300-YEAR-OLD COIN WITH A 300-YEAR-OLD HOLE

This 300-year-old coin around my neck. It was off of a Spanish Shipwreck known as the Shipwreck of 1715. When I first saw it, I noticed a little hole with a speck of a diamond. I questioned the jeweler about it, why would you drill a hole in a 300-year-old coin and damage this 300-year-old treasure? The jeweler preceded to tell me that it was a 300-year-old hole.

Think about how we used currency 300 years ago. There were no banks, no financial institutions to hold merchants money. So if I had a bunch of money, I had it on a wire or had it in a box. I may have kept my money in my mattress. People would keep their money on a wire, punch holes in the coins, string the money through the wire and then go back to business on their horse and buggy, or however they got from point-to-point 300 years ago. If you have ever heard a phrase that the business owner started his business on a shoe string, you now know where the phrase originated.

What I found amazing in this one coin that I wear is that, It has thousands of transactions in its history. Who knows what was bought and sold with this very coin? Whether it was goats or chickens, a piece of property somewhere, or a boat ride to the states, or whatever it might be. There is no documented history behind each one of those transactions.

Today, when National Transaction processes a transaction for a merchant, we know the date and time. We know the amount of sale, we probably know the email address and the owner zip code, we actually know quite about the information around that transaction.

Many articles are written that answer the who, what, when, where and why questions with today’s electronic transactions. We have four of the five answers. We know who, what, when and where. The only thing that we don’t know is why the customer bought the item.

If this coin had today’s technologies there would have been thousands of transactions that this coin could have shared. The story of those purchases would be fascinating.

All business owners wants to make a sale. Each time they do make a sale, we recommend capturing any and all contact information. This customer is a buyer! Today, most people have an email address or cell phone number. If we don’t capture the customer’s information we have just ignored the single most important thing in any business’s life cycle: the customer.

 

Posted in Best Practices for Merchants Tagged with: banks, business owner, currency, customer, financial institutions, Merchant's, purchases, transactions

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

Big Data Not Just for Customer Insights

Over the last couple of years, Big Data has become a huge buzzword in the business world. Whether this data comes from social networks, purchase histories, Web browsing patterns or surveys.

The vast amount of consumer information that brands can gather and analyze has allowed them to improve and personalize their customers’ experiences. But for all the attention Big Data has received, many companies tend to forget about one application of it…Employee Engagement.

When done in the right way, tracking, analyzing and sharing employee performance metrics can be very beneficial for both you and your staff. One of the things that is very powerful is being able to analyze real-time information, boil it down into performance data and empower employees with reports from that data. If you can provide employees with data to do their job better in a succinct, actionable way, it’s very motivating.

The more Big Data can be incorporated into an intimate individual experience, the better. This demonstrates to the employee that the experience is not just off the shelf and that it is relevant to the person. This personal relevance is shown to deliver higher engagement.

Applying Big Data analytics to employees’ performance helps identify and acknowledge not only the top performers, but the struggling or unhappy workers as well.

If you want to introduce analytics technology to your employee engagement strategies, below are a few tips to help you.

Find a program that integrates with your current systems. For any new software that you implement within your company, it’s important to make the transition as seamless and simple for your employees as possible.

The software has to work where the employees work already. You can’t make them switch tasks and go to another platform to aggregate the data stream. The software should genuinely assist the end user. Your choice of software should be a grassroots decision, and you should have buy-in from your employees before you ask them to use the new system.

Consider how employees will view themselves and others. Once you introduce performance and engagement analytics into your company, you’ll have to consider how that program fits into employee relationships and workplace culture as a whole.

A company needs to take into consideration the actions of the employee’s co-workers and how to make these data points of interest to the employee. This helps to foster a respected and trusting engagement experience and data needs to be used to build trust. No matter what solution you choose, an analytics program moves you away from the traditional manual reporting process of performance measurement; helping make your staff more efficient, motivated and engaged.

Business software is in the beginning stages of being useful for performance measurement. Businesses have not pushed for innovation as hard as consumers have, but now that’s starting to change. Think about business processes in a different way and gather data in a way that matters.

Select and focus on the most important metrics.Analytics programs can pull and process data for a large number of metrics. Even when applying Big Data to customer service, many businesses struggle to keep up with the volume of information pouring in. Narrowing down your focus to only the most important key performance indicators (KPIs). Don’t introduce too many metrics, it becomes too difficult and confusing. If you can boil it down to some very simple statistics, like a score that incorporates the elements you want, everyone can focus on consolidated KPIs.

 

Posted in Best Practices for Merchants Tagged with: big data, Business software, consumer, customer, customer service, data, key performance indicators, program, service, social networks, software, web, Web browsing patterns

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

4 Ways That Ecommerce Merchants Misuse Data

The use of customer data can help you make smarter decisions that can improve your store, enhance the shopper experience, and increase conversions. When used incorrectly, however, data can waste resources and alienate your visitors.

Ways that ecommerce merchants commonly misuse data.

Collecting Unnecessary Data

Big Data analytics and reporting tools can put a lot of information in your hands, but that doesn’t mean you should collect and track every single metric. Don’t waste space and bandwidth collecting information that is not essential in your business. Unnecessary data can create noise that slows down the analytics process. Gathering and analyzing information you don’t need can distract you from the metrics that matter. Collecting too much data can create security headaches. The best defense against breaches is to not have data to steal. If you don’t need it, don’t collect it.

Determine your store’s key performance indicators before collecting any information. A good way of doing this is to examine each metric and ask yourself whether it’s just  nice to know or is something that you can actually act on. While it may be nice to know that a particular customer has a high Klout Score, that metric probably won’t do anything for your bottom line. It’s better to not bother with it. Key metrics vary from one business to the next. For most ecommerce sites, the important metrics usually include conversion rate, traffic sources, and on-site browsing activities.

Creeping-out Shoppers

Most retailers do this inadvertently when they’re trying to customize the shopper experience. A certain amount of personalization can provide value and convenience to users, but you also have to draw the line between cool personalization and creepy. Sending emails with tailored product recommendations is a good way to increase conversions. But you have to be careful with how you execute it, so that you don’t appear too intrusive. The same goes for remarketing banner ads.

Ignoring Qualitative Information

Numbers can produce many insights, but focusing solely on that data can create an incomplete view of your company. Best data strategies make use of both quantitative and qualitative information. Go beyond the numbers to get the pulse of your customers by collecting feedback through social interactions, customer service logs, surveys with open-ended questions and more. Qualitative information can complement and validate the hard numbers.

Using Data to Justify a Decision or Hypothesis

When it comes to data collection, many merchants fall into the confirmation bias trap, wherein they interpret the information to confirm their existing beliefs or to justify their decisions. Using data this way causes you to ignore information or results that aren’t in line with your beliefs and could result in you missing opportunities. Say a company has so much faith in its new marketing strategy that when website traffic improves, the staff deems the campaign a success without looking at the conversion or retention rates. If the staff had ignored initial biases and looked at the big picture instead, they could have identified flaws and found ways to correct them. The key to addressing this is to have an open mind when interpreting information. This can be difficult, especially when you’re too close to your business. Consider a third-party specialist who can remain objective, to help make the right decisions.

 

Posted in Best Practices for Merchants, e-commerce & m-commerce Tagged with: breaches, business, conversion rate, customer, customer data, customer service, data, ecommerce, ecommerce merchants, Merchant's, rate, retention rates, Security, sources, tools, traffic

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

Unified MPOS?

The move to mobile point of sale (mobile POS) is radically changing the face of customer interactions and payments, as both customers and merchants grow increasingly comfortable with the concept of mobile payments. In the current, crowded marketplace most mobile payment solutions are not compatible with each other. Instead of unifying the payment experience they create islands separated by technology or usage that are tailored to individual providers in the market. Multiple devices are currently needed in-store to process different payment types and the challenge is how they can make payments unified in such a way that only one device is needed in store.

The use of cash by customers also adds a level of complication to the mobile POS story. The removal of IDM terminals, removal of customer queues and ability for customers to simply walk up and pay an assistant or to leave a store and have their bank card automatically debited certainly suits the expectations of customers today, however a large number of customers still use traditional cash methods to pay for goods and services. A number of stores that have gone down the route of implementing mobile POS now have a problem dealing with cash because the wandering shop assistants and personal shoppers can only accept card or web-based payment options. The future for mobile POS has potential to be bright, a dominant player will have to emerge in the market. This will break down the technology barriers and usage barriers between different players. The success to mobile POS lies in the payment process being truly unified with one device in one place and very seamless workflow. This will be very complicated thing to achieve, there have been a lot of attempts and a lot of false starts in the history of mobile POS. MPOS will be the future. Five years from now people will be amazed that they did transactions with landlines. NO child will ever see a telephone with a cord attached. Never a popcorn on top of the stove since we developed microwave ovens. Technology changes, and we are slow to adopt new stuff. Once we change we don’t know how we did without it.

Posted in Best Practices for Merchants, Mobile Payments, Mobile Point of Sale, Point of Sale, Smartphone Tagged with: bank, card, cash, customer, devices, IDM terminals, Merchant's, mobile, mobile point of sale, MPOS, payment solutions, payment types, payments, point of sale, POS, provider's, services, technology, terminals, web-based payment

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

UPS discovered malware at 51 of its US stores

Package delivery giant UPS has become the latest company to admit that customer payment card details may be at risk after it discovered malware at 51 of its US stores. In a statement, UPS says that customers who used credit and debit cards at 51 of its 4470 franchised sites between 20 January and 11 August are at risk. Names, postal and email addresses and payment card information may all be compromised, but UPS says that it has no evidence of any fraud, and that the malware has now been eliminated. Earlier this month the US government took the step of putting out an alert warning retailers about a new family of malware, dubbed Backoff, targeting point-of-sale systems. The UPS Store, received a bulletin from the government among many other US retailers that made them aware of the problem. As soon as they became aware of the potential malware intrusion, they deployed extensive resources to quickly address and eliminate the issue. Customers can be assured that they have identified and fully contained the incident. US merchants have found themselves under siege from hackers in recent months, with the most notable case seeing thieves use a vendor’s credentials to infect POS devices with malware and steal the details of around 40 million Target customer cards.

Posted in Best Practices for Merchants, Credit Card Security Tagged with: card, card details, card information, credit, customer, customer cards, debit cards, devices, fraud, Malware, Merchant's, payment, point of sale, POS, retailers