Ever plop down a handful of $100 bills on something you’d saved up for months to purchase only to experience a guilty feeling as soon as you got the receipt? “Pain of payment,” commonly referred to as “buyer’s remorse,” is a very real physiological reaction that can create anxiety or strong regret for the shopper. Why is it referred to as “pain,” you may ask? Because these sensations affect the same area of the brain that processes physical and emotional pain. There is a way to circumvent this experience, though it shouldn’t be practiced by those lacking self-control — Credit cards seem to almost completely diminish or even eliminate pain of payment, allowing us to swipe away to our heart’s content and fully enjoy purchasing something we’ve wanted. But this solution begs another question: “Can payment methods alter the way we shop for goods?” Check out our infographic for the answer!

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China has given permission to Citigroup Inc. to issue credit cards within the communist country, a move which comes amid a probe by the World Trade Organization on the legality of Chinese restrictions on allowing foreign companies to process transactions.

Citigroup will be the first western bank to infiltrate China, and only the second along side Hong Kong based Bank of East Asia which first entered the Chinese market in 2008.

Currently, banks that wish to process within the country must co-brand with operators in the country and issue the cards in yuan. Instead of being processed through American companies like Visa or Mastercard, all transactions will go through UnionPay, which is based in Beijing. More…

There are many hardware swipers available these days to turn your cell phone or iPad into a mobile credit card processing machine – but Card.io have developed a “visual swipe” technology that lets users take a photo of a credit card to process a payment.   In June, Card.io launched and allowed developers to accept payments with a photo of the customer’s credit card.  Recent updates to the technology will allow consumers to send and receive payments from a credit card photo and deposit funds directly into their checking, savings or PayPal accounts.

Between the June launch date and January 2012, Card.io has over 160 developers using the visual swipe technology app.  A user enters the total amount of money they need to charge their customer, and then takes a photograph of their customer’s credit card with their cell phone camera.  The Card.io app sends the encrypted card date via 128-bit SSL encryption out for processing, and the credit card image itself is not saved, nor is More…

According to research done by Javelin Strategy & Research, consumers are reverting back to cash for small purchases, despite aggressive incentivization by credit card companies to charge.

The research shows that 79 percent of consumers utilized paper money in the last week. In contrast, only 65 percent used a debit or credit card.

This comes as a relief for vendors that specialize in small purchase items like coffee shops that have weathered the unintended consequences of the Durbin Amendment to the Dodd-Frank Act, which capped debit swipe fees at 21 cents. Previously, merchants would pay a small percentage of the total cost in swipe fees where a $1 cup of coffee would incur a transaction fee of a few cents. But after the Durbin Amendment took effect, banks decided to charge the entire 21 cents for any transaction, including that $1 cup of coffee, which ate into profits.

Since merchant are not allowed to pass swipe fees onto the consumer nor can they require minimum purchases, many have been biting the bullet on small purchases, though many More…

If you thought your credit card processing fees were high, be thankful you’re not a taxi driver in San Francisco — they’re currently paying 5 percent which is taken out of their profits.

Under a 2010 city ordinance, taxi drivers are required to accept debit and credit cards in their vehicles, which isn’t necessarily a game-changing requirement. Their grievance arises from a new policy allowing the taxi companies to pass off the processing fee on the driver instead of covering it as they had in the past.

This has some taxi drivers telling riders that they don’t accept cards or the machine is broken, even offering to stop at an ATM so they can pay in cash if the riders don’t have any.

Taxi drivers already pay out relatively large sums of money to actually do their job — paying an average of $92 a shift just to use the vehicle and an estimated $60 in gas, plus optional tips for dispatchers — adding 5 percent on all credit card transactions has them outraged, taking away from their approximate earnings of $120 per 10 hour shift. More…

Being a business owner, you want to be able to cash in on the credit market, but accepting credit cards comes with responsibilities and fees.  Protecting customer’s information to avoid credit theft and fraud is a major responsibility and keeping fees in check to maintain profitability is important.  That’s why choosing a reputable credit card processing company with affordable fees is vital.  Two of the major processing companies for small business owners are ProPay (www.propay.com) and PayPal (www.paypal.com).

ProPay

Probably the lesser known of these two options, ProPay caters to small business owners for all of their credit card processing needs.  Business owners can visit their website at propay.com and do a side by side comparison of the accounts offered.  Signing up for an account is done quickly and easily online.  ProPay uses encryption and tokenization to secure customers information and uses ProtectPay to remove customer data upon storage, thus keeping information secure.

Formed in 1997, Propay has been recognized as a leader in online credit card processing.      They are a Better Business Bureau member, a partner and member of the Direct Selling Association (DSA), and a member of the Electronic Transactions Association (ETA).  ProPay has been awarded the DSA partner of the year award, and the ETA Independent Sales Organization of the year award.  They are Trust-e certified and More…

The large antitrust litigation being brought against Visa, MasterCard and a slew of large banks on the behalf of millions of merchants may end in a settlement that one analyst is projecting could also cause a reduction in credit card processing fees by as much as 33 percent for up to one year.

Jason Kupferberg of Jefferies Group Inc. is expecting a settlement before the case is to be taken before the U.S. District Court for the Eastern District of New York later September of this year. Kepferberg estimates the settlement to be between $5 billion to $15 billion of which Visa will be responsible for 67 percent and MasterCard the remaining 33 percent.

The litigation is being drawn on the behalf of larger retailers including Kroger Co. and Safeway, Inc. among many others for alleged price fixing on transaction fees between the two processing giants.

Visa has already set aside $4.3 billion in litigation escrow, $2.7 billion of which is an “uncommitted balance” according to the Securities and Exchange Commission. More…

Visa, MasterCard and a plethora of large banks are the subject of a new antitrust litigation drawn on the behalf of five million retailers in the country, with potential settlement costs in the tens of billions of dollars.

Central to the lawsuit are claims that these institutions have been setting prices on credit card transactions that fall outside of what would be expected in a truly open and competitive market.

Average interchange fees incurred by credit card transactions hover around 2 percent, but could be dropped as low as half of a percent, which would result is losses projected also in the billions annually.

The Durbin Amendment of the Dodd-Frank Act effectively capped debit card swipe fees as 24 cents per transaction, which caused banks to increase credit card transaction costs to recoup their losses. More…

A Valero gas station in California was the apparent location of a credit card skimming scheme. The Valero gas station, located on Baldwin Avenue in Sierra Madre California has issued a warning to customers about a possible skimming scam that occurred between December 1 and December 27, 2011.

The fraud involves criminals placing a device inside a gasoline pump that is used to obtain information from customer credit cards. There were several reports from customers who stated their ATM cards and credit cards contained charges that were not authorized after using the cards at the gas station pump.

Each charge was reported to be about $100 for each transaction and most customers reported the charges were made in areas they do not go to or had never been to for purchases, with one customer reporting a total of three separate charges made on More…

Chip and PIN credit cards are common in Canada and Europe, but has not yet become popular in the United States due to the technology and expense required to switch from magnetic stripe readers to Chip and PIN credit card processing equipment.  Chip and PIN credit cards are considered more difficult for thieves to steal credit card numbers through skimming and forgery crimes.

Foreign Travelers

People living in the United States who travel frequently overseas have found it difficult to use their regular credit cards once they arrive at their destination.  Many Canadian and European merchants no longer have equipment to process credit cards via the magnetic strip found on all US credit cards.  For frequent travelers out of the United States, it is recommended that individuals obtain Chip and PIN based credit cards.  Chase Bank is among a handful of issuers of US credit cards that also feature Chip and PIN features that can be used overseas.

What is Chip and PIN?

Instead of information being stored on a magnetic strip plastered across the back of a credit card, Chip and PIN cards store information on a More…

Hackers around the world have figured out how to break through internet security for some companies, and once inside the secure areas of the websites, copy credit card numbers, security codes and cardholder names and addresses.  The stolen credit card details are then placed on a retail-style website, where thieves can purchase them for about $3.50 each.  Nearly 8.4 million US credit card numbers are stolen annually.

Some of the “best” sites for buying stolen credit card details include an ability to search for cards based on the issuing bank – so customers can choose cards from institutions with weaker security and minimize their risks of being caught.  Sites will also allow automatic validation before paying for the credit cards, to make sure the card details they’re buying have not yet been canceled by the banks and can be used to make purchases. More…

The Durbin Amendment was created to “protect” retailers and gave the Federal Reserve the power to set interchange fees for debit card transaction processing.  The idea is lower debit card fees would improve economic growth, since retailers could lower prices on items when they pay lower fees to banks for accepting debit cards, and lower prices would result in more consumers buying. The debit card transaction fee was 44 cents per transaction before the amendment, and has been capped at 21 cents as a result of the Durbin Amendment.

Plaintiffs Arguing Against the Durbin Amendment

The following are among the plantiffs in the legal action against the Federal Reserve over the failings of the Durbin Amendment:

• National Retail Federation
• National Association of Convenience Stores (NACS)
• Boscov’s Department Stores
• Miller Oil Co
• Food Marketing Institute

Their argument is that the interchange fees for debit cards do not More…

Dashboard technologies allow businesses to take in large amounts of data and rearrange the points in many different ways to help them get a clearer overall picture. Data related to your business is all around you, and using dashboard technology will allow you to take advantage of a relatively unknown resource that many of your competitors most likely don’t know about nor know how to utilize.

Alexander Chiang, the Research Director at Dashboard Insight, was kind enough to let us ask him some questions on the future of the business intelligence and dashboard industry, and how we can further take advantage of such an early industry that will be exponentially useful the sooner small businesses begin using it ahead of their competitors…

CreditCardProcessing.net: What sort of progress has dashboard software made in the past couple of years?

Alexander: Vendors that provide dashboard software are able to handle larger sets of data now. They are also making it easier for less tech-savvy users to develop their own dashboards. It’s better known in the industry as self-service BI. In addition, some vendors are beginning to More…

Though debit card swipe fees were capped at 21 cents on Oct. 1 per the Durbin amendment of the Frank-Dodd act, some business owners conducting small transactions are experiencing an increase in costs from Visa and MasterCard.

Before the new law, businesses were being charged approximately six to seven cents for a $1 transaction on say, a cup of coffee. But now, in an effort to recoup substantial losses from capping larger transactions, Visa and MasterCard are charging the full 21 cents on that same cup of Joe, which has business owners scrambling to recoup their own losses through incentivizing cash purchases through discounts, raising prices or backing off debit transactions all together and installing ATMs.

Estimated losses for banks hovers around $6 billion annually, while repercussions for businesses that frequently conduct small transactions goes largely unaccounted for. Some banks initially attempted to charge a monthly debit card fee for consumers which resulted in public outcry and a mass exodus from large banks to local credit unions, known as Bank Transfer Day. More…

In 2008, the Housing and Economic Recovery Act included a reporting requirement outlined in 6050W of the Internal Revenue Code which goes into effect this year.  Credit card processors are now required to report income that comes from credit card payments to the IRS; and with this change, many credit card processors are charging their customers new fees.

Are You Being Charged a Fee for the IRS Reporting Requirement?

The intent of the IRS reporting requirement was not to cost consumers more money; but there have been a number of processors adding a new fee to their customer’s statements in an effort to offset their new expenses.  Take a look at your credit card processing statement to see whether you are being charged – you may see a new fee called “reporting fee” or “reg. comp fee” or “regulatory fee” or “monthly IRS fee”.  Because credit card processors are all More…