A surcharge is a fee that is added to a card transaction, either as a set amount or a percentage of a transaction. Typically, used to cover the cost of the merchant account charges.
There are rules, exceptions and state laws to observe to ensure you are compliant.
At present there are surcharge bans in the following states:
California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. (Appeals are pending for California and Florida)
Surcharge Rules:
Applicable only to credit card transactions, not debit or prepaid card transactions.
The surcharge cannot be greater than the merchant’s average discount rate for that brand’s credit card transactions.
Maximum surcharge allowed is 4%.
Cardholder must be notified of the surcharge.
Surcharge must be listed on the receipt as a line item and the primary payment amount must be processed together as one transaction.
A convenience feeis a fee charged for the “convenience”of being able to pay using an alternative payment channel outside the merchant’s customary payment channel.
Any merchant can charge a convenience fee IF the fee charged is for the legitimate convenience of being able to pay using a different payment channel than the merchant’s usual payment channel.
Example: Your business customary payment channel is face-to-face or card present and you provide an alternative payment channel, such as the option to pay by phone using a credit card, that could then charge a convenience fee along with the payment.
Mail Order/Telephone Order (MOTO) merchants and ecommerce merchants, whose customary payment channel is exclusively non face-to-face or card-not-present, are NOT permitted to charge convenience fees.
Convenience Fee Rules:
Customer must be notified of the convenience fee prior to finalizing payment and given the opportunity to cancel.
Payment must take place through an alternative payment channel.
The fee can only be added to a non face-to-face transaction. Must be flat or fixed, regardless of the value of the payment due.
The fee must be applied to all means of payment accepted through the alternative payment channel. Must be included in the total transaction amount.
This is a question we encounter on a daily basis. Travel environments are unique in that your transactions are usually keyed, there is almost always a delayed delivery period, large ticket transactions are not uncommon since one cardholder may be paying for multiple tickets, they tend to be seasonal, with peak season months generating an unusual spike in their “average” monthly volume, and chargeback’s pose a potential threat by travelers who are unable to complete their trip. Combine even a few of these factors together and you have cause for a reserve, or even account termination.
Being a part of a MO/TO (Mail Order/Telephone Order) or Keyed environment carries an increased risk of potential fraud or unauthorized use of a credit card. Since the credit card and cardholder are not present at the time of the transaction, the merchant has a limited ability to ensure the card is not being misused or that the proper AVS (address Verification Service) information is provided. NTC stresses the use of Credit Card authorization forms in order to obtain the correct credit card number, expiration date, billing address, and signature of the cardholder.
Travel merchants tend to have periods of increased volume based on peak travel seasons, whereas most other industries tend to have the same average monthly volume every month. This can generate spikes in volume on the merchant account that can trigger security concerns with the processor. Helping the merchant to analyze their volume trends and reporting the trends to the underwriters helps eliminate the security concerns when these spikes occur.
Large transactions which exceed the average sale amount for the merchant account can also trigger security concerns. Merchants who do not inform their merchant processor of large transactions prior to charging the credit cards can trigger security concerns and cause funding delays and reserve holds. Educating and clearly communicating with the merchant how to handle large tickets, volume spikes, and group bookings, prevents reserves, funding delays and/or other merchant account issues.
Another concern from the underwriters is the delayed delivery time frame. Delayed Delivery refers to the amount of time between accepting a credit card payment (whether a deposit or full purchase) and the time the cardholder travels. The client’s credit card is billed and the travel agent is paid however, the trip the travel agent was paid for doesn’t generally take place for 2 to 3 months. This leaves a lot of time for things to change, and should the client not travel for some reason, the first thing they do if the travel agent does not issue a refund, is claim a chargeback. NTC offers quite a few tips that can help protect the travel agent from chargeback situations.
Most merchants do not realize that merchant processors carry a financial risk on merchant accounts, and normally fund merchants prior to receiving payment from the client’s bank. Essentially, a merchant account is an unsecured loan. The merchant runs a transaction and at the end of the day they settle their batch. Generally the merchant will receive the funds for that batch in their bank account within 2 business days even though the travel arrangements the client paid for do not take place right away.
Here at National Transaction Corp, we specialize in understanding what makes your transactions, as a travel agent, unique in how they affect your merchant account. Educating the merchant and ensuring they have a good understanding of what makes travel merchant account high risk, is one of our specialties. We have established a special relationship with our underwriting department which facilitates our ability to approve your high risk travel merchant account.
Having a product or service based business can be easily manageable when you are pricing your business correctly. But can it be done? Before processing, consider pricing.
What does that mean? Before you pick your payment processing service, consider pricing them correctly. Pricing can be tricky sometimes. If you charge too much, you might have a harder time selling your product but if you charge too little people might not honestly see the value of what you have to offer.
There are a certain number of things you need to consider that can make your life easier when it comes to pricing. Knowing your market can, by far, be the most important thing of all. Without knowing your market, you cannot correctly know whether your product or prices will be good.
Knowing your market can greatly positively impact your business. It can help you figure out anything from pricing to branding and including what you can do to grow the business. Start by building up your perfect customer or “avatar” write what your ideal client would enjoy, dislike, what age, gender (if applicable), and even area where they would live.
Once you have this, it will give you a better idea on how to price your services. Consider this:
You sell handmade bags. Although it does not take you too long now to make the bags, the materials are costly, and you need to maximize its use. Your ideal client would not hesitate in buying them, is into fashion, and although anyone can buy them, you have seen many girls ages 18-25 falling in love with them as you walk around with your bag.
Knowing the age group, you know how and where to market and can figure out how much are they willing to pay for your bags. You can also research how much are you competitors charging and see if you price matches, is under-priced or over-priced based on this research.
The next thing you need after figuring out the age and market is your materials. How much do you spend per product? You would need to consider if the price covers the cost of making it and gives you profit.
Having all of these factors will help you price your items correctly so that you are on your way to business success. Once all of these are set up and taken care of, then it is time to set up your account with National Transaction to have a personable and secure payment processing service to start earning on your business.
The travel industry, with its high-value transactions and international clientele, faces unique challenges when it comes to credit card processing. While accepting plastic is crucial for smooth booking and customer convenience, travel agencies must be aware of the inherent risks and implement strategies to mitigate them. Here’s a breakdown of the key credit card processing risks and how to minimize them:
1. Chargebacks:
The Problem: Travel plans change, flights get delayed, and unforeseen circumstances arise. This can lead to a higher rate of chargebacks, where customers dispute charges with their credit card company. Chargebacks can be costly, involving fees, lost revenue, and potential damage to your merchant account reputation.
Mitigation:
Clear Cancellation Policies: Crystal-clear terms and conditions regarding cancellations, refunds, and travel changes are essential. Ensure these are easily accessible during booking.
Thorough Documentation: Maintain detailed records of all transactions, customer communications, and travel itineraries. This provides evidence in case of a dispute.
Proactive Communication: Keep customers informed about any changes to their travel plans and address concerns promptly.
Secure Payment Processing: Utilize 3D Secure (like Verified by Visa or Mastercard SecureCode) for added authentication and fraud prevention.
2. Fraud:
The Problem: The travel industry is an attractive target for fraudsters due to high transaction values and the potential for anonymity. Fraudulent activities can include using stolen credit card details, booking fictitious trips, or exploiting vulnerabilities in online booking systems.
Mitigation:
Address Verification System (AVS): Verify the billing address provided by the customer against the address on file with the credit card company.
Card Security Code (CVV): Always require the CVV code for card-not-present transactions.
Fraud Detection Tools: Implement fraud screening tools that analyze transactions for suspicious patterns and flag potentially fraudulent activity.
PCI DSS Compliance: Adhere to the Payment Card Industry Data Security Standard (PCI DSS) to ensure secure handling of sensitive cardholder data.
3. Currency Fluctuations:
The Problem: International travel often involves transactions in multiple currencies. Fluctuating exchange rates can impact your profit margins and create uncertainty in pricing.
Mitigation:
Dynamic Currency Conversion: Offer customers the option to pay in their home currency, providing transparency and potentially reducing chargebacks related to exchange rate discrepancies.
Hedging Strategies: Explore financial instruments to mitigate currency risk, such as forward contracts or currency options.
4. High Processing Fees:
The Problem: Travel agencies often face higher processing fees due to the perceived risk associated with the industry.
Mitigation:
Negotiate with Processors: Shop around and compare rates from different credit card processors. Don’t hesitate to negotiate for better terms, especially if you have a high volume of transactions.
Consider Interchange-Plus Pricing: Opt for transparent pricing models like interchange-plus, which separates the interchange fee (charged by card networks) from the processor’s markup.
5. Technological Challenges:
The Problem: Keeping up with evolving payment technologies and security standards can be challenging. Outdated systems can increase your vulnerability to fraud and data breaches.
Mitigation:
Invest in Secure Technology: Use a robust and secure online booking system that integrates with reputable payment gateways.
Regular System Updates: Ensure your software and security protocols are regularly updated to address emerging threats.
Partner with Reliable Providers: Choose payment processors and technology vendors with a strong track record of security and reliability.
By understanding and proactively addressing these credit card processing risks, travel agencies can protect their business, enhance customer trust, and navigate the exciting world of travel with greater financial security.
The way we pay for goods and services has undergone a dramatic transformation. From bartering to coins to paper money, the journey of payment methods has been long and fascinating. But no shift has been as revolutionary as the rise of electronic payments. Let’s dive into this evolution and explore where this exciting technology might lead us next.
Early Days (1950s – 1970s):
1950: The Diners Club card emerges as the first multipurpose charge card, laying the foundation for modern credit card systems.
1958: American Express launches its charge card, initially paper-based, revolutionizing travel and expense tracking.
1966: Barclays Bank in London introduces the first Automated Teller Machine (ATM), allowing customers basic account access outside banking hours.
1970s: Electronic Funds Transfer (EFT) systems gain traction, enabling direct deposit of paychecks and automated bill payments.
Rise of Digital Networks (1980s – 1990s):
1979: Visa introduces the first electronic authorization system and point-of-sale (POS) terminal, paving the way for real-time transaction processing.
1983: Debit cards become more prevalent, allowing consumers to access funds directly from their bank accounts.
1994: First Virtual Holdings pioneers the first secure online payment system, marking the dawn of e-commerce.
Late 1990s: Online banking explodes in popularity, offering customers convenient account management and payment options.
The Internet Age (2000s – Present):
1998: PayPal emerges, simplifying online transactions and boosting consumer confidence in online shopping.
2003: Mobile payments gain momentum in various countries, driven by the increasing adoption of mobile phones.
2010s: Near Field Communication (NFC) technology enables contactless payments, giving rise to mobile wallets like Apple Pay and Google Pay.
2020s: Biometric authentication adds another layer of security to electronic payments, using fingerprints and facial recognition. Real-time payment systems gain popularity, allowing for instant fund transfers.
The Future of Electronic Payments:
Invisible Payments: Imagine a world where payments happen seamlessly in the background. Technology like Amazon Go is already showcasing this, with customers simply walking out of stores with their purchases.
Cryptocurrency and Blockchain: While still in its early stages, the potential of cryptocurrencies and blockchain technology to disrupt traditional payment systems is enormous. Expect to see more integration and wider acceptance in the coming years.
AI-Powered Payments: Artificial intelligence will play a crucial role in fraud prevention, personalized payment experiences, and the development of even more innovative payment solutions.
Increased Financial Inclusion: Electronic payments have the potential to bring banking services to underserved populations, promoting financial inclusion on a global scale.
The evolution of electronic payments is an ongoing journey. As technology continues to advance, we can expect even more exciting developments that will reshape the way we transact and interact with the world around us.
Merchant Aggregators, Merchants of Records and Payment Service Provider what’s the difference?
Payment Service Provider – is a company, which provides payment gateway and related services (like antifraud tools) to merchants. PSP is a representative of one or several acquiring banks. The merchant signs an agreement with the acquiring bank and PSP. The acquiring bank provides a merchant account and secures settlements for merchant’s transactions directly to the merchant’s bank account. Payment Service Provider secures delivery of the merchant’s transactions to the acquiring bank and some related services like fraud scrubbing and recurring transactions. The merchant has an own merchant account with this model.
Merchant Aggregator – is a company, which uses one merchant account to process transactions from many merchants. Merchants don’t have any agreements with an acquiring bank, but with the merchant aggregator. You get quick setup and get shut down quickly. Most aggregators are hard to get hold of, they don’t have human customer support. The problem with this model is, it’s not intended as a long-term, scalable solution to accepting payments and they can freeze your account or hold your money if anything unusual happens.
Merchants of Record – are a merchant, who use services of payment service provider (PSP) or merchant aggregators to accept payments on their websites for goods or services they sell. Merchant of record role requires an array of administrative responsibilities, such as managing a merchant account with a payment processor, paying associated credit card rates & fees for the transactions and other responsibilities like complying with PCI DSS Standards.
Tokenization is a powerful security feature that allows a merchant to support all of their existing business processes that require card data without the risk of holding card data and without any security implications, because tokens are useless to criminals, they can be saved by the merchant as they do not represent any threat.
The liability and costs associated with PCI compliance is substantially reduced and the risk of storing sensitive data is eliminated.
Tokenization applies to credit card and gift card transactions.
Imagine a world where you could accept credit card payments without actually storing any sensitive cardholder data. No more worrying about data breaches, PCI compliance headaches, or the crippling costs of a security breach. That’s the power of tokenization.
Here’s how it works:
Instead of storing sensitive credit card information on your systems, each card number is replaced with a unique, randomly generated “token.” This token is useless to hackers, but it can be used to process payments securely on the merchant account that created the token.
Think of it like a valet ticket:
You hand over your car (the sensitive data) to the valet (the tokenization provider), who gives you a unique ticket (the token). The valet keeps your car safe, and you can use the ticket to retrieve it when needed.
The benefits are immense:
Ironclad Security: Reduce your PCI DSS scope and minimize the risk of costly data breaches. With tokenization, even if your system is compromised, the actual card data remains safe.
Effortless Compliance: Simplify PCI compliance and avoid hefty fines. Tokenization helps you meet the stringent security requirements for handling sensitive cardholder data.
Recurring Billing Made Easy: Securely store tokens for recurring billing or future transactions. This allows you to charge customers later without having to store their sensitive information.
Improved Customer Trust: Demonstrate your commitment to data security and build customer trust. Knowing their information is protected encourages repeat business and loyalty.
Streamlined Checkout: Offer a frictionless checkout experience with saved payment information. Tokenization enables faster and more convenient payments for your customers.
Tokenization is not just a security measure, it’s a strategic advantage:
Reduce costs: Minimize the expenses associated with data breaches and PCI compliance audits.
Boost efficiency: Streamline your payment processes and reduce administrative overhead.
Enhance your reputation: Position your business as a leader in data security and customer trust.
In conclusion:
Tokenization is a game-changer for businesses that accept credit cards. It offers unparalleled security, simplifies compliance, and unlocks new opportunities for growth. Embrace the future of secure payments with tokenization and watch your business thrive.
For Electronic Payments with Tokenization call now 888-996-2273 or click here NationalTransaction.Com
Visa 3-D Secure (3DS) is a security protocol designed to add an extra layer of protection to online credit card transactions.It aims to reduce fraud by verifying the cardholder’s identity before the transaction is authorized.Visa’s implementation of 3DS is called “Visa Secure.”
Here’s how it works:
Transaction Initiation: When a customer makes an online purchase with their Visa card, the merchant’s website communicates with the Visa network to initiate the 3DS process.
Risk Assessment: The issuer (the cardholder’s bank) performs a risk assessment based on various factors, such as the cardholder’s history, the transaction amount, and the merchant’s risk profile.
Authentication: If deemed necessary, the issuer challenges the cardholder to authenticate their identity. This usually involves a step-up authentication method, such as:
One-time password (OTP): Sent to the cardholder’s registered mobile phone or email.
Biometric authentication: Fingerprint scan or facial recognition.
Knowledge-based authentication: Security questions or personal information.
Verification: Once the cardholder successfully authenticates, the issuer confirms their identity to the merchant.
Transaction Completion: The merchant can then proceed to process the transaction with increased confidence that the cardholder is legitimate.
Integration and Implementation:
Merchants need to integrate 3DS into their online payment systems.This typically involves working with their payment gateway provider or acquiring bank to implement the necessary APIs and protocols.Visa provides detailed documentation and support for merchants to integrate Visa Secure.
Benefits and Features of 3DS:
Reduced Fraud: By verifying the cardholder’s identity, 3DS significantly reduces the risk of unauthorized transactions and chargebacks.
Improved Security: Adds an extra layer of security to online payments, protecting both merchants and customers from fraud.
Shift in Liability: In many cases, if a fraudulent transaction occurs after successful 3DS authentication, the liability shifts from the merchant to the issuer.This can save merchants significant costs associated with chargebacks and fraud disputes.
Increased Customer Confidence: Demonstrates a commitment to security and builds trust with customers, encouraging them to complete their purchases.
Enhanced User Experience: The latest version of 3DS (EMV 3DS 2.0) offers a smoother and more user-friendly authentication experience, minimizing friction during checkout.
Support for Mobile and Digital Wallets: 3DS is compatible with various payment channels, including mobile devices and digital wallets, providing a consistent and secure experience across all platforms.
In conclusion: Visa 3-D Secure is a powerful tool for merchants to enhance the security of their online transactions, reduce fraud, and improve customer confidence.
By implementing Visa Secure, merchants can protect themselves from financial losses and provide a safer and more trustworthy shopping experience for their customers.
For e-Commerce Electronic Payments set up with 3D Secure
With smartphone users on the rise Nielson says that in 2012 47% of smartphone owners use mobile shopping apps in the Shopping / Commerce category. Although these do not account for actual mobile payment transactions they show that smartphone users are frequently turning to their mobile devices to find deals and purchase information.
But what exactly is m-commerce? M-commerce is a hybrid technology that takes web technologies that scale screens to mobile devices like Apple iPads and Android tablets. The commerce end of it comes from shoppers and merchants actually executing payment transactions over mobile devices of some form. Read more of this article »
Travel Agents prefer NTC ePay because they get paid faster with their very own “Buy Now” button or simply by requesting payments by email!
In our last installment, we shared how the security of NTC Payment Processing works for you. In this second part of our three-part series, we discuss the ways that the technology behind NTCePay helps your travel agency.
NTCePay offers travel agents the most innovative technology because it is fast, mobile friendly and easy to use.
Whether you use Quickbooks, Peachtree or any other accounting application, you can enter the invoice number into the ePay application for reconciliation, and you can customize your pricing to any amount you choose. Your agency can create invoice and payment links that can be posted to your website or any social media website for payment.
Things flow better when everything seems to work together, making your day a lot easier? Technology is something that can get your daily workflow to go smoothly, and NTC ePay works for you. If you need a customized solution to go with your workflow, NTC can make most anything a reality for your business workflow.
National Transaction Corporation is one of the few travel payment processing companies that can directly integrate with both TRAMS and SABRE. You can perform your bookings like you always have but have the payment flow the way you need it to. We also integrate with many booking engines and shopping carts allowing you many options that are not available by host agencies.
NTC ePay is simple, secure and sets up in just minutes. It’s a web application, so you can use it on any device you already own: your desktop, laptop, tablet or phone. It lets you add inventory items or use the quick send feature for simplified invoicing.
Our ePay product was designed from the ground up with your security in mind. Even though we encrypt data back and forth to the payment gateway, we also use the gateway to handle the cardholder’s input. NTC’s cutting-edge technology doesn’t store credit card data, nor does it transmit that data. What that means to you is that the liability is 100% on the bank and not your business, as is typically the case. The application is written and hosted on our own servers, so you can set up and be in the e-commerce business within minutes.
By the way, there are also many customizations available to you with NTC ePay which can be set up very easily by your users. Inquire with your specific process and we will meet your specific needs in the travel payment scope.
Now, when you run a social media campaign you can leverage our NTCePay technology to help you increase sales. Use our ePay links to post vacation travel packages or special sales and have customers pay in two clicks.
Next week we will share the third reason in this series why National Transaction Corporation is the preferred choice for travel agents like you.
Remember, when you need a safe and technologically advanced gateway to manage all your travel agency payments, look no further than NTC.
Feel free to call us now at 888-996-2273, if you are ready to start using NTC ePay today.
With smartphone users on the rise 
