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PAYARC was recently in the news! Jared Ronski shared some insights with Business2Community.com on
How AI & Machine Learning Are Transforming the Payments Landscape. The article discussed preventing fraud, new opportunities, how AI improves efficiency, and other innovations resulting from advancements in technology. You can read the full article here.
If you’re a doctor or a merchant that sells medical equipment or supplies, you probably have to consider that patients and customers may want to use an HSA (Health Savings Account) or FSA (Flexible Savings Account) to pay. Perhaps you’ve been considering switching to PayArc,but aren’t sure if you will still be able to accept these forms of payments.Good news—you will! If your practice or business falls under one of the following MCCs, you will be able to accept HSA and FSA.
When was the last time you went to the grocery store and pulled out a checkbook in the checkout line? Or how about this — when was the last time you wanted to pay for an item and were told a merchant didn’t accept a credit card and required cash? The odds are that the last time you used a check at the store was a while ago (some merchants actually won’t accept them anymore!) and stores that don’t accept cards are now the exception that proves the rule. And the rule is that the old way of paying for products and services in the 21st century is changing — fast.
This process has only been accelerated by the introduction of ecommerce. Almost overnight, a whole new crop of businesses sprouted up on the internet, and payment processing infrastructure to support it came up along with it too. Payment processing has seen great innovation in that time: from specialized security, to fraud prevention, to increasing amounts of tools for merchants to personalized their online checkout processes. Consumers have responded well to this new form of commerce. Nowadays, many people don’t even think twice about whipping out a credit card to pay for a product or service online, and online retailers are reaping the rewards. Ecommerce continues to gain momentum, as US e-commerce sales grew 14% in Q1 2018.
The engine of technological development chugs on, and with it comes important questions. Because of this potent combination of quick growth and rapid innovation in ecommerce and payment processing, it’s not off base to wonder what’s next for online payments. Are they going to go the way of checks or cash (in some places)? In other words, are online payments dead?
It’s true that things are much more different in the payments scene than they were even four years ago. Look at China, for example. Mobile ecommerce payments have taken the country by storm, all but replacing cash and credit cards. Instead of having certain businesses not accepting card transactions under a certain minimum or requiring cash outright, mobile payments in China are quickly becoming the status quo. Citizens scan QR codes and pay with apps like WeChat or Alipay to pay for food, transportation and other everyday necessities. This preference for mobile payments is creating a ripple effect in neighboring countries like Japan, as vacationing Chinese citizens increasingly prefer to pay with their phones. “Mobile pay is growing so rapidly in mainland China that as a foreigner I sometimes found it difficult to complete basic transactions without it,” writes journalist Evelyn Cheng, going on to outline her difficulties purchasing items at a McDonald’s and paying for a cab with cash. But Cheng also notes some concerns with this widespread system of mobile payments, namely privacy.
So could that massive shift toward mobile payments happen elsewhere? And what does this mean for ecommerce? Well, though mobile wallets are starting to become more of a mainstream fixture in the US, the adoption of this technology is still nowhere near China’s. And that’s the key takeaway for ecommerce payments: without wide adoption from consumers, the effects of mobile payments won’t be felt by ecommerce. Though common mobile wallets like Apple Pay and Google Pay can be used to conduct Card Not Present (CNP) transactions that offer heightened security and fewer chargebacks risks, consumers haven’t embraced these payments wholeheartedly. “Mobile payments are a long way from mainstream adoption because current offerings lack a clear promise of superior benefits to consumers or a business model that addresses the needs of all the players in the payments ecosystem,” says Forrester Research analyst Emmett Higdon. That’s not to say it never will, but for now, the “card” in CNP transactions isn’t going anywhere.
Of course, mobile wallets or payment-enabled apps like WeChat aren’t the only alternative payments to credit cards out there. There are others, like bank transfers, that are likely to increase in popularity in the coming years. Of course, ecommerce merchants would do well to pay attention to the rise of these other payment types. One method to keep an eye on is voice payments. An offshoot of conversational commerce (the name given to the trend of interacting with businesses through messaging and chat apps), voice payments means that consumers can pay for items with their voice. Devices like Amazon’s Alexa or Google Home can now double as personal shoppers, with consumers simply placing an order by speaking. But as with all new payment types, voice payments will live and die based on consumer adoption. Only time will tell if these methods will successfully be accepted by the mainstream public.
Although there’s no shortage of alternative payments out there, online payments are a widely-accepted fact of life for a typical ecommerce consumer. And this acceptance is critical for its longevity. While there are other payment options on the horizon, there aren’t any that are prominent enough to disrupt the current online payments landscape. In short, traditional online payments won’t be going anywhere anytime soon.
With this in mind, merchants who conduct business online need to ensure they have streamlined, secure end-to-end payments infrastructure in place. The continued push toward online and CNP payments means merchants must partner with trusted merchant service providers to keep their customers happy.
Have you received your merchant services statement recently and wondered what all the fees mean? It’s not uncommon for those new to credit card processing services to be a bit confused by all of the charges that may come with your invoice. Here’s what you need to know about the most common of them: card brand fees.
First, every card issuing company that you work with (including Visa, MasterCard, Discover, and American Express) will charge these fees on your statement. Sometimes referred to as Card Brand Fees, or even Card Association Fees, they get paid directly to these card issuers. They sometimes show up as NABU (“Network Access and Brand Usage”) next to the charge on the statement.
Because the money charged for card brand fees goes to the card (VISA, for example), the credit card processor doesn’t usually benefit. While some processors may charge a cost above this fee, your statement should break this out. If not, you can view the line item charge to see what the actual cost is and subtract that from what you were charged to know for sure.
NABU card brand fees help defer the cost of each transaction processed. They keep MasterCard and American Express in business to serve merchants who accept their forms of payment, either as a debit or credit card purchase.
Fees vary by card issuer, bank, and your specific agreement with the processor. While not every merchant will pay the same, some common charges may make up these costs.
They include:
Other fees that cards can charge include a per-location monthly fee, Misuse of Authorization Fee, and various pre-authorization fees.
Depending on whether the charge is through Discover, MasterCard, VISA, or American Express, you can see between four and fifteen various fee types per statement. Costs range from a tiny $0.0025 per transaction to a flat fee of $15 per month for each kind of brand card fee. Some of the fees charged, however, are very rare and do not apply to all business types.
The costs associated with credit card processing may seem intimidating, but the benefits are clear. Having the ability to proudly display that you accept the major card brands can be a significant win for your business. As more people choose to carry an average of two or more major credit cards with them when they shop each day, it’s become apparent that consumers love choice.
Switching between a VISA and a MasterCard, for example — so that they can benefit from card rewards or optimal interest rates – is desired by smart shoppers. Knowing that your store accepts a variety of cards will help you remain competitive in today’s business world. These mandatory card brand fees may be a small price to pay for the type of customer experience most have come to expect.
While most of the NABU fees are set in stone with the credit card issuer and are not usually up for negotiation, there are ways to ensure that the number and scope of these charges remain manageable. Putting robust security features in place and using best practices for card acceptance can reduce some of the penalty fees that occur for transactions without a physical card or that don’t clear on time.
PayArc has special offers for foundations and nonprofits, sometimes providing processing at cost. For additional tips for managing your card account fees, see your PayArc representative.
ata breaches are the enemy of the payments industry. The PCI-DSS, which stands for Payment Card Industry Data Security Standards, is a set of rules set forth by the PCI Security Standards Council specifically to lessen the chances of a data breach. This Council is comprised of Visa, MasterCard, Discover, American Express, and JCB International, and they share the goal of making payment processing safer for all those involved to protect against fraud and theft of card data. These are regulations that all merchants must stay compliant with in order to accept credit cards and choosing not to stay PCI-compliant is bad news for your business.
Failure to comply with the PCI-DSS can result in hefty fines for the offending merchant. Card networks can charge acquiring banks penalties in the thousands of dollars per month, and the acquiring banks then pass those penalties onto their merchants, costing merchants dearly. Because of this risk, it is necessary to research how your acquiring bank helps you stay PCI-compliant.
If you do experience a data breach, even if you’re PCI-compliant, you can still face fines and penalties. You may be required to pay cardholders whose data was stolen, which can total around $50-$90 per cardholder. Additionally, customers may lose faith in your company and be wary of returning to purchase from you.
Lawsuits are also a consequence of a data breach. Big-name companies pay settlements in the millions of dollars if they experience a cyber-attack. Target was the subjects of a major data breach just a few short years ago in 2013 and paid an $18.5 million multi-state settlement in 2017. In 2015, as the result of a class-action lawsuit, the retail company paid cardholders $10 million.
If you refuse to comply with the PCI-DSS, not only can you incur all of these potential fines and consequences, you also run the risk of your acquiring bank terminating your merchant account. All in all, it is just a much better idea to spend the time becoming PCI-compliant and drastically reducing the chances of a breach. Here at PayArc, we help merchants stay compliant through our partnership with ControlScan.
You can learn more about it here.
stolen credit card means potentially devastating losses for the card network, banks, and the cardholders themselves. That’s why the Payment Card Industry is always trying to stay one step ahead of criminals who would steal cardholder data. That’s why American Express, MasterCard, Visa, Discover, and JCB International founded the Security Standards Council in 2006—their work prioritizes the understanding and implementation of “standards for security policies, technologies and ongoing processes that protect their payment systems from breaches and theft of cardholder data” and “helping vendors understand and implement standards for creating secure payment solutions.”
The PCI-DSS—the Payment Card Industry Data Security Standards—are regulations that all merchants must stay compliant with in order to accept credit cards. These Standards exist to protect cardholder data and help keep everyone safe from fraud. As a result, they are ever-changing to keep up with new technology.
The Security Standards Council has determined levels for PCI-Compliance related to how many transactions a merchant does annually. PayArc itself is PCI Level 1 DSS Compliant—which means that PayArc belongs to the highest level of security. Merchants who must comply with Level 1 do more than 6 million Visa or Mastercard transactions annually. Most merchants, however, are PCI Levels 2, 3, or 4. Merchants who must comply with Level 2 do between 1 million and 6 million Visa or Mastercard transactions yearly, merchants who must comply with Level 3 do between 20,000 and 1 million Visa or Mastercard transactions yearly, and merchants who must comply with Level 4 do less than 20,000 Via or MasterCard transactions yearly.
PayArc offers a range of programs to manage risk and stay PCI-Compliant. These programs range from encryption and tokenization, to velocity filter, AVS/CVV capture, and the ability to limit transactions from select countries. Additionally, PayArc’s Gateway Service is PCI-Compliant and allows merchants to monitor transactions in real-time.
All of this is managed through our partnership with ControlScan. PayArc utilizes ControlScan’s state-of-the-art software to manage merchant PCI compliance. This includes a PCI self-assessment, vulnerability scanning, access to live support, and educational content designed to help merchants understand compliance and security better.
To understand more about how PayArc and ControlScan work together to help merchants stay PCI-Compliant, click here.
isa offers a credit card that is tailored to the needs of businesses. Visa Corporate is a commercial credit card that features spending data reports, employee convenience, and benefits like Auto Rental Collision Damage Waivers, Travel and Emergency Assistance Services, and Cardholder Inquiry Service. Commercial cards are popular with businesses primarily because it enables companies to analyze how much employees are spending and where they are spending corporate funds in detail.
A “card-not-present” transaction is a transaction that is either keyed in or done online—that is, not run through a terminal. These types of transactions have higher interchange rates because there is a higher risk of fraud.
The interchange rate for this type of transaction is 2.70% and $0.10. To find out more about Visa’s interchange rates, read up here.
Mastercard also offers a Corporate Card. This card also comes with a range of useful commercial services and savings programs,like integrated travel and booking management, expense management and reporting, and card controls; and benefits like emergency card replacement, car rental insurance, and purchase assurance. However, there is no specific rate for commercial card-not-present transactions.
s a business owner, your first priority should be keeping as much profit as you can, and that includes minimizing the number of chargebacks you experience. Chargebacks can not only eat into your profits, they can also throw suspicion onto your reputation with your payment processor. A chargeback reversal is what happens if you win the second presentment (sometimes called “re-presentment”) part of the chargeback dispute process.
Chargeback reversals will help your business, but it can be hard to prove your case. Further, many merchants choose not to dispute chargebacks at all after considering the amount of time and cost associated with going through the dispute process. You can learn more about chargeback arbitration here. If you do choose to dispute a chargeback, here are some tips for achieving a chargeback reversal:
You can learn more about Visa’s Chargeback Resolutions process here, MasterCard’s here, Discover’s here, and American Express’s here. Once you understand the resolutions process for the card network you are dealing with, it will be easier to understand exactly what you need to win a reversal.
Does your business receive more than its fair share of chargebacks?
Credit card associations are paying attention. Most card associations monitor merchant activity on a monthly basis. They keep tabs on everything from chargeback ratios, to disputes and fraudulent transactions.
Merchants are expected to keep disputes and fraud at acceptable levels. If your business receives excessive chargebacks, you could land on the chargeback monitoring program.
If you exceed the threshold set by the card network, you will be placed on a monitoring program. In most cases, you will receive a warning before being placed in the program.
Businesses who receive a warning must take immediate action in reducing chargeback ratios.
Here are a few ways you can prevent chargebacks:
In the event that your business is placed in the program, you may be required to pay monthly fines and additional fees until your level of fraud and disputes have gone down.
You’re going to want to take an active role in reducing your levels of fraud and disputes. Work with your acquirer to develop a strategy to reduce your chargeback levels – or what is also called a chargeback mitigation plan.
If you want specialized help in preventing chargebacks, reducing your chargeback levels or creating a chargeback mitigation plan (required if you have received a warning), then get in touch with us so we can help you successfully navigate chargebacks and chargeback disputes.
Visa will no longer support the Performance Tier 2 interchange program for merchants in the Canada region. Although these programs will still be visible throughout the systems, no volume will report to these programs.
Visa will no longer assign the Electronic and Standard interchange programs to transactions. Although these programs will be visible throughout the systems, no volume will report to these programs.
Visa will no longer assign the Supermarket Performance Threshold programs. Although these programs will be visible throughout the systems, no volume will report to these programs.
Visa will no longer assign the Business Standard fee programs for travel service and non-travel service transactions that do not meet Custom Payment Service (CPS) qualification. Although these programs will be visible throughout the systems, no volume will report to these programs.
Mastercard is enhancing the Canada domestic interchange programs by lifecycling the existing consumer credit programs and creating new ones. They are also restructuring the commercial programs by setting them up as Small Medium Enterprise, Large Market, and World Elite for Business.
The Transaction Integrity Class (TIC) is used as a method of evaluating transactions to determine their class as some transactions are inherently more secure than others. It encompasses the fundamental safety and security of a transaction and considers the differences between the technology used and the Cardholder Verification Method (CVM) used to assess the validity of both the card and the cardholder to determine the overall integrity of the transaction.
Mastercard currently provides the TIC value in the authorization for point-of-sale (POS) purchase and purchase with cash back for most transactions initiated in the U.S. region. Mastercard requires the TIC field to be part of the authorization response (as of April 2016). TSYS Acquiring Solutions already supports the TIC throughout our authorization and clearing processing platforms.
Effective April 17, 2020, Mastercard will require the TIC to be present on clearing messages and will be including it in their interchange edits. When an invalid TIC is provided by merchants or acquirers for a U.S. domestic transaction, the transaction will be rejected by Mastercard with error message 2819. At this time, approximately 50 percent of all Mastercard volume processed on our clearing platform does not include the TIC.
Mastercard has updated electronic commerce security level indicators (ECSLI) values for the Mastercard Identity Check Program. This includes a new security level indicator (SLI) value for the EMV 3-D Secure (3DS) specification.
Amex will implement new error messages for 2077 and 2078. TSYS Acquiring Solutions will update MAS, PPM, and e-Connections to support the new error messages.
Amex will revise a country code and a country name to match ISO standards.