January 9th, 2017 by Elma Jane
The Travel industry payment experts! Why NTC?
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Not all Travel Merchant Accounts Are The Same!
Posted in Best Practices for Merchants, Travel Agency Agents Tagged with: merchant, online, payment, payment processing, payment processor, travel, travel industry, Travel Merchant
June 23rd, 2016 by Elma Jane
Merchant Aggregators, Merchants of Records and Payment Service Provider what’s the difference?
Payment Service Provider – is a company, which provides payment gateway and related services (like antifraud tools) to merchants. PSP is a representative of one or several acquiring banks. The merchant signs an agreement with the acquiring bank and PSP. The acquiring bank provides a merchant account and secures settlements for merchant’s transactions directly to the merchant’s bank account. Payment Service Provider secures delivery of the merchant’s transactions to the acquiring bank and some related services like fraud scrubbing and recurring transactions. The merchant has an own merchant account with this model.
Merchant Aggregator – is a company, which uses one merchant account to process transactions from many merchants. Merchants don’t have any agreements with an acquiring bank, but with the merchant aggregator. You get quick setup and get shut down quickly. Most aggregators are hard to get hold of, they don’t have human customer support. The problem with this model is, it’s not intended as a long-term, scalable solution to accepting payments and they can freeze your account or hold your money if anything unusual happens.
Merchants of Records – are a merchant, who use services of payment service provider (PSP) or merchant aggregators to accept payments on their websites for goods or services they sell. Merchant of record role requires an array of administrative responsibilities, such as managing a merchant account with a payment processor, paying associated credit card fees for the transactions, other responsibilities like complying with PCI DSS.
Posted in Best Practices for Merchants, Travel Agency Agents Tagged with: bank account, credit card, customer, merchant, payment gateway, payment processor, Payment Service Provider, PCI, transactions
March 31st, 2014 by Elma Jane
A payment processor is a company often a third party appointed by a merchant to handle credit card transactions for merchant acquiring banks. They are usually broken down into two types: Back and Front-End.
Back-End Processors accept settlements from Front-End Processors and, via The Federal Reserve Bank, move the money from the issuing bank to the merchant bank.
Front-End Processors have connections to various card associations and supply authorization and settlement services to the merchant banks’ merchants. In an operation that will usually take a few seconds, the payment processor will both check the details received by forwarding them to the respective card’s issuing bank or card association for verification, and also carry out a series of anti-fraud measures against the transaction.
Additional parameters, including the card’s country of issue and its previous payment history, are also used to gauge the probability of the transaction being approved.
Once the payment processor has received confirmation that the credit card details have been verified, the information will be relayed back via the payment gateway to the merchant, who will then complete the payment transaction. If verification is denied by the card association, the payment processor will relay the information to the merchant, who will then decline the transaction.
Modern Payment Processing
Due to the many regulatory requirements levied on businesses, the modern payment processor is usually partnered with merchants through a concept known as software-as-a-service (SaaS). SaaS payment processors offer a single, regulatory-compliant electronic portal that enables a merchant to scan checks “often called remote deposit capture or RDC”, process single and recurring credit card payments (without the merchant storing the card data at the merchant site), process single and recurring ACH and cash transactions, process remittances and Web payments. These cloud-based features occur regardless of origination through the payment processor’s integrated receivables management platform. This results in cost reductions, accelerated time-to-market, and improved transaction processing quality.
Payment Processing Network Architecture
Typical network architecture for modern online payment systems is a chain of service providers, each providing unique value to the payment transaction, and each adding cost to the transaction. Merchant>Point-of-sale SaaS> Aggregator >Credit Card Network> Bank. The merchant can be a brick-and-mortar outlet or an online outlet. The Point-of-sale (POS) SaaS provider is usually a smaller company that provides customer support to the merchant and is the receiver of the merchant’s transactions. The POS provider represents the Aggregator to merchants. The POS provider transaction volumes are small compared to the Aggregator transaction volumes. The POS provider does not handle enough traffic to warrant a direct connection to the major credit card networks. The merchant also does not handle enough traffic to warrant a direct connection to the Aggregator. In this way, scope and responsibilities are divided among the various business partners to easily manage the technical issues that arise.
Transaction Processing Quality
Electronic payments are highly susceptible to fraud and abuse. Liability to merchants for misuse of credit card data creates a huge expense on merchants, if the business were to attempt mitigation on their own. One way to lower this cost and liability exposure is to segment the transaction of the sale from the payment of the amount due. Some merchants have a requirement to collect money from a customer every month. SaaS Payment Processors relieve the responsibility of the management of recurring payments from the merchant and maintain safe and secure the payment information, passing back to the merchant a payment token. Merchants use this token to actually process a charge which makes the merchant system fully PCI-compliant. Some payment processors also specialize in high-risk processing for industries that are subject to frequent chargebacks, such as adult video distribution.
Posted in Best Practices for Merchants, Credit card Processing, Electronic Check Services, Electronic Payments, Internet Payment Gateway, Merchant Services Account, Payment Card Industry PCI Security, Point of Sale, Visa MasterCard American Express Tagged with: aggregator, aggregator transaction volumes, back end, card associations, card data, chargebacks, credit card transactions, electronic portal, front end, front-end processors, issuing bank, merchant, merchant bank, network architecture, online payment systems, payment gateway, payment processing, payment processor, payment transaction, pci-compliant, point of sale, POS, SAAS
In discussions about merchant service providers, Square and PayPal entering talks is a given. Sqaure offers free credit card readers to entice merchants to switch their credit card processing to them. PayPal recently launched an initiative to expand it’s reach into retail stores and offers to waive processing fees through 2013. With the coming rush to mobile transaction processing more companies are entering the fray. AT&T, Verizon, T-mobile and Sprint are looking to get into the credit card transaction processing gig as they already carry that data over their cellular networks. ISIS Wallet and Google’s digital wallet bring credit card transactions to Android smartphones and tablets, and Visa is expected to launch its Visa Ready program as it rolls out test merchants. Read more of this article »
Posted in Mobile Payments Tagged with: Android, bluetooth, Chip & PIN, credit card processing, Digital Wallet, EMV, fees, google, ISIS, m-commerce, merchant, merchant account, nfc, payment processor, PayPal, Rates, Square, transactions, Visa MasterCard American Express
