B2B Credit Card Payments And EMV Technology

What’s the best EMV payment technology for business to business (B2B) merchants? Once the requirements are defined for non-EDI payments, the options are limited. Whether card not present only, or a mix of retail, phone, and ecommerce, B2B payments are different.

B2B Credit Card Payment Minimum Requirements.

  • Tokenization to store credit card, and possibly check and wire data
  • Level 3 processing (significantly reduces merchant fees through lower qualified interchange rates)
  • Payment optimization to qualify transactions properly. For example, if merchant does a pre-authorization, and captures at a later date, certain rules need to be met to avoid higher non-qualified interchange rates.
  • 24/7 payment options for customers to serve multi-time zone and increase security

EMV Terminals for B2B.

There are no desktop or countertop terminals that support level III processing, and that won’t change. These terminals are programmed with the acquirer instructions via download, and less frequently, may be connected to Point of Sale (POS) software.

To meet the minimum B2B requirements, a payment gateway is required. Merchants process transactions by accessing a virtual terminal via a secure web page, or with an integrated software solution. The gateway must certify level III processing for each card brand, and EMV, and the specific terminal, for each acquirer.

For example, CenPOS has certified the Verifone MX915 to TSYS, with P2P encryption, level III processing. Most acquirers and banks support TSYS as a way to connect to their platfor; for example, First Data, Chase Paymentech, and Bank of America Merchant Services. To date, no other gateway has certified level 3 processing for retail and EMV. The difference for distributors is huge; it’s not uncommon to reduce merchant fees an average of 30%.

Pending Certifications

Exercise caution on claims of pending certifications, if the solutions provider:

  • Doesn’t have any certifications to date, after a year or more to prepare.
  • Has never had level III processing for retail certification
  • Does not offer a way to automate interchange management in a mixed retail & card not present environment, or for card not present only

 

 

 

Bin Management – Shift4 vs CardSense vs CenPOS

What is bin management software, or bin spinning? How does bin management differ from interchange optimization with least cost routing? Shift4’s Universal Transaction Gateway® (UTG®), Element’s CardSense™, and CenPOS’s end to end payment engine have different approaches to helping merchants reduce credit card processing fees. Bin management requires a hosted, server-based payment gateway.

Identifying BIN numbers is a challenge due to multiple resources to obtain and maintain the data, which is in a constant state of flux. Card issuers refer to the leading six digits on the card as an “issuer identification number (IIN)”, or “bank identification number (BIN)”. All BIN’s have a sponsor bank. Interchange fees, the bulk of credit card processing fees are related to the BIN. The BIN number identifies the card brand (Visa, MasterCard etc), card issuing bank, type of card (debit or credit), category of card (business, purchasing, prepaid, etc), and country of origin, in addition to other data. 

Is pin debit or signature debit cheaper? Cashiers were trained to ask “will that be credit or debit?” years ago when there was a significant cost differential between signature debit and pin debit. After the Durbin Amendment became law, about 70% of debit cards now carry the same cost of .05% and $.22 per transaction, but there’s still advantages to routing transactions:

  • Pin debit has a 14 day dispute period vs 120 days for signature debit
  • Dues and association fees are not applicable for pin debit
  • For cards that don’t fall under the big bank rules of fixed .05%, fees vary depending on the transaction routing; there’s a threshold where it’s cheaper to process as signature vs pin debit.

All three gateways enable merchants to manage the threshold and can communicate with a terminal to prompt the customer in the optimal way for the merchant.

Shift4 vs CardSense vs CenPOS retail debit card bin management

Element PS CardSense BIN management service allows merchants to differentiate between credit, PIN-debit, prepaid, and FSA/HSA cards, and then business management software then allows the merchant to decide how to process the transaction: as a PIN debit, prepaid debit or a healthcare card; merchants are directed to the API for POS integration. To use CardSense, merchants must have an Element PS merchant account, and an API is available to integrate to their POS.

Shift4 identifies card type as debit or credit, then based on merchant defined threshold, prompts the customer the preferred way – signature or pin- to process the debit transaction. To use Shift4 for retail, merchants can use the virtual terminal with any merchant account, or integrate with a POS system.

CenPOS identifies card type as debit or credit, then based on merchant defined threshold, prompts the customer the preferred way – signature or pin- to process the debit transaction; additionally, using proprietary least cost routing technology, CenPOS dynamically routes the transaction to the lowest cost debit network (Star, Pulse, Internlink etc), if applicable. To use CenPOS for retail, merchants use the virtual terminal with any merchant account, or integrated with a POS system.

Shift4 vs CardSense vs CenPOS retail credit card bin management

There’s no public information that Shift4 or CardSense offer additional bin management beyond debit. CenPOS retail bin management also supports all commercial cards, including corporate, purchasing, and business cards. CenPOS has uniquely certified their gateway for retail level III processing, significantly reducing interchange fees for eligible cards.  For example, a $7,500 building supply sale could be reduced from 2.65% + $.10 to 1.20% + $40.00. Unlike pin debit, which prompts customers for action, level III prompts cashiers for action, and dependent upon merchant rules, cannot be bypassed.

Cash management optimization

CenPOS’s patented optimization of payment processing encompasses many elements to help merchants mitigate risk and increase profit margins. CenPOS products use merchant preferences and transaction profiles to manage the expense of payment interchange and provide a method for electronically delivering coupons. Using this technology, businesses can accept any form of payment via websites, store fronts, call centers, and mobile applications to improve customer engagement and simplify reconciliation. The intelligent system closely manages the full lifecycle of each transaction and utilizes advanced risk management and proprietary transaction routing to reduce the total cost of payment acceptance.

In summary, bin management is a host-based solution to help merchants reduce merchant fees and mitigate dispute or ‘chargeback’ risk. It’s a step above countertop terminal capabilities, but limited in impact since debit fees became regulated. CenPOS’s cash management optimization of payment processing is a powerful system empowering merchants to control profit margins across all sales channels.

Disclaimer: Shift4 and Element PS information is based upon publicly available information as of this date. The CenPOS information herein is not all inclusive.

Does My Company Need CenPOS? B2B Payment Gateway Checklist For Credit Card Processing

If your company has a business to business component and more than five hundred thousand in credit card processing revenues, this article is for you. If you answer yes to any question, you’ll almost certainly increase EBITDA with very little effort by switching to CenPOS.  Changing your merchant services provider is not required.

  1. Do you have a desktop terminal?
  2. Do you use authorize.net, Paypros, or Paypal for your payment gateway or virtual terminal?
  3. Do you have mixed swipe and card not present transactions on the same merchant account?
  4. Do you preauthorize cards and charge when ready to ship- sometimes weeks later?
  5. Do you ever preauthorize card for one amount, but capture or settle a different amount (change order)?
  6. Is MasterCard Data Rate I or II on your merchant statement, but not Data Rate III?

The list is what I call ‘easy pickings’ for big financial impact, and I don’t even need to see your merchant statement. CenPOS fees will nearly always be more than offset by merchant fee savings. That’s not necessarily a big enough reason to make a change, but isn’t it compelling enough to call 954-942-0483 now and learn more about how our platform can help your company?

3 Reasons A Desktop Credit Card Terminal Is A Poor Merchant Solution

Last week I visited multiple merchants that sell products and services  business to business, most of them whom never see their customers. They all had desktop terminals.

FD100ti

The FD100ti by First Data is a good quality retail terminal, but I wouldn’t recommend for business to business, card not present merchants.

3 Reasons A Desktop Credit Card Terminal Is A Bad Solution For Business To Business Merchants

  1. PROFITS REDUCED: It doesn’t support level III processing, critical for business to business merchants to save money on merchant fees.
  2. INCREASES RISK: It cannot store and tokenize credit card numbers for repeat billing so either card data is stored on paper forms or employees get the number over and over again, either way exposing the card number repeatedly.
  3. INEFFICIENT:  Employees have to key enter full card data every time for repeat customers; data records are limited to whomever has access to accounting software, or waits for reports to be generated and disseminated.

Tip: There are no desktop terminals that support level III processing. Merchants need a virtual terminal or integrated payment solution that supports level III processing.

Level III processing with PayTrace virtual terminal vs CenPOS virtual terminal

Are you looking for a payment gateway or virtual terminal that supports level III data (L3 or level 3)  processing and does not require a new merchant account? This review compares a select few features of Paytrace and CenPOS, specifically to address business to business needs with token billing. Level III data, or enhanced data, can significantly reduce credit card processing fees.  Both services are compatible with multiple credit card processors, including the big two, First Data Merchant Services and Chase Paymentech.

Watch these two videos, each of which uses stored customer payment information, and adds level 3 data to a transaction, then read my comments below.

PayTrace is a product of PayTrace, Inc, a registered trademark. PayTrace Level 3 Processing Video:

http://dl.dropboxusercontent.com/u/27003654/Training%20Videos/Level3/Level3.htm

PayTrace level III processing transaction with stored card number video steps:

  1. Retrieve stored customer
  2. Key enter amount
  3. Process transaction
  4. Confirm total
  5. Transaction is approved.  Red text appears stating Level III could be added
  6. Click to add Level III data.
  7. Default data is displayed- modify & click to add.
  8. Alert remains that at least 1 item should be added. Click to add a line item.
  9. Default line item detail appears. Click to add line item.
  10. Click to add another line item or close and return to Paytrace page.

Optionally click navigation to view all level III data items – update any in red before settlement.

 

CenPOS level III processing transaction with stored card number (token billing): level 3 video

If the video does not automatically load, click the link to watch on my youtube channel, Youtube.com/3dmerchant

#30-B Charge a stored credit card and pass level III data video (click to enlarge video, then hit escape to return)

CenPOS Level III Processing Steps:

  1. Retrieve stored customer token
  2. Key enter amount
  3. Invoice is required (required for key entered transactions qualified interchange rates)
  4. Submit transaction
  5. Level III default template including line item appears (choose alternate template if desired) . Optionally add notes.
  6. Submit
  7. Receipt appears- review, print or close. ( Customer is automatically sent a copy of receipt to email address or mobile on file.)

COMPARE AND REVIEW:

There are many differences between the payment  gateways, however, these video’s demonstrate two key differentiators that are consistent when comparing level III processing services on the market.

  1. PayTrace relies on employees to do the right thing at the point of sale to help merchants qualify for the lowest interchange rates. CenPOS does not. Administrators create rules to meet company financial and risk objectives, including requiring level III enhanced data on all eligible transactions.
  2. Simplicity of function and pleasing design. The CenPOS user-friendly, graphical interface and automated prompting is unparalleled. The efficiencies gained are highly valued by CenPOS users.

What do you think? I’d love your comments.