On our blog, we’ve talked a lot about emerging technologies, their pros and cons, how to ease into them, and also how to future proof your business to accept these technologies. Recently Bank of America published their annual Trends in Consumer Mobility Report. In it, they surveyed consumers on a range of topics relating on how we interact with our mobile phones. In their report they show the sharp rise of awareness and adoption of mobile payments.
While the adoption has been slower than predicted, mobile wallets are starting to gain traction as a payment option. According to the Report, in 2016 40 percent of respondents would use or already use their phone to make purchases at checkout. this is up from 34 percent in 2015. As awareness increases, mobile payments will become more pervasive.
In the past couple years there has been a significant push by companies like Apple and Samsung to promote mobile wallet technologies. These work by allowing the consumer to link their credit/debit card to a secure application on their phone, and just wave your phone at checkout instead of using a physical credit card. Currently this is one of the more secure methods of payment. It uses some of the most advanced security and encryption features available.
Unlike a traditional credit card, the information stored is encrypted and when you run a transaction, the information is tokenized. This means a one time use code is generated and in the event the information is intercepted, it is useless to a potential fraudster. These apps also require the use of a fingerprint or password to access the application and authorize a payment, adding an extra layer of security.
To make sure that your business is able to accommodate these types of payment technologies, we recommend that your customer facing devices (terminals and pin pads) are NFC capable. Some other ways to increase awareness are to instruct staff on how to train customers and make sure you have signage letting your customers know you can accept things like Apple Pay and Samsung Pay. If you’re interested in learning more, or want to take NFC payments, shoot us an email at info@agapay.gives or call us at 800-644-3909 Option 1.
As a way to combat the longer transaction time associate with EMV (chip) transactions, Visa has been leading the charge to release a new technology called Quick Chip. While a standard chip transaction is done entirely on the chip, with quick chip, an authorization is sent with a preset amount instead of the actual total for an authorization. Then the customer can remove their card while waiting for the approval to come through, and the rest of the transaction is completed by the terminal (this is similar to how most mag strip transactions currently work). Since the transaction is still has all the encryption features of an EMV (chip card) transaction, they are just as secure but significantly reduce the amount of time the card is in the machine and is expected to reduce the amount of errors caused by cards being pulled out too soon.
At this stage, the technology is relatively new, and as with all new technology will take some time to implement. As more processors and card readers are certified and upgraded quick chip transactions this will reduce some of the hassle that people associate with Chip Cards (For some quick tips on dealing with EMV cards, check out our last blog post). This upgraded EMV experience is expected to remove some of the barriers that have caused slow adoption of chip capable terminals among merchants, and bring more businesses up to the EMV standard. For questions and comments, contact us at 800-644-3909 or email us at info@agapay.gives
Chip cards seem to be a common point of frustration for businesses and cardholders. From the longer transaction time which lead to staring awkwardly at the customer, to the frustration of pulling the card out too soon, it’s no wonder that people aren’t taking too kindly to it. In the video below that was posted on YouTube by Above Average they take a comedic approach to venting these frustrations that we all can relate to. If you read below the video, we’ll talk about some of the ways as a business that you can help to reduce frustration.
Here are a few simple tips to make chip transaction easier:
Use an internet connection
Chip transactions are encrypted at every point, meaning that the processing time is longer, and more data is being transmitted. To speed things up, connect your terminals via internet which is much faster than dial up or transactions over a phone line.
Let customers know to keep their card in the reader One of the biggest frustrations is when the card is pulled out too soon as it will void the sale and you will have to start over. In the event of a Pin Debit transaction, if the card is pulled after the pin is entered, but before the approval is received, the cardholder may be charged twice. (If this happens to you, call your customer service rep for your merchant account to get it resolved)
Educate whenever possible It may not always be possible to avoid every situation, but you can make it easier the next time around for your customer. The chip is a microprocessor (a small computer) that is powered by the credit card terminal. The encrypted authorization from the cardholder’s bank has to be decrypted by the chip on the card for the terminal to understand the response. Thus, if the card is pulled out too soon, the process is interrupted and the transaction can’t be completed. The terminal will let you know when it is finished and safe to remove the card.
Use the right hardware and software There are terminals on the market that have EMV (chip card) capabilities, but may not be supported by your credit card processor. To avoid the hassle of upgrading your equipment just to not be able to accept chip cards, contact your merchant services company and ask which terminals are EMV ready and supported.
To see if your business qualifies for a free upgraded terminal contact us at info@agapay.gives or call us at 800-644-3909 Option 1.
Anyone who’s worked retail has likely made a mistake while charging a credit card. This can create a headache for customers, staff, and management. For most people the first reaction is to simply void the transaction and start over. The problem with this approach is you’re usually left with the customer asking why they were charged twice, asking for a refund and having to explain that “They’re just holds, the voided one will fall off in 3-5 business days.” While this may be true, the customer is left frustrated, and you are left without options. In this post, in addition to explaining the void we want to talk about what your options are, when they should be used and why.
1. Void
When I worked my first retail job, I was trained that if I messed up a transaction, I should void it and do it again. It’s a way to quickly clean up an otherwise costly mistake, but what is it? To start we need to explain the main components of a credit/debit sale. The first is the Authorization, when the card is ran, an authorization request is sent to the cardholder’s bank or credit card company to verify the funds are available. If the authorization comes back approved the funds are placed on hold in the customer’s account, a receipt prints, and for the cashier and the customer, the transaction is complete. But for the banks, the transaction isn’t finished. The terminal stores the transaction and (usually) at the end of the day completes a batch settlement. When a transaction is settled is when the funds are “captured” meaning a request to transfer the funds is sent to the cardholder’s bank.
When you process a void, the authorization sits with the cardholder’s bank, untouched, but the transaction is cleared from the terminal, so the funds are never captured, meaning no money has left the cardholder’s account and the hold will drop off the account. Usually in 3-5 business days. This is great if you just need to process a quick correction, but sometimes multiple holds on an account can pose a problem. Especially when those transaction amounts are high. While the money hasn’t left the account, the bank has placed it in reserve for a pending authorization, and says the customer can’t use it for other things until the hold falls off. If this is a problem, the cardholder can call their bank, have the bank verify with the business that the transaction was voided, and the hold will be released. I’m sure right now you’re thinking, “There has to be a better way.” And there is.
Pros: Quick and Easy, all terminals and online gateways are capable of voiding transactions
Cons: Funds are held until bank removes the hold (3-5 business days), only works on same day transactions (before batch/settlement) *DOES NOT WORK FOR PIN DEBIT TRANSACTIONS
*Problem with voiding Pin Debit: Pin Debit authorizations don’t work in the same was as a credit card. When a pin debit authorization is received by the bank, the funds will transfer, even when voided. If the transaction has been voided from the terminal, the merchant’s processing bank loses the routing information on the transaction, and often the amount, while removed from the customers bank account, ends up in a financial limbo of sorts. The funds are kept by the bank until the transaction can be corrected and routed to the merchant’s bank account. This process, in our experience, can take 3-4 weeks. To avoid this, for Pin Debit, you have to Reverse or Refund the transaction. This same process can occur on a Pin Debit chip transaction when a customer has entered their Pin, then removes their card before the transaction is complete, as the authorization has already been sent, but the transaction is interrupted in the terminal, causing the terminal to void the transaction. If this happens, call your processor and ask for them to initiate an inquiry.
2. Reversal
Whereas a void just wipes the transaction from the terminal, a Reversal works like an Authorization in reverse. When processing a reversal, in addition to clearing it from the terminal, it also sends a notification to the cardholder’s bank to release the held funds. In a partial reversal, only part of the hold is released and the transaction is processed at the new amount. This avoids multiple authorizations, and the customer having to wait for their money to be released, or going through the hassle of calling their bank to release the held funds. The disadvantage to a reversal in that, like a void, it must be completed prior to the batch settlement. In the event that funds need to be returned after the batch settles, really the only option is to refund. In terms of correcting errors, reversals are generally the best option.
Reversal for Pin Debit – With a Pin Debit transaction you cannot void the transaction, as it doesn’t work in the same way. For same day transactions (before batch/settlement) you will need to process the transaction as a Reversal. If your terminal is not capable of processing a reversal, you may need to process the correction as a refund. In this case, consult your Merchant Services Provider to see what your options are.
Pros: Quick and easy, funds are released in the customer’s bank account
Cons: Not all terminals support reversal capability, must be processed same day (before batch/settlement)
3. Refund
When a transaction has already been captured, the only option the merchant has is to refund the amount to the card. A refund works like a transaction in reverse. The card is swiped or keyed in, and a refund is created in the terminal to transfer funds to the cardholder’s account. Just like an Authorization, the capture of a refund isn’t processed until the terminal batches out. From the time the capture is processed, it can take 3-5 business days for the funds to appear in the cardholder’s account.
Pros: reliable way to return funds to customer
Cons: Funds can take 3-5 business days to hit the customers account
If you have questions, or would like a free review of your existing merchant account contact us by email at info@agapay.gives or by phone at (800) 644-3909.
In our experience we’ve come across several companies and organizations that advertise a low, flat rate billing structure, making it an easy sell for these organizations to seem to beat the competition’s pricing. The difficulty is that what you see may not always be what you get.
In light of the recent revelations at one major bank of inappropriate practices and account fraud to boost sales numbers, it has opened the door for further scrutiny and investigation into some of their other practices. One of these relates to their use of what is termed in the merchant services industry as “billback”.
Billback occurs when your merchant services provider (MSP) charges a specific advertised rate up front, then charges the remainder of the fees at a later date.
To understand billback, we need to understand a little bit about how processing fees are charged. For every credit and debit card, there are fees associated with processing that are called “Interchange.” There are specific categories assigned based on the type of account (consumer versus business), merchant category ( for example, retail stores have different rates than hotels or e commerce), as well as how the card is processed (card present, online, etc.). Given the huge amount of variation, there are hundreds of categories for interchange each with a different rate, sometimes in excess of 3% of the sale volume. With billback, the processing fees are initially charged at the flat rate that is quoted, then for the following month, the difference of any transactions that had fees that exceeded the threshold the processor sets are charged to the merchant. Creating confusion about the true cost of processing, and misleading the merchant to think they’re on a level pay.
The better alternative is to go with a pricing structure called Interchange Plus. This pricing structure is the most transparent, as your billing will reflect the true cost of processing, as well as a clearly defined margin for the processor. This means that when you accept cards with lower interchange, you see the savings from that transaction.
For a free, no obligation review of your processing statements, contact us at info@agapay.gives or by phone at (800) 644-3909.
As a merchant you have a responsibility to protect your customers sensitive data, yet every year we hear about massive data breaches and most people with a credit or debit card have received a replacement card due to a breach. While these types of large scale breaches get the most attention, there are other ways to have your card information stolen. In this post we will explain some of the ways that credit card information is stolen, and precautions you can take to avoid it.
Card Skimming
Card skimming is most prevalent on ATM’s and other forms of unattended card readers. This is achieved by placing a small device where you insert or swipe your card that reads the magnetic stripe data to be retrieved later. These can take the form of a false front on the card slot at an ATM or gas station. It can be a small device attached to a card reader. These can also be accompanied by a small camera or pin pad overlay to record the pin number.
The best way to prevent card skimming is to be aware and test devices before you use them. Check that the card reader is securely fastened as most ATMs and gas pump card readers are made to be solid, so if the parts are loose or look out of place, report it to the owner and use a different ATM, gas pump, or avoid using the vending machine, whatever the case may be.
Malicious Software
While most computers have firewalls and security software, hackers are constantly innovating ways to get around them. When malicious software is installed on the computer or your network they can track keystrokes or intercept data that is then sent to the hacker. This will include logins, passwords, secret answers, etc. To avoid this style of identity theft, ensure that your security software is up to date. Avoid downloading software from unknown sources and ensure that your computer and network are being scanned regularly to detect and remove any possible malicious software.
Dishonest Employees
Sometimes it can be an employee who is perpetrating the fraud. Whether by copying the information using a skimmer, writing down the card info, or taking the data from the office, all of these are potential data breaches. The best way to manage that is to use clear policies regarding who is able to handle card data and that it is restricted to a need to know basis and make sure that you or your managers know how to spot skimmers or potential tampering. Prevention is your best tool in dealing with fraud because once it happens it can be very costly. If you become aware of an issue, address it right away and contact your merchant services provider for advice on how to minimize any damage caused.
