Archives for Merchant Services

Payment Processing: Innovation, Security, Threats

As the number of electronic transactions grow, so do the opportunities for cybercriminals to steal money. As a merchant, you need to provide the best payment security possible, so your customers don’t have to worry about their data. As a customer, you need to be aware of the threats against you – and the technological advances that help combat them.

From the cardboard and celluloid cards pre-1958 to the biometrics, geolocation and tokenization security of today, the merchant services industry has been evolving in the security department since the very beginning. Here are some of the important aspects of payment security and how they’ve developed over the years.

PCI Compliance

PCI Compliance refers to the security standards established by the Payment Card Industry Security Standards Council in 2006, and they’re an important indicator of security status today. These standards were created to ensure that anyone who processes, transmits or maintains payment data has proper security in place. PCI standards are frequently adapted, and they differentiate security measures for merchants based on both the volume and type of transactions they process. In other words, PCI compliance is both very important, and very confusing.

Card Tech

In 1958, the first plastic payment card was created. By the 1970s, we’d seen the addition of tamper-resistant signature panels, microprint security, and card embossing designed to protect card carriers from nefarious counterfeiters.

Electronic security found its stride in the mid-80s with the development of risk scoring and real-time electronic authorization designed to protect against fraud. In the 90s, we saw the addition of the CVV security code for magnetic stripes, and the first inklings of EMV chip card technology. EMV chips were added into payment cards because of the greater payment security it offers, plus its resilience against “skim” scams compared to magnetic strips. Chip technology also uses encryption and tokenization to further protect against theft. In fact, the Department of Justice estimates that 86 percent of identity theft cases originate with existing account information. This information is protected by EMV chips in the case of a breach.

Speaking of breaches – some major ones took place in the 2000s. In 2003, it was the DPI data breach that saw eight million card accounts compromised. In 2005, CardSystems Solutions was breached; 40 million cards were compromised. In 2010, ALDI debit card accounts and pins were stolen from nearly 1,100 grocery stores, and the following year Michaels was breached for the first of three times in three years, potentially compromising PINs and three million payment card accounts. In 2013, Target was breached with 40 million payment card accounts stolen and an estimated industry cost of $248 million.

This is all to say that, as security tech advances, so do the threats they protect against. This digital arms race continues today, as we shift away from static solutions to dynamic, more resilient technology.

The Future of Payment Security

The payment card industry projected $31.3 billion in global card losses to security threats in 2018. Another study found that retailers stand to lose some $130 billion in fraud between 2018 and 2023. No matter which way you look at it, financial institutions across the globe must push to be more innovative than the fraudsters if they want to keep their – and your – money safe.

Some of those innovations include tokenization, biometric data, geolocation, improved chip tech, and an ever-increasing base of data analytics. In fact, the technology is becoming so impressive that tech-wizard hackers are no longer the only major threat in day-to-day fraud. Instead, it’s the social hackers using card-not-present scams that have begun to take advantage of less tech-savvy audiences – and retailers are ill-prepared to fight it.

Conclusion

The faster we connect, digitize, and innovate our daily transactions, the more risks are introduced. The payment security landscape is akin to the Wild West, and it is more important today than ever before to make sure your electronic payment processing environment is as secure as it can be.

Thankfully, security is a deterrent to fraudsters in itself. Hackers tend to search for low-risk, high-reward options. Much like keeping your Point-of-Sale terminal under lock and key when it’s not in use, adequate payment processing security is usually enough to make your accounts unattractive targets. After all, you can’t get breached if no one is willing to try!

Square Payroll is now mobile

Launched back in 2009, Square is a popular merchant services aggregator that has become very popular with small businesses and retailers. In 2015, it introduced Square Payroll, a desktop service which allows its customers to process payrolls. Now, three years later, the service is going mobile.

ZD Net explains that using Square Payroll mobile, “Employees clock in and out of their shift via integrated time cards on Square’s Register app. When the pay period closes, the business owner imports employee hours and Square’s payroll service calculates applicable taxes and sends the funds out to workers. Employees have the ability to enter their own tax details upon setup, and state and federal payroll taxes are filed automatically for the business.”

For Square Payroll customers who are considering going mobile, the company assured in a recent blog post that the experience will be very similar. “Import your timecards or enter hours, submit your pay run, and leave the rest to us (we’ll take care of filing, paying, and withholding your payroll taxes). And now you can easily do all of this on your mobile device, no matter where you are,” Square assured.

If you use Square Payroll, the process may have just become a little easier for you. It also showcases the growing trend of having access to everything from our smartphones at the drop of a dime.

Source: paymentsjournal.com – Square Payroll Goes Mobile
Published: September 26, 2018

Why 95% of Businesses Overpay for their Merchant Services

Be honest with yourself. Have you ever said any of these common phrases below?

“We do a pretty good job making sure our costs are low.”

“We already switched vendors and are certain we have good rates.”

“We were told we have the lowest rates.”

“We really like our rep. They take good care of us.”

Well, these statements are more or less defense mechanisms created by our subconscious to convince ourselves that we’re not getting taken advantage of.
The truth is, how can you possibly know if your rates are as low as they should be? If you don’t know, then you are probably overpaying. There’s nothing wrong with you… you are just like nearly everyone else!

There are several reasons 95% of businesses overpay for their merchant services:

1.   Limited data for optimizing their merchant processing configuration.
2.   Lack of time to focus on a non-core activity.
3.   The traditional sales rep-client relationship.

Limited Data

Depending on the size of the business, the job of setting up and tracking merchant services costs might fall on the owner, CFO, accounting, IT, business manager, or maybe even someone in accounts payable. In almost every case, the services in question are a necessity, and the individual charged with setting up or maintaining the service has little or no expertise in merchant processing. After all,why would they?

canstockphoto17280434

Now, in contrast, just imagine:

  You had a database containing the details of over 17,000 merchant services pricing deals from all different types of industries.
  You had software specifically designed to “lift the fog” and make it easy to understand all the different fee categories associated with your pricing model.
  You had someone who followed the ever-changing markets daily and had the negotiation strength of a large national organization.
  You had someone who knows all the unpublished deals, as well as how system or process tweaks can save thousands?

What are the chances your rates would be lower? You guessed it – about 95%!

Lack of Time

Let’s cut to the chase… is your time more valuable doing what you excel at for your business, or trying to become a cost reduction specialist in merchant processing? What is the opportunity cost of taking focus off the core business?

Instead of taking your eye off the ball, just imagine:

  For less than you pay today, you can have a team of professionals that handle all things related to merchant processing.
  For less than you pay today, you have a team of professionals who hold suppliers accountable, looking for billing errors and suggesting additional cost savings if/when they occur… all while you focus on your core business.

Would that free up time and give you some peace of mind?

The Traditional Sales Rep-Client Relationship

This might be the most important differentiation between Schooley Mitchell and the rest of the market. Consider the true objective of a sales rep: their job is to get business for their employer in the most profitable way possible, and make it more profitable over time. Is this a bad thing or does it make sales reps bad? Of course not, it’s how business works and is a necessary aspect of free markets
and capitalism.

Now, instead of the traditional sales rep-client relationship, just imagine:

  A consultant who is only paid if savings are found and implemented.
  A consultant who is paid a portion of found savings after you realize the savings.
  A consultant whose pay is exactly equal to the value they bring.
  A consultant who is unbiased as to who provides the given service and is completely objective with cost-saving recommendations.

In a nutshell, for less than you pay today, you can have a professional team that optimizes the merchant services configuration for your business.

Is the 95% accurate? Yes, that percentage is compiled from our last 20 years and our 17,000+ clients who have saved more than $260 million!


Bill Gribble is a Strategic-Partner with Schooley Mitchell, North America’s largest independent telecommunications and merchant services consulting firm in North America. On average, we reduce telecom and merchant services expenses by 27-28% and have delivered over $260 million in documented savings to our clients to date. Visit his site at www.schooleymitchell.com/bgribble.

© Schooley Mitchell 2017

Payment alternatives go unexplored as credit cards used increasingly for small purchases

canstockphoto17280434You’ve probably heard said that you shouldn’t use a credit card for small purchases – especially for something under five dollars. According to CNBC, despite this advice being engraved into our increasingly cashless society, it seems that it isn’t proving effective with younger generations.

A study done by CreditCards.com of 1,001 adults shows that seventeen percent of people have used their credit card to buy something that costs less than five dollars. This might not seem like a lot, but the number has increased eleven percent from last year.

CreditCards.Com senior analyst Matt Schultz suggests that this could be in part due to cards which reward users for monthly spending. Many cards require users to spend $3,000 in the first few months to qualify for bonuses.

Another reason might be that the alternatives just aren’t succeeding. For example, Mike Maughan, head of brand growth and global insights at Qualtrics, says that “mobile payment platforms aren’t exactly catching on.”

The majority responsible for these small purchases, and in fact the generation most likely to use their credit card, are millennials. The very people who were supposed to champion the cause of alternative solutions like Apple Pay are actually failing it. Believe it or not, they are four times more likely to use cash over a mobile payment platform.

PayPal Cutting Support for Microsoft, BlackBerry

paypalOnline payment processor PayPal has recently announced it will stop supporting Amazon Kindle, BlackBerry, and Microsoft Windows’ mobile apps in order to dedicate more effort to Apple iOS and Android devices. As of June 30, these platforms will no longer be affiliated with PayPal.

For many, this doesn’t come as a surprise. Microsoft’s recent news that it is getting out of the mobile game gives PayPal little reason to stay, and likewise BlackBerry has been declining in popularity for years now. The only question is why PayPal would choose to abandon Amazon Kindle, which is still widely used by consumers. Unfortunately, PayPal didn’t give many answers.

“It was a difficult decision to no longer support the PayPal app on these mobile platforms,” explained Joanna Lambert, PayPal’s vice president of consumer product, in a blog post. “But we believe it’s the right thing to ensure we are investing our resources in creating the very best experiences for our customers.”

If you are a Windows, BlackBerry, or Kindle mobile user, you will now have to access PayPal via its website.

*Source: CNET

Credit Card Cloning Scam Shocks Connecticut Town

Visa credit cardA recent credit card theft in Clinton, Connecticut proves our money may not be as safe as we think. Hundreds of dollars have been stolen due to credit card cloning, which exploits the 40-year-old magnetic stripe on the back of cards. This leaves both credit and debit cards vulnerable.

Two men were caught on a security camera at a convenience store in Clinton making hundreds of dollars’ worth of fraudulent purchases. The card they cloned belonged to a man in the Hartford area.

“The technology is the problem,” resident Robert King was quoted as saying in an NBC article. “I think they’ve got to find a way to make it more fool-proof.”

And King is right. Experts believe that the process of cloning a magnetic stripe card is relatively easy for a tech-savvy person with the right computer and card reader. It could be harder to accomplish with the newly introduced chip-and-PIN cards.

As always, experts are recommending consumers keep tabs on their credit card statements and never let credit or debit cards off their person. Cash is still the safest way of protecting against this kind of scam, which can be frustrating in an increasingly card based world.

Visa to Speed Up Chip Processing

visaVisa knows we’re not a patient bunch, which is why the credit card giant is taking steps to make chip-and-PIN processing faster, aiming to cut  processing time at the terminal to two seconds or less.

A recent study showed the average processing time is 10 seconds, a substantial increase from the two to three seconds it took to process a card using the magnetic stripe. Visa has already started talks with terminal manufacturers, but the hardware itself isn’t the only factor at play – connection speeds also play a role in processing times.

“There’s been a lot of interest in what we can do to improve the transaction speed,” Visa’s vice president of risk products, Stephanie Ericksen, was quoted as saying in a Bloomberg article. “The key difference will be you can insert your card, leave it in the terminal for a split second and remove the card rather quickly, rather than waiting for the entire transaction to complete.”

In total, American consumers have 265 million Visa credit and debit cards in their wallets. About 20 percent of Visa’s merchant locations have upgraded terminals to process chip cards, which were introduced to the U.S. market in 2015.

Google Launching Hands Free Payment App

google hands freePaying for credit or debit interactions with your smartphone is becoming the norm thanks to systems like Apple Pay and Samsung Pay. Now Google is taking a leap forward with its introduction of Hands Free, an app that allows you to make electronic payments without even having to take your phone out of your pocket.

The app, which works on both Android and iOS, is currently being tested by McDonald’s and Papa John’s in the South Bay area of San Francisco. It works by identifying your face and location. First you have to tell the cashier at participating locations that you want to pay with Google, who will then ask for your initials. Hands Free has a list of all Hands Free-using phones within the range of the specific terminal you’re using. So when the cashier enters your initials they see a list of people close by and match you to your picture in the system.

If having the cashier be able to identify your face sounds too arbitrary, Google is also testing a version where a camera automatically matches you to the system. If the transaction is successful, you’ll receive a notification. This would also be a great warning against potential suspicious activity on your account.

Hands Free is not a part of Android Pay.

*Source: PCWorld

Apple Pay May Launch MasterCard in Canada

mastercard paymentsIf the rumors are true, Apple Pay is preparing to roll out MasterCard payments in numerous countries in 2016, including Canada, Australia, Brazil, Japan and Singapore.

According to MacRumors.com, an internal document indicated Apple Pay’s plans to increase its offerings. Though the service supports the big American banks, it doesn’t offer the same in foreign countries.

“Earlier this month, a hidden ‘NetworkInterac’ string was uncovered in iOS 9.2.1 code that hints at Apple Pay support at Canada’s big banks,” wrote Joe Rossignol, on MacRumors. “Interac is Canada’s official debit card network, adopted by the country’s largest financial institutions nationwide. TD already stirred speculation in October when it inadvertently listed Apple Pay as a method of payment on its website, before quickly removing it.”

Apple Pay Available in Canada

Apple PayAmerican Express users in Canada can now access Apple Pay on their iPhones. The service allows users to upload their credit card information into their phone and use it for tap-to-pay purchases.

Apple requires cooperation of banks and card issuers for the service to work, and unfortunately for them Canada’s financial institutions have not been eager to jump on board. That’s why at this time only American Express cardholders issued by Amex Bank of Canada can activate Apple Pay. There is no word on whether it will expand to others.

Apple Pay is compatible with near-field communication while using the iPhone 6 and 6S models and the Apple Watch. It can also be used to make in-app purchases.

Source: Castanet.net