credit card processing

Costco, Elavon, Nova and merchant rates

cspeedy — Mon, 30 Aug 2010 14:53:49 +0000

We frequently address questions from merchants currently using the Costco Wholesale Merchant Processing. Costco’s merchant partner is Evalon, formerly Nova Information Systems.

Eariier this year, some Costco member merchant rates were increased, though on the surface it looked like a decrease. It really depends on your business whether you’d be better off or not. In most cases, businesses will pay more.

COSTCO PUBLISHED MERCHANT RATES, April 2010.

Visa/MasterCard Qualified (Traditional Credit & Signature Debit) 1.48% plus $0.20 (reduced)
Visa/MasterCard Qualified Rewards 2.20% plus $0.20 (increased)
Visa/MasterCard Partially Qualified 2.96% plus $0.33
Commercial Non-Qualified 2.96% plus $0.33
MasterCard Non-Qualified 3.80% plus $0.33
Pin-Debit Transaction Fee $0.12

Previous blog readers know these numbers above are pretty meaningless for comparing merchant rates. What really matters is your effective rate. You get the qualified rate when the customer uses their check card and signs for it instead of entering the pin number. Debit card usage is definitely on the rise so the lower rate is a good thing. But how many of your transactions will qualify for the qualified rate vs the other rates? Reference this article for a more important number to use when comparing rate plans.
how to calculate credit card processing effective rate
In addition to the above fees, processors are passing alongÂ .30% or .40% international fees launched in 2009 by Visa and MasterCard, also called cross border service fees. These are fees for foreign issued cards. There’s no way out of this one. Everyone pays it. Since no one knows how many foreign cards you’ll be presented with, it’s usually an extra line item on your merchant statement. I’d be vary wary of any deal that did not separate out these fees.

Based on the April rate changes, I’m staying neutral on processing up to $100,000 annually via the Costco membership plan. Anything over that, I’d look at other options.

Mobitex wireless network on First Data alternatives

cspeedy — Tue, 24 Aug 2010 16:30:06 +0000

As previously announced, First Data will discontinue support of the Mobitex wireless network and will decommission connections effective Merchants will no longer have wireless merchant service as of 8/30/2010. You do not need to change merchant processors, but you do need to change your wireless network. Depending on your current hardware and software set up, you may need to update software, update software settings, or change your wireless equipment.Â

Â URGENT SITUATION?

IfÂ you’re processing via the Mobitex wireless networkÂ ONLY, then your situation is urgent. Call for an immediate FREE consultation. Be prepared to share existing merchant account, hardware, software and any other relevant POS information. We’ll need make, model, and version information as appropriate. You can also fill out our FREE Merchant Account Analysis contact form.
There may be new technologies for credit card processing since you last looked. We’ll ask questions to understand your payment processing needs and how different methods could affect your costs before we recommend a wireless solution or anything else.

What are Mobitex alternatives forÂ CDMS or GPRSÂ that you canÂ use onÂ First Data?Â
If you still need a wireless network vs another type of technology, AprivaÂ®Â Â is probably the most popular.Â With Apriva you simplyÂ choose the best network for you.Â You may even already have Apriva, but are using the Mobitex Network and now just need toÂ choose a different network.Â Link forÂ current Apriva GPRS, CDMA and Mobiitex network coverage maps.

Wireless connections are basically going to compare to your cell phone reliability. So if you don’t have good connectivity now with your cell phone, choose a different network.Â Check with your friends.

Another option is offered by Way Systems. Their terminals can be boarded (Â configured forÂ your merchant account)Â for theÂ Way or via Apriva. We have cheap wireless credit card terminalsÂ specials ongoingÂ for certain Way productsÂ right now.

wireless credit card terminal discount deal

cspeedy — Fri, 30 Jul 2010 14:34:23 +0000

The wireless credit card terminal discount is back and even better.

The Way 1581 Mobile Payments Solution is among the cheapest wireless terminals we know of to accept credit cards wherever you are- even on the golf course. Perfect for any event indoors or outdoors, collect money for auctions, dinner and tournament fees. Kit includes a wireless terminal and printer and works on any GPRS network.

Mobile means no boundaries. Not tethered by wires, nor restricted by WiFi availability. So merchants can accept payments anytime anywhere.

The New MTT 1581 empowers merchants everywhere with the limitless possibilities of a truly mobile POS terminal. This revolutionary offering from WAY Systems has the functionality mobile merchants demand for successful, secure transactions anywhere. The terminalâ€™s stylish, sleek form factor fits easily in the palm of your hand, combining the convenience of a mobile phone with the power to accept payment anywhere, at anytime.

Works virtually anywhere
Best mobile coverage available (GPRS)
Supports all major processors
Customer support included (24/7 Helpdesk)
Easy-to-use retail mobile credit and debit application
- Optionally supports tip (retail), toll, invoice number, cash receipt, AVS, CVV2, Amex CID (as supported by your processor)
Shipped ready â€œOut-of-the-Boxâ€ with setup and activation completed

Now with Essential Organizer Features including:

Calendar with appointment capability
Alarm Clock
Calculator
Note features
Stopwatch
Address Book

MTT 1581 Technical Specifications

Dimensions

Height: 4â€ (102 mm)
Width: 2.5â€ (64 mm)
Depth: 1.44â€ (37 mm)

Weight

Total Weight: 5.5 oz. (156g)
Printer: 8.8 oz. (250g)

Wireless Communications

Dual band GSM TM 850/1900 MHz
International frequency 900/1800 MHz

POS Transaction Storage

Store and forward transactions

POS Processor

High performance 16 bit microprocessor optimized for low power consumption

Security

MULTOS 4.06+ Link Security Module
PKI (for key exchange between
MTT and Server)

Printer

Mobile thermal printer, infrared communications

Magnetic Stripe Card Reader

Tracks 1, 2 and 3

Keypad

Uses telephone style keys for data entry
Uses internal PCI PED compliant PINpad for PIN entry DUKPT, 3DES

Smart Card Reader

EMV Level 1 (in process for 2008)

Battery

Up to 50 hours stand-by time
Up to 300 transactions per charge

CLICK TO BUY:

Wireless Terminal - Way Systems MTT 1581

Visa, MasterCard minimum transaction limit changes

cspeedy — Thu, 29 Jul 2010 13:20:07 +0000

Visa and MasterCard merchant card acceptance policies state that merchants cannot set a minimum for acceptingÂ credit cards on a transaction. If you accept the card, you must accept for all transactions. This has not stopped businesses, especially restaurants and quick stop stores from posting signs with $10 minimum charge. The repercussion for merchants can be fines and removal of card acceptance privileges. Additionally there are state laws that address this issue and conflict with the card association regulations.

Why do merchants want to set a minimum fee? The problem is the high cost of credit and debit card processing relative to their profit margins. For example, a typical sale costs the merchant a percentage rate and a per item fee. If 2% plus $.20 per item, that’s the equivalent of 4% fee for accepting a card for payment.

The 2010 Durbin amendment specifically addresses this issue in this section:

Setting of maximum/minimum transaction thresholds for use of a credit card

The Senate-passed amendment provided that card networks could not prevent merchants from setting a minimum or maximum dollar amount for payment by credit card.

The compromise provides that such a minimum may not exceed $10, with authority given to the Fed to increase that dollar amount.Â The compromise also limits the ability to set maximums for payment by credit card to the Federal government and colleges and universities. The compromise further clarifies the Senate language and establishes that a minimum payment not exceed $10 â€“ matching laws currently on the books in a number of states.

It’s important to note that the Durbin Amendment is still a work in progress that will give the Federal Reserve new powers. Not everyone thinks this is a great idea, as we published in the article

Financial Industry responds Durbin amendment on interchange

PCI Compliance scanning

cspeedy — Wed, 28 Jul 2010 13:01:27 +0000

Merchants must scan computer systems at various intervals for Payment Card Industry Data Security Standard (PCI DSS), depending on their merchant type and other criteria.

Read our merchant data security sticky web page for further information and links.

PCI Security Standards Council maintains a list of certified scanning companies

Below is a select list of those I’ve had the most positive interaction with over the years.

Comodo CA Ltd
www.comodo.com HackerGuardian PCI Scanning Service

ControlScan
www.controlscan.com PCI 1-2-3

Digital Resources Group
www.drgsf.com DRG SecureScan

McAfee Inc.Â McAfee Secure, formerly Hacker Safe (I knew Hacker Safe very well, but have had little experience with McAfee Secure)
www.mcafee.com

Qualys
www.qualys.com QualysGuard

This list does not infer the other companies would be less acceptable to work with, only that I’ve personally not dealt with the company or simply not had enough interaction to remember them. To protect your company from credit card processing fraud and the costly repercussions of it, all companies should have completed a PCI Compliance Certification whether you have standalone terminals or are connected to computers.

Authorize.net merchant update on mastercard partial auth

3D Merchant admin — Tue, 27 Jul 2010 13:01:15 +0000

Email received from authorize.net updates MasterCard partial authorization requirement. “In late March, we sent an e-mail regarding MasterCard and Discover’s modifications to the rules concerning the processing of debit, pre-paid and gift cards for merchants located in the United States.

Recently MasterCard and Discover relaxed the requirements for e-commerce merchants so that support for partial authorizations and balance responses are no longer required, but recommended best practices. All retail and mobile merchants, however, must still support the requirements.

Additionally, all merchants are still required to support authorization reversals for any non-settled authorizations. The deadline for all Authorize.Net merchants to support the requirements is still June 30, 2011.

IMPORTANT: Although no longer a requirement for e-commerce merchants, Authorize.Net intends to support partial authorizations and balance responses for all merchants. We highly recommend that your merchants provide support for these features as they can help decrease declined transactions and potentially increase sales.

You can review the timeline of when we expect support for each processor in our Partial Authorization FAQs at < http://www.authorize.net/support/pafaqs#when>http://www.authorize.net/support/pafaqs#when.

We have also updated our FAQs to reflect the latest changes. If your merchants have questions, please refer them to the FAQs at http://www.authorize.net/support/pafaqs/ for additional information, including integration updates, value-adding services and more.”

multiple ecommerce checkouts on a single merchant account

cspeedy — Fri, 23 Jul 2010 18:31:52 +0000

Can I use a single merchant account if I have more than one ecommerce site? By regulation, you must have a different merchant account for each domain name.Â The domain name, not the company name, must appear on consumer credit card statements. This is a field entered on the merchant application.Â The main purpose is to reduce consumer confusion and thus reduce chargebacks.

What if you have single page checkouts on the same domain name?

For example, the merchant may sell something with a one page checkout. One page is mydomain.com/product1. Another is mydomain.com/product2. They do not link to a single shopping cart checkout for some internal reason. You could possibly use one merchant account for both web pages, provided it’s the same company and shares the same federal tax ID. In some cases the merchant may want to set up a separate terminal identification (TID) to assist in the reconciliation process. Each TID would have it’s own totals, but all the data appears on one merchant statement, under one merchant account. To set up TID’s, contact your merchant processor.

Non-profit organizations sometimes have this with fundraising on their web sites. The non-profit has multiple events and donor options each with a simple one page checkout specific to that event or donation. Provided the rules are met above, you can probably use one merchant account. Always check with your processor for confirmation of your situation.

Financial Industry responds Durbin amendment on interchange is

cspeedy — Tue, 13 Jul 2010 14:22:00 +0000

Is the Durbin amendment good for consumers? For Merchants? Readers outside the industry probably look at the news articles and think it’s all good. However, if you dig deeper and hear opposing business views, you may begin to question those conclusions. Like the complex interchange system itself, the complexities of repercussions also need to be dealt with to determine what’s best for everyone.

While there are surely self serving interests in some of these articles, I think it’s worth perusing to come to your own conclusions.

List of articles of interest:

From Visa’s Viewpoints blog June 17, 2010: Industry Experts Agree: Problematic Durbin Amendment misses the Mark

The Root Interview: Russell Simmons on His RushCard

Durbin Amendment on interchange fees update

cspeedy — Mon, 12 Jul 2010 13:56:58 +0000

Durbin, Key House Conferees Reach Agreement on Interchange Fees

Monday, June 21, 2010

[WASHINGTON, D.C.] â€“ Assistant Senate Majority Leader Dick Durbin (D-IL) today announced that an agreement has been reached with key conferees on the Wall Street reform bill regarding his amendment regulating interchange fees. The agreement makes minor, clarifying changes to the language which passed the Senate 64-33, and responds to concerns raised by state governments regarding their use of prepaid and debit cards distribution of government benefits.

â€œIâ€™m pleased that we were able to reach an agreement which makes modifications which strengthen consumer protections and bring competition to a market where there is none,â€ Durbin said. “We addressed specific concerns of states serving the unemployed and firms serving the unbanked. This was a good faith effort with House conferees to face legitimate issues and resolve them fairly without surrendering our goals of bringing fairness to interchange fees and common sense regulation to the credit card industry. I applaud the leadership of Chairmen Frank and Dodd in reaching this milestone agreement.”

Under the agreement, the new language will be offered by the House to the Senate during the conference negotiations on the Wall Street reform package as early as tomorrow. It is expected to be debated and eventually accepted by the conference committee, subject to ratification by the Committee Chairmen, and become the final language regarding interchange fees. The conference committee hopes to finish its work on the bill this week and the House and Senate are expected to pass the final legislation before July 4th.

Summary of the modifications to the Durbin interchange amendment:

Government administered cards

The Senate-passed amendment would regulate the interchange fees associated with debit or prepaid cards issued by large banks on behalf of government-administered payment programs (e.g., unemployment insurance, TANF, child support).

The compromise exempts federal, state and local government program debit and prepaid cards from interchange regulation, provided that after a two-year grace period the prepaid cardholding beneficiaries are not charged any overdraft fees or fees for the first monthly in-network ATM withdrawal.

Definition of â€œinterchange transaction feeâ€

The Senate-passed amendment defined â€œinterchange transaction feeâ€ to include debit card fees that are established by a payment card network (e.g., Visa and MasterCard) and that accrue to either the card-issuing bank or to the network itself.

The compromise provides that the Fed cannot regulate network fees (i.e., the fees that Visa and MasterCard charge and that accrue to themselves) except to ensure that the fees are not used to circumvent interchange fee regulation. These changes are a different way of accomplishing the same goal of protecting consumers from loopholes which would allow banks to raise fees to cover any loss in interchange revenue.

Reloadable prepaid cards

The Senate-passed amendment would regulate the interchange fees associated with reloadable prepaid debit cards, which are in common use by consumers who lack bank accounts.

The compromise exempts these cards from interchange regulation, provided that after a two-year grace period the issuing bank must not charge cardholders any overdraft fees or fees for the first monthly in-network ATM withdrawal. The compromise is an attempt to protect the unbanked from being driven to payday lenders and other non-bank entities for their financial needs. It further ensures that fees wonâ€™t be charged on those who can least afford them.

Fraud prevention costs

The Senate-passed amendment did not permit consideration of fraud prevention costs in the calculation of reasonable and proportional interchange rates.

The compromise provides that the Fed can adjust the interchange fee rate received by a particular card-issuing bank if the bank demonstrates that the adjustment is reasonably necessary to cover fraud prevention costs incurred by the bank.Â In order to qualify for this adjustment, the bank would have to comply with standards established by the Fed that would demonstrate that the bank is taking effective steps to reduce fraud, and the bank would also have to show that the adjustment it seeks is limited to those reasonably necessary fraud prevention costs.Â This compromise provides competition where there is currently none. Banks will be incentivized to efficiently and effectively prevent fraud while competing to provide the best protection for the lowest cost. These changes will make the market more efficient and allow for savings to be passed on to consumers.

Discounting between card networks

The Senate-passed amendment provided that card networks could no longer prevent merchants from offering customers a discount to use one card network vs. another (e.g., a discount to use Visa vs. MasterCard), and that this discount would apply in both the credit card and debit card contexts.

This provision has been removed from the amendment.Â In its place, the compromise includes a provision directing the Fed to issue rules preventing card networks from requiring that their debit cards can only be used on one debit card network (thereby ensuring that merchants will have the choice of at least two networks upon which to run debit transactions).Â This provision also provides additional competition to a previously non-competitive part of the market. It allows merchants to choose the debit network with the lowest cost â€“ the opposite of the current system where merchants are forced to use a specific network with fixed prices.

Discounting between forms of payment

The Senate-passed amendment provided that card networks cannot prevent merchants from offering a discount for one form of payment vs. another (cash vs. check vs. credit vs. debit).Â The compromise clarifies that these discounts cannot be offered if the discounts differentiate between card issuers or card networks.

The compromise further clarifies that the discount must be offered to all prospective buyers and disclosed clearly and conspicuously to the extent required by federal and applicable state law, though a network would not be permitted to penalize a merchant for a discount that is provided in compliance with federal and state law. This change simply clarifies the language in the Senate bill which allowed merchants the ability to offer discounts for one form of payment over another.

Setting of maximum/minimum transaction thresholds for use of a credit card

The Senate-passed amendment provided that card networks could not prevent merchants from setting a minimum or maximum dollar amount for payment by credit card.

Non-discrimination between cards issued by different banks

The Senate-passed amendment did not change the existing prohibition in the operating rules of Visa and MasterCard against card issuer discrimination.

The compromise amendment contains a rule of construction affirmatively stating that nothing shall be construed to authorize any person to discriminate between debit cards or between credit cards on the basis of the issuer who issued the card.Â This language further clarifies the Senate passed language regarding non-discrimination between card issuers.

Authority of the Federal Reserve Board vs. the Consumer Financial Protection Agency/Bureau

The Senate-passed amendment provided for regulatory authority under the amendment to migrate to the Consumer Financial Protection Agency/Bureau after the CFPA/B is established.

The compromise provides that regulatory authority under the amendment shall remain with the Fed.

Non-applicability to USDA nutrition assistance program EBT cards

The Senate-passed amendment was silent on the applicability of the amendment to USDAâ€™s nutrition assistance programs in which interchange fees are not charged for electronic benefit transfer (EBT) transactions.

The compromise makes clear that nothing in the amendment shall apply to these nutrition assistance programs.

Durbin worked closely on these changes with House and Senate conferees including: Chairmen Dodd and Frank, Rep. Meeks, Rep. Maloney, Rep. Gutierrez and Rep. Welch.

Reference original blog post

Senate Approves Debit-Card Swipe-Fee Limits in Bill

Follow the Durbin Amendment in Congress Bill Summary & Status 111th Congress (2009 - 2010)
S.AMDT.3989

accept credit cards on your iphone with Payware

cspeedy — Thu, 08 Jul 2010 18:47:28 +0000

3D Merchant Services is now offering PAYware Mobile to accept credit cards on your iphone. A merchant account is required in addition to the iphone, iPhone credit card encryption sleeve, and secure gateway service.

Payware mobile is a bit like existing wireless merchant terminal service. You pay a separate fee for the service and the bill appears on your existing merchant statement. However, this service only works with iphone 3g and 3gs, not Blackberry or other models as of this writing. The iphone app is free.

You can see the encryption sleeve in the image below.

Verifone Card Encryption Sleeve

The PAYware Mobile credit card encryption sleeve is the only mobile product that delivers end-to-end encryption. The moment the card is swiped, data is encrypted and stays that way until the bank receives it. The phone never sees, nor does it store, any sensitive data.

The PAYware Mobile credit card encryption sleeve fits any iPhone 3G or 3GS model. The sleeve’s design is sturdy and compact, built to survive real world abuse.

Patented end-to-end encryption
Make more “card present” sales and save
Fits all iPhone 3G or 3GS models
Built-in stylus for signature capture

HOW IT WORKS

After you download the iphone app at the app store, you’ll click the app any time you want to use it. When the little blue light appears ( by the guys lower thumb) you’re ready to swipe. You can pre-set sales tax and then modify as you go along or you can enter as needed. You can also add in a tip amount, or have it calculate automatically. Customers will sign the iphone with the stylus supplied. You can email the receipt. (No printer is included.)

HOW IT AFFECTS YOUR PAYMENT PROCESSING COSTS- You’ll pay card present costs. The app supports debit and credit cards. It does not support PIN based debit.

WARRANTY- VeriFone generally provides a limited hardware warranty of 12 months in the United States. The warranty period for each Product is calculated from the date the Product is shipped or the date title to the Product passes to Customer, whichever date is earlier.

REPORTING- In addition to your existing merchant account reports, you’ll also have access to the PAYware mobile gateway reporting system. If you have 1 or many units, all the data appears in one portal for management review in real time.

ESTIMATED PAYWARE OPERATING COSTS-Â Â These are in addition to your cell phone and merchant services fees.

The mobile carder is free with a two year contract while promotions last. Â Otherwise it’s $149. The gateway monthly fee is $15 - $30 a month and transaction fees vary as a per transaction fee or a percentage of each transaction. Some gateway providers offer a special â€œdormant feeâ€ that allows you to keep your account open for a small fee during the months you donâ€™t need it if you have a seasonal business.

Call if you’d like a quote for your company.