Merchants permitted to steer customers from American Express

The result of a federal antitrust case could change the way merchants treat acceptance of American Express. In short, merchants complained of substantially higher fees to accept American Express, but were not allowed to steer customers to lower cost card brands. A judgement was entered April 30, 2015 in favor of the plaintiff. An open ended stay of the permanent injunction pending appeal was denied.  However, the court allowed for a 30 day temporary stay of the permanent injunction on May 19, which just expired.

Excerpt from the American Express Anti-trust judgement

As reflected in § III.A of the Permanent Injunction, the court has determined that in order to implement an effective remedy in this case—in other words, “to allow Merchants to attempt to influence the General Purpose Cards that a Customer uses by providing choices and information in a competitive market”—merchants must be allowed to steer toward particular brands of debit cards, in addition to steering between brands of credit cards. (Permanent Injunction § III.A.)
The Permanent Injunction does not, however, expressly protect steering to other forms of payment, such as cash and check, although other sources of law provide such protection in certain circumstances…

Finally, the court expressly does not include brands of debit cards within the scope of
§ III.A.7 of the Permanent Injunction. Thus, while a merchant has the right under the Permanent Injunction to communicate to customers the cost of accepting American Express, or the relative costs of accepting different brands of credit cards (and the merchant may do so on an average, rather than transaction-specific, basis), American Express can prohibit merchants from including costs associated with acceptance of debit cards in this calculation, since blending the costs of accepting credit cards and debit cards would likely overstate the difference between the merchant’s overall cost of accepting American Express and its cost of accepting other brands, such as Visa and MasterCard, that have both credit and debit cards.

Keys for merchants who want to adopt steering

  • Merchants can offer discounts or rebates to customers
  • Merchants can display signs stating ‘preferred’ card brand
  • Merchants cannot blend debit and credit rates to communicate cost of acceptance differences
  • Other laws are applicable, including the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. “Retailers can encourage their customers to use other forms of payment, such as cash and checks, and can discount for PIN debit, cash and checks.”

Merchant Card Brand Steering Challenges

Under the Durbin amendment, customer receipts must include a subtotal, discount amount, and final total. Merchants need a software or cloud based solution that can make the calculations and output the correct receipt.

If offering discounts for steering, removing decision making and calculations from cashiers is critical for both compliance and cash management.

CenPOS Steering Solutions

CenPOS is a merchant centric, cloud based payment engine with fully compliant steering technology, including the ability to identify which cards qualify for discounts, and automatically calculating the discount.

  • Analyze transaction data by user/department, day of week, and hour of day, to determine if and when steering is cost effective.
  • Offer steering discounts only when and where it’s financially beneficial instead of 24/7 in all locations.

 

REFERENCES

United States of America, State of Arizona,    State of Connecticut,    State of Idaho,    State of Illinois,    State of Iowa,    State of Maryland,    State of Michigan,    State of Missouri, State of Montana,    State of Nebraska,    State of New Hampshire,    State of Ohio, State of Rhode Island,    State of Tennessee,    State of Texas,    State of Utah, and    State of Vermont
v.
American Express Company, American Express Travel Related Services Company, Inc., MasterCard International Inc., and Visa Inc.
http://www.justice.gov/atr/cases/americanexpress.html

* http://www.justice.gov/atr/cases/f313600/313609.pdf

http://www.marketwatch.com/story/amex-to-stop-merchant-curbs-2015-06-18-231034750

http://www.forbes.com/sites/maggiemcgrath/2015/02/19/antitrust-lawsuit-loss-puts-amex-among-the-dows-worst-performers/

3D Merchant Services Powered by CenPOS
2633 NE 26th Ave Metro South FloridaFL33064 USA 
 • 954-942-0483

CenPOS certifies for EMV on TSYS

cenpos payments logoCenPOS certifies for EMV on Visa, MasterCard, American Express, and Discover on the TSYS Processing Platform.

CenPOS, a payment technology provider, announced today that it has certified EMV on Visa, MasterCard, American Express and Discover on the TSYS network. EMV is an international standard that regulates financial transactions with a smart card chip in replacement of a magnetic stripe. Smart card chips provide a higher level of security than magnetic stripes as they are designed to securely store data and allow secured authentication of the cardholder during the transaction. In the US, the liability shift for merchants is scheduled for October 1st 2015. Given the huge financial risk associated with non-compliance the merchant community is encouraged to independently validate that the payment solution, including the hardware, being sold to them is actually EMV certified with their merchant processor prior to purchasing the solution.

EMV will change the landscape of the payment processing arena in the United States, we took the card brand announcement very seriously back in the summer 2011 and made this a top priority at our company. Our hard work and unwavering commitment to compliance with all card brand mandates is paying off in a big way for us and our customers as evidenced by our multiple EMV certifications under our belt,” said Jorge Fernandez, Co-Founder and Chairman of CenPOS. “We are educating merchants across the United States on EMV and the risks associated with non-compliance. We are finding that some merchants are being misled in believing that they are ready when in fact the solution that was sold to them is not yet certified. I am sure this will have legal and financial ramifications for payment professionals selling non-certified solutions,” added Fernandez.

About CenPOS

CenPOS is a merchant-centric, end-to-end payments engine that drives enterprise-class solutions for businesses, saving them time and money, while improving their customer engagement. CenPOS’ secure, cloud-based solution optimizes acceptance for all payment types across multiple channels without disrupting the merchant’s banking relationships.

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Contact Christine Speedy, CenPOS Reseller and Integrations Specialist, 954-942-0483 for more information.

ICVerify Software End of Life & Replacement Options

ic verify replacement alternativeFirst Data announced today the end of life for ICVerify® Software, also known as First Data Payment Software for Windows®. Following a similar announcement by Verifone for PCCharge in May 2015, It was inevitable that ICVERIFY Software, another PC based payment software solution would also be deemed obsolete. What will software companies and merchant users replace it with?

What does ICVERIFY Software end of life mean?

Product development has ended. First Data has a timeline to stop selling and stop supporting ICVERIFY. The product owner does not have to immediately change, but should review the timeline and consequences for future business decisions.

ICVERIFY KEY DATES:

  • June 17, 2015 End of Development Date: Effective immediately, there will be no new development for the ICVerify product. This includes development work requested as a result of a support issue.
  • July 31, 2015 Final Order/Shipment Date: No new orders or licenses. No new MID/TIDs or adding users to existing licenses.
  • June 30, 2016, End of Support Date: First Data support discontinued. Up until that date, both level 1 and level 2 telephone support for existing users.

First Data will honor valid ICVerify support contracts for customers that have purchased annual support, prior to June 17, 2015, through the end of their annual term. Effective immediately support contracts will not be renewed. This includes contracts for Level 2 integration support for First Data clients as well as Level 1 support agreements for non-First Data clients. Level 1 support for First Data clients will remain free until June 30, 2016.

“This is an ideal time to examine long term omnichannel payment needs to avoid transitioning to other outdated technology,” according to Christine Speedy, a cloud payments expert. “At their core, all payment gateways enable merchants to process web based transactions securely with cloud solutions. Beyond that, there are many differences, and even bleeding edge solutions could lead to further disruption, if the new technology disappears when ideas don’t catch on or venture capital dries up.”

TIPS FOR NEW PAYMENT GATEWAY VENDOR SELECTION:

Is 3-D Secure (Verified by Visa and MasterCard Secure) for card not present transactions supported?
Are there any EMV certifications? If not, what is the roap map time frame? (note- EMV certified is not the same as EMV ready or capable)
Is the gateway processor neutral to provide maximum financial flexibility? (Critical for integrations.)
If business to business, for which sales channels does the gateway support level III processing? (mobile, retail, EBPP, kiosk, online payments, ecommerce, other) Can the user bypass submitting level III data on eligible transactions?
Is ACH supported? (If no, this is a red flag as lagging in innovation.)
What type of audit trail is available for PCI 3.0? How long is the data accessible?

Do you need a new payment gateway for your application? Or to replace your ICVERIFY account? CenPOS is a flexible omnichannel gateway with EMV, 3-D Secure, tokenization, and Level III processing. CenPOS solutions, including virtual terminal and electronic bill presentment and payment, can significantly impact EBITDA, PCI Compliance, and efficiencies. Contact Christine Speedy at 954-942-0483 for integrations and new accounts.

Level 3 Processing Payment Gateway

Looking for level 3 processing payment gateway for your application? Whether you need retail, ecommerce, hosted pay page or something else, we have the solution.

level 3 interchange rates

The difference from Data Rate III to Commercial Standard is the data sent with the transaction. Swipe and card not present are both eligible for the same interchange rates in the example.

Choosing a gateway capable of level 3 processing is not enough. There’s a multitude of rules that must be followed for the lowest qualified interchange rate. Merchants desiring to maximize qualification will want a gateway that automates processes to ensure all the rules are met, not to just send level III enhanced data.

Keep your existing new merchant account with our omnichannel payment gateway.  If your processing doesn’t support level 3, we’ll help you get an account that does.

Contact Christine Speedy 954-942-0483 for a free trial and your business to business company can start qualifying for lower interchange rates almost instantly. If your application only supports specific gateways, we have solutions for that too.

Level 3 processing for Magento

Looking for a level 3 processing gateway?

No new merchant account required with our omnichannel payment gateway that works with your existing financial partners. Contact us for a free Magento gateway module and your business to business company can start qualifying for lower interchange rates almost instantly.

Example of a wew low interchange rate a merchant transaction qualified for.

Example of a low level 3 interchange rate a merchant transaction qualified for. Without our solution, the qualified interchange rate would have been more than double.

Key things to note:

  • Level 3 processing for all major processors
  • Omnichannel – from retail to hosted pay pages to Electronic Bill Presentment & Payment, level 3 is supported all sales channels.
  • To qualify for level 3 interchange rates, any initial pre-authorization and settlement must be equal, and there must be a valid authorization code (not expired), in addition to other requirements. It’s here where most other solutions fail, even if they do support level 3.

Level 3 payment gateway are modules available for Prestashop and other shopping carts too. Contact Christine Speedy at 3D Merchant Services