5 Credit Card Fraud Tactics to Watch Out For

When it comes to credit card fraud, the statistics are sobering. According to Forbes, fraud costs merchants upwards of 21 billion dollars per year. In addition, the Center for Strategic and International Studies (CSIS) and McAfee recently revealed that cybercrime is a $445 billion industry worldwide.

As a merchant, one of the best ways you can protect yourself against fraud is by educating yourself. After all, you can’t fight it if you don’t know what you’re up against.

While this is far from an exhaustive list, here are a few of the main kinds of credit card fraud to be aware of.

1. Sleeper fraud.

If you’ve ever lost or had your credit card number stolen, likely you were alerted to this after you noticed a large number of big-ticket purchases go through your account. This is pretty typical when it comes to credit card fraud. Usually, a criminal will steal your card or your info and start racking up charges in your name ASAP.

Sleeper fraud is a variation on this strategy. In this case, the criminal will acquire your credit card info and lay low for a while, opening accounts in your name and making small purchases in order to establish credibility and not set off any alarms. Eventually, the criminal will escalate their behavior and start making a large number of purchases on the stolen card. As a consumer, this is why it’s especially important to check your credit card statement and review each and every charge — even the small ones — to stop sleeper fraud in its tracks.

2. Chargeback fraud.

If a customer receives an item that is damaged, faulty or is something that they didn’t order themselves (see above regarding sleeper fraud), they have the right to request that the charges be reversed on their credit card.

As mentioned before, a chargeback is different from a refund because it voids a credit card purchase by withdrawing funds that were previously deposited into the merchant’s bank account and applying a credit to the consumer’s credit card. If the claim is determined to be valid, the bank then forcibly removes the money from the merchant’s bank account.

However, some fraudsters will abuse the system, ordering a lot of merchandise online only to claim that it never arrived or was damaged so that they can request a chargeback and essentially get it for free. While also known as “friendly fraud,” these kinds of fraudulent chargebacks cost merchants millions in losses every year.

3. Fallback fraud.

EMV card machines and designed to read the embedded chips that come with these more secure cards. Many card machines, however, can still swipe and process cards with magnetic stripes. While it’s difficult to fake an EMV chip, it’s easier to create a fake credit card with a magnetic strip.

Fraudsters will then try and make purchases using the fake EMV card and (surprise, surprise) the chip won’t work. Merchants will then have to “fall back” to traditional swipe and signature authorization.

4. Synthetic ID fraud.

In the past, criminals would use a real person’s personal info to open fraudulent accounts on their behalf. This tactic has evolved and now thieves are using a combination of real and fake credentials to commit fraud. What makes this kind of fraud especially egregious is that criminals often use info stolen from children and minors — people with valid social security numbers but neither the resources nor need to monitor their credit scores closely. As a result, this kind of identity fraud can go on for decades without anyone being the wiser.

5. Deep fakes.

Looking forward, this is one of the scariest developments when it comes to payment fraud and identity theft. Thanks to artificial intelligence, it’s now possible to make videos of people saying and doing things they didn’t actually say or do, with the goal of defrauding both merchants and customers. While this isn’t commonplace yet, the technology exists and is something to look out for in the future.

At the end of the day, protecting your business and customers from credit card fraud all comes down to educating yourself about potential breaches and being extra diligent about following best practices when you’re handling sensitive financial data.

What’s Mobile Commerce (mCommerce) and why should you care about it?

Originally coined in 1997 by Kevin Duffey at the launch of the Global Mobile Commerce Forum, Mobile Commerce (also known as mCommerce) refers to the delivery of electronic commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology. In other words, it’s any kind of financial transaction that occurs through a mobile — from sending your friend money for next week’s concert tickets to ordering a new sweatshirt from one of your favorite retailers’ mobile apps.

If you think of eCommerce as a large umbrella tree, mCommerce is a growing branch, reaching down to meet customers on the go. As we become increasingly reliant on our smartphones, mCommerce is becoming the norm. Global M-Commerce sales are projected to double between 2018 and 2021, with mCommerce’s share of total online retail increasing to almost three-quarters, according to a forecast cited in Research and Markets Global mCommerce 2018 report.

The growing popularity of mCommerce comes down to the fact that it’s incredibly convenient. You no longer have to go to a brick and mortar store or tear yourself away from your phone to use your laptop in order to shop, do banking or make mobile payments. Instead, mCommerce allows you to meet your customers where they are and provide a better customer experience.

Here are a few other ways mCommerce can be beneficial to your business:

1. Faster, easier purchases.

Not only does mCommerce allow customers to make purchases on the go, but it also makes them faster by eliminating the need to connect to a server, as one would with a traditional eCommerce site.

2. The ability to send push notifications.

Instead of relying on email — which, let’s face it, most of us already receive too much of — mCommerce allows you to send customers push notifications directly to their smartphone. This is a great way to alert your customers about sales and promotions while drawing them back to the mobile app.

3. Deeper analytics.

You can learn so much about your customer through mCommerce, like their age, sex, location, and shopping habits. You can then take this information to tailor your product selection to exactly what your customer loves and needs. This can also help with making marketing efforts more effective, targeted and personal. After all, nothing feels better than receiving a push notification about something that you’re legitimately interested in — whether it’s something new you’re excited about or a sale on an item you use all the time.

4. It provides a better customer experience overall.

As outlined above, many of us are now using our phones to shop because it just feels more streamlined to make purchases through designated apps. Combine that with increased speed,  more personalized customer service and the flexibility to shop anywhere; it’s easy to see how mCommerce has the ability to offer an amazing customer experience.

5. It isn’t going anywhere.

If you think mCommerce is a flash in the pan trend, think again. The complete flexibility of mCommerce technology means that it isn’t going anywhere, in fact, it’s likely only growing from here as more people realize it’s power.

What are APIs and how do they fit in with ISV partnerships?

Partnering with an integrated payments provider can be beneficial to both your business and your customers. By integrating tailored payment processing technology into your application, you’re creating a unified user experience. Everything is in one place which means that your customers won’t have to leave your platform to access other tools.

However, the process of integrating new software and business functionalities can be daunting for merchants. The process is prone to errors and can cause friction in day-to-day transactions, which may even cost you business. This is where ISVs come in.

To make things easier, merchants can partner with independent software vendors (ISVs), which can help your business flourish by opening up new markets.

While you’re aware the benefits to both the customer and the merchant, how exactly does the technology behind ISV partnerships work? Good question. First, we need to start by discussing APIs.

So, what exactly is an API?

In the world of payments, there seems to be no shortage of acronyms, however, an API plays a crucial role in ISV partnerships.

In simple terms, an API (application programming interface) allows developers to integrate one technology’s features and functions into their own software.

For example, if your company has a customer-facing app, you can use your payment processor’s API to securely accept payments and view real-time analytics from inside your app. While every API offers different capabilities, many of them allow merchants to accept both card present and card-not-present transactions, therefore providing an easy to use all-in-one solution that helps streamline your payment system.

Why is an API valuable?

That’s another great question. An API adds value to your existing technology, extending your platform’s capabilities and functionality. While every API is going to be slightly different, typically it will provide you with a variety of tools that will allow you to view analytics and efficiently manage customer information. Some APIs will also allow you to set up one-time or recurring payments and create invoices.

When you’re running your own business, time is money. By providing you with the tools to streamline all of these processes within one application, you’ll not only save yourself a lot of time and sanity, but it will also reduce the likelihood that you’ll make detrimental errors.

As a merchant, protecting your customer’s sensitive financial data should be top of mind. That’s where tokenization comes in. As we discussed before, tokenization replaces credit card numbers with a different, random string of numbers, called a “token.” The tokenized number is then stored securely and can be used in lieu of the actual card number. Because the token has no relationship to the customer’s actual data, there’s no way for the merchant to know the customer’s credit card number, therefore making it a safer option all around for storing credit card information. A good API will tokenize your customer’s payment information so that you never have to worry about your customer’s data being insecure.

Combine these selling points with the fact that you’ll be providing your customers with an integrated experience, and the value of an API is beyond evident.

Here’s Why Your Business Needs End-to-End Encryption

If you run a small to mid-sized business, you’re at risk of a data breach. According to the US Securities and Exchange Commission (SEC), 43 to 60 percent of cyber attacks are targeted towards small and mid-size businesses. If that wasn’t worrisome enough, a study by the U.S. National Cyber Security Alliance found that 60 percent of all small businesses that suffer a cyber attack go out of business within six months of the breach. Recovering from a breach takes time and money, and often customers are slow to trust a business again after their data has been compromised.

While these statistics may seem harrowing, there are certain practical steps that merchants can take in order to protect themselves from data breaches and cyber attacks, like working with products and partners that use End-to-End Encryption (E2EE).

At first glance, E2EE may seem like yet another acronym within an industry that already feels crowded with them, but understanding E2EE is essential to protecting your business.

So, what exactly is end-to-end encryption?

We’re glad you asked. End-to-end encryption (E2EE) is a method of secure communication that prevents third-parties from accessing data while it’s being transferred from one end system or device to another. In E2EE, the data is encrypted on the sender’s system or device and only the recipient is able to decrypt it.

In other words, when you’re processing credit cards and handling sensitive financial data, E2EE ensures that it doesn’t fall into the wrong hands, therefore creating a security breach.

How does it work?

Think of the process of E2EE a bit like two interlocking puzzle pieces. When transferring data, the sender uses an encryption key which essentially scrambles the data. In order to receive the information and unscramble it, the recipient needs to have the corresponding key.

How this works for credit card processing: when a customer uses a credit card to make a purchase, their information is encrypted. It remains encrypted until the data arrives at the payment processor or acquirer who is then able to unscramble or decrypt it.

What are the benefits of E2EE?

Along with everything mentioned above, another huge benefit of E2EE is that you don’t really have to think about it. It’s built right into hardware and software, which means you there’s nothing to initiate or add-on. Your customer’s data is protected — simple as that.

The downside to E2EE is that it protects data while it’s being transmitted from the customer to the payment processor, but unfortunately, it can’t protect either of those endpoints. For example, end-end-end encryption isn’t going to protect data if for some reason it’s hacked on either end. To counteract this, many payment processors have started using Two-Factor Authentication.

Two-Factor Authentication (also known as 2FA or multi-factor authentication) requires the user to verify two separate variables, such as a password plus another piece of info before they’re able to make any sensitive changes on their account. For example, if you try to link a new bank account or reset your account password, 2FA will prompt you to enter the info above in order to verify your identity.

If you’re operating as a merchant, it’s imperative that you keep customer information such as passwords, credit card numbers and other personal data such as their home address and birthday completely secure. Using products that involve end-to-end encryption is one way to reduce the risk of a costly data breach.

What exactly is ACH processing for Small Businesses? Here’s what you need to know.

As a small business owner, cash flow is something that’s always top of mind. If you’ve already done some research, you’ve probably heard that ACH processing can provide your business with a leg-up when it comes to processing payments. But what exactly is ACH processing and what are its benefits?

Good question. ACH or “automatic clearing house” is a batch processing system in which financial institutions accumulate ACH transactions throughout the day for later batch processing. Instead of using paper to carry necessary transaction information (such as with checks), ACH Network transactions are transmitted electronically, allowing for faster processing times and cost savings.

In other words, by eliminating the need for a paper check, transactions are processed electronically and merchants can receive funds much faster and easier than if they had to wait for a check to process.

Here’s how it works.

ACH payments are typically used to move funds from one bank account to another. The ACH Network processes two types of transactions: Direct Deposits via ACH and Direct Payments via ACH.

Direct Deposit via ACH is the deposit of funds for payroll, employee expense reimbursement, government benefits, tax and other refunds, and annuities and interest payments. It includes any ACH credit payment from a business or government to a consumer.

Direct Payment via ACH is the use of funds to make a payment. Individuals or organizations can make a Direct Payment via ACH as either an ACH credit or ACH debit.

Most merchants who use ACH will use it for things like paying for a service (Direct Payment via ACH) or for payroll (Direct Deposit via ACH). The funds move through the ACH Network, and the funds are deposited into the receiving bank account within a few business days. Simply put, ACH is a method for merchants to move money and make financial transactions without ever needing to use a physical check, credit card or debit card.

To set up ACH payments for your business you’ll need to work with a processor that offers them. It’s the payment processors that handle the actual payment and deposits the money into your account.

Here are a few ways that ACH processing benefits your small business:

It saves time and money.

Because you don’t have to worry about waiting for a check to process (which, isn’t always the speediest process, let’s be real), you can access funds quicker, which improves your overall cash flow. ACH credit and ACH debit transactions process quickly.  The transfer of funds from one financial institution generally happens the next day.

ACH payments are also more affordable than wire transfers, as payment processors typically offer them for free (compared to the $10-$35 banks typically charge for wire transfers within the United States). ACH payment processing also provides helpful tracking tools that allow you to easily keep tabs on payments and cash flow.

Better for recurring payments.

Lastly, ACH is much less expensive than paying with a credit card which makes it particularly helpful for recurring bills and invoices. With credit card payments, you’re subject to interchange fees and markups (which vary depending on the processor). ACH payments bypass this altogether, saving you time and money in the process.

To recap, ACH payments provides a secure option to get paid and make payments, that also saves you money on credit card fees. Because they process quickly, ACH payments can help improve your cash flow so you have the funds ready and available to grow your business.

These Mega Trends will Shape Payment Processing in 2019. Are you prepared?

According to a report by Accenture, Gen Z will make up to 40 percent of all US consumers by 2020. These teens and young adults are a tech-savvy emerging demographic that doesn’t remember a time before Google, Apple, Facebook and Amazon ruled supreme. Experts suggest that their purchasing and payment habits will surely influence other consumers. Over the next year, merchants should expect to see a surge in services that are catered towards all things mobile.

Here are a few of the Mega Trends that are expected to shape payment processing in the next year. Which ones will you choose to embrace?

1. Skyrocketing popularity of in-store mobile payments.

In the upcoming year, in-store mobile payments are expected to overtake credit cards and grow from a $75 billion industry to $503 billion by 2020. It makes sense that people are moving towards digital wallets. We do everything else with our smartphones, why not make payments as well? It’s easy and streamlined. By providing your customers with the option of in-store mobile payments, you’re giving them a quicker, more forward-thinking way to pay for goods and services.

2. Increase in mPos devices.

As of 2021, experts predict that there will be over $27.7 million mPos (mobile Pos) devices in circulation in the United States. This is a huge jump from 3.2 million in 2014. In other words, the long-held tradition of lining up to pay for your purchase at the till may be on the way out. Not only is this more convenient for the customer, but the increasing popularity of mPos devices gives merchants more options to provide an amazing customer experience by meeting customers where they are (on the shop floor, in the checkout line). Plus mPos has the ability to create an easier, quicker checkout process, which is never a bad thing.

3. Biometric authentication.

Biometric authentication – I.e. using a fingerprint to verify and access a mobile wallet – is slated to be another big trend going forward in 2019. Apple Pay and Samsung Pay currently both use fingerprint identification, but not all platforms offer the same level of security. But soon this will change. Biometric authentication is a good development for merchants because it is likely to lead to a reduction of fraud –after all, while it’s still possible to steal a credit card number, it’s nearly impossible to fake a fingerprint.

4. Rewards-driven purchasing.

As we mentioned above, millennials and Gen Z are leading the way with their buying power. Along with their older counterparts, they’re looking for customer experiences that make them feel valued. This means an increase in demand for customer rewards — either through points or a loyalty program of some sort. According to a survey, half of the consumers have said they would switch primary cards for a higher rewards value, and more than 40% of consumers would make the switch for a major upfront bonus.

Here’s how to prepare as a merchant:

As more and more customers choose to put their trust in mobile wallets, merchants will need to keep up with this shift in the payment industry. If you want to stay ahead of the curb, now is the perfect time to invest in new technologies that can handle multiple payment types. If you feel like your business might benefit from an mPos, this is another option to consider.

Amazing customer service provides great long-term benefits for both customers and merchants. Savvy merchants are creating these kinds of experiences for their customers by giving them what they want: rewards. One of the easiest ways to win over and keep your customers is by implementing a loyalty program.

On the surface, most of these trends primarily benefit the customer. However, by adapting to meet the changing payment needs of the customer, businesses have the opportunity to create a memorable experience for their clientele. After all, you can’t have a business without customers.

Everything You Ever Wanted to Know about “Declines” But Were Afraid to Ask

Declined. For cardholders and merchants alike, never is it a word that’s met with a smile. Declined transactions are upsetting to customers and represent a potential loss of revenue for your business. Unfortunately, though, they do happen. We only fear what we don’t know, so if you have a clear understanding of what declines are and why they happen, you’ll be better prepared to handle declined transactions when they occur.

Let’s start by discussing approvals.

When a credit card is approved during a transaction, it means the customer’s issuing bank, has approved the card. Issuing banks will approve credit card transactions when the credit card number and expiry dates are valid, the customer has enough credit to cover the amount of the transaction, and the card has not been reported as stolen or compromised. However, keep in mind that approval is not a guarantee that the funds will be transferred to your account. There’s always a chance that a customer will request a chargeback at a later date.

Declines work the same way but in reverse. When a card is declined it means that the issuing bank has flagged it for a variety of issues: the card’s number or the expiry date is no longer valid, the customer doesn’t have enough credit to cover the transaction or the card has been reported as lost, stolen or compromised. In order to prevent criminals from “testing” cards, issuing banks don’t provide a specific reason as to why a card is declined. However, declines typically fall into one of these categories:

DECLINED – ND

One of the most common kinds of declines, this is just a normal decline from an issuing bank. This usually means that the cardholder has insufficient funds or there’s been a restriction placed on their card.

DECLINED – EXPIRED CARD

If the credit card is past its expiry date, the bank won’t be able to process it. The customer will have to provide another form of payment (this kind of decline is also incredibly common, as credit card expiry dates tend to be an afterthought for many of us).

DECLINED – INVALID CARD

If you’ve entered a credit card number incorrectly, you’ll receive an “Invalid Card” error. This means that the system has done a MOD10 check (the checksum formula used to validate a variety of identification numbers) and it was unable to validate the card. In this case, you’ll need to re-enter the credit card information.

DECLINED – CALL FOR AUTH

While this is technically a decline, there’s a chance the bank will still approve the transaction. The bank simply requires the merchant to call for authorization. If the bank approves the transaction, they’ll provide the merchant with an approval code.

Keep in mind that some credit cards — especially business and corporate cards — may have restrictions on the kinds of purchases that can be made using the card. Same goes for international transactions. A card issued in another country may have a restriction in place that prohibits from processing all international transactions.

In either case, the cardholder would have to call their bank so that they can unlock the card and approve the purchase.

DECLINED – PICK UP CARD

If you receive this message, it means you should “pick up” the card if it’s physically present. This message typically occurs when a card has been taken out of circulation due to it being reported lost, stolen or compromised in some way. Cue: every scene in movies where the owner of a ritzy boutique or restaurant takes the credit card from the customer and cuts it up right in front of their eyes.

Here are a few other things to keep in mind when dealing with declines:

If you receive a “pick up card” error message, this could be a sign that the customer is trying to make a fraudulent purchase with a stolen credit card, so approach the situation with caution. It’s never worth compromising your safety just to get a card from a customer.

Unless you’re inputting credit card numbers manually and receive an “invalid card” error message, trying to process a card multiple times isn’t going to change it from a decline to an approved message. While the customer may request that you try it again, once a card has been declined, it’s declined. If the customer has any questions, they need to speak directly with their credit card company.

Is Flat Fee Processing Right for Your Business? Here’s What You Need to Know.

While looking for a credit card processor you’ve probably come across companies offering “flat fee processing” and now you’re wondering if it’s the right choice for your business.

What is flat fee processing?

Flat rate is a popular pricing model for credit card processing and typically involves one of the following two options: a flat fee percentage or flat fee subscription.

Flat-rate percentage

A flat rate percentage is a fixed percentage that you pay for each transaction and it’s based on volume. Common flat rates are currently around 2.75% – 2.9% for swiped transactions. You may also find some flat rate pricing models that also include a per-transaction fee, often in the range of 20 – 30 cents per transaction.

Many business owners will be lured in by the convenience of a flat rate percentage pricing model — after all, it seems remarkably simple. While it may be an okay option for smaller businesses that only accept credit cards on occasion, it can end up being very costly if you are processing a larger volume of transactions. You’ll always end up paying above and beyond the interchange rate.

Interchange fees are fixed costs that remain the same regardless of which credit card processing company a merchant uses. With flat rate percentage pricing, a payment processor doesn’t have to be transparent about interchange costs because they’re paying them on your behalf. Because of this, they’re at liberty to charge whatever percentage they want for the convenience, pocketing the rest in the process.

The percentage is also calculated based on your sales volume. The more you sell, the more transactions you process, the more you’ll pay — which, isn’t exactly a great deal for businesses that are hoping to expand and grow.

Flat-rate subscription

On the other hand, flat-rate subscription pricing is a fixed dollar amount that you pay the payment processor, usually monthly. With this kind of pricing model, a processor’s markup is applied as a flat monthly fee and per-transaction fee instead of a percentage of sales volume. The business pays exact interchange fees in addition to a flat monthly or annual fee to the processor. In most cases, there is also a per-transaction fee, which means that a merchant may also pay a fixed amount on every transaction.

As far as flat-rate pricing goes, a flat rate subscription model is a lot more transparent because you’re able to see the actual cost of processing (interchange fees). Another advantage of this kind of pricing model is its simplicity. You’ll always pay the same fees regardless of sales volume. If you’re a new business and overwhelmed by all the different fees on your monthly statement but are still looking to grow your sales, a flat fee subscription might be a great option for you.

However, keep in mind that convenience comes at a price. While a subscription model is likely going to cost your business less than a percentage model, it still might not be the most competitive pricing available to you. So, do your research. Which processing fee model is right for you all depends on your specific business needs.

Here’s Why Recurring Payments Are Your Best Friend as a Business Owner

Imagine you’re a business owner and you have customers that return every month (or year) to purchase the same service. Now imagine that every month you have to invoice and track down those payments manually. You do this with the good faith that (hopefully) your invoices will reach your customers and they’ll pay on time. It’s stressful and you never know if and when you will receive your revenue. What if things could be different?

If you see you and your business in the above-mentioned description, you’re the perfect candidate for recurring payments. With a subscription-based service, you store your client’s credit card info and charge their card on a regular monthly (or annual) basis.

Thinking of switching over to automated payments? Here are a few reasons why adopting a subscription-based payment model is to your advantage as a merchant.

1. It saves time.

Trying to track down payments every month is a recipe for insanity. The more you can automate in your business the better. Not only will you ensure that your customers pay on time, but you’ll also never have to worry about double charging them. When payments are automated and recurring, it frees up time for you to focus on other aspects of growing your business.

2. You’ll pay lower interchange fees.

The interchange rate is what card issuers (Visa, Mastercard, American Express, Discover) charge for processing credit cards. While rates vary depending on credit card type, if your business offers a monthly membership or subscription, you will end up paying a lower interchange fee because you’re deemed a lower risk. Since you have the credit cards on file and are charging them the same fee each month, the chance of fraud occurring is much lower.

3. It makes for more consistent cash flow.

When you can’t predict if/when your customers will pay for their services, it makes for shaky cash flow and a disorganized business. Instead of sending out invoices a la carte, a recurring payment system will send them out at the right time, ensuring the customers pay and you receive your payments on time. When you know exactly how much money is coming in each month and when it’s so much easier to plan for the future of your business.

4. Faster payments and better recordkeeping.

When payments are automated, your money lands in your bank account faster with less work for you. It also means that all of your payments can be tracked under one master set of records. If something needs to be followed up on, your accountant or bookkeeper won’t have to sort through all kinds of different records. Instead, everything will be available in one place.

5. It provides better customer service.

It would be pretty annoying if every month you had to go into your gym and pay your membership in person — or even worse, if you had to pay for all of your memberships and services, up front, in advance. By providing customers with a subscription-based payment system, they never have to worry about forgetting a payment and having their service cut-off. Whether you’re a consumer or a merchant, automated payments are easier for everyone involved.

Should You Use the Same Provider for Your Merchant Account and Gateway?

When it comes to processing credit cards, there are several components at play. In order to accept and process credit card payments, you’re going to need a merchant account, which is essentially a bank account that allows businesses to accept payments in multiple ways including debit or credit cards. You’re also going to need a payment gateway: an e-commerce application service provider that authorizes credit card or direct payments processing before sending it on to your processor.

When researching these services, you may be tempted to get each of these components (merchant account, processor, gateway) a la carte because at first glance it seems to be more cost-effective. While this is sometimes the case, think of your credit card processing as a meal that you order at a restaurant. While there’s a definitely a chance that you’ll be able to put together a fantastic spread by ordering a selection of different sides and mains, it’s important to keep in mind that the complete meals on the menu are put together in a certain way for a reason — because each component works and complements the other.

The same can be said about credit card processing. Here are a few of the advantages of getting your merchant account, payment processor and gateway from the same company:

1. It makes set up so much easier.

If your goal is to set up your business as easily and quickly as possible, getting these services from the same provider is advantageous. Each component exists within the same system and therefore is designed to work together from the get-go. This can save you a lot of time and hassle during the setup process.

2. You only have one customer service department to deal with.

When you’re running your own business, time is money. Imagine something goes wrong with your credit card system and you need to troubleshoot. If you’ve purchased these services each from a separate provider, you’re going to have to deal with three different customer service departments in order to pinpoint the issue. While you’re interfacing with these different companies, you can’t process cards and you miss out on sales (costing you more money in the process).

3. You won’t have to stress over updates.

When you have all of these services under one provider, your merchant account, processing, and gateway are going to continue to work well together, even when there are new updates released.

On the other hand, if you’ve purchased everything a la carte, there’s a good chance that not all updates will be seamless. In fact, all it takes is one security update to crash your whole system. There’s going to be issues that need to be worked out and you’re going to have to spend a lot of unnecessary time trying to work things out (see #2) which will once again lead to a potential loss of revenue and/or negative customer experience.

4. You’re not going to save money in the long-run.

To recap, while the individual components may seem cheaper initially when you buy them from different providers, the time you’ll spend trying to make these separate entities work together is going to cost your business more overall. Most service providers offer special bundle deals which will save you money and sanity in the long run.

4 Payment Processing Trends to Look for in 2019

Last month, I was in New York City preparing to watch the marathon with a friend. The air was delightfully crisp, so my friend and I decided to head over to Starbucks to grab a beverage to keep us warm while we watched the race.

At the counter, I placed my order only to realize when I went to pay that I’d forgotten to slip my wallet into my purse. In the middle of my friend offering to buy my coffee, I remembered something. I pulled out my phone, quickly updated my Apple Pay and made my purchase by scanning my phone. I couldn’t believe how incredibly easy and convenient the whole process was.

This was the first time I made a purchase using my digital wallet, but I doubt it will be the last. I’m not the only consumer that feels this way. In the past year, consumers have become a lot more comfortable with alternative payment methods.

If you want your business to stay relevant, you need to adapt to your customers’ evolving payment needs. To get you up to speed, here are a few payment processing trends that are sure to be huge in 2019.

1. Predominance of Mobile Wallets.

The beauty of mobile payments is they tend to be quicker and more secure than paying by cash or card. Credit card information stored in a mobile wallet is encrypted and requires the consumer to unlock their device and/or use a passcode or fingerprint. Projections show that Apple Pay and Google Wallet will continue to vie for the top spot into 2019 and beyond, but Android Pay and Samsung Pay still have their share of supporters.

2. Increased popularity of mPOS devices.

Any smartphone or tablet can be transformed into an mPOS (mobile POS) with a downloadable mobile app. In 2019, you’re going to see a lot more mPOS devices popping up in a variety of different contexts. According to Total System Services, approximately 27.7 million mPOS devices will be in circulation in the U.S. within the next three years (a ten-fold increase since 2014).

3. Biometric authentication.

Biometric authentication – such as using a fingerprint to verify and access a mobile wallet – is slated to be another big trend going forward in 2019. Apple Pay and Samsung Pay currently both use fingerprint identification, but not all platforms offer the same level of security. But soon this will change. Overall the technology is a lot more cost-effective, especially when it comes to preventing fraud and other security breaches, so expect to see a lot more of it in 2019.

4. Improved customer experience.

The exciting thing about these growing trends is that they all contribute to a better customer experience. Providing the option to pay through mobile or via mPOS allows you to service your customers right where they are while providing a checkout service that’s swifter and more secure than ever before.

5 Things High-Risk Merchants Should Look for in a Payment Processor

When it comes to choosing a credit card processor, businesses are treated differently based on the perceived level of risk they present. Enter the high-risk merchant. Your business could be identified as high risk for the following reasons:

• Excessive number of charge-backs
• Poor credit of business owner
• Being a new business
• Having a previously closed merchant account

However, often businesses are deemed high risk based solely on the industry in which they operate. Here are some business categories that are generally deemed high-risk:

• 1-800 chat sites
• Airlines or airplane charters
• All adult-oriented merchants
• Cannabis or drug-related paraphernalia
• Cigarettes, e-cigarettes, or vape shops
• Credit protection, counseling, or debt repair services
• Debt collection services
• Discount health or medical care programs
• Debt consolidation services
• High average ticket sales
• Multi-level marketing (MLM) sales tactics
• Non-US citizens doing business in the United States
• Offshore corporation establishment services
• Replica handbags, watches, wallets, sunglasses, etc.
• Self-defense, pepper spray, mace, etc.
• Vitamin and supplement sales
• VoIP services
• Weapons of any kind

As a high-risk merchant, credit card processing comes with a unique set of challenges. You’ll want to make sure you have a credit card processor that is equipped to deal with your specific business needs.

While the perfect payment processor may take some time to find, here’s what you should be looking for if you’re a high risk merchant.

Knowledgeable, excellent customer service.

Just because you’re classified as a high-risk merchant doesn’t mean you should settle for a sub-par credit card processing company. In fact, it’s more important than ever that you find a company that has a strong track record for dealing fairly and equitably with their clients. They should provide outstanding customer support, reasonable and transparent pricing and easy to understand billing practices. They also shouldn’t require you to commit to lengthy contracts in order to sign on.

Charge-back mitigation programs.

As mentioned before, charge-backs are used to dispute a credit card purchase and get a refund for the card holder. A charge-back voids a credit card card purchase by withdrawing funds that were previously deposited into the merchant’s bank account and applying a credit to the consumer’s credit card. Instead of seeking a refund from the merchant, the consumer contacts the credit card company and requests a refund. If the claim is determined to be valid, the bank then forcibly removes the money from the merchant’s bank account.

If you’re a high-risk merchant — for example, a private jet company that’s subject to nature’s elements or company that relies on a free trial followed by an automated renewal — you’re going to have a higher number of charge-backs. While charge-backs are a fact of doing business, they still cost you money. That’s why you’ll want to look for a credit card processing company that offers a charge-back mitigation program. Usually this involves working with a partner organization that will help work with the consumer to mitigate and reduce the number of charge-backs you receive.

Experience dealing with merchants in your particular industry.

If you’re a high-risk merchant, the right payment processor will have a clear understanding of how your business and industry works. This could include anything from support with high-dollar transactions to knowledge of the pharmaceutical or cannabis industry. For example, if you’re a private chartered jet company, you’ll want to work with a company that understands that charge-backs are a common occurrence in your business and can work with customers in case flights are delayed or cancelled.

Look for companies that have specific programs designed to address the unique and specific needs of your business. You might even find payment processing companies that specifically work with your industry. Take for example the cannabis industry — over the past few years there’s been an explosion of payment processing companies that are dedicated to addressing the unique needs of this industry.

Scalable services and pricing to grow with your business and meet your needs along the way.

Your business isn’t static, and the services offered by your payment processing company shouldn’t be either. High-risk merchants are especially vulnerable to predatory processing companies that charge excessively high fees and require long contracts. You want a processor that’s going to help address the changing needs of your business and grow with you. This means choosing a processor that offers the services you need and has a strong ethical track record.

Everything You Wanted to Know About Chip Readers (But Were Afraid to Ask)

Chip readers are just another trendy add-on designed to make us upgrade our equipment and payment methods, right? Wrong.

When you’re a merchant it may seem like you’re constantly having to adapt to new technology — for better or worse. However, when it comes to chip readers, they’re actually a highly beneficial tool for your business. Chip cards in general are designed to actually make financial transactions safer and more secure, therefore saving you time and money in the long-run.

Here are a few things that you should know about chip readers, but might have been afraid to ask.

1. What’s the difference between EMV and NFC?

The world of credit card processing is full of acronyms, which can get really confusing — especially if you’re a new merchant trying to learn the lay of the land. This question is a good place to start. EMV stands for Europay, MasterCard, and Visa. It’s the abbreviation used when discussing chip-enabled credit and debit cards. NFC stands for Near Field Communication, which refers to the technology that enables contactless payments, like using mobile wallets (such as Apple Pay) or cards with contactless technology built in.

While both offer valuable security benefits to customers and merchants alike, they’re essentially two separate kinds of technology. Some payment processing equipment is designed to accept both kinds of payments, but not all are. If you’d like to accept both EMV and NFC, check with your payment processing company to see what equipment you’ll need.

2. What’s the deal with Chip and Pin processing?

Chip and Pin processing simply means that along with inserting the chip of their card, the customer is also required to enter their pin. It’s a step away from the traditional Chip and Signature model and provides an added layer of security to credit card transactions.

3. How are chip cards really going to affect my business?

If you’re operating a business in 2018, you’re required to have chip enabled readers (if you aren’t, you soon will be) and for good reason. Chip cards provide an extra level of security that helps protect both the merchant and the consumer from fraudulent purchases and other data breaches.

Unlike magnetic strip cards, which have sensitive financial data stored on their strips which can be then accessed remotely to make fraudulent purchases, chip cards create unique transaction codes every time the card is used. This is a one-time use code and cannot be used again for other purchases. Long story short, chip cards are simply a safer, more secure payment option for your business.

4. Am I legally required to invest in a chip-enabled card reader?

No, not yet. However, if you’re concerned about preventing credit card fraud and want to provide your customer with the most secure shopping experience possible, you’ll want to switch over to a chip enabled reader as soon as you can. Retailers generally bear the financial costs of fraudulent purchases, so if you’re hoping to protect your business financially, investing in a chip-enabled reader is a no brainer.

5 Ways to Better Protect Your Customers’ Financial Data

As a merchant, protecting your customer’s financial data should be a primary concern. If you become slack in this area, you risk compromising your customers’ safety and your reputation as a business. With mobile payments and credit cards becoming increasingly popular ways to pay for goods and services, criminals have come up with new and clever ways to commit fraud.

When it comes to handling your customers’ financial data, you can never be too safe. To protect your business and your customers’ well-being, here are a few things you can do to maximize financial security and reduce the likelihood of fraud.

1. Carefully choose your employees.

Ensuring your customers’ financial data remains secure starts by making sure you have the right people on your team. While you might be tempted to hire anyone who seems qualified, it’s important that you dutifully screen potential employees before you hire them. Do a background check to make sure candidates don’t have a criminal history of fraud or other financial crimes. You want to be sure that your employees are trustworthy, so make sure you actually contact and speak to their previous employers and follow up with their references.

2. Conduct proper training.

It doesn’t matter how trustworthy your employees are. If they’re not trained properly, your customers’ financial data is at risk. This not only means training your staff to properly execute financial transactions, but also ensuring that your computers are properly protected against potentially hazardous sites that include malware.

If necessary, create a policy that computers can only be used for business purposes or sites that are pre-approved (for example, stipulate that your employees can’t open attachments from your computers). Staying on top of these things and continually training your staff on new technologies as they emerge should help keep data secure and reduce the risk of fraud.

3. Only use PCI-compliant software.

When it comes to handling your customers’ credit card information, only use PCI-compliant payment gateways that filter out fraudulent transactions using anti-fraud tools like AVS (Address Verification System). All of the software you use should be PCI-compliant and tested frequently to ensure customers’ financial data remains safe and secure. If you’re storing customers’ credit card information electronically, make sure that it’s properly encrypted. If their info is stored physically, make sure that it’s housed somewhere secure that isn’t easily accessible (for example, a locked filing cabinet or safe).

4. Beef up your password requirements.

If your business involves an online component, ask customers to create a more complex password that involves multiple special characters. A weak password system puts your business at risk of fraud. If employees are required to use a password to access the system, make sure they change their password every 90 days to ensure security.

5. Have a security breach plan in place.

Even if you’ve done everything necessary to secure your customer data, sometimes security breaches still happen. To make sure things are handled in a swift and secure manner, it helps to have an emergency plan in place for securing compromised systems. If something goes wrong, make sure your employees know exactly what to do and stay in constant touch with your customers. Remaining transparent and providing follow-up support to your customers will help ensure them that you’re committed to security.

6 Reasons to be excited about Tap and Pay (NFC)

Near Field Communication (NFC) otherwise known as “tap and pay,” is becoming an increasingly popular payment method — and for good reason. NFC allows customers to simply tap or wave their card over your terminal to make a payment. It’s also the technology behind mobile wallets, which allow users to make purchases directly from their smartphones.

Here are a few reasons why you should be excited about tap and pay.

1. It’s ultra convenient.

No signatures. No pins. No messy receipts to deal with. If a customer is making a payment using their phone, they don’t even need to have their physical wallet because they can use their mobile one. What’s easier than paying with a tap of your smartphone screen? It’s simple and incredibly easy to use.

2. Faster, easier transactions.

Unlike traditional payments that require a customer to swipe their card and enter a PIN number, with NFC, a customer can simply tap their card and pay, allowing you to service them quickly and reach the next customer faster. It doesn’t get much more convenient than this.

3. Allows customers to go wallet-free.

Forgot your wallet? Left your credit card at home? As more customers adopt NFC fueled payment options like Apple Pay, Google Pay, and Samsung pay, these pesky problems will no longer be an issue. Customers will simply be able to pay for goods and services using the mobile wallet on their smartphone.

4. More secure.

The first time you heard about tap and go payments, you probably thought to yourself, “how could this possibly be secure?” However, the truth is that tap and pay is actually more secure than using a physical credit card for several reasons. In the unfortunate situation where a mobile device is lost or stolen, all credit card information is password protected. Additionally, NFC-enabled payment cards are designed to be more secure than the magnetic strip of a regular credit card. Unlike a physical card where anyone can pick it up and see your credit card information, with tap and go, merchants have no physical access to customers’ credit card information.

5. It’s versatile.

NFC is very versatile and covers more than just payments. This technology can be used for booking tickets, reserving movie seats, redeeming rewards, coupons and so much more — and this is just the start when it comes to creating a seamless customer experience. NFC has also become popular in academia because it the high level of encryption allows institutions to use it as a security system, by accurately ID-ing students entering and exiting the premises. It’s also used in the workplaces for security purposes and to allow employees to share information amongst themselves.

6. Awesome customer experience.

Companies that adopt cutting-edge technology are often viewed as progressive and forward thinking. In other words, having NFC gives you major cool points. Customers are always looking for the most hassle-free way to access goods and services, and tap and pay provides just that by allowing people to pay for services with the tap of the wrist. By providing an easy way to do business, you’ll not only retain current customers you’ll also attract new ones.