Credit Card Processing Blog
Despite the popularity of online shopping, phone and mail order businesses are still thriving. Infomercials, print ads and catalogs are especially beneficial in generating sales through these two popular methods. While customers have gotten more comfortable providing credit card numbers by phone and mail, businesses still face the challenge of ensuring processing of that information is secure and reliable on their end.
Phone and mail order processing is referred to as “card not present” transactions. Without the card being present, businesses face an increased risk, which is often reflected in the response they get from credit card processing services. Some will not cover these payments at all, while others charge a higher fee than they would for swiped cards. There are many leading payment processing services who provide these services to businesses at a great rate, while also providing the latest technology to ensure customer data is secure.
Fraud Detection and Prevention
One major challenge phone and mail order merchants face is fraud. Customers can only provide numbers, with no way for the merchant to verify that the signature on the back matches the one on the credit card slip. Because of this, card not present transactions have become a popular way for criminals to make purchases on stolen credit cards. Fraud can also be perpetrated through chargebacks, with customers purchasing items, then disputing the charge to be able to both keep the item and get a refund.
Technology has put measures in place to help protect merchants and card issuers. Flagship Merchant Services utilizes Authorize.net’s advanced fraud detection to flag highly suspicious behaviors. Flagship’s merchants can place limits on the dollar amount for each transaction, as well as limiting the number of purchases that can be made within an hour, for online businesses who also do phone and mail order. Through Flagship, merchants also have address verification service, which rejects a transaction if the billing address entered doesn’t match, as well as Card Code Verification (CVV2) to require the three-digit code from the back of the card to be entered before the transaction can be processed.
Credit Card Terminals
While many merchants choose to enter mail and phone orders into a virtual terminal on a PC or mobile device, some processors also provide the opportunity to enter card information into a credit card terminal. National Bankcard provides businesses a choice, even giving businesses the option of reprogramming an existing terminal for use with its services at no charge.
National Bankcard also utilizes the fraud protection found with Authorize.net’s services. With Authorize.net, each merchant can set up its own rules to manage its own business as it prefers. By utilizing processors that use Authorize.net’s advanced fraud prevention tools, businesses have access to the following benefits:
– Reduce chargeback fees—Merchants are often responsible for chargeback fees even if they are found to be not at fault in the dispute.
– Sell with confidence—Without protections in place, a merchant may resort to intuition before accepting payments from callers. With fraud protection, phone and mail order businesses will be able to process transactions with the knowledge that any suspicious activity will be stopped.
– Flexibility and scalability—Using an online portal, businesses can change settings on an ongoing basis. As new behaviors are identified as problematic, merchants can adjust those settings on their own.
Businesses across the country accept credit card payments by mail and phone each day. By choosing credit card processing services that offer the best fraud prevention available today, merchants can prevent chargebacks and fraudulent transactions and increase legitimate sales to improve their bottom lines. Authorize.net’s fraud prevention tools have allowed payment processors to provide support for card not present transactions with minimal risk.
Any business that accepts credit cards accepts a certain amount of risks. Chargebacks and fraudulent activity are a natural part of doing business. There are some things businesses can do to minimize those risks, but card issuers accept a small percentage of loss as one of the costs. For some businesses, though, those risks are higher. Labeled as “high risk,” these merchants can often be rejected or face higher fees. While this may put merchants at a disadvantage, it doesn’t take away their ability to negotiate the best rates possible. Fraud prevention technology has opened up processing possibilities for businesses of all types, including high risk.
Types of Businesses
Businesses that earn the “high risk” classification are those that are primarily known to be prone to a heavy level of chargebacks and fraudulent activity. Those include mail order and phone-based businesses, which are unable to verify the identity of the cardholder due to the nature of the transaction. Among the many business types commonly classified as high risk are:
– Pornographic merchants
– Debt collectors
– Weaponry retailers (including guns)
– Pawn shops
– Vacation planners
– Amazon, eBay, Google and Yahoo stores
– Travel agencies
– Real estate
– Multi-level marketing businesses
If the nature of a business automatically labels it high risk, it’s important to avoid processing scams that take advantage of these merchants. Unscrupulous businesses will try to make merchants feel as though they have no choice but to accept contracts with unfavorable terms, including exorbitant fees and a termination fee that makes it almost impossible to get out.
Another tactic some payment processors may use is the requirement of a “rolling reserve.” Processing services take out a small percentage of each transaction (usually 5-10 percent) and set it in a reserve account. That financial cushion is designed to cover any fraudulent activity or chargeback. Many businesses have difficulty losing even 5 percent of daily earnings held back, so it’s important to determine whether you can remain solvent before agreeing to a rolling reserve.
Authorize.net’s fraud prevention technology has opened up some of the best processors in the industry to accept high-risk merchants. These tools put in place protections that detect suspicious activity before a transaction is processed, as well as giving merchants the opportunity to limit transaction amounts and multiple charges from the same IP address. Authorize.net also verifies the billing address against the one attached to the card and requires the three-digit card verification number on the back of the card to make sure the buyer has physical possession of the card.
CreditCardProcessing.com accepts merchants of all types, protecting each account with Authorize.net’s services. Phone and mail order businesses have access to a virtual terminal to enter payments and e-commerce merchants are provided Authorize.net’s scalable options. Businesses that specialize in single purchases have access to a simplified checkout method, while merchants with shopping carts to collect multiple purchases before checkout have a protected application interface that can be adjusted as the business’s needs change.
When you apply for a merchant account, the processor will use a special set of criteria to assess risk. Even being an online business can hurt a merchant, since card not present transactions are involved. North American Bancard considers all merchants, regardless of risk, although in some instances you may be required to provide additional supporting documentation during the application process. This may include trade references and copies of recent tax returns.
Even a high-risk merchant can access competitive rates and great services. Check the contract carefully before signing, and get several estimates from reputable companies to make sure you’re getting the best deal available.
Businesses are all too aware of the risk of working in a technology-enabled world, especially with so many data breaches having made recent news. One data breach can damage the reputations of a company and its payment processors, requiring a business to spend years rebuilding trust. In some cases, businesses never recover.
According to data from IBM, there were 1.5 million monitored security breaches in the U.S. in 2013, with businesses suffering financially from reputation and brand damage, lost productivity, lost revenue and more. Despite this data, however, a large percentage of businesses are unprepared to respond to a data breach, even though there are many tools available now. Here are a few ways merchants can protect themselves against a data breach.
Ensure PCI Compliance
Payment Card Industry Data Security Standard (PCI DDS) compliance is a prerequisite for card acceptance from all the major cardholders. Simply trusting that your solutions are compliant isn’t enough, however. To safeguard your business against potential data breaches, regular PC DDS self-assessments are a must. Education is available through the PCI Security Standards Council to help merchants understand what they need to do to become and remain compliant.
Some ways a merchant can ensure PCI compliance is by educating team members on the measures they should take to ensure customer data remains safe. This includes information on common ways hackers steal information. Check terminals regularly to ensure no fraudulent equipment has been attached and avoid leaving customer information on slips of paper in your office or store.
Choose the Right Processor
Some processing services have built-in fraud and data breach protections in place to help merchants. Flagship Merchant Services promises that it has one of the largest chargeback prevention, credit card fraud, and loss prevention departments in the processing industry. Not only will this help merchants prevent bad transaction, it also will help reduce chargebacks, saving companies costly chargeback fees. National Bankcard also has a comprehensive fraud and chargeback prevention department to help protect businesses. In addition to putting these protections in place, National Bankcard also has a risk management section offering tips to businesses to help them reduce their own risks.
Collect Only Needed Information
One of the best ways to prevent data from being intercepted is to ensure it isn’t available in the first place. If data is being collected, there should be a reason for it, whether that data is a zip code or a credit card number. Once the data has been collected, it should be transmitted to a secure server, where only a limited number of authorized, trusted personnel are able to access it. Every server containing customer data should be secured to the best standards available. Information should be encrypted as it travels to various points for approvals and malware and antivirus protection should be installed on all servers to protect against breaches.
Upgrade to the Latest Technology
While it’s no guarantee against a data breach, the upcoming EMV payment technology offers a greater level of protection against unscrupulous activity. All merchants are required to switch to the new payment equipment by October 2015, but many merchants are already advertising it as part of their processing solutions. Cayan is not only switching merchants over to it, the company has provided a helpful infographic to help merchants understand what to expect. With EMV, information will be extracted from a chip rather than the strip on the back of the card, with the information sent using a unique transaction code that can only be used one time. As the infographic points out, fraud dropped 60 percent in the UK after the country’s retailers switched to EMV.
Data breaches can be a serious problem for businesses of all sizes. By taking measures to protect itself against fraud and security issues, a retailer can be better protected through the holiday season and beyond.
Consumers have increasingly grown reliant on plastic over cash. But while it may seem most businesses have kept pace with the shift, data from Intuit shows otherwise. Of the nation’s 27 million small businesses, Intuit found that 55 percent do not accept credit card payments. With the majority of transactions each day conducted using credit cards, this slow adoption rate among small businesses is alarming. For many small businesses, the reason to stay away from plastic is a financial one. Each transaction brings with it a fee and those fees can add up over the course of a year. But with so many consumers going cashless, those businesses may actually be losing out on opportunities. Here are the top five reasons any small business should consider accepting credit cards for payments.
#1 Remain Competitive
The top reason to sign up for credit card payment processing is to be able to compete with surrounding businesses. Unless a merchant is located in an area filled with cash-only business, something extraordinary must be offered to continue to attract customers. A restaurant must have the best food in town, a dry cleaner must offer services for a couple of dollars per item, and a retailer must have either one-of-a-kind items or bargain prices to continue to draw in customers. Otherwise, when customers are trying to decide where to have dinner or shop for back-to-school items, that business will lose out to a competitor that does accept credit card payments.
#2 Impulse Spending
If a business is concerned about losing money to fees, some studies might contradict that thinking. Research has found that customers spend more when paying by credit card. One great example is McDonald’s, which specializes in low-priced purchases but found the average ticket was $7 by credit card when it was only $4.50 by cash. The extra income McDonald’s brings in more than made up for the extra money it was forced to pay in transaction fees.
Businesses of all sizes are beginning to realize the power behind all the data being collected each day. When a business contracts with a processing company like CreditCardProcessing.com, online reporting offers information that isn’t available with cash transactions. These reports offer an overview of activity a business sees each month to inform future planning and determine changes that need to be made.
Cash checks are time consuming and prone to errors. Once a merchant chooses a payment processing service for its credit card transactions, the process becomes easier. Instead of counting and depositing cash and checks at the end of each day, you’ll have access to a detailed account of your transactions. Popular processors like Cayan can even connect to a business’s back-office accounting solution to make budgeting, audits, and tax filing much easier.
#5 Online Sales
Even local businesses are feeling increased demand to provide online ordering and payment acceptance. Retailers and specialty shops can enjoy increased sales by selling those products online, both to local customers and to those who live far away. Even restaurants can make use of online payment capabilities, accepting catering requests and taking orders for delivery or carryout online. Cash-only business limit themselves to on-site purchases only, preventing the growth that might come from being able to reach out to an online audience.
Businesses that are still accepting only cash and checks for purchases may be limiting their growth. Switching to credit cards will not only help you remain competitive, but you may find that customers spend more with each visit, surpassing any extra they’re having to pay for fees each month.
Most companies will offer you free equipment just for signing up for their services. When you look at it from their point of view, you can see that it makes a lot of sense to give you a terminal that’s worth a hundred dollars or so when they’re expecting to make at least that much in the first year of you working with them.
However, there are other tricks to making sure you spend as little as possible on processing equipment. We’re here to tell you exactly what those are.
In changing times, it’s crucial that merchants adapt in order to compete. The rise of on-the-go shopping has revolutionized the way people make purchases, making it necessary that business find a way to accept mobile payments.
With the use of mobile card readers becoming more and more popular, merchants should note the ways in which they differ from traditional terminals and the similarities they share. What do you prefer?
Today’s businesses are expected to take a variety of payment methods, including every major credit card available. As the industry considers the next wave of payment options, retailers are challenged to keep up without sacrificing customer service and security. Time-challenged business owners face a variety of challenges as they attempt to manage cash flow on a daily basis. Customer service must always come first and a business’s technology must ensure that happens. Today’s merchants are concerned about several major issues.
The news has alerted both consumers and merchants that data breaches can happen, even at major retailers. While businesses are concerning themselves with ensuring their own equipment and employees meet the highest security standards, they must also entrust their processing to a provider that adheres to those standards. PCI compliance is essential in any company providing payment services today. Prior to signing a contract, a business should ensure all customer data will be safeguarded as it travels from the retailer to the processing company and associated banks.
Chargebacks and Fraud
Chargebacks are a serious problem for merchants today, with businesses losing 60 percent of all chargeback disputes. In some cases, those disputes are simply a way for a customer to get a refund while also retaining the product. When a chargeback dispute is filed, the business not only loses the merchandise or service that was refunded, but it’s also responsible for any fees associated with the chargeback.
Merchants like CreditCardProcessing.com automatically set customers up for Authorize.net, a service that provides advanced fraud and chargeback protection. This software protects CreditCardProcessing.com’s online transactions against stolen credit cards, chargebacks, and more. The software includes tools that detect transactions that are likely to be fraudulent and block those transactions before they can go through.
When lines are long and customers are waiting to pay, the worst thing that can happen is for a credit card reader or POS system to fail. Technology failures also apply to a business’s online payment processing, as merchants strive for 24/7 uptime, especially during the busiest times of the year. Flagship Merchant Services has been acknowledged for its reliable products and superior customer service, with free equipment and setup provided to customers. Flagship uses some of the best equipment in the industry to reduce merchant downtime and offer retailers some of the fastest processing speeds available. When a business knows it can rely on payment processing even during the busiest times of the year, it can proceed with confidence.
In-House Customer Service
In order to serve its own customers properly, a business must be able to count on good customer service from its own vendors. A business should choose a processor with a customer service desk that is open when that business is open, including on holidays, if applicable. If possible, contact the customer service desk before signing the contract to ensure it actually is available when the company says it is.
In-house customer service is important to some retailers, who have had bad experiences with companies that promise to provide great customer service, only to shuffle them around to outsourcing providers when they call. Your provider may promise 24/7 customer service, only to send you to an overseas company after hours that has no way to help you with the issues you’re having. Ask these questions on the front end to avoid being surprised once you’ve begun working with a processor.
Business owners are often tasked with keeping up with a multitude of issues each day. It’s important they find a processing provider that offers reliable service when they need it to avoid adding one more thing to their to-do lists.
As each new year begins, consumers and businesses are eager to hear about the top technologies expected to emerge in the coming months. 2015 promises to be an exciting year, with wearables, cloud technology and data science all promising to be an even bigger part of the business marketplace. While these technologies impact retail and ecommerce businesses, many are focused on how things will change in the way they interact with their customers. Payment processing is an important part of many businesses, with fast, reliable technology being essential to keeping customers happy. As businesses choose new providers or consider moving from an existing provider to another, there are some major upcoming technologies they should consider.
The biggest feature in 2015 is EMV, which will become the required standard in October. If a business fails to switch to the new global standard by October, liability for fraud will switch from the credit card issuer to that business, so moving to the new standard is essential. New equipment will need to be installed, since cards will be dipped instead of swiped, and software will need to be updated to handle the new technology. Major credit card processing services like CreditCardProcessing.com have already upgraded their technology to comply with the new security standards. The switch to EMV has demonstrated the importance of contracting with a payment processor that strives to remain current with the latest technologies.
As mobile card readers have gone mainstream, retailers of all types are learning their benefits. In 2015, stores and restaurants will grow bolder with these technologies, equipping in-store staff with tablets and smartphones that allow them to accept payments on the floor, rather than at a cash register. This will help keep lines down during the busiest times of the year, as well as give locations a scalability not previously seen. Instead of adding a cash register to accommodate the holiday rush, a store could bring in card readers for use on those days. Restaurants are also expected to increase the use of tabletop devices and tablets in taking orders and payments. Applebee’s and Chili’s have both installed tabletop payment systems in their restaurants and this technology could extend to allowing customers to place their orders at the table.
Businesses today are dealing with accepting payments online, in store, on mobile devices and through recurring payments. As all of this technology has evolved, it has brought a demand for a streamlined approach. With its new Genius platform, Cayan seeks to make it easier for all of its merchants to manage everything in one place.
Genius allows Cayan to customize solutions to each business, adding and removing features as needed. Through the same device, a retailer can accept cash, credit cards, and debit, along with universal acceptance of technologies like EMV, NFC, and QR codes. Gift and loyalty programs can also be managed through the device and all software is updated through the cloud, to ensure a business has the latest version of the software it needs to keep payments secure and reliable. The cloud has driven businesses to expect scalable solutions that are updated by the provider and Genius is an example of how 2015 will move payment processing in that direction.
As merchants search for payment processing services, these three technologies are an important part of the provider they choose. These software and hardware changes will be a significant part of 2015, as well as the years to follow, so it’s important that merchants choose a provider that promises the latest technology and delivers on that promise on a consistent basis.
With rates starting at 0.38% and 19 cent transaction rates, Flagship offers some impressively low prices that should be attractive to most merchants. The company also promises free set-up, which gets you up and running without breaking your bank at the hands of expediency. In addition, with the application process being so quick and easy, it’s no wonder why Flagship services so many merchants across various industries. This type of flexibility and dependability are what many people look for in a payment processor, making Flagship one of our premiere processing solutions here at CreditCardProssesing.net. Be sure to check out the video below for a full review of of the company’s services and see if it is the right solution for your business needs.
During the time a business is shopping for a credit card processing provider, that business is in a powerful position. Multiple vendors are often vying for a retailer’s business, giving the merchant the ability to negotiate. Once the contract is signed, it will be too late to get a better deal, especially if your business commits to a three-year contract. But for many merchants, knowing exactly which items can and cannot be negotiated can be tricky. Although not all items are up for negotiation, providers are often willing to lower prices on items and, in some cases, remove terms completely from the contract. Here are three things you should negotiate before you sign on the dotted line.
Whether you’re planning to buy or lease your processing equipment, this is one area that can be negotiated with the processing provider. If your business promises to bring in a high monthly transaction volume, throwing in a piece of equipment for free is a small investment that will give the provider a big return. Realizing the value of that small investment, companies like National Bankcard advertise free credit card terminals as a selling point. This equipment connects to the company’s software to provide credit swiping abilities at a register. While your business may be required to purchase the remainder of the POS to fully accept credit cards, this one free terminal can shave $400 off of your initial setup price.
Depending on the contract, cancellation fees can easily cost thousands of dollars. With popular processors like Flagship Merchant Services promising competitive rates with no processing fees or contracts, a company that requires a binding contract with exorbitant cancellation fees should be scratched off your list if it is unwilling to negotiate those fees. Many contracts include either a large flat fee or a fee multiplied by the number of terms left in your contract. This means that if, for some reason, you want to cancel soon after signing, you’ll be paying a large fee to exit the contract.
If the company is unwilling to waive the cancellation fee or negotiate it downward, suggest building in a grace period for you to try the service out. This could be 30-60 days or longer, serving as a trial period in which you can see if there are hidden fees built into your monthly statement or if the promised customer service levels are delivered.
Annual and Setup Fees
While setup fees are rare, since processing providers are trying to attract merchants rather than scare them off, they do exist. Some processors promise no setup fees, only to charge small administrative fees for things it deems as “extras.” Be sure you have all of these fees in writing up front before you sign a contract. Even more providers charge annual fees, which should be negotiated based on the fact that many merchants offer processing without these administrative fees. Very few companies charge application fees, but it’s important to watch for that, as well.
Before signing a contract, compare your potential processor against rates offered by processors like Cayan, which offers competitive prices with no annual or startup fees. By having fees outlined and discussed during the negotiation process, you can save hundreds of dollars over the course of your contract.
With so many processing companies vying for merchant business, companies can easily negotiate pricing while searching for a provider. It’s important to have these discussions prior to signing the contract, since a long-term contract can result in years of overpayments. With so many great deals available, businesses are in a great position to get a bargain on their monthly processing services.
A business’s relationships with its vendors and providers are essential to successful operations. Business owners have enough to worry about without dealing with repeat calls to customer service and frustrating outages. When a merchant finds itself unable to get the service it wants from its payment processing provider, it may be time to make a change. Getting out of a relationship with a processing service can be complicated, though, especially if you’re tied to a long-term contract. Termination fees can be devastating, especially if you cancel early in your contract and fees are calculated based on the number of months remaining. Even if you aren’t under a binding contract, there are steps you should take before canceling your service.
Review Your Contract
You may think you know exactly what your contract with a payment service says, but it’s always helpful to read through the fine print, especially if you didn’t review it carefully before signing. Is it a long-term contract with hefty termination fees, determine the cost you’ll be forced to pay to get out of the contract before proceeding. If you’ll be forced to pay to exit your contract, read over the rest of the fine print. Were there promises being made initially that aren’t being honored? If your provider promised 24/7 support but provided only unanswered calls and emails, you may have a legitimate argument for getting out of your contract early.
Initiate a Discussion
Whatever your contractual situation, it’s always best to speak to someone at your current processing service to voice your dissatisfaction. Don’t simply talk to the person who answers the customer support line. Go up the chain to a supervisor or customer retention specialist and make it clear that you’re planning to leave if a resolution can’t be reached. During the discussion process, you’ll be able to determine where you stand in terms of getting out of the contract. This is where the vendor will let you know whether you’ll be expected to pay a cancellation fee despite your dissatisfaction with the service. Keep in mind that the company may be willing to work with you out of a desire to protect its reputation as a provider. Mention well-respected providers like Flagship Merchant Services who have earned a reputation as being customer-driven.
Seek Other Options
Even a large termination fee may not be a final decision. Some payment processing services are willing to buy you out of your current contract in order to win your business. Before cancelling your current service, speak to a few reputable providers and determine whether someone is willing to help you get out of your current contract by paying the fees. This is especially true if you can show that your business processes a large amount of transactions each month that will bring great value to the processing provider you choose.
As you’re shopping, consider a service like National Bankcard that requires no contracts, has no cancellation fees, and offers a free credit card terminal to get you started. Whether you’ve been forced to pay a cancellation fee with your previous provider or not, the cost savings will be a relief, and you’ll also be allowed to try the new service out without committing. During this trial period, you can ensure that all of the issues you have with your previous provider have been resolved with the new one.
Merchants don’t have time to deal with disappointing vendors. When issues arise, communicating openly with your providers and reading over contracts before taking action can make a big difference. Many processors will be willing to work with you and if you find one that won’t, consider one of the many other great providers that may beat the rates you’ve been getting from your disappointing vendor.
Since they’re more well-known for being a payment gateway, most people don’t realize that Authorize.Net also offers their own credit card processing solution. The primary convenience is that you can consolidate your fees, which could equal fewer bills and a lower cost overall.
By offering a billing model drastically different from many competitors, Payment Depot hopes to help small volume merchants accept credit cards at profitable rates. The company does this by charging a general monthly subscription rate and a per-transaction flat rate, which makes the cost of processing with the company undeniably easy to figure out.
2Checkout, which has been around for 15 years, offers several different checkout options that leave enough space for your company’s branding. Throw in the ability to accept payments in tons of different currencies, and this might also help your online business go global.
With a wide variety of solutions that are tailored to specific industry needs, National Bankcard could give you the payment processing tools that you want for your company’s success. National Bankcard runs several free equipment promotions, making it easy for you to save money on your way to accepting payments. You’ll also have the potential to access cash advances of 3,000 to 300,000 dollars, which could really help you get your business off the ground.