Archive for December, 2009

Charge Recurring Customers without Retaining Merchant Account Data

Tuesday, December 22nd, 2009

Holding onto card holder data has its advantages, especially for managing recurring orders or to speed up overall transaction time. However, there are additional risks and guidelines associated with retaining data compiled from your merchant account.

What is Required to Store Customer Data

To store credit card numbers, a business must adhere to stricter PCI Security Council Data Security Standards. There is an increased risk of losing customer data to a security breach or a hardware malfunction.

Storing customer sensitive data is also more complicated from a technical perspective, requiring several hardware and software tools to do it effectively. Security measures need to be consistently maintained and updated by a trusted person.

Despite the risks, sometimes credit card number storage is a necessity. In this case, it’s best to look at an external data storage company.

Why it Pays to Store Data Off-site

Customers are the lifeblood of your business, and they trust you with sensitive information. Outsourcing storage of customer credit card information ensures its protected by the highest security measures available, and by someone focused solely on safe data storage. Running a business is work enough, and offloading this responsibility to a respected vendor can save lots of time and headaches.

In addition, some outsourcing services have a more effective process in place to bill recurring customers, rather than retaining credit card processing information. Choose an online payment gateway that offers this type of data storage. It will be held in the gateway’s secure database for easy access. When you need to charge a customer again, just refer to the customer number and charge amount.

Authorize Net can be configured both ways. While most merchants use Authorize Net’s secure servers it also works with sites that want to maintian sensitive customer data on their own servers.

Do Credit Card Rewards Boost Consumer Sales?

Wednesday, December 16th, 2009

When looking at ways to boost sales, it helps to review how certain consumer credit card processing benefits might provide an incentive to buy. As people stretch their gift giving budgets by using credit during the holidays, they are even more likely to do so if there is a promise of a reward for using their credit card.

Do Credit Card Rewards Help Consumers Justify Purchases?

Airline points are a common benefit for credit card users, and are usually the reason people are willing to make purchases on a card. This is especially true when each swipe brings them closer to free round trip airfare for the tropical vacation of their dreams — airfare they would not otherwise splurge on.

The incentive of free airline miles or discounts at favorite stores are just some reasons people are more willing to pull out the plastic, according to a recent study by Andrew Ching, assistant professor of Marketing at The University of Toronto and Fumiko Hayashi, senior economist at the Federal Reserve Bank of Kansas City. Overall, their study revealed that removing rewards from credit cards would reduce the amount of purchases consumers make using credit in the quest for rewards points for goods/services.

In addition, a 2008 survey by the Aite Group, a financial and technological research firm, found rewards are the second most important reason consumers choose one card over another, and many consumers own multiple rewards cards. Marketing research firm ComScore also did a study in 2008 that indicated two-thirds of consumers would consider changing cards, if the card was available and the rewards they value were better.

How Credit Card Rewards Impact Merchants

Rewards and miles programs come with an additional cost to the merchant though. The discount rate a merchant pays on these types of cards can be 2% higher than the qualified rate they normally pay on personal credit or debit card. Taking into consideration this means the total discount rate could be 4%-5% it’s critical a merchant factors this in when they price their products or services. Rewards and miles cards can drive additional sales for your business but there is a cost to it.

Currently processing? Do you know what your rate is on rewards and miles cards? Take advantage of our complementary merchant account review (rate analysis). Fax in one of your most recent statements to 312-896-5628, provide us with a good day & time to call. One of our pricing specialists will contact you and break out your current rates. There is a good chance we’ll be able to save you up to 25% on your current fees by customizing a rate plan specifically tailored for your business.

Now is the time to improve your bottom line! Contact us today at 888-383-8056.

3 Tips to Minimize Fraud for Merchant Accounts (part 3 of 3)

Sunday, December 13th, 2009

This post concludes coverage of ways to reduce fraud in merchant credit card processing – something all businesses should be mindful of during the busiest gift-giving season of the year. In reviewing all the methods, fraudulent shoppers use to infiltrate e-commerce sites, it can’t be stressed enough how important it is to stay current on merchant credit card processing protections.

Match up the Bank County with Billing Address Company:
It may be easy to miss, so be careful. If the card is issued from one country, but the merchandise is being billed to another, that is a pretty clear indication something may be up. This is really important due to the fact smaller banks may not have as strict identification procedures, and will not catch the error.

Verify if the Mailing Address is a Mailbox or Ship Forward Service:
Anyone trying to scam a business wants to stay anonymous, but they still want to pick up the merchandise. Most often they will use a public P.O. Box, private mailbox, or a drop shipment forwarding address , which serves as a temporary receiving point. Always request a physical address, or don’t send the order. Never send to a P.O. Box (unless it’s a legitimate company), a public rented mail box or forwarding address – as there is no way to verify if the buyer is legit.

Develop an Internal Fraud Avoidance File:
Create a file that includes all the details of each fraudulent order, year after year, to avoid being scammed by the same person again. Include all critical information related to the transaction, including the name, address and phone number(s), as well as credit card number.

Now if an order comes in that looks suspicious, you can review the file to see if there are similarities in the look or presentation of information, or if the same person has resurfaced to try again. This is a great way to keep clear track of potential dangers, and protect your internet merchant accounts against fraudulent credit card transactions.

4 Tips to Minimize Fraud for Online Merchant Accounts (part 2 of 3)

Saturday, December 12th, 2009

Continuing the topic of fraud from the previous blog post, we are covering additional safeguards for online merchant accounts that are useful in protecting against fraudulent consumers. These measures are even more important during the holidays when merchant accounts are at higher risk, especially with people looking to cash in on cyber deals.

4 Tips to Get Started

Use Extra Care with International Orders:
Anything being shipped to an international address should be double checked, especially if it’s from a high fraud country. According to a ClearCommerce survey, there are 12 countries that are considered high-risk, a few being Egypt, Turkey and Malaysia. Their research showed that although sales outside of the United States only represented 17% of the sample study, they accounted for over 42% of all fraudulent orders. Some merchants I know that take international orders will have the cardholder fax or email them a copy of their ID and credit card so they know they are dealing with the cardholder and they have the physical card on their person.

Double Check Country IP Address Against Billing Address:
This can be managed using an address verification system (AVS), mentioned in the previous blog post.

Check for Anonymous Proxy Servers:
A consumer using a stolen credit card may be able to hide their actual IP address by using a proxy server. Proxy servers allow people to browse the Web anonymously, and due to the fact these addresses change frequently, they can be hard to detect consistently.

If you feel your internet merchant accounts may be at high risk from this type of shopper, it’s important to employ strong IP and server detection technology. This technology will help you avoid the guessing game when reviewing orders, and ensure the anonymous proxy server list is automatically updated.

Always Send a Confirm Email:
Use an auto-generated email to confirm a sale and test the validity of an email address, as well as to verify the details of the card holder’s order. Be sure to keep track of order decline rates, especially if they are declined by the card issuer or because its considered to be a fraudulent international order. If the merchandise was back-ordered and has to ship more than seven days after initial authorization, be sure to obtain a secondary authorization.

4 Tips to Minimize Fraud for Your Online Merchant Account (part 1 of 3)

Friday, December 11th, 2009

The act of fraud has moved beyond simply passing a bad check at the local grocery store and is now global in scope, which means business owners with an online merchant account need to know the best ways to protect themselves.

To make sure you are covering all aspects of your online business, it’s important to put in place key preventative measures that can help safeguard your merchant account.

Tips to Get Started

Secure a Geolocation by IP Address:
In the world of e-commerce knowing the specific geographic location of an online buyer is critical, and Geolocation by IP address can help. This tool enables you to pinpoint the location where the product is being purchased, and see if it matches with the billing address. This is also known as Address Verification Service or AVS. A Geolocation IP Address is also great for analyzing online orders overall, and getting a sense of what percentage may be a problem.

Verify that the Phone Number and Zip Code Match:
Often a merchant will discover orders with an invalid zip code. If a process is in place to verify this during the initial order, it’s easier to side step a fraudulent sale. Most online payment gateways will check the zip code and street address of the credit card you are processing to make sure it matches the billing address of the cardholder.  Also double check that a phone number is not just a Voice Over IP phone but an actual brick and mortar location or legitimate cell phone. Delay payment until a clear match of this information can be established.

Call to Confirm the Validity of a Credit Card:
If an online merchant has any suspicions about an order, its best to call the issuing bank and confirm the general account details. This will ensure the card is not stolen.

Verify the E-Mail Address:
Be aware of temporary, throw away email addresses. They are usually free, although not everyone that uses a free email account is fraudulent. It’s best to ask for additional information from these transactions just to be sure.