Category Archives: Payment Gateway

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.

Credit Card Testing Explosion Hurts Merchants Profits

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If you accept payments online, have you hardened security to protect from card testing? Card testing is a big criminal business. They’re sophisticated and use hardware and software that can send thousands of stolen credit card data in less than an hour to your payment portal or ecommerce shopping cart before you even know you’ve been hit.

Brute-force authorization attacks can be very expensive for merchants. For every attempted authorization, merchants pay a payment gateway fee, plus a fee to the merchant services processor (acquirer).

Example:

  • $.30 per transaction gateway
  • $.10 per transaction processor
  • 20,000 cards tested @$.40= $8,000

There’s no getting back the $8,000. The gateway and processor passed the data you gave them. In the event orders are approved, there’s the additional cost of lost product shipped and the associated chargeback fee. Then there’s the cost of damaged brand reputation from cardholders who voice on social media, where it lives on forever, how their card was used unauthorized.

How can merchants protect online payments from card testers?  Google reCAPTCHA is a free service that protects your website from spam and abuse. reCAPTCHA can prevent bots from submitting a transaction that you’ll pay for. For most shopping carts, it’s the payment gateway that must support reCAPTCHA. If the integration does not include reCAPTCHA or similar service, merchants might want to review if their gateway is compliant with current rules acceptance in general.

Protecting against both bots and fraudulent transactions is tricky.

Fifteen percent of all cardholders have had at least one transaction unnecessarily declined in the previous 12 months, according to a 2015 study by Javelin.

Unnecessary declines are also called False Positives. Cardholder authentication is a layer of security to protect against fraudulent purchasing, increasing approvals and reducing False Positives. 3-D Secure is a global XML protocol for Cardholder Authentication; The card brands each has their own name- Verified by Visa, Amex Safekey, MasterCard SecureCode. Benefits of 3-D Secure include automation, shifting liability to card issuers without manual review of orders, increased approvals, and sometimes reduced Visa and MasterCard interchange fees.

Which payment gateways support recaptcha and Cardholder authentication?

reCAPTCHA is easy to implement, just check with your payment gateway provider or web developer. 3-D Secure is quick, easy and requires a few steps:

  • Confirm your payment gateway is 3-D Secure certified for your credit card processor (merchant services provider or acquirer). Ask which are certified: Verified by Visa, Amex Safekey, MasterCard SecureCode. Some have certifications, some don’t.
  • If there’s an application such as a shopping cart or e-invoicing, confirm the payment gateway integration will support 3-D Secure.
  • Contact your acquirer and ask them to register your merchant account for 3-D Secure. Some can, some can’t. It’s usually done in a day.
  • Turn on 3-D Secure in the payment gateway.

FAQ

Is there a cost for reCAPTCHA? No, it’s free from Google. If your payment gateway supports reCAPTCHA, it may just need to be activated on your account, no programming needed. Contact your payment gateway support or check their FAQ to find out.

Is there a cost to register for 3-D Secure? That’s up to the individual company doing the registration. Costs start at $0.

Is there an ongoing cost to use 3-D Secure? Yes, and it’s up to the individual company offering the service. Costs typically range from $.075 to $.30 per attempted authorization.

If hit by a card tester, can I negotiate to reduce fees? It’s unlikely because services were delivered as per your agreements.

Christine Speedy, authorized CenPOS reseller, provides universal payment processing solutions, including reCAPTCHA and 3-D Secure cardholder authentication, to maximize merchant profits and mitigate risk across multiple sales channels. Contact Christine at 954-942-0483. 

VISA FRAUD DISPUTE RULES CHANGES IMPACT CARD NOT PRESENT

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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 5.4.2.5, 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?

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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.