3 Things CPA’s Must Advise B2B Clients in 2018

Accountants offer professional advice regarding cash flow, accounts receivable, tax preparation and all sorts of other consulting. Credit card processing and all the compliance it encompasses introduced immense new compliance challenges in 2017, and it’s fair to say, most businesses have no idea what they are, or what the repercussions are. A big problem is people think it’s someone else’s responsibility to keep their business compliant. Every single merchant must make internal changes to comply.

Three things every B2B company needs to know about credit card processing right now:

  1. If you store credit cards, you must be compliant with Visa Stored Credential Framework. This is arguably as huge as the retail shift to EMV chip card acceptance. There are significant financial and risk consequences for non-compliance. Some solutions companies reduce the compliance burden more than others, while maximizing profits and cash flow.
  2. PCI Compliance mandate for TLS disablement will disrupt business, mostly starting right now, February 2018. Businesses need to ensure they’re servers, software (if applicable) and browsers are compliant, and also have an plan to help internal and external customers overcome issues trying to login to portals, make online payments etc.
  3. It’s a Visa rules violation to request the card security code on a paper credit card authorization form, or any digital form where the business can decrypt and view it. It can’t be stored, period. Not by the merchant nor service provider, including payment gateway.

Why these 3 things? Because 100% of B2B companies I talk to will fail on at least one, and usually two or three. That includes CPA firms also. 86% of all data breaches in 2016 were from level 4 merchants, defined as “Any merchant processing fewer than 20,000 Visa e-commerce transactions per year, and all other merchants — regardless of acceptance channel — processing up to 1M Visa transactions per year.” By complying with the three items on my list, B2B companies will harden their systems and increase profits. The latter occurs because compliance with rules reduces fees. 

Example of solutions to solve these problems:

  1. An intelligent payment gateway can automate compliance with many elements of the Visa Stored Credential Framework. Simply passing data as most payment gateways do is not enough.
  2. Engage internal or external IT team to test all systems for TLS compliance, and verify at SSLlabs.com.
  3. Empower customers to self pay via push (text or email), or pull (online hosted pay page) technology so that employees never have access to cardholder data again. Whatever the old justification for using paper forms with full card data, there is a technology solution that has negated the need.

Christine Speedy, CenPOS authorized reseller, 954-942-0483. 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.

Credit Card Authorization Form Q&A Webinar November 8 2017

 credit card authorization formWhat’s the best credit card authorization form?

Learn best practices for 2017 and 2018 card not present credit card processing based on the latest Payment Card Industry Data Security Standards (PCI compliance), Visa, MasterCard and other rules. This webinar is ideal for credit managers and any entity that is currently using paper credit card authorization forms, or encrypted digital forms.

Christine Speedy will review related compliance rules, including PCI and October 14 Visa Stored Credential rules, consequences for non-compliance, and solutions to replace traditional paper credit card authorization forms. Live Q&A.

Register now for the credit card authorization form webinar Nov 8, 2017 11:00 AM in Eastern Time. TIP: For PCI Compliance, you need a current web browser and you’ll need one for this webinar too. Read this article and take the free browser test.

Christine Speedy, CenPOS authorized reseller, 954-942-0483. 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.


April 5, 2017—This alert contains critical information regarding new and revised Visa card acceptance rules effective now and coming in the future for merchants. Business to business companies may be at higher risk of associated chargeback losses or declines due to the average size of order. Effective April 22, 2017, Revisions have been made to split the “Other Fraud” Dispute condition under Enhanced Dispute Resolution into separate conditions for Card-Present and Card-Absent Transactions, and to incorporate changes to the payment flow related to Disputes.

Christine’s Analysis: Merchants need to support both EMV chip for Card-Present and Verified by Visa for card not present. Verified by Visa is their brand for 3-D Secure, a global security protocol for cardholder authentication across all card brands. For example, a  cardholder might be asked to enter a PIN number or answer some other type of authentication question. Cardholder authentication for Card-Absent Transactions shifts liability for “it wasn’t me” disputes to the issuer. This card-absent cardholder authentication process requires cardholders self-initiate payments, eliminating collecting card numbers via phone or paper credit card authorization forms. Merchants are rewarded for using cardholder authentication with reduced interchange rates and increased approvals.

Christine’s TIP: Per Visa rule, a US merchant or its agent must not Request the Card Verification Value 2 data on any paper Order Form. Replace paper forms with digital, PCI Compliant forms and online payment solutions with cardholder authentication ASAP.

Online payment solutions include a hosted pay page like the one shown below.

hosted paypage online payments

A hosted pay page empowers customers to make secure payments online using a 3rd party provider (Payment Gateway also known as a Payment Facilitator.)

Other solutions include pushing out payment requests, such as via a text or email. electronic invoice presentment and payment eippWith new and revised rules impacting the entire payment ecosystem including issuer, acquirer, gateway, merchant, and potentially other software like ERP’s and ecommerce shopping carts, merchants should verify all parts their payment ecosystem supports them. Desktop terminals are not capable of supporting all the rules for card absent needs; a cloud-based payment gateway is required whether non-integrated, or integrated ecommerce shopping cart, ERP or other software.

Does your online payment solution support Verified by Visa, or do you need a solution? Contact Christine Speedy at 954-942-0483 for a fast and easy solution, compatible with your existing credit card processor.

What is Auth Code 14, declined?

A credit card processing response of Auth Code 14, is a decline for Processor Declined, Fraud Suspected. Why does this happens for recurring billing, including unscheduled recurring billing using a stored credential, also known as a token on file? The method used to store the first transaction, and process subsequent transactions can impact authorization approvals.

For example, a merchant has successfully processed unscheduled transactions using a token on file since 2016. However, in 2017, declined for Auth Code 14 appeared.

auth code decline 14

Why would a previously stored and working card decline now? Look at the AVS,  ZIP, and CVV response above. Compare to the example below.

token billing

For the second receipt, AVS match Y= address and 5 digit zip match, Zip match Y=Address and 5 digit zip match, CVV = match X, cannot verify CVV. Because CVV was verified a match on the initial zero dollar authorization it’s not required to be presented on subsequent transactions.

The first example is returning that information does not match, thus the reason for suspected fraud. Without looking at the very first authorization when token was created, several possibilities exist, including  cardholder issued a new chip card with same number but other changes occurred in the interim; cardholder address changed or was never validated.

Merchants are at risk of issuer initiated chargeback if authorization rules are not followed. Refer to  Visa Product and Service Rules, Table 5-21: Requirements for Prepayments and Transactions Using Stored Credentials for more information. With recent rules changes, and more coming October 2017, merchants need a cloud based solution that can automate compliance. Not all of them have that intelligence. For example, some cloud based payment gateways enable merchants to perform prohibited transaction requests that put the authorization at risk of chargeback for non-compliance.

Due to many recent and upcoming changes for card absent and recurring billing with stored credentials, merchants are advised to review processes to include empowering customers to self-manage adding cards on file, and using cardholder authentication. Visa requires Verified by Visa for cardholder authentication in a card not present environment; without it, expect increasing declines.

Disclaimer: The rules of card acceptance are very complex and change typically twice a year, sometimes with interim bulletins regarding more changes. Merchants should read the manual for complete details regarding card acceptance for your business type.

Christine Speedy, authorized CenPOS reseller, provides universal payment processing solutions, including cardholder authentication, to maximize merchant profits and mitigate risk across multiple sales channels. Contact Christine at 954-942-0483. 

Hotel credit card authorization form 2017 change

Hotel and lodging industry must update best practices due to 2016 and 2017 changes in Visa and MasterCard rules. Cardholder authentication and multiple authorization indicators are two key components of change. Hotels that comply will maximize profits and security. Noncompliance will result in higher credit card acceptance fees due to penalties, increased declines, reduced profits, and new chargeback risk.hotel credit card authorization formFor those still using paper credit card authorization forms, few are in compliance with Visa Core Rules Prohibition against Requiring Cardholder or Account Data – US Region.

“A US Merchant or its agent must not: Request the Card Verification Value 2 data on any paper Order Form.”

Authorization validity is front and center to the 2017 rules changes. Merchants used to get and authorization, and settle it later at checkout. Now merchants must send the correct transaction types and link them all together with a unique identifier:

  1. The ESTIMATE (Visa) or UNDEFINED (MasterCard) indicator is sent when the final settlement amount is unknown. The customer must be informed that it is an estimate as well.
  2. INCREMENTAL authorization is obtained when the original authorization expires or to increase the amount on hold.
  3. Final Authorization says this is the final transaction.

TIP: Merchants need 3-D Secure (Verified by Visa, MasterCard SecureCode), a global cardholder authentication standard for card absent transactions, to maximize profits and compliance for card not present transactions, which is only available with customer initiated transactions: hosted pay page, digital payment request, online booking. Paper forms don’t create a digital record tied to the credit card, and cardholder authentication is not possible, as defined by the card brands. It’s also not possible to comply with the rule by key entering data into any desktop terminal.

The unique transaction transaction identifier can be a point of breakdown in the process. For example, the events manager obtains a paper credit card authorization form. The first charge is a deposit; the second charge is at the end of the event; a third charge occurs after assessing damages to a room. In each case, the amount is key entered into the payment processing terminal. Since there is no transaction identifier tying them all together, the authorizations are invalid and the ISSUER is within their rights to chargeback for invalid authorization, example Visa reason code 72.

There are so many nuances to the rules, and changes needed in the payments ecosystem, hotels should not assume existing partners have completed the required updates to comply. Technology that can automatically manage the authorization and settlement process- not the old way, but with all the new rules changes- requires a sophisticated payment gateway. Like EMV, there will be vendors that struggle to adapt.

For compliant solutions that can be used standalone or integrated, improving your customer experience, contact Christine Speedy, 954-942-0483.

Reference materials:

  • MasterCard® Pre & Final Authorization Mandate by CyberSource, December 2016.
  • Visa Core Rules October 2016.
  • MasterCard Revises Standards for Processing Authorizations and Preauthorizations by Vantiv December 2016.
  • MasterCard Transaction Processing Rules, November 2016.

See merchant bulletins – downloads for links to many resources.