used to make better buying and selling decisions.
Posted in Credit card Processing, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Mobile Payments, Mobile Point of Sale, Smartphone, Visa MasterCard American Express Tagged with: adwords, Amazon, big data, big information, brick and mortar, cross channel, cyber, drop shipping, e-commerce, ecommerce, Facebook, internet retailers, laptop devices, Mobile Devices, mobile friendly payment options, mobile optimization, mobile-based site, on-site, online, online shoppers, online store, onsite, personalization, retailers marketing, retailers online, shopping experience, smartphone, Smartphones, tablet, tablets
January 23rd, 2014 by Elma Jane
Commonwealth Bank of Australia (CBA) will now offer the embedded payments service to customers that use the Samsung Galaxy S4 and have CBA’s mobile banking app. MasterCard indicated that this development allows these customers to make payments at more than 1.6 million PayPass-enabled merchant locations around the globe.
MasterCard is just one major issuer that views embedded chips in NFC-enabled phones as the key to unlocking mobile payments globally. But, its news yesterday of how it is going to leverage its Samsung partnership puts a bit of a different spin on digital wallets and mobile payments.
“Our focus is on helping consumers shop and pay in a way that best fits their needs, across all of their devices,” Mung Ki Woo, group executive of mobile and industry alliances at MasterCard, said in a December 11 statement.
The move is part of MasterCard’s continued relationship with Samsung. Earlier this year, MasterCard teamed with the handset maker to offer exclusive deals and special discounts to Samsung Galaxy S4 users in Bangladesh.
Posted in Electronic Payments, Financial Services, Mobile Payments, Mobile Point of Sale, Near Field Communication, Smartphone, Visa MasterCard American Express Tagged with: commonwealth, devices, Digital wallets, embedded payments, make payments, MasterCard, merchant, mobile banking app, Mobile Payments, nfc-enabled phones, paypass, Samsung, shop and pay
December 30th, 2013 by Elma Jane
Earlier this year, American Express offered its cardholders free permanent membership in ShopRunner, a service that gives its members free, two-day shipping at several retail sites. Similarly, PayPal recently tested two-day free shipping offers with a few retailers, whereby shoppers could get free, two-day shipping without an annual fee if they simply checked out using PayPal. The offer had no minimum purchase requirement. Now, Global payment firm MasterCard announced that its customers will receive free, two-day shipping from five of the Internet’s leading retailers. MasterCard also offered a premium service that extends the free, two-day shipping offer to other online merchants. MasterCard joins American Express and PayPal in offering customers free, two-day shipping options at select online retailers.
Collectively ShopRunner, PayPal’s offer, and MasterCard’s recent move may be part of what some in the retail industry are calling the Amazon Prime effect, which is a trend to faster, free shipping services driven in part by Amazon’s Prime service. These offers are changing customer expectations, so that merchants, regardless of size, may need to change free shipping offers to reflect the two-day service available from Amazon Prime, ShopRunner, and now MasterCard.
MasterCard Offer Aims at Large Retailers
To take advantage of the MasterCard offer, shoppers must register at a special MasterCard site, sign in and shop from the site, select two-day shipping at checkout and of course, pay with a MasterCard. Customers will have to pay for the two-day shipping upfront and email the order confirmation to MasterCard to be reimbursed.
Regular online shoppers may purchase an annual subscription for $69.99, extending the free, two-day shipping to about 30 larger retailers, including Nordstrom, J. C. Penney, Home Depot, and GameStop. The premium annual subscription also raises the maximum limit from $500 for six months to $1,500 per year.
The “Free Shipping by MasterCard” offer features five of the retail industry’s best known merchants: Best Buy, QVC, Macy’s, Kohl’s, and Walmart. Online purchases made from these sellers can earn free shipping up to $20 per purchase and $500 maximum over a six-month period.
Implications for Small, Mid-sized Ecommerce Merchants
Free shipping is now or, at least is becoming a key to online ecommerce success. As an example, Forrester Research’s U.S. Online Holiday Retail Forecast 2013, which was released on November 25, found that many online shoppers will leave a site and not buy anything if there is not a free shipping offer available.
Customers may look at shipping as an extra cost or even a waste of money, which is different from how they calculate the gas and inconvenience of going to a store or mall. Even offering free shipping with a minimum purchase can make customers feel better about the checkout process.
Where MasterCard’s offer is different is that it is increasing the expectation around how long a package should take to arrive, and, perhaps, changing how sellers need to think about free shipping.
When an ecommerce retailer purchases pay-per-click advertising, invests in email marketing, buys banner ads, or even prints a brochure or catalog to include in the shipping box, that retailer is investing to acquire or keep customers.
When it comes to accounting for these marketing investments, pay-per-click advertising, as an example, is often taken as part of marketing expenses generally and not attributed directly to a single transaction. For this reason, it is possible that merchants are losing money on some particular orders because of the advertising and promotional expenses associated with those particular orders, but making a profit overall thanks to spreading out marketing costs over all orders and generally increasing the total number of orders and reorders.
Ecommerce businesses may need to start thinking about shipping costs, even two-day shipping costs, in a similar way, not necessarily associating these costs with individual orders, but looking at the business as a whole to see if the free shipping offers are increasing profitability or market share company wide.
New Opportunity for Payment Providers
Free, two-day shipping offers also represent an opportunity for payment companies, like MasterCard, since these free shipping offers could give a particular payment service a competitive advantage. After all, most shoppers will choose the payment card or payment option that provides free shipping over other payment choices.
For the most part, PayPal, American Express via ShopRunner, and now MasterCard are focusing on large retailers, but there may be another opportunity with small and mid-sized online merchants.
Posted in Credit card Processing, e-commerce & m-commerce, Electronic Payments, Point of Sale, Visa MasterCard American Express Tagged with: Amazon, American Express, catalog, checkout, ecommerce, free, macy's. kohls, marketing, MasterCard, Merchant's, online, online merchants, pay-per-click, PayPal, purchases, qvc, retailers, shipping, shoppers, shoprunner, site, walmart
December 30th, 2013 by Elma Jane
MasterCard and Green Dot today announced an expanded relationship that allows all U.S. cardholders with MasterCard rePower -enabled prepaid cards to reload their cards via the Walmart Rapid Reload service.
Walmart Rapid Reload utilizes the Green Dot Network to provide cardholders with a fast and easy way to load funds directly to their cards by swiping their cards at any register at participating Walmart stores (not available in VT or WY). Cardholders can add funds directly to their prepaid account by using cash or a pre-printed payroll or government check. Cashier-added funds will be available for use by MasterCard rePower-enabled cardholders within minutes.
The MasterCard rePower network is open to any MasterCard issuer of reloadable prepaid card programs. Portfolios such as the Univision MasterCard Prepaid Card will be able to offer their cardholders the new cash reload option through Walmart Rapid Reload.
Prepaid products provide consumers with choices in how they manage and spend their money. In order to maximize the potential of prepaid, cardholders need to be able to conveniently and securely reload funds. Our expanded partnership with Green Dot now allows our cardholders to load funds to their prepaid cards at more than 4,000 Walmart stores that offer Walmart’s Rapid Reload service, said MasterCard Group Executive of U.S. Market Development Craig Vosburg.
Posted in Credit card Processing, Electronic Payments, Gift & Loyalty Card Processing, Visa MasterCard American Express Tagged with: cardholders, green dot, MasterCard, network, pre-printed, prepaid cards, rapid reload, register, reloadable, repower, securely, Swiping, univision, walmart
