Around 2:45 PM EST Visa had an outage related to a system update, lasting about 40 minutes. However, this created a backlog resulting in disruptions to other card payments for some merchants as well. Merchants may have noticed the issue by seeing a ‘timeouts’ message. Visa spokeswoman Sandra Chu said the outage was unrelated to the security breach that Global Payments recently suffered.
Miami, FL (PRWEB) March 13, 2012
Today, CenPOS, a fast-growing payment processing network, announced that the full suite of CenPOS payment applications has been certified for use with the complete line of Motion® Tablet PCs, attaining Gold Level Partner status in the Motion Valued Partner (MVP) Program. With CenPOS running on Motion Tablet PCs, retailers benefit from a purpose-built mobile computing solution that brings secure transaction processing to the point of sale (POS).
With CenPOS’ powerful payment processing engine and Motion Tablet PCs’ integrated features, such as magnetic stripe reader and digitizer pen input, the partners are creating a seamless POS experience that couples the ability to swipe cards and capture signatures for fast and accurate payments.
“Together CenPOS and Motion are equipping retailers with information and capabilities in real-time that enhance efficiency and productivity as well as employee and customer satisfaction,” said Grant Frederiksen, senior director, strategic corporate alliances, Motion Computing.
“CenPOS is committed to creating efficiency through innovation, and Motion Tablet PCs are the ideal mobile computing solution to utilize our intelligent payment processing technologies,” said Jorge Fernandez, CEO, CenPOS.
Motion Valued Partner Program
The MVP Program is designed to bring purpose-built tablet PCs together with innovative partner offerings to deliver industry-leading mobile computing solutions to business customers. Created to support Motion’s entire partner network – including technology resellers as well as software and hardware providers – the MVP Program provides partners with marketing, sales and training resources to drive sales effectiveness.
About CenPOS
“Creating efficiencies through payment innovation”
Founded in 2009, Miami-based CenPOS is a payment technology provider. CenPOS is committed to providing its customers and partners with innovative solutions for today’s rapidly evolving consumer payment choices.
CenPOS is an intelligent payment-processing network that streamlines the payment experience for businesses and consumers by using state-of-the-art technology to replace inefficient, outdated payment systems. The network reflects the core values that drive the experienced and innovative CenPOS team: Simplicity, Scalability, Security and a holistic approach to payment processing strategies.
CenPOS provides solutions to a range of organizations including but not limited to retail, card not present merchants, automotive dealers, professional services and academic institutions; special programs are also available for non-profits.
CenPOS HQ: (305) 630-7960, or toll free: (877) 630-7960.
About Motion Computing
Motion Computing is a leading global provider of tablet PCs and supporting mobility solutions, combining world-class products with services customized for the unique needs of mobile professionals across vertical markets, such as field service, retail and healthcare. The company’s enhanced line of rugged tablet PCs as well as mobile point of service solutions and accessories are designed to increase mobile productivity while providing portability, security, power and versatility.
Web Resources
Motion Tablet PCs: http://www.motioncomputing.com/products/index.asp
Retail: http://www.motioncomputing.com/solutions/retail.asp
LinkedIn: http://www.linkedin.com/company/12982
Twitter: http://twitter.com/MotionComputing
Facebook: http://facebook.com/MotionComputing
Motion Media Contact:
Stephanie Hueter
(512) 637-2745
shueter(at)motioncomputing(dot)com
“Together CenPOS and Motion are equipping retailers with information and capabilities in real-time that enhance efficiency and productivity as well as employee and customer satisfaction,” – Grant Frederiksen, Motion Computing
Following Visa’s new merchant fee announcement, MasterCard will launch a new annual fee for acquirers on July 1, 2012. No specifics of the fee has been released, however, it will be based on credit-card volume and pin-debit volume will be excluded from the calculation.
Once again, CenPOS retail customers will have another advantage at escaping increased fees. CenPOS pin debit conversion rate averages over 75% across all USA markets. Pin-debit also mitigates merchant risk with only a 14 day window for consumer disputes vs 120 days for signature debit.
About CenPOS : “Creating efficiencies through payment innovation”
Founded in 2009, Miami-based CenPOS is a payment technology provider committed to providing its customers and partners with innovative solutions for today’s rapidly evolving consumer payment choices. CenPOS is an intelligent payment-processing network that streamlines the payment experience for businesses and consumers by using state-of-the-art technology to replace inefficient, outdated payment systems.
CenPOS sales: Christine Speedy direct (954)942-0483
Visa announced a new fixed fee for merchant acquirers that will surely be passed on to merchants. “The fixed fee for merchant acquirers is expected to be $2 per month for about 60% of merchants and $5 or less per month for about 80% of merchants, Visa” said Friday. Visa said it also is waiving the fixed fee for acquirers that work with “qualifying charitable organizations.”
Visa Inc.’s new Fixed Acquirer Network Fee (FANF) is targeted at boosting profits after the Dodd-Frank Act, particularly the Durbin Amendment, changed debit fees and network rules, impacting Visa’s revenues.
Although there is no official release as to the final numbers, here is some data that is circulating:
Retail or Card-present merchants, excluding fast-food restaurants:
Card-not-present merchants, merchant aggregators, and fast-food restaurants:
The fee goes into effect beginning April 1, 2012 and merchants who are on ‘pass through’ pricing can expect to see the new fee on their statements as a separate line item, reflecting whatever fee is applicable to their account type, beginning in July 2012.
The Visa Acquirer Processing Fee (APF) will be reduced from 1.95 cents per debit authorization to 1.55 cents, as per the July 2011 announcement coinciding with new debit rules.
See Also Wall Street Journal article: UPDATE: Merchants Face Cost Changes As Visa, MasterCard Unveil New Fees
Do you have a notice informing customers of a surcharge for using credit or debit? Careful, as this practice could land you in hot water. A checkout fee, or payment card surcharge, added onto a consumer’s bill when he or she uses a credit or debit card is against Visa rules, mirroring laws in 10 U.S. states.
Merchants can offer a discount for alternative payment methods such as cash or checks, but you cannot add on for charges.
Note: Certain industries are permitted to charge a ‘convenience fee’, where it is not prohibited by law. This will be covered in a future article.
| Summary: | Attached is revised guidance describing potential risks associated with relationships with third-party entities that process payments for telemarketers, online businesses, and other merchants (collectively “merchants”). These relationships can pose increased risk to institutions and require careful due diligence and monitoring. This guidance outlines certain risk mitigation principles for this type of activity.Statement of Applicability to Institutions with Total Assets under $1 Billion: This guidance applies to all FDIC-supervised financial institutions that have relationships with third-party payment processors. |
Highlights:
Improperly managing these risks may result in the imposition of enforcement actions, such as civil money penalties or restitution orders. |
FDIC Financial Institution Letters
Payment Processor Relationships
Revised Guidance FIL-3-2012
January 31, 2012 Printable Format:
FIL-3-2012 - PDF download
Visit FDIC web site
Revised Guidance on Payment Processor Relationships
The FDIC has recently seen an increase in the number of relationships between financial institutions and payment processors in which the payment processor, who is a deposit customer of the financial institution, uses its relationship to process payments for third-party merchant clients. Payment processors typically process payments either by creating and depositing remotely created checks (RCCs)—often referred to as “Demand Drafts”—or by originating Automated Clearing House (ACH) debits on behalf of their merchant customers. The payment processor may use its own deposit account to process such transactions, or it may establish deposit accounts for its merchant clients.
While payment processors generally effect legitimate payment transactions for reputable merchants, the risk profile of such entities can vary significantly depending on the make-up of their customer base. For example, payment processors that deal with telemarketing and online merchants1 may have a higher risk profile because such entities have tended to display a higher incidence of consumer fraud or potentially illegal activities than some other businesses. Given this variability of risk, payment processors must have effective processes for verifying their merchant clients’ identities and reviewing their business practices. Payment processors that do not have such processes can pose elevated money laundering and fraud risk for financial institutions, as well as legal, reputational, and compliance risks if consumers are harmed.
Financial institutions should understand, verify, and monitor the activities and the entities related to the account relationship. Although all of the core elements of managing third-party risk should be considered in payment processor relationships (e.g., risk assessment, due diligence, and oversight), managing this risk poses an increased challenge for the financial institution when there may not be a direct customer relationship with the merchant. For example, it may be difficult to obtain necessary information from the payment processor, particularly if a merchant is also a payment processor, resulting in a “nested” payment processor or “aggregator” relationship.
Financial institutions should ensure that their contractual agreements with payment processors provide them with access to necessary information in a timely manner. These agreements should also protect financial institutions by providing for immediate account closure, contract termination, or similar action, as well as establishing adequate reserve requirements to cover anticipated charge backs. Accordingly, financial institutions should perform due diligence and account monitoring appropriate to the risk posed by the payment processor and its merchant base. Risks associated with this type of activity are further increased if neither the payment processor nor the financial institution performs adequate due diligence on the merchants for which payments are originated. Financial institutions are reminded that they cannot rely solely on due diligence performed by the payment processor. The FDIC expects a financial institution to adequately oversee all transactions and activities that it processes and to appropriately manage and mitigate operational risks, Bank Secrecy Act (BSA) compliance, fraud risks, and consumer protection risks, among others.
Potential Risks Arising from Payment Processor Relationships
Deposit relationships with payment processors expose financial institutions to risks not customarily present in relationships with other commercial customers. These include increased operational, strategic, credit, compliance, and transaction risks. In addition, financial institutions should consider the potential for legal, reputational, and other risks, including risks associated with a high or increasing number of customer complaints and returned items, and the potential for claims of unfair or deceptive practices. Financial institutions that fail to adequately manage these relationships may be viewed as facilitating a payment processor’s or merchant client’s fraudulent or unlawful activity and, thus, may be liable for such acts or practices. In such cases, the financial institution and responsible individuals have been subject to a variety of enforcement and other actions. Financial institutions must recognize and understand the businesses and customers with which they have relationships and the liability risk for facilitating or aiding and abetting consumer unfairness or deception under Section 5 of the Federal Trade Commission Act.2
Financial institutions should be alert for payment processors that use more than one financial institution to process merchant client payments or that have a history of moving from one financial institution to another within a short period. Processors may use multiple financial institutions because they recognize that one or more of the relationships may be terminated as a result of suspicious activity.
Financial institutions should also be on alert for payment processors that solicit business relationships with troubled financial institutions in need of capital. In such cases, payment processors will identify and establish relationships with troubled financial institutions because these financial institutions may be more willing to engage in higher-risk transactions in exchange for increased fee income. In some cases, payment processors have also committed to purchasing stock in certain troubled financial institutions or have guaranteed to place a large deposit with the financial institution, thereby providing additional, much-needed capital. Often, the targeted financial institutions are smaller, community banks that lack the infrastructure to properly manage or control a third-party payment processor relationship.
Financial institutions also should be alert to an increase in consumer complaints about payment processors and/or merchant clients or an increase in the amount of returns or charge backs, all of which may suggest that the originating merchant may be engaged in unfair or deceptive practices or may be inappropriately obtaining or using consumers’ personal account information to create unauthorized RCCs or ACH debits. Consumer complaints may be made to a variety of sources and not just directly to the financial institution. They may be sent to the payment processor or the underlying merchant, or directed to consumer advocacy groups or online complaint Web sites or blogs. Financial institutions should take reasonable steps to ensure they understand the type and level of complaints related to transactions that it processes. Financial institutions should also determine, to the extent possible, if there are any external investigations of or legal actions against a processor or its owners and operators during initial and ongoing due diligence of payment processors.
Financial institutions should act promptly to minimize possible consumer harm, particularly in cases involving potentially fraudulent or improper activities relating to activities of a payment processor or its merchant clients. Appropriate actions include filing a Suspicious Activity Report,3 requiring the payment processor to cease processing for a specific merchant, freezing certain deposit account balances to cover anticipated charge backs, and/or terminating the financial institution’s relationship with the payment processor.
Risk Mitigation
Financial institutions should delineate clear lines of responsibility for controlling risks associated with payment processor relationships. Controls may include enhanced due diligence; effective underwriting; and increased scrutiny and monitoring of high-risk accounts for an increase in unauthorized returns, charge backs, suspicious activity, and/or consumer complaints. Implementing appropriate controls for payment processors and their merchant clients can help identify payment processors that process items for fraudulent telemarketers, online scammers, or other unscrupulous merchants and help ensure that the financial institution is not facilitating these transactions. Appropriate oversight and monitoring of these accounts may require the involvement of multiple departments, including information technology, operations, BSA/anti-money laundering (AML), and compliance.
Due Diligence and Underwriting
Financial institutions should implement policies and procedures designed to reduce the likelihood of establishing or maintaining inappropriate relationships with payment processors used by unscrupulous merchants. Such policies and procedures should outline the bank’s thresholds for unauthorized returns, the possible actions that can be taken against payment processors that exceed these standards, and methods for periodically reporting such activities to the bank’s board of directors and senior management.
As part of such policies and procedures, financial institutions should develop a processor approval program that extends beyond credit risk management. This program should include a due diligence and underwriting policy that, among other things, requires a background check of the payment processor, its principal owners, and its merchant clients. This will help validate the activities, creditworthiness, and business practices of the payment processor, as well as identify potential problem merchants. Payment processors may also process transactions for other payment processors, resulting in nested payment processors or aggregator relationships. The financial institution should be aware of these activities and obtain data on the nested processor and its merchant clients. Nested processors and aggregator relationships pose additional challenges as they may be extremely difficult to monitor and control; therefore, risk to the institution is significantly elevated in these cases.
Controls and due diligence requirements should be robust for payment processors and their merchant clients. At a minimum, the policies and procedures should authenticate the processor’s business operations and assess the entity’s risk level. An assessment should include:
Financial institutions should require that payment processors provide information on their merchant clients, such as the merchant’s name, principal business activity, location, and sales techniques. The same information should be obtained if the merchant uses sub-merchants (often called “affiliates”). Additionally, financial institutions should verify directly, or through the payment processor, that the originator of the payment (i.e., the merchant) is operating a legitimate business. Such verification could include comparing the identifying information with public record, fraud databases, and a trusted third party, such as a consumer reporting agency or consumer advocacy group, and/or checking references from other financial institutions. The financial institution should also obtain independent operational audits of the payment processor to assess the accuracy and reliability of the processor’s systems. The more the financial institution relies on the payment processor for due diligence and monitoring of its merchant client without direct financial institution involvement and verification, the more important it is to have an independent review to ensure that the processor’s controls are sufficient and that contractual agreements between the financial institution and the third-party payment processor are honored.
Ongoing Monitoring
Financial institutions that initiate transactions for payment processors should implement systems to monitor for higher rates of returns or charge backs and/or high levels of RCCs or ACH debits returned as unauthorized or due to insufficient funds, all of which often indicate fraudulent activity. This would include analyzing and monitoring the adequacy of any reserve balances or accounts established to continually cover charge-back activity.
Financial institutions are required to have a BSA/AML compliance program and appropriate policies, procedures, and processes for monitoring, detecting, and reporting suspicious activity. However, nonbank payment processors generally are not subject to BSA/AML regulatory requirements, and therefore some payment processors are more vulnerable to money laundering, identity theft, fraud schemes, and illicit transactions. The FFIEC BSA/AML Examination Manual urges financial institutions to effectively assess and manage risk associated with third-party payment processors. As a result, a financial institution’s risk mitigation program should include procedures for monitoring payment processor information, such as merchant data, transaction volume, and charge-back history.
Consumer complaints and/or high rates of return may be an indicator of unauthorized or illegal activity. As such, financial institutions should establish procedures for regularly surveying the sources of consumer complaints that may be lodged with the payment processor, its merchant clients or their affiliates, or on publicly available complaint Web sites and/or blogs. This will help the institutions identify processors and merchants that may pose greater risk.
Similarly, financial institutions should have a formalized process for periodically auditing their third-party payment processing relationships; including reviewing merchant client lists and confirming that the processor is fulfilling contractual obligations to verify the legitimacy of its merchant clients and their business practices.
Conclusion
The FDIC recognizes that financial institutions provide legitimate services for payment processors and their merchant clients. However, to limit potential risks, financial institutions should implement risk mitigation policies and procedures that include oversight and controls appropriate for the risk and transaction types of the payment processing activities. At a minimum, Board-approved policies and programs should assess the financial institution’s risk tolerance for this type of activity, verify the legitimacy of the payment processor’s business operations, determine the character of the payment processor’s ownership, and ensure ongoing monitoring of payment processor relationships for suspicious activity, among other things. Adequate routines and controls will include sufficient staffing with the appropriate background and experience for managing third-party payment processing relationships of the size and scope present at the institution, as well as strong oversight and monitoring by the board and senior management. Financial institutions should act promptly if they believe fraudulent or improper activities potentially resulting in consumer harm have occurred related to activities of a payment processor or its merchant clients, in accordance with their duties under BSA/AML policies and procedures, as well as under Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive acts and practices.
| Sandra L. Thompson Director Division of Risk Management Supervision |
| Mark Pearce Director Division of Depositor and Consumer Protection |
1 Examples of telemarketing, online businesses, and other merchants that may have a higher incidence of consumer fraud or potentially illegal activities or may otherwise pose elevated risk include credit repair services, debt consolidation and forgiveness programs, online gambling-related operations, government grant or will-writing kits, payday or subprime loans, pornography, online tobacco or firearms sales, pharmaceutical sales, sweepstakes, and magazine subscriptions. This list is not all-inclusive.
2 Under Section 8 of the Federal Deposit Insurance Act, the FDIC has authority to enforce the prohibitions against Unfair or Deceptive Acts or Practices (UDAP) in the Federal Trade Commission Act. UDAP violations can result in unsatisfactory Community Reinvestment Act ratings, compliance rating downgrades, restitution to consumers, and the pursuit of civil money penalties.
3 The U.S. Department of Treasury’s Regulation 31 (CFR 103.18) requires that every federally supervised banking organization file a SAR when the institution detects a known or suspected violation of federal law. Part 353 of the FDIC’s Rules and Regulations addresses SAR filing requirements and makes them applicable to all state-chartered financial institutions that are not members of the Federal Reserve System.
4 See footnote 1 for examples of potentially high-risk areas.
5 An Independent Sales Organization is an outside company contracted to procure new merchant relationships. Gateway arrangements are similar to Internet service providers that sell excess computer storage capacity to third parties, who in turn distribute computer services to other individuals unknown to the provider. The third party would make decisions about who would be receiving the service, although the provider would be responsible for the ultimate storage capacity.
View article on FDIC web site: FDIC Payment Processor Relationships Revised Guidance
NFC-enabled smartphones from Samsung Electronics, LG Electronics, and Research In Motion approved for use with Visa payWave, Visa’s mobile application for payments at the point-of-sale
San Francisco, January 10, 2012
Visa Inc. (NYSE:V) and Visa Europe today announced that NFC-enabled smartphones from Samsung Electronics, LG Electronics and Research In Motion (RIM) have been certified for use with Visa’s mobile application for payments at the point-of-sale, Visa payWave. The Samsung Galaxy SII, LG Optimus NET NFC, BlackBerry® BoldTM 9900, BlackBerry Bold 9790, BlackBerry® CurveTM 9360 and BlackBerry Curve 9380 have been added to the list of Visa compliant payment products available for commercial deployment by financial institutions.
All the new devices certified by Visa host the Visa payWave application on a secure SIM card and feature NFC (Near Field Communication) technology, the short range communications standard that enables mobile phones to securely transmit payment information to a contactless payment terminal.
“This is an important step for Visa, its financial institution partners and the mobile industry,” said Bill Gajda, Global Head of Mobile Product, Visa Inc. “In addition to issuing plastic magnetic stripe or chip-enabled payment cards, financial institutions can now consider offering their accountholders a way to transform their smartphones into fully functional mobile payment devices.”
Visa’s certification of these smartphones paves the way for mobile device manufacturers, mobile operators and retailers to partner with financial institutions to offer Visa mobile payment functionality to consumers globally.
Visa’s Certification Process
Visa has played a leadership role in establishing global standards for mobile payments, making sure that they are aligned with existing technology and security standards for chip payment cards and can easily be integrated into the existing payments ecosystem. For example: Visa payWave on mobile devices is compatible with existing contactless (NFC) payment terminals already installed at retail outlets worldwide, enabling Visa accountholders to simply wave their enabled phone in front of a payment terminal in order to pay.
Visa has a compliance testing process for both mobile devices and the secure elements that host the Visa payWave mobile application. The process includes extensive technical and usability testing with respect to the Visa mobile payment functionality. This helps to ensure reliable and secure Visa transactions which are compatible with the global standard for chip-enabled payments, and establishes a required signal range for all mobile (NFC-enabled) Visa payment devices. Visa’s compliance testing process helps to ensure the combination of the phone; secure chip and Visa’s mobile payment application will provide the level of security and user experience Visa accountholders have come to expect from Visa.
“Today’s announcement is another example of the momentum we are seeing behind NFC as an industry standard for mobile payments,” said Nick Holland, senior analyst Yankee Group. “Yankee Group predicts that the value of NFC-based transactions will grow significantly, from $27 million in 2010 to $40 billion in 2014.”
# # #
Miami, FL (PRWEB) January 02, 2012
CenPOS, a fast-growing digital payment processing technology provider, has recently received certified status with T Tech and First Data Merchant Services; CenPOS recently received certification from Vantiv. These latest industry certifications place CenPOS in the technological forefront of the ever-changing payment process ecosystem and provide a robust array of payment solutions the company offers its clients.
T Tech Certification
T TECH offers a full suite of electronic check processing, check guarantee and ACH services allowing clients to streamline their processes and maximize their resources. As a result of the T TECH certification, CenPOS that will now be able to support both Check 21 and ACH transactions.
First Data Merchant Services Certification
First Data Merchant Services (FDMS) Certification to allows CenPOS the ability to support additional transactional sets. CenPOS is now able, through this certification to FDMS’ Nashville platform, to complete partial authorizations on prepaid cards, full authorization reversals on both debit and credit, and complete debit returns.
In April 2010, the Card Association mandated that acquirers must process partial authorizations and real- time reversals. Partial authorizations allow consumers with prepaid cards to zero out the balance on their cards. Real-time reversals require that merchants close out any pending authorization within a specific amount of time depending how the transaction was conducted.
About CenPOS
http://www.cenpos.com/
“Creating efficiencies through payment innovation”
Founded in 2009, Miami-based CenPOS is a payment technology provider. CenPOS is committed to providing its customers and partners with innovative solutions for today’s rapidly evolving consumer payment choices.
CenPOS is an intelligent payment-processing network that streamlines the payment experience for businesses and consumers by using state-of-the-art technology to replace inefficient, outdated payment systems. The network reflects the core values that drive the experienced and innovative CenPOS team: Simplicity, Scalability, Security and a holistic approach to payment processing strategies.
CenPOS provides solutions to a range of organizations including but not limited to retail, card not present merchants, automotive dealers, professional services and academic institutions; special programs are also available for non-profits. Call us: (305) 630-7960, or toll free: (877) 630-7960.
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EDITORS NOTE:
More CenPOS resources:
Youtube.com/3dmerchant
3Dmerchant.com/blog/category/cenpos/
CenPOS.com
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