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According to the Federal Reserve, American’s total credit card debt has reached $951.7 billion – up 8.2 percent from a year ago and the highest ever recorded. This may sound like good news for the Acquirer industry but it may have a bad spiral effect. Some may speculate that our financial situation started with real estate developers and individuals flipping houses. Perhaps it was our poor lending guidelines? When I heard that the House voted against the government financial bailout I realized it was only a matter of time before our nation’s financial situation affected the payment processing industry.

As more and more financial institutions struggle and the unemployment rate begin to increase, issuers are going to begin offering less credit to card holders. This means that less people are going to have the ability to make purchases. Many business owners will be impacted by less spending.

Some options many merchants are turning to are:

Continue reading "Merchant Services Affected By Financial Crisis?"

In today’s economy, more and more people are turning to using credit cards. With this new onslaught of credit card users there comes a greater possibility of fraud. The payment card industry had made great progress in compliance and security. Visa and MasterCard are actively creating technology and guidelines to protect consumers and merchants alike.

Visa and MasterCard have developed ways to improve the security of online transactions. Verified By Visa and SecureCode allow the card holder and card issuer to authenticate each other. This is done by exchanging digital secure certificates. Card holders can be assured that they are dealing with a real merchant and conversely provide a merchant with proof of a real cardholder. A digitally signed record of the transaction is created. Most issuing banks encourage card holders to sign up for these programs and many online merchants give consumers the opportunity to sign up before they proceed with payment.

Continue reading "New Innovations Are Keeping Credit Card Information Secure"

In 1730, the first advertisement for credit was placed allowing furniture to be purchased over time. Almost 200 years later, Western Union issued a metal plate to their employees instead of a paycheck. Of course this card was only good in company owned stores. It was not until the 1950s that Bank of America issued the first revolving credit card.

Technology in the payment card industry has grown tremendously in just the last 5 years. Merchants are able to accept payment using any java enabled cell phone, and can even turn their laptop into a credit card terminal. But the best is yet to come.

Continue reading "Technology Trends and Card Processing"

For years the government has taken a Laissez Faire approach to Interchange Rates, but recently the U.S House Judiciary Committee has begun heavily campaigning to control them. Proposed legislation (HR 5546 The Credit Card Fair Fee Act) would require Visa and MasterCard to negotiate Interchange fees directly with merchants. This would put a stop to a credit card processing company’s ability to set non negotiable fees. If the merchant and the credit card company are not able to come to terms, then they would have to submit their final offers to binding arbitration by a three judge panel.

If this new bill is passed by Congress, it is could potentially create more of a mess and ultimately higher costs. I am sure there are millions of businesses in the U.S alone, and if it passes, Visa and MasterCard are going to be getting a lot of calls from people looking to negotiate their fees. This means they will have to hire more staff to take the calls, and possibly even create systems to track all the various negotiated rates. So will this bill help the situation, or only put a band aid on what merchants believe to be an issue? Fees collected generally go to rewards programs, credit losses, and operating costs.

There are a total of 23 Bills regulating the card processing industry; some of the key ones are as follows:

Continue reading "Should The Government Be Involved In Interchange Legislation?"

With technology on the rise and our economy weakening more and more, scams are evolving within various industries. The merchant services industry is vulnerable to a variety of different scams.

About a month ago, a merchant contacted our company to set up a merchant account and began running thousands of dollars in transactions. After the first month of processing we received a call from a business owner claiming he received a credit card processing bill from us, but that he does not take credit cards. The imposter account was a SCAM! The fake purchases were made with stolen credit cards and deposited into bank accounts owned by the fake company. These guys generally run small transactions and fly under the radar. They also registered a domain name that is similar to that of the business they were impersonating.

How might this have been caught sooner? Merchants and consumers should check their credit reports frequently and report any suspicious activity. It is also helpful if companies look through the web to see if there are websites that resemble their own or use their business name.

Continue reading "Watch Out For Merchant Account Scams"

I have discussed in previous posts new Interchange category rate changes that most business owners have most likely seen notifications about on their statements. Most of these notices say “Increase” and these increases are being passed on the merchant. Not all Interchange categories have experienced increases – the main changes have been in the Business, Corporate, and Purchase Card categories and the increases range from .05% to as high as .25%.

Some of the main increases have been Corporate Card Non -Travel Level 2 with an increase of .05%, Purchasing Card Retail with an increase of .10%, and Business Standard T&E with an increase of .25%. Card types such as Corporate Card Retail had a decrease of .10%.  Although the CPS Automated Fuel Dispenser Credit category went down significantly on their rate by .35%, they raised their transaction fee by .20 cents.

Many merchants that take the card types in the increased categories may want to contact their merchant services provider to see what their total increase will actually cost them.

Continue reading "Are Businesses In Store for More Interchange Increases?"