Category Archives: Merchant Services

Point of Sale for Heavy Equipment Rentals – Credit Card Processing Rules Changes 2017

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Heavy equipment rental companies and dealers must make changes to comply with new Visa credit card acceptance rules. The sweeping changes to rental industry card acceptance rules were announced in October 2016, with April and October 2017 mandates for compliance.  The changes are complex and require cloud technology to automate compliance. Countertop terminals are not capable of compliance, and must be replaced.

fd130 emv terminal

Countertop terminals such as the FD130 and the Verifone VX520 are not capable of compliance for heavy equipment rentals, and must be replaced.

Visa rules changes include:

  • Defining who initiated the transaction (customer self-pay or merchant)
  • Transaction data sent
  • Authorization rules
  • Stored card rules
  • Customer communications.

Compliance will increase approvals and mitigate fraud risk; Failure to comply will increase risk of financial losses and issuer declines while reducing EBIDTA. These changes are significant, impacting chargeback risk and financial penalties to heavy duty equipment rental.

Visa compliant solutions:

The complexity of compliance with both card present and card not present rules requires a solution that can dynamically manage it, removing employees from making decisions that could impact profits. Everyone must change in the ecosystem- card issuer, acquirer (credit card processor),  payment gateway and merchant. Whatever you had in 2016 was not compliant since all the other players were not ready yet.

Merchants should update to a payment gateway that supports at a minimum:

  • Estimated, initial, incremental, and final authorization requests (traditional terminals cannot comply
  • Authorization Reversals for unused authorization (amount changed)
  • Authorization validity periods
  • Stored credential rules
  • Creation and retrieval of customer opt-in records
  • Automated authorization and settlement amount matching (otherwise transaction downgrades to worst rate possible and other repercussions)
  • Verified by Visa, which uses the 3-D Secure protocol to shift fraud liability to the issuer, much like EMV does for retail.

  • verifone MX915 EMV terminal

    The Verifone MX915 EMV chip terminal is an option to use in a compliant rental solution.

If you have a payment gateway, or need one, ask these questions:

  • How will you help us comply with the new Disclosure to Cardholder and Cardholder Consent rules?
  • What does the consent record look like?
  • How will we retrieve records?
  • How long are the records retained?

Contact Christine Speedy to get a compliant solution for your rental services needs. 954-942-0483. The ROI for most businesses is virtually overnight! Month to month risk free solutions.

Another change of note is 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. For merchants that comply, it’s all good. For merchants that do not comply, there will be more risk of financial penalties and risk of issuer initiated chargeback. A key component to mitigate chargeback risk is support for Verified by Visa.

There are many nuances to the rules and potential chargeback reason code 72 risk, which were non-existent in the past. Rather than consumer initiating a chargeback, the issuer will be within their rights to initiate a chargeback if the merchant fails to comply with the rules, for example, failing to submit the correct authorization flag for an estimate.

Reference: Visa Core Rules and Visa Product and Service Rules, 15 October 2016. See especially Table 5-14, 5-21, 5-22. https://3dmerchant.com/blog/merchant-bulletins-downloads

Resources:

• https://usa.visa.com/support/merchant/library/visa-merchant-business-news-digest.html see articles on Visa Stored Credentials mandate and updated revisions on Visa Stored Credentials framework

• Some acquirers put out statement alerts on their April, June and or July merchant statements.

See also, Visa Stored Credential Mandate.

Contact Christine Speedy to get a compliant solution for your rental services needs. 954-942-0483. You’ll be more profitable, efficient, and

Installment Prepayments Credit Card Processing Rules Change 2017

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Installment prepayment credit card processing rules change effective October 2017 will impact business profits and chargeback risk. Everyone in the payment ecosystem has or will need to make changes to comply, including acquirer, issuer, payment gateway, merchant, and sometimes software solution.

payment gateway SaaS recurringInstallment prepayment credit card processing best practices:

  • When capturing card data to create a random token replacing sensitive data for the first time, perform an Account Number Verification Transaction via a Zero Dollar Authorization. There’s a payment gateway procedure, including using specific transaction indicator, for this. If the solution you’re using performs a $1 authorization, often with a void or reversal after, that’s because the payment gateway, and or the implementation, are out of date and don’t support current requirements. Ask how yours works and contact us for help now if you cannot do a zero dollar authorization!
  • Payment gateway to identify all future transactions after storing:

– With an indicator that shows that the Transaction is using a Stored Credential
– With the Transaction Identifier of the initial Transaction.

  • The sales receipt must include phrase “recurring transaction”
  • A convenience fee cannot be charged on an Installment Transaction.
  • Transactions cannot be key entered into desktop terminals; a cloud based payment gateway is required

Guidelines and rules vary by card brand, business type and many other factors. Additionally, the rules are complicated. This article may oversimplify such complexities. Merchants are advised to use tools, including intelligent payment gateways, to help comply automatically to maximize profits and mitigate risk.

Reference: For example, read Visa Stored Credential Transaction Mandates and also Visa Core RulesTable 5-21: Requirements for Prepayments and Transactions Using Stored Credentials.

Before selecting a payment gateway for installments, ask these questions:

  • How will it help with new Visa Stored Credential Mandates compliance?
  • Does it support 3-D Secure cardholder authentication, for customer initiated payment?
  • What type of digital record is created at the time of customer opt-in to terms, how is it retrieved, and how long is it retained?
  • Does it support Zero Dollar Authorization?
  • Does the receipt dynamically change based on type of transaction, i.e. cash, credit card single payment, installment payment etc.
  • Does it level 3 processing for commercial cards (if applicable to business type)?
  • If I change banks or payment processors, how will it affect my customers? My business?

TIP: An easy starting point to reduce the list of options is to ask any payment gateway what type of digital record is created at the time of creating an installment agreement, and how will you access it? Need help to get compliant? Contact Christine Speedy to learn more about solutions for your business that are quick and easy to adopt, increasing efficiency and growing profits virtually overnight.

Dealership Post-Acquisition Standardization Cash Flow & Profits

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Car, truck, and ag equipment dealership acquisitions by mega dealers are on a torrid pace. Cash-flow and profits are directly linked to standardization among locales. The right payment processing technology creates instant receivables financial transparency at headquarters regardless of varying dealer management software. heavy duty equipment credit card processingCloud-based payment processing is critical to financial transparency. For example, credit card processing terminals batched out individually means management has to wait for reports. A cloud solution, including payment gateway, can provide real-time insights by dealer location or any other number of data points.

Key payment gateway differences for dealership evaluation:

  • Real-time dashboard with drill down vs export reports to view (additional payment types not shown)dashboard net sales payment gateway report
  • Compliance with complex rules for rentals, preauthorizations, retail and card not present. How many merchant accounts needed to comply?
  • Compliance with Visa October 2017 stored credentials mandates
  • Level 3 processing capabilities for commercial cards
  • EMV chip or EMV chip and pin
  • Push payment requests (collect remote payments before delivery) via text or email
  • Cardholder authentication (3-D Secure) for remote payments
  • Payment methods supported: cash, check, wire, credit card and other methods vs just credit cards provides significantly tighter controls and data insights

Dealers hesitant to replace desktop EMV chip terminals due to prior investments should bite the bullet. Better solutions to improve customer experience and back office efficiency will reduce ROI time for acquisitions.

ABOUT: Christine Speedy is a payment processing expert with deep experience in the multi-department needs of dealerships. Solutions empower CFO’s to achieve common customer satisfaction goals with tight financial controls, risk mitigation, and reduced PCI Compliance burden. Need standardization help? Call 954-942-0483 to learn more about solutions for your business that are quick and easy to adopt, increasing efficiency and growing profits virtually overnight.

 

SaaS Startups: Credit Card Customer Onboarding 2017

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Critical rules changes for credit card processing, especially recurring billing, will impact business profits and chargeback risk effective October 2017. Simply copying what other big SaaS businesses are doing successfully is not good enough. Everyone needs to make opt-in updates to comply, and EMV chip card acceptance is a good example of how even big companies can takes months or years to change.

payment gateway SaaS recurring

Critical SaaS recurring billing credit card processing rules past, present and future:

    • To validate a card and create a token for future purchases, perform a Zero Dollar Authorization. There’s a procedure, including using recurring indicator, and a transaction fee for this. If the solution you’re looking at suggests a $1 authorization, that’s because the payment gateway, and or the implementation, are out of date and don’t support current requirements. Run!
    • The sales receipt must include phrase “recurring transaction”, frequency of the charges, and the period of time agreed to.
    • Cardholder opt-in record. Rules may vary by each card brand; following Visa requirements is a good practice. For example, read Visa Stored Credential Transaction Mandates and also Visa Core Rules. One of the new requirements is specifying how the Cardholder will be notified of any changes to the agreement. The significance of new mandates is huge, and non-compliance will result in higher fees, penalties, reduced sale approvals and chargebacks.

Payment gateway selection directly impacts profits, risk, and your customer buying experience. Lots of developers integrate one or two of the oldest payment gateways because they’re “reliable” and familiar. True, but, this could cost your company it’s path to profitability and even existence. Any WordPress developer knows technology and implementation of technology changes. It’s constant. Before selecting a payment gateway for a SaaS startup, ask these questions:

  • How will it help with new Visa Stored Credential Mandates?
  • Does it support 3-D Secure cardholder authentication?
  • How will it help with account updating for expiration and replacement cards?
  • What type of digital record is created at the time of customer opt-in to agreement, how is it retrieved, and how long is it retained?
  • Does it support authorization reversals?
  • Does it level 3 processing for commercial cards (if applicable to business type)?
  • If I change banks or payment processors, how will it affect my customers? My business?

TIP: Most payment gateways are reliable; level 3 processing, and 3-D Secure support are starting points to reduce the list of options. Need help to get compliant? Contact Christine Speedy to learn more about solutions for your business that are quick and easy to adopt, increasing efficiency and growing profits virtually overnight.