Blog

Online shopping is at an all time high. According to The Nielsen Report, over 875 million consumers have shopped online. This is up 40% in the last two years. The most purchased items are books, clothes, accessories, video games, airline tickets and electronic equipment. While 2008 holiday purchases at retail locations were down 5 percent, shopping on the internet was up 15 percent, on Cyber Monday alone. If your business is not online you are missing out on huge potential profits.

Once your business is online and your shopping cart has been built, you have to select a payment gateway. Many merchants select their payment gateway based on what their merchant services provider tells them. There are hundreds of payment gateway options out there, and not all of them measure up.

A gateway facilitates your online payments by connecting your secure order from your merchant account to a processing bank. Something as important as the transfer of money should take some research. When selecting a gateway, consider available features, reliability, and support.

Continue reading "Does Your Payment Gateway Measure Up?"

Back in 2005, many of us in the merchant services industry were in the thick of the CardSystems security breach. The Federal Trade commission claims "this is the largest known compromise to financial data to date". Millions of dollars in fraudulent purchases were made with the stolen data. Processors, like the one I was working for at the time, had only a short window to move all their merchants to a new platform. This incident made it clear that card holder data must be protected and more precautions should be taken to ensure that card holder data is not compromised on this large of a scale again.

Now merchants are in for a new type of threat. The very software that business owners use on their computer networks may cause card holder data to be compromised. Packet sniffers are software or hardware that monitors data on a network, and they have been around for a long time. This software is typically used to troubleshoot a network issue or to test firewalls . Conversely, we have malware that is designed to damage a network. It appears that attempted fraud is on the rise again. Packet sniffers are being used as malware on systems to snag or intercept card holder data.

Continue reading "Is Your Online Payment Gateway Secure?"

With 80% of online shoppers using credit cards, you can’t afford NOT to take credit cards. Did you know that merchants offering credit cards as a payment option increase their profitability by estimated 50%? With the inherent advantages involving credit card processing, should you really go with your initial instinct and choose the cheapest option?

Let’s face it – we all strive to have that BMW as opposed to a Dodge Neon, and even shop around for the best appliances. Knowing this, have you ever stopped to wonder why we, as business owners, opt for the lowest bidding credit card processor for something as important as our business?

As with other products, cheaper does not necessarily equate to better. How about reliability? If your customers are charged the wrong amount, or transactions are declined due to an unreliable or inaccurate gateway, who do you think they will blame? That’s right, YOU! Consider this – is the money you’re saving using the cheapest solution worth the cost of losing future business?

Let me share with you this example, a few weeks ago, a merchant was having trouble getting cards approved on his website. He then had his funds held by his processor. His merchant services provider told him it was his gateway and conversely, the gateway provider told him it was his merchant services provider. Needless to say, this merchant chose his provider based on the lowest bid, and what he got as far as service and reliability was a whole lot of finger-pointing and denial of liability.

I’m sure as business owners you are bombarded with calls and mailers from merchant services companies on a daily basis claiming their fees are the lowest. Fees for merchant services are an unfortunate reality, irrespective of the processor you choose, so it is important to choose the right company to partner up with. Here are some things you should know when deciding on a merchant services provider:

• Make sure whatever gateway you choose is compatible with your shopping cart software.
• Rates and fees are determined by many factors: length of time in business, percentage of sales made over the phone or the internet, type of business, personal credit rating, and dollar amount of sales per month. A typical rate should be about 2.30% to 3.5%, but some companies charge as high as 6%. Poor personal credit or business type may warrant a much higher rate.
• Do not agree to a high discount unless you are sure no other company will process your charges for lower.
• Be sure to ask about all fees involved such as Gateway fees, ACH fees, monthly minimums, Address Verification Fees, transaction fees and statement fees.
• Read all agreements closely to determine the circumstances for which your money can be put on hold.
• Find out if there will be a hold or reserve on your account. If so, how much with be held and how long will it be held for?
• What types of fraud and risk monitoring does the processor and gateway provide?
• Who do you call when you have questions? For instance, a processor offering its own gateway is a better choice since there will be fewer support calls to make in the event of service interruption.

In my experience in this business, I have come across numerous merchants that got exactly what they paid for – very little.

Take my advice, do your homework and don’t settle for the lowest bidder.

I frequently get calls from merchants who say they were quoted one rate, but claim different rates are showing up on their statements. Unfortunately, merchants can experience a rate increase or surcharge because of the type of card your customers are using, such as sky miles cards and rewards cards. Another cause of increased processing costs is transactions being processed incorrectly by the merchant. How can merchants avoid being charged these surcharges and still qualify for the best rate possible?

First, it is important to understand the different types of transactions that can occur when running a credit card sale:

Continue reading "What are Non-Qualified Transactions and How Can Merchants Avoid Them?"

With fraud on the rise, online merchants face increasing risks. In card-not-present transactions, there are two basic levels of credit card validation used to validate that credit cards presented for payment actually belong to the person initiating the transaction. Continue reading "Validating Credit Cards"