How Emerging Markets are Driving the Digital Wallet Trend

Jul 26, 2017 by

How Emerging Markets are Driving the Digital Wallet Trend

It’s been suggested that emerging markets could see a major economic boost if they made just one simple change: go cash-less. It’s already happening around the world, and there is good reason to go cash-less.

Security

Storing cash is risky, especially if you have a lot of cash. In developing nations, one job might lead to significant sums of cash for someone, but they’ll need to live on that for week or months while they find more work. High incident rates of theft are propelling more retailers to adopt credit card terminals to store money digitally and make it harder for thieves to steal.

Nearly 80% of adults in emerging markets have either a mobile phone or a smartphone that they use on a daily basis. Even more carry credit and debit cards, says Charge.com, and as these technologies merge the POS becomes a perfect mechanism to help transmit payment data digitally.

There is a large segment of the population in any developing or developed nation that is underbanked, meaning they either don’t maintain a bank account or they aren’t benefitting from doing so. Part of the problem is that these people need closer control over their budgets, in order to plan and save effectively.

Right now, banks can’t respond to these pressures fast enough and the costs of providing the existing services is far too high. With digital transfers, all transfers are much faster and more affordable. That makes the mobile wallet the new cost-saving measure of the future for many on the lower income. Even those who wish to start a business will benefit from this revolution. They’ll find it easier to pay contractors from anywhere in the world, and make international purchases they need to run their business.

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How Merchant Processing Services are Countering Global Transfer Theft

May 11, 2017 by

How Merchant Processing Services are Countering Global Transfer Theft

Written by: Charge.com

Summary: Transferring money to another country? You’d best carefully select a merchant service that implements the highest security measure available.

One of the most challenging tasks that merchant services must face is the global transfer of money. You’ve heard the stories of fraud, theft, and corruption all over the news, so it’s likely that you’re skeptical when wiring money overseas. And to add fuel to fire, the transfer must stop at multiple points, increasing the risk of it being hijacked by hackers. This guide is designed to showcase the increasing level of security being implemented by merchant services to minimize the risk of transfer hacking.

How Secure is Secure?

When a credit card merchant account first authorizes the transfer, they provide a secure means beforehand. This is done via SSL encryption to help keep the transfer anonymous to others – and with the amount of sensitive data such as account numbers floating around, it’s absolutely mandatory to keep this secure.

When a credit card is swiped or processed, the payment gateway will search for authorization. Once it receives confirmation, it will tag the transaction with a key that matches the user’s bank account. Now, transferring money overseas isn’t much different from this. The fact that it requires travelling through different countries before reaching the destination may require additional days to complete, but more notably, it also presents a security risk if these financial institutions are negligent in their transfer operations.

The Bottom Line

In order to protect global transfers, companies need to ensure that they take the proper security precautions to ensure that the money is kept safe and reaches the destination unscathed. With fraud and theft increasing at an alarming rate, new technologies are being scrambled together to counter these hackers.

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The Basics of the Payment Processing Landscape

Mar 23, 2017 by

The Basics of the Payment Processing Landscape

In 2014, and even a bit in 2015, the landscape of merchant processing looked pretty grim. Not a lot was happening at the consumer level, technology wasn’t very compelling and good deals were hard to find. Businesses didn’t have a lot of options when it came to transferring money online, and most just went with whatever services were offered through their bank or merchant account.

This led to a lot of very expensive fees an inefficient money transfers. Today, things look very different and the future is rather bright for companies who utilize credit card processing. There are several reasons why that is the case.

New Technology

Smartphone adoption rates are higher than they’ve ever been, which means that everyone around you has the potential to carry their wallet in their pocket without ever carrying cash. These devices are secured, sometimes with multiple levels of encryption, and they are easy to use as a means for transferring money.

Merchant accounts are adapting by adding new ways to pay at the terminal. Customers can use digital wallets, mobile devices and more. This goes against the traditional credit card system, but consumers don’t seem to mind. It’s safer to pay with a phone, or to pay online, meaning more of us can buy what we want when we want.

Integration

The missing piece of the puzzle isn’t the willing consumer, it’s a business ready to adopt this new technology. It’s been difficult to find a good system that you can link to an existing merchant account, and provide an ecommerce component. Today, that’s no longer the case as there are more options than ever before.

Some of these services are tied to an account, but not all of them. As compatibility improves, it will be easier for consumers to consolidate their wallets.

Right now, the landscape is still fractured but that won’t always be the case. Soon, digital wallets on your mobile device will be the standard. You’ll be able to receive your paycheck over mobile, pay your bills and buy your groceries, all with nothing more than your phone.

Better Security

Of course, the innovation everyone will benefit from (but isn’t the most exciting) is better security. Transactions on these new systems use an anonymous instance, so everything takes place in a vacuum of sorts. This makes it harder for hackers to detect, and nearly impossible for them to extract any meaningful data from.

Bio: Charge.com offers fast, safe and efficient credit card processing on the Web. Accept credit cards online or in store with Charge.com.

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Why Bluetooth Will Drive Digital Wallets in 2017

Dec 30, 2016 by

Why Bluetooth Will Drive Digital Wallets in 2017

When Apple pulled the plug on the headphone jack, pun intended, it started a debate about whether wired peripherals were a thing of the past. Apple, Samsung and a growing number of smartphone manufacturers are beginning to see a great deal of promise in Bluetooth technology. Soon, Bluetooth will affect everything from how you listen to music to how you pay for the items you buy on your way home.

Bluetooth Peripherals

Already, it’s possible to transfer money digitally over Bluetooth. Merchants had been slow to adopt this technology because, for many, it means expensive adjustments they need to make to stay in compliance with the law. Now that the painful part is over, and smartphone adoption rates are up, Bluetooth technology is on the rise.

This has given way to several important peripherals, including card readers and mobile payment systems. Two devices might use Bluetooth and WiFi, so someone can take an order from a customer and process payment while the order is fulfilled. This would work well in restaurants, or in the retail sector. Imagine ordering a customized computer, or wardrobe, and having every piece hand delivered to you in the exact specifications you asked for. That’s the power of Bluetooth.

Digital Wallets

Another important innovation is the digital wallet itself. Bluetooth technology just helps provide the vehicle to make a payment, the wallets handle the encryption and actual movement of funds. Plus, these wallets are accepting and using a growing number of currencies. Soon, you might be able to travel abroad with little more than a smartphone and a passport.

Bio: Payza is the most reliable digital wallet accepted by more than 190 countries around the world. Read Payza reviews to see why Payza is one of the most trusted names in digital wallets.

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Credit Card Safety Policies for Your Store

Dec 22, 2016 by

Credit Card Safety Policies for Your Store

Credit card machines have evolved to provide better security for the payment information passed to and from your bank to a customer’s account. Behind-the-scenes, you don’t really need to do much other than setup the account properly and test it to make sure it works. Still, it’s important to have good security policies you can use for employees in house.

Limiting Exposure

Your credit card processor will handle of the sensitive data, but your employees should try and limit the amount of times where they have to deal with the full number for a card. Avoid keying things in, or require manager approval when typing a credit card number into the terminal, and never have employees write this information down. If they need to call a customer’s card provider, or leave the terminal for any reason, the customer and card should accompany them.

The less time you spend with sensitive data, and the fewer opportunities you have to record that data, the better for you and the liability your company faces.

Tracking Terminals

Every employee should have some kind of login ID they use to sign into your store’s credit card terminals. That login should tell management who used a terminal, so you can lookup transactions and identify who rung them up if something goes wrong.

Final Thoughts

If you’ve not already done so, upgrade your store’s payment system so you’re utilizing modern technology. Then, enable chip readers at the register so you can take the more secure form of payment instead of the outdated magstrip.


Charge.com Payment Solutions, Inc. offers the most affordable rates on credit card terminals and merchant accounts.

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All About Payment Gateways

Aug 26, 2016 by

All About Payment Gateways

Credit card services involve many moving parts, and one of those moving parts is known as the “payment gateway”. This part of the transaction is the portion that moves the money to and from the payment processor, but it’s not to be confused with the payment processor or merchant account. Confused yet? Then this guide should help.

How a Typical Transaction Works

Typical payment processing begins with the customer swiping his card at the credit card machine. He may also place an order on a website clicking “submit”, or some equivalent button. The user’s browser encrypts the information before it’s sent anywhere, which is made stronger if the site utilizes SSL encryption. The merchant receives that transaction, but can’t touch the money.

The merchant service provider typically doesn’t control the means of getting the transaction to and from a bank. That company forwards the payment to the gateway, which also adds an additional layer of SSL encryption.

The information is forwarded, like a hand off, to the credit card bank. They verify the transaction as authentic and they approve or decline it. They simultaneously issue a response code to the merchant’s processor, indicating whether the transaction was approved or denied. The processor then uses the payment gateway to send that code to the merchant’s bank. This starts the full authorization process, where funds begin to transfer.

At the end of each day, the merchant submits all processed transactions as a “batch”. This batch records their sales for the day, which completes most of the work transferring funds. After that, the banks have to work out the exchange which can take about 24 hours. If everything goes smoothly, the transaction itself will take about 2-3 seconds, while the transfer will take a maximum of 72 hours.

Final Thoughts

A payment gateway is necessary to running a merchant account. Few of these companies manage their own, so the costs of the transfer are a part of the costs a merchant pays at the credit card machine. If you’re considering a merchant account for your new business, be sure choose the interchange plus model for your pricing plan. If you choose a flat rate, all of those costs are lumped into a single transaction fee. With interchange plus models, you get a fair rate based on the type of transaction your process. Ultimately, that can reduce the fees you pay.
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With no setup fees, and low rates, Charge.com Payment Solutions, Inc. is one of the fastest and most efficient methods to process payments online.

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Know the Lingo: Basic Terminology for Merchant Accounts

Jul 12, 2016 by

When you’re trying to research something new, like credit card processing, you’re going to need some foundation for the lingo so you understand what is being discussed. There are many terms related to merchant accounts, almost too many to list in a single article, so these terms are some of the most important. After reading this guide, you should have a firm understanding of terminology you can use to help find the best merchant account for your business.

Merchant Bank

The merchant bank is responsible for providing the means to facilitate a transaction, also known as a payment gateway. They may not design that gateway, but they allow customers to utilize it in order to securely send money online or in-store. Aggregators, like PayPal, design their own solutions and allow transaction processing without the “bank” nomenclature.

Processor

The processor is the middleman for your transaction, which routes the credit information. When you slide a card through a credit card machine, the processor passes the information to the gateway that sends the data to the merchant bank.

Issuing Bank

The customer’s bank, or the bank issuing funds to cover the costs of the transaction (including the purchase, and associated taxes). These institutions give credit cards to consumers, and usually pay the costs up front while charging customers interest to pay those costs back.

SSL

Secure Sockets Layer, a form of encryption that helps anonymize and protect financial data as it is passed from the issuing bank to the merchant bank.


Charge.com Payment Solutions, Inc. is an affordable merchant account provider with mobile and in-store credit card processing solutions. 

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What the Truth in Lending Act Does

Jan 6, 2016 by

What the Truth in Lending Act Does

By Phineas Upham

If this were 1965, and you were trying to buy a car you might run into some trouble if you tried to buy a car the way consumers do it today. First and foremost, there is no Internet so pricing a car is very different. If you got talked into a loan you couldn’t pay, banks could garnish your wages with the burden being placed squarely on your shoulders.

Truth in Lending changed some of that.

The Act was designed as a safeguard for consumers, and it helped give prospective buyers options to shop around. It didn’t just apply to the automotive landscape, but the effects were felt most prominently there.

If you’re old enough to remember the beginning of 0% APR financing, you might not be aware that this is an indirect effect of Truth in Lending. Failure to properly differentiate between a finance charge, and the amount financed, meant that a potential lender could just roll the extra interest from a loan into the loan itself. They could package the loan as a 0% APR loan, leading consumers to believe they would save thousands, and reap the rewards.

APR was mandated by Truth in Lending, and it was meant to help consumers gauge how favorable a loan’s terms were to their particular circumstance. However, deals like “0% APR financing or $1,000 cash back” masked what the consumer could potentially get. Which is the better deal?

The Act was passed in 1968, and has helped a great deal in standardizing the costs of lending.


Phineas Upham is an investor from NYC and SF. You may contact Phin on his Phineas Upham website or Twitter page.

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8 Ways to fight Chargebacks

Oct 9, 2015 by

8 Ways to fight Chargebacks

Credit card chargeback fraud is a persistent problem for merchants and can be hard to detect. But there are ways small-business owners can fight back.

Fraudulent chargebacks include cases of identity theft and so-called “friendly fraud,” in which a customer deceptively says a product or service was never ordered or was not delivered. Friendly fraud accounts for 18 percent of all merchants’ fraud cases, according to the 2014 LexisNexis True Cost of Fraud Study.
Usually, you won’t hear from the customer if they’re committing friendly fraud, says John Monarch, CEO of Direct Outbound, a Greenville, South Carolina, call center firm that provides chargeback dispute services. Many customers go straight to their card issuer as a matter of convenience, whether their chargeback is a result of someone misusing their credit card, friendly fraud, or even incorrect chargebacks that are a result of not recognizing the purchase. A 2014 survey by Trustev found that 17 percent of U.S. consumers have disputed charges without contacting an online merchant, and 7 percent admitted to lying about the condition of a product so they could return it for a refund.

If chargeback fraud goes unchecked, the consequences can be severe. Too many chargebacks could prompt your acquiring bank to terminate your account. That could make it almost impossible to get a new account, according to Tim Russo, fraud prevention team leader at cleverbridge, an e-commerce technology firm in Chicago.

Russo says card associations use a database known as MATCH, which stands for Member Alert to Control High-Risk Merchants (previously known as the Terminated Merchant File, or TMF). The system is used by MasterCard and Visa processing banks to identify merchants that have had their accounts terminated. Once a merchant is on this list it is highly unlikely that future merchant account applications will be approved. “The TMF, or MATCH list, is essentially a blacklist from which it is almost impossible to be removed,” says Russo.

Determining whether your business has a chargeback fraud problem can be tricky. However, there are several important signs that fraud is an issue, as well as some smart ways to prevent it — or, at least, fight it when it happens.

1. Understand your risk. Merchants who do business online are at particular risk of chargeback fraud because they are not able to see the credit card being used or check a customer’s identification or signature, says Monarch. As a result, it can be easier for fraudsters to use stolen credentials to order merchandise online. In addition, because the merchandise is often shipped without a signature required for delivery, it can be easier for friendly fraud perpetrators to claim the product was never received.

The problem is growing, too. The LexisNexis study found that 51 percent of the fraud experienced by merchants who accept online transactions comes from the online channel, compared to 42 percent in 2013.

Knowing that you’re more vulnerable to risk gives you an indication that you need to be more vigilant about verifying what you can and tracking fraud overall, Monarch says.

2. Flag verification issues. Erik Van Riper, founder of Build the Store, a San Fernando, California, online business that builds e-commerce platforms for other companies, says preventing fraud requires using all possible verification components when fulfilling a transaction. If the card is present, ask for identification. If it’s not, you need to take other measures.

“One thing that we insist on for any credit card transaction is that the billing address matches the credit card billing address. The shipping address can be different, but we insist that at least the knowledge of the billing address is there, and correct,” he says. If the purchaser can’t provide this verification, the transaction is not approved.

3. Look for unusual activity. From there, Van Riper recommends monitoring transactions for unusual activity, such as orders for high volumes of product or for many expensive items of the same type or brand. Review the location of the transaction. If the billing address is in New York and the customer is shipping to a place in Oregon, you may wish to further verify the transaction by contacting the customer. Set a threshold — say, $100 — and require a signature on the package for any shipment valued at more than that amount, he recommends.

4. Examine notification codes. When you receive a chargeback, it will have a reason code. Each code, which varies by card network, will indicate the reason for the chargeback, such as “counterfeit magnetic stripe” or “fraud, card not present environment.” Once you have the code, investigate the transaction to spot irregularities, says Russo. Were there missed indicators that this was a fraudulent transaction?

5. Review nonfraud chargebacks and declines. Don’t just scan your reason codes for fraud. Investigate other reason codes and your decline rates, Russo says.

High decline rates may signal a problem with attempted fraud. But some codes might indicate customers don’t recognize their transactions, he says. If you see those codes regularly, it could mean you need to work with your credit card processing company to clarify the descriptor that appears on customers’ credit card statements. It’s also a good idea to include a telephone number on the descriptor, if possible, so customers can easily contact you if they have questions about charges.

The bottom line is to track the reasons for your chargebacks and try to take steps to remedy them. If you’re not tracking this data, you could have a problem before you even know it. “Tracking customers that have charged back is usually a good idea, because if it was a case of ‘friendly fraud’ there’s the chance that it will be done again,” Monarch says.

6. Make your case. If a chargeback has been filed, the bank will ask for all records you have verifying that the order is real. Be sure to provide those in a timely manner, Monarch says. They may include terminal records, signatures and any other information available for in-person transactions. Online transaction backup may include address verification and CVV verification, IP address information that coordinates with the purchaser’s address, and product delivery records with delivery confirmation showing the customer received the package.

The TMF, or MATCH list, is essentially a blacklist from which it is almost impossible to be removed.

— Tim Russo
Fraud prevention team leader, cleverbridge

Monarch says it’s usually not helpful to try to contact the customer if they have already initiated a chargeback. “The chargeback is on record against you at this point,” he explains. “Even if you win and get your money back, it still counts against your merchant account for the month.

“The best plan of attack, if it’s already filed, is to simply gather as much data as possible, write up a detailed document regarding how one purchases your product or service, and submit all of this to the acquiring bank, which will have mailed or faxed you a chargeback letter,” he says.

7. Get your data. At MasterCard, the central repository for fraud data is the System to Avoid Fraud Effectively (SAFE), which supports fraud prevention programs and security efforts, Russo says. All MasterCard issuers are required to report fraudulent transactions to SAFE at least monthly. SAFE then generates reports for both issuers and acquirers and provides data for other security and risk management programs, as well as merchant audit programs.

Your credit card processing company likely has access to this data, Russo says. Asking your processor for as much of that information as possible may be helpful if you have a series of fraudulent transactions of less than $30 (the threshold at which you are typically notified) that are caught before they get to you. He admits it can be hard to get a full accounting of this type of activity, but the more volume you do and the better relationship you build with your processor, the more likely it is to help you.

8. Work with your processor. Russo, who has previously been employed by two processing companies, says these firms may have additional resources to help you combat fraud, such as suggestions for enhancing security and advice on how to better verify transactions. Stay in touch with your processing company to ensure that you’re adopting the latest and best practices to prevent fraudulent transactions, he says.

Spotting chargeback fraud can be tricky, but by knowing where to look and using that information to improve your operations, you can stave off losses. It’s not a one-and-done activity, though. Small businesses must be vigilant to minimize chargeback fraud on an ongoing basis.

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If Merchant Accounts Confuse You, Read This

Sep 17, 2015 by

If Merchant Accounts Confuse You, Read This

Merchant accounts are not an easy business decision to make, and they can be overwhelming for those who are just starting out in business. After all, you’re in business to make something. You’re not a bank and shouldn’t be expected to operate like one. Fortunately, there are some questions you can ask yourself that might help you determine which merchant account is best for your needs.

Are Loyalty Programs Important to You?

As businesses scale, they tend to find customer loyalty an important quality to maintain and nourish. Smaller businesses might be more reliant on the quality of their craft. Whatever stage your business is in, you need to determine whether loyalty programs are an important part of that growth. If so, you need to pay attention to the second tier in you pricing structure.

What About Volume of Transactions?

If you don’t expect to make many transactions every day, which is common with big-ticket establishments, then you might have some flexibility in taking a higher transaction rate for lower monthly minimums or lower batch fees. Pay attention to the variables offered by each solution, and don’t be afraid to negotiate a bit in order to find a plan that better suits your needs.

What About Termination Fees?

Some accounts come with a contracted term. It’s common to find merchant account contracts that extend one to three years, with some going as high as five. It’s also common to see those types of accounts include a one-year termination clause. You’ll also see annual fees as well. Be sure you carefully project the future of your business before you make this decision.

Bio: Firoz Patel directed and oversaw operations for AlertPay Inc., a company he founded in 2005. Currently, Firoz Patel oversees operations for the Payza platform and resides in Montreal, Quebec.

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