November 17th, 2015 by Elma Jane
Within the payment processing industry, Merchant accounts are categorized according to how they process their transactions.
There are two primary merchant account categories:
Swiped (Card Present) and Keyed (Card-Not-Present).
Swiped or Card-Present Transactions: Are those in which both the card and the cardholder are present at the time the payment is processed, they physically swipe their customers credit card through a terminal or point-of-sale system.
The sub-categories within this group include:
Retail Merchants – Normally conduct their business in an actual storefront or office space. They primarily use counter-top terminals or Point-of-Sale systems. Restaurant Merchants – Requires a special set-up that allows for tips to be added to the final sale amount by settling the transaction with an adjusted price that will include the tip amount.
Wireless / Mobile Merchants – They use wireless terminals or mobile phones to run these transactions in Real-Time. Have the ability to accept credit cards transactions wherever they are located out on the road.
Hotel / Lodging Merchant – Will authorize a customer’s credit card for a certain sale amount.
Card-Present Transactions also include grocery stores, department stores, movie theaters, etc. Card acceptance settings where cardholders use unattended point-of-sale (POS) terminals, such as gas stations, are also defined as card-present transactions.
Keyed-In or Card-Not-Present Transactions: Whenever the transaction is completed and the cardholder (or his or her credit card) is not physically present to hand to the seller.
The sub-categories within this group include:
Mail Order / Telephone Order (MOTO) – The customers card information is gathered via over the phone, fax, email or internet and then manually key-entered into a terminal or payment gateway software. Once the transaction is approved and completed, the product is then shipped to the customer for delivery.
eCommerce / Internet – Conduct ALL of their business over the internet through a web site. So all credit card transactions are processed online via a payment gateway in real-time. The payment gateway is integrated into the web sites shopping cart. The cardholders card is charged instantly.
Travel Merchants is one example of Keyed or Card-Not-Present Transactions.
Start processing credit card payments today whether Swiped or Keyed.
Give us a call now at 888-996-2273 so more details!
Posted in Best Practices for Merchants, e-commerce & m-commerce, Mail Order Telephone Order, Mobile Payments, Mobile Point of Sale, Point of Sale, Smartphone, Travel Agency Agents Tagged with: Card Not Present transactions, card present, card-not-present, card-present transactions, cardholder, credit card, credit card payments, credit card transaction, ecommerce, keyed, Lodging Merchant, mail order, merchant accounts, merchants, mobile merchants, moto, payment gateway, payment processing, point of sale, POS terminals, Restaurant Merchants, Retail Merchants, shopping cart, swiped, telephone order, terminal, transactions, travel merchants
October 8th, 2015 by Elma Jane
Rules have changed in regards to swiping credit cards October 1st, 2015 with the EMV Liability Shift; which may not cause much concern for most consumers, but for merchants.
EMV compliance isn’t a legal requirement. However, if you’re a merchant that accepts credit cards in-person, then you need to find out whether you’re meeting the EMV Standard. The new rule for the liability shift applies October 1st, regardless of the size or type of business.
What Is EMV Standard?
EMV stands for EuroPay, MasterCard, and Visa, the three companies that originally created the standard.
The EMV Shift is to provide enhanced security and prevent fraudulent activity with credit cards. Updated equipment is also necessary for processing the new computerized cards, and unfortunately, the responsibility of securing up-to-date hardware falls on the merchant.
Since card evolves more instead of cash in our society, fraud and data breaches is on the increase, and now a common occurrence. Adapting new technology is therefore necessary. A hassle for many merchants, but there are actually benefits from all parties involved in a credit card transaction.
Data shows that fraud decreases dramatically when EMV Standards are implemented In Europe. The region has experienced an 80% reduction in credit card fraud, while the USA has seen a 47% increase by NOT implementing EMV standards.
The new liability rules took effect on October 1st in the US, and any party that has not yet implemented EMV-compliant machines might now be liable for fraud committed with counterfeit chip cards. Note that this liability shift only applies to in-person transactions. Phone order and web order transactions will be dealt with as they always were.
For Merchants, it means you’ll eventually need to get new equipment for processing credit cards payments in-person (unless you’ve already done so not too long ago, as nearly all POS terminals sold in the USA nowadays are EMV compliant). For most business owners, it’s a good idea to implement the new system sooner rather than later.
Step to take as a Merchant Until you get your EMV equipment
- Ask for an official ID from customers whose credit card you process.
- Conduct some research to see which EMV system would be best for your business.
- Start shopping around for new payment processing options that are EMV compliant.
If you already have a machine that can process chip cards, you’re fully EMV-compliant.
If you don’t accept any in-person payments, then you’re all set.
If you do accept in-person payments and you do not have a chip card machine, chances are you’ll be fine for a little while. But those of you with a high risk of encountering a fake card (if you are a high-volume business with a large average ticket, for instance) should probably upgrade soon.
Fraudsters are going to be taking advantage of businesses that haven’t upgraded so it’s a great time to switch!
Check out NTC’s EMV/NFC Capable Terminal!
Posted in Best Practices for Merchants, Credit Card Reader Terminal, Credit Card Security, EMV EuroPay MasterCard Visa, Point of Sale Tagged with: chip cards, credit card transaction, credit cards, credit cards payments, EMV, EMV equipment, EuroPay, high risk, MasterCard, merchants, nfc, payment processing, POS terminals, visa
April 27th, 2015 by Elma Jane
I was shopping in Kmart and didn’t understand why my Credit Card transaction was declined. My card is EMV and Kmart is EMV, but the Kmart system did not forced the transaction to run as EMV so, Citibank declined it. Kmart can loose a $600 sale can your small business afford it? If you think hiring a professional is expensive try an amatuer…
A lot of stores, specially big chain stores, have EMV capable terminals, but they haven’t turned them on yet and still force you to swipe. Some think, migration is just getting a new terminal and asking their acquirer to enable EMV on their account. Its not only about the liability shift, and the EMV equipment, It’s the lack of information for the Merchants.
There has to be training and orientation that merchants will need to invest into for their employees. As well as changing our mentality that we all need to be prepared for this upcoming transition….as both consumers and business owners.
The issuing banks can, and are starting to decline transactions when a merchant CAN use EMV but do not. EMV is coming October 2015 and if you are not ready you may loose sales, and will loose when a fraudulent card walks in your business.
Posted in Best Practices for Merchants, Credit Card Reader Terminal, Credit Card Security, EMV EuroPay MasterCard Visa, Visa MasterCard American Express Tagged with: banks, card, consumers, credit card transaction, credit-card, EMV, Merchant's, swipe, terminals
April 15th, 2014 by Elma Jane
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
