More about CVV Number

The CVV Number (Card Verification Value) on your credit card or debit card is a 3 digit number on VISA, MasterCard and Discover branded credit and debit cards. On your American Express branded credit or debit card it is a 4 digit numeric code.

The codes have different names:

American Express – CID or unique card code.

Debit Card – CSC or card security code.

Discover  – card identification number (CID)

Master Card – card validation code (CVC2)

Visa  – card verification value (CVV2) 

CVV numbers are NOT your card’s secret PIN (Personal Identification Number).

You should never enter your PIN number when asked to provide your CVV. (PIN numbers allow you to use your credit or debit card at an ATM or when making an in-person purchase with your debit card or a cash advance with any credit card.)

Types of security codes:

CVC1 or CVV1, is encoded on track-2 of the magnetic stripe  of the card and used for card present transactions. The purpose of the code is to verify that a payment card is actually in the hand of the merchant. This code is automatically retrieved when the magnetic stripe of a card is swiped on a point-of-sale (card present) device and is verified by the issuer. A limitation is that if the entire card has been duplicated and the magnetic stripe copied, then the code is still valid.

The most cited, is CVV2 or CVC2. This code is often sought by merchants for card not present transactions occurring by mail or fax or over the telephone or Internet. In some countries in Western Europe, card issuers require a merchant to obtain the code when the cardholder is not present in person.

Contactless card and chip cards may supply their own codes generated electronically, such as iCVV or Dynamic CVV.

Code Location:

The card security code is typically the last three or four digits printed, not embossed like the card number, on the signature strip on the back of the card. On American Express cards, the card security code is the four digits printed (not embossed) on the front towards the right. The card security code is not encoded on the magnetic stripe but is printed flat.

American Express cards have a four-digit code printed on the front side of the card above the number.

MasterCard, Visa, Diners Club,  Discover, and JCB credit and debit cards have a three-digit card security code. The code is the final group of numbers printed on the back signature panel of the card.

New North American MasterCard and Visa cards feature the code in a separate panel to the right of the signature strip. This has been done to prevent overwriting of the numbers by signing the card.

Benefits when it comes to security:

As a security measure, merchants who require the CVV2 for card not present payment card transactions are required by the card issuer not to store the CVV2 once the individual transaction is authorized and completed. This way, if a database of transactions is compromised, the CVV2 is not included, and the stolen card numbers are less useful. Virtual Terminals and payment gateways do not store the CVV2 code, therefore employees and customer service representatives with access to these web-based payment interfaces who otherwise have access to complete card numbers, expiration dates, and other information still lack the CVV2 code.

The Payment Card Industry Data Security Standard (PCI DSS) also prohibits the storage of CSC (and other sensitive authorization data) post transaction authorization. This applies globally to anyone who stores, processes or transmits card holder data. Since the CSC is not contained on the magnetic stripe of the card, it is not typically included in the transaction when the card is used face to face at a merchant. However, some merchants in North America require the code. For American Express cards, this has been an invariable practice (for card not present transactions) in European Union (EU) states like Ireland and the United Kingdom since the start of 2005. This provides a level of protection to the bank/cardholder, in that a fraudulent merchant or employee cannot simply capture the magnetic stripe details of a card and use them later for card not present  purchases over the phone, mail order or Internet. To do this, a merchant or its employee would also have to note the CVV2 visually and record it, which is more likely to arouse the cardholder’s suspicion.

Supplying the CSC code in a transaction is intended to verify that the customer has the card in their possession. Knowledge of the code proves that the customer has seen the card, or has seen a record made by somebody who saw the card.

 

Posted in Best Practices for Merchants, EMV EuroPay MasterCard Visa, Point of Sale, Visa MasterCard American Express Tagged with: (Card Verification Value), (CVC2), American Express, atm, authorization data, bank/cardholder, card holder data, card identification number, card issuers, Card Not Present transactions, card number, card numbers, card security code, card validation code, card-not-present, card-present transactions, cardholder, cards, cash advance, chip cards, CID, code, Contactless card, credit, credit-card, CSC, customer, customer service, CVC1, CVV Number, CVV1, CVV2, Data Security Standard, debit, debit card, debit cards, device, Diners Club, Discover, fax, gateways, iCVV or Dynamic CVV, individual transaction, internet, issuer, JCB credit, magnetic stripe, mail, MasterCard, merchant, payment card, Payment Card Industry, payment card transactions, payment gateways, PCI-DSS, Personal Identification Number, PIN, point of sale, post transaction authorization, security codes, telephone, terminals, unique card code, virtual terminals, visa, web-based payment

Bad Credit? Here Are Ways To Get A Credit Card

Consumers know how hard it is to obtain a credit card, if your credit score isn’t up to par. A bad credit score can prevent you from getting credit and make it hard to purchase your day to day necessities. People with poor credit don’t know their options. There are a number of ways to get a credit card if you have a poor credit score. There will likely be road blocks and limitations in your search. You won’t have the same options available as someone with pristine credit. But you will be able to get a line of credit if you look in the right place.

COSIGNED CREDIT CARDS                                                                                                                              If you get a cosigner, you will be able to obtain a card that would not be available to you otherwise. The cosigner has to have good credit, and they are responsible for your debt if you can’t pay. Make sure your cosigner fully recognizes their obligations and what will happen if you are unable to pay.

GIVE AN EXPLANATION FOR POOR CREDIT                                                                                        Explain the circumstances behind your poor credit. You can add a 100-word statement to your credit report such as the loss of a job. If you can tell your story and convince creditors you are on the road to increasing your credit score, they may believe you are more likely to pay back your debts. Divorce and illness are two other instances where individuals may see a drop in their credit score. Make sure whatever you list is true.

IMPROVE YOUR CREDIT                                                                                                                              One of the most difficult options. Poor credit can seem extremely hard to repair. But there are choices, it is just a process that will take a significant period of time. If you have poor credit, you can open bank accounts and pay off your loans and credit cards on time. If you pay off your debt in a timely manner, your credit score will improve over time and you will gain access to more credit card options.

RETAIL STORE CARDS                                                                                                                               Retail stores often have store credit cards they offer customers. Retail stores are generally more willing to approve applicants without a stellar credit score. But these cards usually come with extremely high interest rates and relatively low credit limits, so make sure you fully understand the terms of the card before applying.

SECURED CREDIT CARDS                                                                                                                            You deposit some money into an account, and then a creditor will provide you with a line of credit equal to your deposit. It is essentially a down payment, and if you don’t pay your credit card bill, your creditor is entitled to the money in the account. This might not sound like a favorable position, but remember that secured credit cards can be used as a valuable tool to rebuild your credit. Make sure the card you apply for reports to a credit reporting agency. This will help you start building a credit history. SELECT A CREDIT

CARD DESIGNED FOR THOSE WITH POOR CREDIT                                                                                      There are a number of credit cards offered by Visa and MasterCard designed for people with poor credit. These cards have low limits, a significant number of fees and high interest rates. But for some people, it may be their best option. Talk to your bank’s administrators or with your current credit card company to see if they offer a credit card that fits your personal needs.

SUBPRIME CREDIT CARDS                                                                                                                    Another option for those with poor credit, but they are ripe with fees that many people who are already short on cash may not be able to handle. Interest rates can be dangerously high for those with poor credit, so beware of these cards. They are often a last resort for individuals who need access to credit. However, like secured credit cards, they can be used to rebuild credit. Make sure you read the fine print and understand the applicable fees before you apply for a subprime credit card. Again, make sure the card reports to a credit reporting agency so you start building a credit history. Finding a line of credit doesn’t have to be a difficult endeavor. If you know what you are looking for, you can find a line of credit that fits your personal needs without breaking the bank. There are limitations, as well as pros and cons, to many of the forms of credit available to those with poor credit scores, such as secured credit cards or subprime credit cards. But those options do give people choices they otherwise may not have, and they help you build credit, so that eventually you will have a greater number of options.

Posted in Best Practices for Merchants Tagged with: account, applicants, card, consumers, COSIGNED CREDIT CARDS, credit, credit card bill, credit history, credit limits, credit report, credit score, credit-card, creditor, customers, deposit, down payment, good credit, interest rates, low credit limits, MasterCard, payment, poor credit, RETAIL STORE CARDS, retail stores, SECURED CREDIT CARDS, store credit cards, SUBPRIME CREDIT CARDS, visa, Visa and MasterCard

CREDIT CARD NUMBER’S ANATOMY

CREDIT CARD NUMBER’S ANATOMY

The numbers on front of a credit card aren’t just random. They give away specific information about the card and where it comes from.

The first 6 digits of the credit card number is the Bank Identification number (BIN). This will tell the name of the credit card issuer.

Example: Travel or entertainment cards, such as American Express  cards, begin with a 3 . All Visa credit cards start with a 4, MasterCard with a 5, and 6 is dedicated to Discover.

The first six digits of the card, including the Bank Identification number, represent the issuer identification number. This identifies the bank that issued the card.

Of course, there’s the personal account number. This is made up of the seventh digit on, everything except the last number on the card.

The final digit on the credit card is known as the check digit or checksum. This number is set by something called the Luhn formula, patented by an IBM scientist in 1960. It’s a formula that uses the numerals in your card’s account number to verify that it’s valid. Various combinations of the card’s digits must ultimately add up to a number divisible by 10.

The formula is mostly used to protect against input errors. Let’s say you enter in the wrong numbers on an online shopping site. The formula will compute that the digits don’t add up right, telling you you’ve entered an invalid card number. That last digit of your credit card makes sure the formula works like it’s supposed to.

Now you know that there’s a lot of information on that little card in the wallet.

Posted in Best Practices for Merchants, EMV EuroPay MasterCard Visa, Visa MasterCard American Express Tagged with: (BIN), account number, American Express cards, Bank Identification number, card, card issuer, card number, check digit or checksum, credit, credit card issuer, credit card number, credit-card, Discover, entertainment cards, issuer identification number, MasterCard, online shopping site, personal account number, Visa credit cards

iPad Point-Of-Sale (POS) System

If your businesses considering an iPad point-of-sale (POS) system, you may be up for a challenge. Not only can the plethora of providers be overwhelming, but you must also remember that not all iPad POS systems are created equal. iPad POS systems do more than process payments and complete transactions. They also offer advanced capabilities that streamline operations. For instance, they can eliminate manual data entry by integrating accounting software, customer databases and inventory counts in real time, as each transaction occurs. With these systems, you get 24/7 access to sales data without having to be in the store. The challenge, however, is knowing which provider and set of features offer the best iPad POS solution for your business. iPad POS systems vary in functionality far more than the traditional POS solutions and are often targeted at specific verticals rather than the entire market. For that reason, it’s especially important to compare features between systems to ultimately select the right system for your business.

To help you choose a provider, here are things to look for in an iPad POS system.

Backend capabilities

One of the biggest benefits of an iPad POS system is that it offers advanced features that can streamline your entire operations. These include backend processes, such as inventory tracking, data analysis and reporting, and social media integration. As a small business, two of the most important time saving and productivity-boosting features to look for are customer relationship management (CRM) capabilities and connectivity to other sales channels. You’ll want an iPad POS that has robust CRM and a customizable customer loyalty program. It should tell you which products are most and least frequently purchased by specific customers at various store locations. It should also be able to identify the frequent VIP shoppers from the less frequent ones at any one of your store locations, creating the ultimate customer loyalty program for the small business owner. If you own an online store or use a mobile app to sell your products and services, your iPad POS software should also be able to integrate those online platforms with in-store sales. Not only will this provide an automated, centralized sales database, but it can also help increase total sales. You should be able to sell effortlessly through online, mobile and in-store channels. Why should your customers be limited to the people who walk by your store? Your iPad POS should be able to help you sell your products through more channels, online and on mobile. E-commerce and mobile commerce (mCommerce) aren’t just for big box retailers.

Cloud-based

The functions of an iPad POS solution don’t necessarily have to stop in-store. If you want to have anytime, anywhere access to your POS system, you can use one of the many providers with advanced features that give business owners visibility over their stores, its records and backend processes using the cloud. The best tablet-based POS systems operate on a cloud and allow you to operate it from any location you want. An iPad POS provider, with a cloud-based iPad POS system, businesses can keep tabs on stores in real time using any device, as well as automatically back up data. This gives business owners access to the system on their desktops, tablets or smartphones, even when not inside their stores. Using a cloud-based system also protects all the data that’s stored in your point of sale so you don’t have to worry about losing your data or, even worse, getting it stolen. Because the cloud plays such a significant role, businesses should also look into the kind of cloud service an iPad POS provider uses. In other words, is the system a cloud solution capable of expanding, or is it an app on the iPad that is not dependent on the Internet? Who is the cloud vendor? Is it a premium vendor? The type of cloud a provider uses can give you an idea about its reliability and the functions the provider will offer.

Downtime and technical support

As a small business, you need an iPad POS provider that has your back when something goes wrong. There are two types of customer support to look for: Downtime support and technical support.

iPad POS systems are often cheaper and simpler than traditional systems, but that doesn’t mean you can ignore the product support needs. The POS is a key element of your business and any downtime will likely result in significant revenue loss. You could, for instance, experience costly downtime when you lose Internet connectivity. iPad POS systems primarily rely on the Web to perform their core functions, but this doesn’t mean that when the Internet goes down, your business has to go down, too. Many providers offer offline support to keep your business going, such as Always on Mode. The Always on Mode setting enables your business to continue running even in the event of an Internet outage. Otherwise, your business will lose money during a loss of connectivity. Downtime can also happen due to technical problems within the hardware or software. Most iPad POS providers boast of providing excellent tech support, but you never really know what type of customer service you’ll actually receive until a problem occurs.

Test the friendliness of customer service reps by calling or emailing the provider with questions and concerns before signing any contracts. This way, you can see how helpful their responses are before you purchase their solution. Your POS is the most important device in your store. It’s essentially the gateway to all your transactions, customer data and inventory. If anything happens to it, you’ll need to be comfortable knowing that someone is there to answer your questions and guide you through everything.

Grows with your business

All growing businesses need tech solutions that can grow right along with them. Not all iPad POS systems are scalable, so look for a provider that makes it easy to add on more terminals and employees as your business expands. Pay attention to how the software handles growth in sales and in personnel. As a business grows, so does it sales volume and the required software capabilities. Some iPad POS solutions are designed for very small businesses, offering very limited features and transactions. If you have plans for growth, look for a provider that can handle the changes in transactions your business will be going through. Find out about features and customization. Does the system do what you want it to do? Can it handle large volume? How much volume? What modules can you add, and how do you interface to third parties? You should also consider the impacts of physical expansion and adding on new equipment and employees. If there are plans in the future for you to open another store location, you’ll need to make sure that your point of sale has the capabilities of actually handling another store location without adding more work for you. If you plan on hiring more employees for your store, you’ll also want to know that the solution you choose can easily be learned, so onboarding new staff won’t take up too much of your time.

Security

POS cyber attacks have risen dramatically over the past couple of years, making it more critical than ever to protect your business. Otherwise, it’s not just your business information at risk, but also your reputation and entire operations. iPad POS system security is a bit tricky, however. Unlike credit card swipers and mobile credit card readers that have long-established security standards namely, Payment Card Industry (PCI) compliance — the criteria for the iPad hardware itself as a POS terminal aren’t quite so clear-cut. Since iPads cannot be certified as PCI compliant, merchants must utilize a point-to-point encryption system that leaves the iPad out of scope. This means treating the iPad as its own system, which includes making sure it doesn’t save credit-card information or sensitive data on the iPad itself. To stay protected, look for PCI-certified, encrypted card swipers.

 

 

Posted in Best Practices for Merchants, Mobile Point of Sale, Point of Sale Tagged with: (POS) systems, accounting, app, business, card, cloud-based, credit, credit card readers, credit-card, crm, customer, customer relationship management, customer support, data, data analysis, database, desktops, e-commerce, inventory, iPad Point-Of-Sale, loyalty program, mcommerce, mobile, mobile app, mobile commerce, online, online platforms, Payment Card Industry, payments, PCI, platforms, POS, POS solution, products, sales, Security, security standards, services, Smartphones, social media, software, tablets, terminal, transactions, web

Leasing or renting a Credit Card Terminal should not be an Option

One of the greatest mistake any merchants can do is deciding to lease or rent a credit card terminal rather than getting one for FREE. While the practice of leasing has declined in recent years in the US it is all they are doing in Canada whether the merchant is renting from a bank or leasing from a sales rep. In both the US and Canada some sales reps will still strive and persuade you that leasing is the perfect choice for you. You’re not obliged to pay any cash up front, or You’re assured a substitute terminal if yours breaks. Those selling statements may sound decent, but they’re not. A terminal lease will end up costing you hundreds, if not thousands of dollars more than what it’s worth. With the fees you’ll end up disbursing to lease a terminal, you could buy that same terminal in a matter of months. If you lease a terminal you could also be forced to buy equipment insurance, which is an additional expense. You may even have to give back the terminal at the end of your lease!

Why Purchasing a Credit Card Terminal is a Good Choice

A terminal lease brings with it a 48 month lease contract. That is a lengthy time to be giving for a terminal that doesn’t cost more than $300 today. Why not just buy one entirely? The cost of the purchase is absolutely tax deductible. Even if you can’t come up with the money to pay cash for your terminal, you can just put it on a business credit card. The interest given is still tax deductible, and let’s says you have a 19 percent credit card rate, if you pay the same amount of $/month toward your credit card balance that you would have paid toward your lease, you’ll have the terminal paid off in less than a year. That’s a savings that can be better channelled into budding and growing your company.

FREE Credit Card Terminal

For those of you, who feels that because of the ever changing technology, they do not want to continue buying new terminals, there are FREE Terminals offers all across Canada. So, with your FREE terminals, there is no out of pocket set up expense and your current processing rate can be the same or reduced significantly.  If your terminal breaks or if there is a better technology that develops, the company automatically ships to you at no charge an upgraded terminal. So, if you can’t buy one, see if your credit card processor will give you one for FREE.

If you’re stuck in a lease, you most likely won’t able to end the contract. A lease term is usually 48 months, so you’ll have to look up when that term terminates before you can leave without a consequence. As an alternative, do your own research and analyze the total expense of leasing vs. purchasing. Better yet, strongly consider the benefits of not having to worry about anything, at one point is that FREE terminal usually has $25 minimum expense to the merchant. Mom taught you there was no free lunch didn’t she? If you decide to return the FREE terminal, you may find a RETURN EQUIPMENT FEE or an EARLY RETURN FEE of that FREE EQUIPMENT.

Posted in Best Practices for Merchants, Credit Card Reader Terminal Tagged with: bank, card, cash, credit, credit card processor, credit card terminal, credit-card, fees, Merchant's, processor, tax, terminal

For a Five Dollar purchase, Cash or Card?

A cup of coffee, a  pack of chewing gum., a newspaper at the airport. For even the smallest, most casual purchase, credit cards and debit cards are replacing cash as the preferred form of payment. One in three usually uses a credit card or a debit card for in-person purchases of less than $5. Eleven percent prefer credit cards, 22% debit cards and 65% cash, but the generational divide is striking. A slight majority (51 percent) of consumers 18-29 prefer plastic to cash, the only age group to do so. A preference for cash becomes stronger in each advancing age bracket, until at age 65-plus, 82 percent prefer cash.

Survey conducted by landline and cellphone found that: Credit cards and debit cards are used more frequently for small purchases by those employed full time (42%) or part time (34%) than for the unemployed (23%). People with children are more likely to use the cards for small purchases (41%) than those without children (30%), perhaps because parents have less time to wait around for change. Income doesn’t seem to be much of a differentiator, except for those near the bottom of the scale. A combined 38% of those making $75,000 or more preferred plastic for small purchases, compared with 43 percent of those making $50,000 to $74,900, 32% of those earning $30,000 to $49,900 and only 23% percent of those making less than $30,000.

Politically, we’ve finally found something on which we all can agree. Thirty percent of Democrats and a nearly identical 28% of Republicans favor credit cards or debit cards rather than cash for small purchases. Interestingly, those describing themselves as politically independent also were more independent from cash, 40% of them prefer plastic for such transactions.

The casual use of plastic is moving steadily through age brackets and already has a firm grip not only on millennials, but also increasingly on Gen Xers. Crunched another way, the data show that if you’re 49 or younger, you’re almost as likely to pay for a $5 purchase with plastic as you are to pay with cash. Fifty two percent prefer cash, 46% prefer debit or credit cards. Now, if you’re 50 or older, you’re still somewhat unlikely to pay for a $5 purchase with plastic. Seventy seven percent still prefer cash, with 21% reaching for debit cards or credit cards. Those who graduated from or attended college are significantly more comfortable than others with using plastic for small purchases.

A combined 39% of those with college degrees prefer debit cards (21%) or credit cards (18%) over cash (59%). Only 16% of those who have not attended college usually use debit cards for purchases of less than $5, along with only 6 percent who prefer credit cards for that purpose.

The trend is clear. Regardless of some differences in magnitude based on demographic factors, plastic is replacing cash as the currency of choice even for small purchases. Plastic use will increase for small purchases, both for debit and credit cards.

Why the shift to cards There are many reasons:

Technological advancements at the point of sale have made it just as fast to pay by plastic as by cash. Rewards have become a common feature of credit cards, with two out of three credit cards offering rewards, encouraging rewards chasing. Debit cards, with their balances available instantly and online have largely replaced paper checks and tedious manual records.

Financial institutions have spent decades persuading consumers to use and merchants to accept cards universally. Small purchases represent particularly appropriate uses of a debit card, assuming you don’t get carried away and overdraw the card-linked bank account. Why keep going to the bank and then carry cash if you don’t have to? Moving away from cash and moving toward using cards for even small purchases is more convenient.

Debit cards are everywhere already, but because their use can’t be reported to the credit bureaus and thus, they don’t build credit, they should only be used as a matter of convenience. People who frequently use credit cards for small, casual purchases also could overdo it, but probably not to a great degree. It would take a lot of lattes to send someone into credit counseling or bankruptcy court. In truth, we like the idea of using credit cards frequently for small, manageable expenses. This gives users the benefit of an active credit history, but leaves them with monthly bills that are small enough to pay off in full, so they don’t have to pay any interest. It’s getting to the point where, if I’m out and about, I’m using plastic the whole time. It’s just so much easier.

Posted in Best Practices for Merchants Tagged with: account, bank, bank account, bankruptcy, bills, cards, cash, cellphone, credit, credit counseling, credit history, data, debit cards, financial, financial institutions, Merchant's, payment, transactions

EMV A Requirement Not A Choice

EMV, which stands for Europay, MasterCard and Visa, and is slated to be mandated across the United States starting in October 2015 and automated fuel dispensers have until October 2017 to comply. Unlike magnetic swipe cards, EMV chip cards encrypt data and authenticate communication between the card and card reader. Additionally, chip card user is prompted for a PIN for authentication.

Why are those dates important? Companies lose $5.33 billion to fraud today, with card issuers and merchants incurring 63 and 37 percent of these losses, respectively. Under the EMV mandate, merchants who do not process chip cards will bear the burden of the issuer loss. By accepting chip card transactions, merchants and issuers should see a reduction in fraud.

Overcoming Barriers to EMV Adoption

Given the significant barriers to EMV adoption, it may be tempting for merchants to meet minimum requirements for accepting EMV payments. However, medium to large retailers should also consider the bigger picture of customer security and peace of mind.

Some key critical success factors for a payment initiative of this size include:

Business Continuity Architecture: As with all payment systems, it is imperative to have the EMV system running at all times. The solution should preferably have Active-Active architecture across multiple data centers and have a low Recovery Point Objective (the point in time to which the systems and data must be recovered after an outage).

Cost Benefit Analysis: Take a top down approach and decide accordingly on the scope of the analysis. This will ensure that decisions on scope are made on basis of quantitative data and not just qualitative arguments.

Phased Approach: To overcome time or cost overage in a project of this scope and complexity, retailers should try using an iterative approach for development. The rollout can be divided into multiple releases of six to seven months, which will provide the opportunity to review, capture lessons learnt, and improve subsequent releases.

Proactive Monitoring Alerts: Considering the criticality of business function carried out by EMV, tokenization and payment gateway, a vigorous supervising environment must be defined to perform proactive and reactive monitoring. It should take into consideration the monitoring targets, tools, scope and methods. This will provide advance visibility to the failure points and better ensuring maximum system availability.

Resilience Testing: Typically in a software project, the testing is limited to the unit, integration, performance and user acceptance. However, due to the critical nature of the applications and systems involved, robust resiliency testing is vital. This will ensure that there are no single points of failure and the system remains available when running in error conditions.

Stakeholder Identification: This is a key step to ensure that you have varied perspectives from all departments and their support. It will keep your organization from being blindsided and reduce the risk of disagreements in later stages of the program. Key stakeholders should include Store Operations, Card Accounting, Loss Prevention, Contact Center and IT & Data Security.

Organizations should adopt a five step approach to implement a secure, robust and industry-leading payment solution:

Encryption – Point to point encryption will ensure card data is secure and encrypted from the point of capture to the processor. Usually, merchants use data encryption that is not point to point, rendering their organization vulnerable to data breaches. Software encryption is the most common form of encryption, as it is easily installed and quires little or no hardware upgrades; however, it is less secure, may expose encryption keys, and is prone to memory scanning attacks. Hardware encryption is considered more secure but requires more costly terminal upgrades. Hardware encryption is designed to self-destruct the keys if tampered, but is not well-defined as very limited headway has been made in this space. 

Tokenization – Build a Card Data Environment (CDE) that will host a centralized card data storage solution. Only limited applications with firewall access and capability to mutually authenticate via certificates can access CDE and receive card data. The rest of the applications will have tokens which are random numbers. This architecture will ease the merchant’s burden with existing and emerging PCI Data Security Standards.

Payment Gateway – Perform a risk assessment on the current payment gateway and identify gaps in functionality, manageability, compliance, scalability, speed to market and best practices. Determine the alternatives to mitigate the risks. Some of the important aspects of a leading payment gateway solution are support for all forms of credit, debit, gift cards and check transactions. Its ability to work with any acquirer, in-built encryption abilities, support for settlement and reconciliation must also be kept into consideration.

Settlement, Funding and Reconciliation – A workflow-based system to handle chargebacks and the automation of chargeback processing will greatly reduce labor-intensive work and enhance the quality of data used for settlement and reconciliation. Upgrades to the existing receipt retrieval system may be needed.

Card fraud is on the rise in the U.S., and merchants are the primary target for stealing information. With the EMV deadline just over a year away, the responsible retailer must take steps to prepare now. Although EMV implementation might seem overwhelming to merchants, they should start their journey to secure payments rather than wait for a looming deadline. Solutions such as data encryption and tokenization should be used in combination with EMV to implement a robust payment solution to better protect merchants against fraud. By proactively adopting EMV payment solutions, merchants can stay ahead of the regulatory curve and better protect their customers from fraud.

 

Posted in Best Practices for Merchants, Credit Card Security, EMV EuroPay MasterCard Visa, Payment Card Industry PCI Security, Visa MasterCard American Express Tagged with: authentication, automation, card, card data, Card Data Environment, card fraud, card issuers, card transactions, CDE, chargeback, chargeback processing, check, check transactions, chip, chip cards, credit, customer, customer security, data, data breaches, data encryption, data security, debit, EMV, emv chip cards, EuroPay, fraud, gateway, Gift Cards, host, integration, magnetic swipe cards, MasterCard, Merchant's, payment, payment gateway, payment solution, payment systems, PCI, PCI Data Security Standards, PIN, processor, retailers, Security, software, swipe, terminal, tokenization, tools, visa

The push that mobile payments need – iPhone 6

While Apple doesn’t talk about future products,latest report that the next iPhone would include mobile-payment capabilities powered by a short-distance wireless technology called near-field communication or NFC. Apple is hosting an event on September 9^th, that’s widely expected to be the debut of the next iPhone or iPhones. Mobile payments, or the notion that you can pay for goods and services at the checkout with your smartphone, may finally break into the mainstream if Apple and the iPhone 6 get involved.

Apple’s embrace of mobile payments would represent a watershed moment for how people pay at drugstores, supermarkets or for cabs. The technology and capability to pay with a tap of your mobile device has been around for years, you can tap an NFC-enabled Samsung Galaxy S5 or NFC-enabled credit card at point-of-sale terminals found at many Walgreen drugstores, but awareness and usage remain low.  Apple has again the opportunity to transform, disrupt and reshape an entire business sector. It is hard to overestimate what impact Apple could have if it really wants to play in the payments market.

Apple won’t be the first to enter the mobile-payments arena. Google introduced its Google Wallet service in May 2011. The wireless carriers formed their joint venture with the intent to create a platform for mobile payments. Apple tends to stay away from new technologies until it has had a chance to smooth out the kinks. It was two years behind some smartphones in offering an iPhone that could tap into the faster LTE wireless network. NFC was rumored to be included in at least the last two iPhones and could finally make its appearance in the iPhone 6. The technology will be the linchpin to enabling transactions at the checkout.

Struggles

The notion of turning smartphones into true digital wallets including the ability to pay at the register, has been hyped up for years. But so far, it’s been more promise than results. There have been many technical hurdles to making mobile devices an alternative to cash, checks, and credit cards. NFC technology has to be included in both the smartphone and the point-of-sale terminal to work, and it’s been a slow process getting NFC chips into more equipment. NFC has largely been relegated to a feature found on higher-end smartphones such as the Galaxy S5 or the Nexus 5. There’s also confusion on both sides, the merchant and the customer, on how the tech works and why tapping your smartphone on a checkout machine is any faster, better or easier than swiping a card. There’s a chicken-and-egg problem between lack of user adoption and lack of retailer adoption. It’s one reason why even powerhouses such as Google have struggled. Despite a splashy launch of its digital wallet and payment service more than three years ago, Google hasn’t won mainstream acceptance or even awareness  for its mobile wallet. Google hasn’t said how many people are using Google Wallet, but a look at its page on the Google Play store lists more than 47,000 reviews giving it an average of a four-star rating.

The Puzzle

Apple has quietly built the foundation to its mobile-payment service in Passbook, an app introduced two years ago in its iOS software and released as a feature with the iPhone 4S. Passbook has so far served as a repository for airline tickets, membership cards, and credit card statements. While it started out with just a handful of compatible apps, Passbook works with apps from Delta, Starbucks, Fandango, The Home Depot, and more. But it could potentially be more powerful. Apple’s already made great inroads with Passbook, it could totally crack open the mobile payments space in the US. Apple could make up a fifth of the share of the mobile-payment transactions in a short few months after the launch. The company also has the credit or debit card information for virtually all of its customers thanks to its iTunes service, so it doesn’t have to go the extra step of asking people to sign up for a new service. That takes away one of the biggest hurdles to adoption. The last piece of the mobile-payments puzzle with the iPhone is the fingerprint recognition sensor Apple added into last year’s iPhone 5S. That sensor will almost certainly make its way to the upcoming iPhone 6. The fingerprint sensor, which Apple obtained through its acquisition of Authentic in 2012, could serve as a quick and secure way of verifying purchases, not just through online purchases, but large transactions made at big-box retailers such as Best Buy. Today, you can use the fingerprint sensor to quickly buy content from Apple’s iTunes, App and iBooks stores.

The bigger win for Apple is the services and features it could add on to a simple transaction, if it’s successful in raising the awareness of a form of payment that has been quietly lingering for years. Google had previously seen mobile payments as the optimal location for targeted advertisements and offers. It’s those services and features that ultimately matter in the end, replacing a simple credit card swipe isn’t that big of a deal.

 

Posted in Best Practices for Merchants, Mobile Payments, Mobile Point of Sale, Smartphone Tagged with: app, Apple, card, card swipe, cash, checkout machine, checks, chips, credit, credit card swipe, credit-card, customer, debit card, Digital wallets, fingerprint recognition, fingerprint sensor, Galaxy S5, Google Wallet, iOS, Iphone, market, merchant, mobile, mobile device, mobile payment, mobile wallet, Near Field Communication, network, Nexus 5, nfc, payment, payment service, platform, point of sale, products, sensor, services, smartphone, software, statements, swiping card, terminals, transactions, wireless technology

More About High Risk Credit Card Processing

High risk credit card processing is electronic payment processing for businesses deemed as HIGH RISK by the MERCHANT SERVICES INDUSTRY

The high risk segment of payment processing has become more important as banks and ISO’s have begun to tighten up their credit restrictions and underwriting policies. Businesses are classified as high risk primarily because of their product or service and the way they go to market. In merchant services, risk is related to CHARGEBACKS or customer disputes.

The more likely a business to have chargebacks, the higher risk the business. For instance, online businesses selling a weight loss product through a free trial offer, is more likely to have chargebacks than a retail store selling the same weight loss product.

Merchants are often unaware their business falls into the high risk category when they first start shopping for a merchant account. Getting a high risk merchant account can be difficult.

These providers have more stringent requirements and the application process is longer compared to traditional merchant account providers.

High risk businesses should expect to pay higher rates and fees for payment processing services. As a general rule of thumb, merchants should count on paying at least more than a traditional merchant account. Most high risk merchant accounts also require a contract of at least 18 months, whereas low risk providers offer accounts without cancellation fees or contracts.

ROLLING RESERVES are also a big part of high risk credit card processing. Most high risk merchants have some sort of rolling reserve placed on the account, especially new accounts without any processing history. A Reserve refers to an account where a percentage of the funds from transactions are held in reserve to cover against any chargebacks or fees that the processor may not be able to collect from the merchant. This is similar to a security deposit, but merchants don’t have to pay it up front. Reserves are a pain point for many small high risk merchants, but they are definitely necessary and without them, processors would not accept any high risk merchants at all.

What Businesses Are High Risk?

As mentioned earlier, businesses are usually classified as high risk due to the product or service they offer, however merchants with severely damaged credit or a recent bankruptcy can also be considered high risk. Below are just of the few common high risk merchant categories:

Adult Websites

Cigars & Pipe Tobacco Online

Collection Agencies

Credit Repair

Debt Consolidation

E-Books & Software

Electronic Cigarettes

Firearms – Online

High Ticket & High Volume

Medical Marijuana Dispensaries

Multi Level Marketing & Business Opportunities

Nutraceuticals like weight loss supplements, cleansers etc.

Penny Auctions

Sports Betting Advice

Ticket Brokers – Online Tickets

TMF Merchants

Travel & Timeshare

Unfortunately this list is growing and some credit card processing companies even classify any start up Internet business, that doesn’t have extensive financials to be high risk. With the recent economic recession in the United States, there has been an increase in these start up Internet ventures. People are either looking to supplement their income or start their own business instead of looking for work.

How To Protect Your Business

Accepting credit cards is the single most important part of most online businesses. Unfortunately, many successful businesses go under after having their merchant account shut down. High risk merchants should always be cognizant of their merchant account and pay attention to chargeback percentages. Below are some tips for high risk merchants looking for payment processing solutions.

Be Upfront: Make sure your processor knows exactly what you sell and how you market the product/service. If they don’t accept your business type, keep shopping for a new merchant account provider. Many merchants will try to fly under the radar by not revealing all their products or fully disclose their marketing methods to the processor. This is a bad move, the processor will eventually find out the details about your business. This is usually from doing an audit on your transactions and contacting your customers.

Negotiate Every 3 Months: Credit card processing companies underwrite applications based on previous processing history. If there is no previous history, the account is riskier and the terms offered are usually more expensive and restrictive. You can always re-negotiate your rates, reserves and other contract terms with your current processor. Once they have 3 months of history to evaluate, they may be able to offer you a better deal. Three months of history is the magic number for most processors. If you applied without the previous history and were declined, there is a chance the same processor will approve your application if you provide 3 months of previous statements.

Prepare For The Worst: All high risk merchants should keep at least 2 active merchant accounts, from different providers. You never know when underwriting guidelines might change, or you may have an influx of chargebacks. Having a backup account or even multiple back up accounts is a good idea. Many high risk providers offer a load balancing gateway, which allows for multiple merchant accounts to be integrated into one payment gateway. This way you can spread transactions across multiple accounts, through one shopping cart/gateway.

 

Posted in Best Practices for Merchants Tagged with: account, account providers, accounts, banks, card, chargebacks, contract, credit, credit card processing, credit restrictions, customer, customers, deposit, electronic payment, fees, financials, gateway, High risk credit card, High Ticket & High Volume, ISOs, low risk, marketing, merchant, merchant account, merchant services, multiple accounts, payment gateway, payment processing, processing services, processing solutions, processor, product, Rates, reserves, retail store, risk, ROLLING RESERVES, Security, security deposit, service, shopping cart, statements, terms, TMF Merchants, transactions, travel, underwriting

ECB named four key payment systems as systemically important

The new ECB regulation, which came into force earlier this month, covers large-value and retail payment systems in the euro area operated by both central banks and private entities. The aim is to promote the smooth operation of safe and efficient payment systems through strong management of legal, credit, liquidity, operational, general business, custody, and investment risks.  In identifying systemically important payment systems, the ECB looked at the value of payments settled, market share, cross-border relevance and provision of services to other infrastructures.  If a system is deemed to meet at least two of these four criteria it makes the list.

Target2 – operated by the Eurosystem.

Euro1 and Step2-T – both run by EBA Clearing.

Core(Fr) – French bank joint initiative, have been identified.

The list will be reviewed annually based on updated data. With this regulation, Europe is consolidating international practice for the oversight of Sips into EU law, as with past efforts for other financial market infrastructures, such as the European Market Infrastructure Regulation for the supervision of central counter parties and trade repositories and the ongoing regulatory initiative for central securities depositories.

Posted in Financial Services Tagged with: bank, central banks, credit, data, depositories, financial market, payment, payment systems, retail payment, securities