January 23rd, 2017 by Elma Jane
What Makes Up The Rate That You’re Paying?
Most rates are made up of three parts:
Interchange – Goes to the bank that issued the card, and is typically made up of a flat rate plus a percentage of the sale.
Assessments – Go to card network like Visa, MasterCard, Amex, Discover etc.
Processor fees – Fees involved with providing the service, risk assessments, the type of transaction, and the size of the transaction. This portion includes the margin between the total rate and the two previous parts, along with any incidental fees, like chargeback or statement fees.
There are a lot more intricacies of what makes up a credit card rate, but this information gets you off to a good start. If you’re interested in learning more about electronic payments, check our website www.nationaltransaction.com or call now 888-996-2273 and talk to our Payment Consultant.
Posted in Best Practices for Merchants Tagged with: bank, card, card network, chargeback, credit card, merchant, payment, processor, transaction
June 16th, 2016 by Elma Jane
Merchants and cardholders have been challenged by the perceived additional time to complete the EMV transaction.
To address concern over EMV checkout time Visa and MasterCard create an alternate EMV payment process that will improve the speed of transaction:
Quick Chip from Visa is available free-of-charge to acquiring banks, payment networks, and other payment processors to offer to merchants. The enhancement requires only a simple software update to the merchant’s card terminal or point-of-sale system.
M/Chip Fast from MasterCard merchants can easily integrate this with their current systems to provide both speed and security for all chip cards. Designed for select environments where fast transaction times, in addition to security, are at a premium.
The new card network options do not require the financial institution to reissue cards, or the merchants to re-certify their point-of-sale terminals.
Alignment in the payments industry and the ability to process a secure transaction in a timely manner for the consumer experience is important.
Keeping current on the payment industry news like Quick Chip and M/Chip Fast or discussion about EMV developments is a smart move for merchants and cardholder as well.
Posted in Best Practices for Merchants, Credit card Processing, EMV EuroPay MasterCard Visa Tagged with: banks, card, card network, cardholders, chip cards, EMV, financial institution, merchants, payment, payment networks, payment processors, payments industry, point of sale, Security, terminal, transaction
April 25th, 2016 by Elma Jane
There are a lot more details of what makes up a credit card rate, this information is a good start to know more about a merchant account. All merchant accounts are subject to the same costs with respect to interchange fees and assessments.
Most rates are made up of three parts:
Assessments – are paid directly to card network associations (Visa, MasterCard, Amex, etc.)
Interchange – are paid to the issuing bank that issued the card, and is typically made up of a flat rate.
Card present transactions (the card is physically present or swiped) are typically lower than card-not-present transactions (the card is keyed-In like e-commerce and mail-order transactions).
Card-not-present transactions have higher interchange rates because they are riskier.
Processor fees – the fees involved with providing the service, risk assessments, the type and size of the transaction. This includes the margin between the total rate and the two previous parts, along with other fees, like chargeback or statement fees.
Posted in Best Practices for Merchants, Credit card Processing, Travel Agency Agents Tagged with: bank, card, card network, chargeback, credit card, merchant account, rate, transaction
October 15th, 2015 by Elma Jane
There are numbers of guidelines issued for accepting card payments, and merchants are expected to understand them all. To avoid issues down the road know a few basic rules in order to keep your business going without being penalized.
There’s a lot of ways to process a credit card: In-store, online, and by phone. There’s also different ways to pay and different brands of cards.
In-store and Card-not-present policies.
In-Store Policies:
- Always verify that the person presenting the card is the cardholder
- Ask for a 2nd ID for comparison
- Cards are non-transferable, cardholder MUST be present for purchase
- Compare the signature on the back of the card with that of the person who presents the card
- Inspect the card to confirm that it’s not visibly altered or mutilated
- Validate the card’s expiration date
Online/Phone Payment Policies: Card-not-present transactions
- Card account number
- Card billing address
- CID (3 digits on back of card OR 4 on the front)
- Card expiration date
- Card member’s home or billing telephone number
- Card member name (as it appears on the Card)
Rules for Visa, MasterCard and Amex that merchants need to know:
- Never store cardholder data on any systems to help minimize the risk of fraud and protect your business from potential chargebacks.
Complying with Federal Laws, State Laws and PCI
- A merchant should be familiar with and abide by Federal Laws regarding accepting credit cards. The Fair Credit Reporting Act is the federal law that establishes the foundation of consumer credit rights. This law regulates the collection and use of consumer credit information by merchants.
- Check state laws on the use of consumer credit information and accepting credit cards. Not all states have additional laws that regulate credit card practices, but some (such as California) prohibit merchants from requesting/requiring a customer to provide any personal information (like their address or telephone number) on any form involved with their credit card transaction. So, it is advised that merchants inquire about further information in their particular state.
- The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements designed to ensure that all companies processing, storing, or transmitting credit card information uphold a secure environment. These rules essentially apply to any merchant that has a Merchant ID (MID). If you are a merchant that accepts credit card payments, you are required to comply with the PCI Data Security Standard, large or small businesses.
EMV Liability Shift Set By Visa and MasterCard as of October 1st
U.S. banks and credit card companies are now using the EMV (Europay, MasterCard, and Visa) technology. The EMV liability shift for fraud carried out in physical stores with counterfeit cards belongs to the merchant if it has not yet upgraded its POS system to accept EMV-enabled chip cards. While issuers absorb losses under card-network rules, that burden will shift to acquirers in cases where the fraud occurs at merchants unprepared for EMV.
It’s good to know every aspect of your business. The above guidelines are part of a business that every merchants should be familiar with. The main reason for these rules is to protect your business and keep your customer’s payment card data safe and secure.
To start accepting more credit cards give us a call now at 888-996-2273. We have the latest terminals that’s EMV/NFC capable.
Posted in Best Practices for Merchants, Credit Card Security, EMV EuroPay MasterCard Visa, Payment Card Industry PCI Security Tagged with: amex, card network, card payments, card-not-present, chargebacks, chip cards, credit card, credit card companies, Data Security Standard, EMV, EuroPay, MasterCard, merchants, MID, Payment Card Industry, PCI-DSS, POS system, U.S. banks, visa
January 21st, 2015 by Elma Jane
With a crucial deadline, the payments industry is starting to look at just what kind of fraud liability and how much fraud merchant acquirers will have to assume if their merchants aren’t ready to accept Europay-MasterCard-Visa (EMV) chip cards by October.
While issuers currently absorb losses under card-network rules, that burden will shift to acquirers this fall in cases where the fraud occurs at merchants unprepared for EMV.
As a result, acquirers will have to reckon with a whole new category of risk exposure.
In card-not-present transactions, acquirers have faced this, but in the overwhelming majority of cases they’ll be confronting it for the first time.
Surprisingly, for all the talk in the industry about the imminent arrival of EMV, it appears few acquiring executives have fully accounted for what the shift really means for them.
Some 24% of U.S. point-of-sale terminals are “EMV-capable,” while 9% of debit/prepaid cards issued, and 2% of credit cards have EMV chips so far. But while terminals may be technically capable, it isn’t known just how many of these merchants have the software and trained personnel to accept EMV.
Foreign issuers, especially, may be licking their chops at the prospect of offloading their consumer-fraud risk onto U.S. acquirers. For years and years, these non-U.S. issuers have invested in EMV, but the U.S. is still using the mag stripe. So non-U.S. issuers appear to be very aware of the liability shift.
To be sure, acquirers’ increased risk exposure may be relatively short-lived. Under the network rules, liability rests with the issuer in cases where both the merchant and the issuer are EMV-compliant. That could be nearly universally the case within a few years. By 2018, nearly all cards and terminals will be compliant.
But that still leaves open the question of how many of these terminals will really be running chip card transactions.
The issue isn’t so much about terminals as about software. Many mid-size merchants are using so-called integrated solutions that run payments as part of a larger business-management system. That means acquirers must work with a number of other parties to reconfigure software, and that presents a challenge when it comes to getting masses of merchants EMV-compliant.
The bigger problem is the integrated point-of-sale market.
While the liability shift may impact acquirers, not all them are convinced their exposure will rise all that much. Some argue the risk of loss from lost/stolen/counterfeit cards at the point of sale is low and not likely to rise, especially for small-ticket merchants.
Fraudsters, are much more inclined to practice their trade online, where the risk of being caught is lower, compared to face-to-face transactions.
Posted in Best Practices for Merchants, Credit card Processing, Credit Card Reader Terminal, Credit Card Security, EMV EuroPay MasterCard Visa, Visa MasterCard American Express Tagged with: card network, card-not-present, chip cards, credit cards, debit/prepaid cards, EMV, EuroPay, fraud, integrated solutions, mag stripe, MasterCard, merchant acquirers, Merchant's, payments, payments industry, point of sale, terminals, transactions, visa
December 5th, 2013 by Elma Jane
Recently, Consumer Reports reviewed 26 different prepaid cards and evaluated them based on different factors. The cards Consumer Reports considered to be the best scored well in each of these four factors:
- Clarity of Fees — How well the fees are disclosed.
- Convenience — Availability of in-network ATMs, bill pay features and how widely the card network brand is accepted.
- Safety — Whether funds are protected with FDIC deposit insurance.
- Value — How much they cost to use.
This is the first time Consumer Reports has evaluated and ranked prepaid cards, revealing a shift in the market for prepaid. As prepaid cards continue to grow in popularity, consumers are going to become savvier about which prepaid cards they purchase. Consider taking a closer look at this Consumer Report to determine how your financial institution’s (FI’s) prepaid offering measures up.
Highest ranked cards are those like the ATIRA suite of prepaid cards TMG’s clients issue. They have fewer fees and make it easier for consumers to avoid them, carry FDIC insurance for each cardholder, offer features comparable to traditional checking accounts and do a better job of disclosing fees.
Not surprisingly, the worst prepaid cards reviewed scored poorly in at least one, and sometimes several, of the above categories. All of the lowest ranked cards have high, unavoidable fees, including activation and monthly fees. Additionally, the lower scoring cards fail to make their fees clear and easy for consumers to access and understand.
Specifically, the report found some prepaid cards fail to provide clear explanations of how to use features such as electronic payments, text alerts and mobile remote deposit capture, and the fees that may be charged for them. Further, while all of the cards reviewed claim to offer some form of protection for consumers, the report found in these policies are often not clearly defined.
Consumer Reports also found it problematic that although issuers provide safeguards voluntarily, they can cancel them at any time. Additionally, according to the report, fee information is often hard to find and difficult to understand. The report states this problem is compounded by the lack of consistency with fee names and descriptions” from card to card, making it challenging for consumers to compare fees and costs. Consumer Reports also found that prepaid cards offered by some of the big banks are not necessarily less expensive than other prepaid cards. Also, these big bank offerings may be less attractive to consumers because they often don’t provide the option of making both electronic payments and payment by paper check.
Posted in Credit card Processing, Financial Services Tagged with: accounts, activation, ATMs, banks, bill pay, card network, cardholder, cards, costs, deposit, electronic payments, fees, financial institution, In-network, insurance, mobile remote deposit capture, monthly fees, paper check, prepaid, text alerts
