Category Archives: industry news

credit card processing and merchant payment industry news including VISA & MasterCard association news, interchange rates, risk management and retailer security requirements

EBA paves the way for open and secure electronic payments for consumers under the PSD2

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The European Banking Authority (EBA) published today its final draft Regulatory Technical Standards (RTS) on strong customer authentication and common and secure communication. These RTS, which were mandated under the revised Payment Services Directive (PSD2) and developed in close cooperation with the European Central Bank (ECB), pave the way for an open and secure market in retail payments in the European Union.  

Following 18 months of intensive policy development work and an unprecedentedly wide number of stakeholders’ views and input, these final draft RTS are the result of difficult trade-offs between the various, at times competing, objectives of the PSD2, such as enhancing security, facilitating customer convenience, ensuring technology and business-model neutrality, contributing to the integration of the European payment markets, protecting consumers, facilitating innovation, and enhancing competition through new payment initiation and account information services.   

The EBA received 224 responses to its Consultation Paper, in which more than 300 distinct concerns or requests for clarifications were raised. In the feedback table published today as part of the RTS, the EBA has summarised each one of them and provided its assessment as to whether changes have been made to the RTS as a result of such concerns.   

In particular, one of the key concerns addressed by these final draft RTS relates to the exemptions from the application of strong customer authentication on the basis of the level of risk involved in the service provided; the amount and recurrence of the transaction; and the payment channel used for the execution of the transaction. In this respect, the EBA has introduced two new exemptions: one based on transaction-risk analysis based on defined fraud levels and the other for payments at so called ‘unattended terminals’ for transport or parking fares. The exemption on transaction risk analysis is linked to a predefined level of fraud and is subject to an 18-month review clause after the application date of the RTS.   

In addition, the EBA has also increased the threshold for remote payment transactions from EUR 10 to EUR 30, and has removed previous references to ISO 27001 and to other specific characteristics of strong customer authentication, so as better to ensure the technological neutrality of the RTS and to facilitate future innovations.    

With regards to the communication between account servicing payment service providers (ASPSPs), account Information service providers (AISPs) and payment initiation service providers (PISPs), the EBA has decided to maintain the obligation for the ASPSPs to offer at least one interface for AISPs and PISPs to access payment account information. This is linked to the PSD2 no longer allowing the existing practice of third party access without identification (at times referred to as ‘screen scraping’ or, mistakenly, as ‘direct access’) once the transition period provided for in PSD2 has elapsed and the RTS applies.   

However, in order to address the concerns raised by a few respondents, the final RTS now also require that ASPSPs that use a dedicated interface will have to provide the same level of availability and performance as the interface offered to, and used by, their own customers, provide the same level of contingency measures in case of unplanned unavailability, and provide an immediate response to PISPs on whether or not the customer has funds available to make a payment.  

Legal basis and background

The draft RTS have been developed according to Article 98 of the revised Payment Services Directive (EU) 2015/2366 (PSD2), which mandates the EBA, in close cooperation with the ECB, to draft Regulatory Technical Standards (RTS) specifying the requirements of the strong customer authentication (SCA), the exemptions from the application of SCA, the requirements with which security measures have to comply in order to protect the confidentiality and the integrity of the payment service users’ personalised security credentials, and the requirements for common and secure open standards of communication (CSC) between account servicing payment service providers, payment initiation service providers, account information service providers, payers, payees and other payment service providers (PSPs). The PSD2 provides that the RTS will apply 18 months after adoption of the RTS by the EU Commission as a Delegated Act.

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Dynamics AX Online Payment Services Expiring – Replacement

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Dynamics users will need to make a major update soon. Effective January 1, 2018, Payments Services for Microsoft Dynamics ERP Payment Services, including any versions of Microsoft Dynamics AX, will be discontinued and users will be unable to process credit or debit transactions after December 31, 2017. CenPOS, an enterprise payment engine, offers an integrated alternative that works seamlessly with both AX and third party applications like Magento ecommerce.

Vendor selection for replacing Payments Services will directly impact profits, efficiency and customer experience. For example, how customers receive, retrieve, and pay invoices are all part of the payment processing ecosystem. Businesses will need an Integrated Service Vendor (ISV) with a PCI Compliant integrated payment gateway. Solution functions, and how they interact with Dynamics AX, varies widely by integration.

Payment processing is a specialized niche that ERP, ecommerce, and business consultants rarely have the in-depth knowledge to advise businesses of best options. In fact, significant new changes have been announced; for example, new requirements for recurring billing to include a unique reference to the initial authorization.

“The Payment processing knowledge gap has been exacerbated by an onslaught of new financial, card brand, and compliance rule changes that show no sign of letting up.” Christine Speedy, CenPOS

CenPOS, an enterprise payment gateway and merchant centric cloud processing platform, is an industry leader in payment processing globally. One of the first to market with both US EMV chip and pin, the CenPOS omnichannel solution maximizes cash flow and profits across all sales channels while improving the customer experience.

CenPOS Dynamics AX Fast Facts:

  • Accounts Receivable Flexibility: Process authorizations, payments and credits:
    • Sales Pickup – Will call, partial order as well as full delivery
    • Journal Entry for Project
    • Free Text Invoices
    • Return Orders
    • Credits, partial credits
    • Sales Orders – Cash and carry
  • Reconciliation Efficiency: automatic daily settlement, single deposit (dependent upon processor setup)
  • Payment types: Accept Check, ACH, credit card, wire, cash, Paypal (Varies by sales channel)
  • Sales Channels; Retail (US & Canada EMV), Electronic Bill Presentment & Payment (includes hosted customer invoice portal and automated collections), Ecommerce, Online Payments, other
  • Compatibility: Agnostic- works with most processors, including First Data, Chase Paymentech, Moneris, WorldPay and others.
  • B2B: Certified for level III processing all channels, including retail, a critical element in managing interchange rate qualification, the biggest cost of credit card processing.
  • Availability: Global

See CenPOS Dynamics AX integration in action here: video overview

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.

CenPOS SALES CONTACT: Christine Speedy, cspeedy AT cenposreseller.com 954-942-0483. Dynamics consultants encouraged to contact us to learn more.

Link: Microsoft Official Notice

myKaarma & Creditcall team up to accelerate EMV chip card adoption for car dealerships

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Car dealers can now simply switch to EMV, providing their customers the most secure payment solution while benefiting from reduced PCI DSS scope.

NEW YORK, NEW ORLEANS, NADA100 (Booth #5501), January 27, 2017 – Creditcall, the omni-channel Payment Gateway and EMV Kernel provider, today announced that it now supports myKaarma, the cloud-based conversational commerce software that’s revolutionizing the auto service industry. myKaarma can now quickly and easily add EMV chip card acceptance to its dealership app by using the Creditcall payment SDK – ChipDNA – which is pre-certified with First Data, one of the leading U.S. processors and the Ingenico Group’s iPP 350 smart payment terminal. More processors and payment terminals will be added in the following months.

myKaarma enhances the retail experience for service departments of car dealerships. The myKaarma app gives the dealership the ability to offer the latest customer engagement technologies such as digital conversations (text, email, voice) and smart payment systems for online and mobile point of sale (POS) with auto-reconciliation, all in one application that seamlessly integrates with the dealerships’ current dealer management system (DMS).

ChipDNA is an omni-channel, EMV-ready payment gateway solution for mobile, online, in-store and self-service card payment acceptance. It is aimed at software developers and can be integrated into Android and iOS based mobile POS (mPOS) payment solutions as well as Windows and Linux semi-integrated environments. It includes a comprehensive terminal management system (TMS), remote key injection (RKI) and point to point encryption (P2PE) for the highest level of cardholder data protection. Developers can choose from 38 different device manufacturer and processor combinations which reduces integration time and resources without the need for complex and lengthy processor certifications.

“We wanted a partner who already had years of EMV experience and a proven solution, knowing if we had any bumps along the way”

– Ujj Nath, CEO at myKaarma

“We wanted a partner who already had years of EMV experience and a proven solution, knowing if we had any bumps along the way, our partner will be able to support us and meet our needs in a timely manner” said Ujj Nath, CEO at myKaarma. “By leveraging ChipDNA, we were able to spend more time making our software even more valuable to our customers, rather than spending time trying to navigate the complex requirements of EMV”.

“Many developers and merchants still assume that replacing an old swipe card reader with an EMV chip card reader equals EMV compliance” says Jeremy Gumbley, CTO at Creditcall. “The reality is that true EMV compliance requires upgrading the entire payment infrastructure, involving several parties and complex moving parts. Once completed, there is still an ongoing requirement for maintenance and updates to remain compliant. We are proud to offer ChipDNA, which allows software developers like myKaarma to avoid the majority of headaches and address EMV with one simple, fast and future-proof integration” Gumbley continues.

About MyKaarma

myKaarma is a conversational commerce software company for automotive dealerships that focuses on enhancing the retail service department experience. myKaarma’s platform gives dealers the ability to offer their customers 21st Century technology through digital conversations and smart payment systems. myKaarma was named as an official communications and payments partner for Mercedes-Benz USA.

About Creditcall

Creditcall provides the tools to enable secure payment acceptance in-store, self-service, online or mobile. From retail and hospitality, to parking, vending, transportation or charity applications, Creditcall’s omni-channel Payment Gateway and EMV Kernels are at the very heart of its partners’ businesses, enabling them to focus on what they do best.

Creditcall is an EMVCo Business and Technical Associate, a PCI SSC Participating Organization, a Mastercard accredited MEPSA company and member of the U.S. Payments Forum with offices in Bristol, UK and New York, USA.

Visa Partial Authorization Service

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Visa merchant library update on December 13, 2016. Visa provides a Partial Authorization service that provides an alternative to declining a transaction when the card’s available balance is not sufficient to approve a transaction in full. This flyer provides information about the benefits realized, how to use the service, and answers to frequently asked questions.

PDF 326 KB Visa Partial Authorization Service – Improve the Customer Experience and Increase Sales

“Partial authorization improves the customer experience by preventing embarrassment from a decline at the point of sale and enabling a seamless checkout with split tender transaction using multiple payment methods.” Christine Speedy

To accept partial authorizations for your business, a few items are needed:

  • Technology that supports it. Payment gateways certify partial authorization for each acquirer. Not all gateways certify.  The receipt must also show each payment amount.
  • The merchant must enable it. For example, this could be a checkbox in the ERP or shopping cart software payments module, or it might be turned on at the gateway administration level. It’s possible a gateway is certified, but the related software using the gateway does not support it.

If partial authorization is not supported, and there’s a decline due to insufficient funds, there’s still an open authorization for the funds that were in the account. An authorization reversal should be completed to remove hold on any cardholder funds. If you don’t want screaming customers, this is a must! Intelligent technology can automate this process.

Compliance with credit card processing rules can be extremely complicated. Relying upon employee training is futile. To improve your customer experience and automate rules compliance, contact Christine today at 954-942-0483.

 

Chip-and-PIN, or Chip-and-Choice? EMV Liability Shift For PIN Transactions

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With US EMV adoption well under way in the US, merchants are in the next phase of decision making for their EMV environment, for those terminals and solutions that support it. Should I force chip and pin when the issuer supports it, or should I allow chip and choice? It’s a tough decision and the answer is not the same for everyone.

Point-of-Sale (POS) systems vary in both implementation and capability. For example, a salesperson for a popular POS solution I spoke to told me they don’t support chip and pin. He actually said, “Since debit card processing costs are the same either way now with regulated debit, pin doesn’t really matter any more anyway.” Not true.

Consider the implications for a specialty retail environment with higher average value transactions, such as building supply, automotive parts, and electronics.

RETAIL: HIGH VALUE
 FORCED CHIP & PIN CHIP & CHOICE
PROS Maximize profit potential 3 ways: highest security supported to shift counterfeit fraud to issuer; Even with regulated debit, there’s some financial differential for sending transactions via debit network, though vastly decreased. Finally, not all debit is regulated, and costs do vary. Less friction at the point of sale, faster checkout.
CONS While consumers know their debit pins, studies estimate consumers’ knowledge of credit card PINs at 5-10%. What is financial impact if customer cannot recall pin, fallback to signature is not allowed, and customer has no other payment method? Potential losses based on US EMV liability shift rules which require the highest level of security to shift back to issuer; may vary by brand for counterfeit, lost and stolen cards.

As with everything EMV, there are many moving parts to certifications for chip card acceptance. In order to have a choice, the merchants ecosystem from terminal to payment gateway, if applicable, acquirer, etc must all support it, which may be a tall order.

IMPORTANT: This article highlights a few items and does not cover all brand, business type, transaction type, card type, nor reasons for determining liability. Refer to various card brand core manuals or your acquirer for more specific details about EMV and card acceptance rules.

RESOURCES & ARTICLES AROUND THE WEB

To avoid issues with broken outside links over time, please copy the URL’s below into your browser.

https://www.mastercard.us/en-us/about-mastercard/what-we-do/rules.html

Chip & PIN vs. Chip & Signature

Best article for thoroughness. October 2014 http://krebsonsecurity.com/2014/10/chip-pin-vs-chip-signature/

Chip-and-PIN, or Chip-and-Choice?

Worth a look. February 10, 2014, By David Lott, a retail payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed. http://takeonpayments.frbatlanta.org/2014/02/chip-and-pin-or-chip-and-choice.html

Chip & Choice Keeping Security Flexible

From Visa web site today, great illustration on impact of choices in different market segments. https://www.visa.com/chip/clients-partners/issuers/credit-card-chip-technology/chip-and-pin-choices.jsp

Chip-and-PIN vs. ‘chip-and-sig’

Good global overview and stats By Janna Herron · Bankrate.com, August 28, 2013
 http://www.bankrate.com/financing/credit-cards/chip-and-pin-vs-chip-and-sig/#ixzz4ALnE5Ps9
“What’s the difference? What separates the two is how each is authenticated at the register. Chip-and-PIN cards require a personal identification number to be entered to complete a purchase, much like how many debit card transactions are carried out now with magnetic stripe cards.” Read more: http://www.bankrate.com/financing/credit-cards/chip-and-pin-vs-chip-and-sig/#ixzz4ALnUjB9D

Visa Core Rules AND OTHER CARD BRAND RULES

Merchant Alerts & Rules Links