Minimum Purchase Requirements and Credit Card Processing

Reducing credit card processing fees has long been a challenge for merchants trying to save money. The benefits of accepting credit cards as a method of payment are obvious in a society that relies heavily on credit. Businesses that make this option available to their customers almost always see an increase in sales as a result. This boost in sales does not come without a price for merchants. With the privilege of accepting credit cards comes credit card processing fees which can quickly add up.
In the past, many small business merchants have tried to reduce these fees by requiring a minimum credit card purchase. Most consumers are familiar with the practice. Often appearing in hand written signs at gas stations or grocery stores, “$10 minimum purchase required for credit cards” policies are not uncommon. What many consumers and in some cases even the vendor themselves do not realize is until recently this practice was actually in violation of the vendor’s merchant agreement.
As a result of the credit card reform, several aspects of credit card processing have changed. One of which is the minimum purchase requirements set forth by businesses. The major credit card companies no longer prohibit merchants from enforcing a minimum credit card purchase as long as they follow certain rules.
Visa has already changed their policy to allow merchants to require a minimum purchase amount for credit cards. This minimum amount cannot exceed $10 and may not be applied toward transactions made with a debit card. MasterCard has not yet officially changed their policy on minimum credit card requirements, however they plan to in the future. American Express is also permitting minimum credit card purchase requirements as long as the merchant has the same minimum requirement for all credit cards.
This change in policy will impact both merchants and their consumers. For the merchant, minimum purchase requirements help reduce credit card processing fees. Merchants have to pay a fee for each transaction. If a small business such as a gas station has many “micro” payments, for example using a credit card to pay for a soda or snacks, they end up paying more in credit card processing fees.
Consumers will be affected in another way. Many people choose to not carry cash and make all or most of their purchases with a credit card. This offers convenience and in some cases an easy way to track expenses for individuals who use their credit card for day-to-day purchases and reconcile their balance every month. For these consumers, the minimum purchase requirement means they either have to buy more than they intended to meet the minimum or carry cash. While this may not seem like a big deal, it does in fact limit options for consumers which may result in a loss of business for merchants who require a minimum payment for credit card purchases.
Merchants should carefully consider whether the money saved on credit card processing fees is worth the potential loss of sales if credit card consumers opt to take their business elsewhere.

Make Sure Your Credit Card Processing is PCI Compliant

Any business that accepts credit cards, whether they accept them in person or over the internet, needs to be concerned with the safety of their customer’s credit card details. When your business begins credit card processing to accept cards as payment from your customers, you need to make sure you are meeting all of the requirements to be PCI compliant.
PCI compliance is a set of requirements set by the Payment Card Industry Data Security Standard. It’s required of all United States companies that process, store, or transmit credit card information, and ensures a secure environment for the storage or transmission of credit details.
If you operate any part of your business online, you’re automatically considered a medium to high risk merchant and will need to take additional steps to ensure your customers information remains private and safe from prying eyes. All merchants accepting credit cards, online or in person, must become PCI compliant, and regardless of how many credit cards you process per month.
Here’s how to ensure your credit card processing meets requirements:
Become PCI Compliant
Step One: Fill out a self-assessment questionnaire, in order to determine what type of business you own and the appropriate PCI compliance steps you’ll need to take.
Step Two: If it’s determined that your business requires a vulnerability scan (merchants with external facing IP addresses), complete and obtain a document of evidence that you’ve passed the vulnerability scan with a PCI SSC Approved Scanning Vendor. You’ll need to do this if you store your customers credit card information electronically, or if your credit card processing is done over the internet. Scan at least once each quarter.
Step Three: Complete Attestation of Compliance.
Step Four: Submit evidence of your passing vulnerability scan and your Attestation of Compliance to your acquirer.
PCI Compliance Improves Business Reputation
Having a successful business is more than just providing quality products or services and exceptional customer service. In fact, some will say that having a good business reputation is more important than what your business is actually selling!
Businesses which maintain PCI Compliance are taking the first steps to ensuring their customers information is safe, but you’ll want to go even further than that. If there are any security breaches within your system that affect your customers, even if you are PCI compliant, you may be liable. You’ll want to take all precautions to prevent security violations to maintain your good business reputation. If you aren’t sure how to set up a strong security system to keep customer credit card data safe, if you’re not sure what scans and how often to run them or how frequently you need to update your records – hire an expert to handle these aspects for you.
Becoming PCI Compliant may seem like it takes a long time and is expensive to implement – but if you compare the potential problems of security breaches and expense of fines for not being compliant – the financial and time investment is well worth it.

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Teal just gave a testimonial for The Merchant Solutions :

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Common Online Security Concerns for Credit Card Processing

All retailers, whether online or offline, have some common security concerns involving their credit card processing, but online transactions still have higher security risks than in-person credit card transactions. The security issues deal with the safety of both your business and your consumers financial data. Currently, credit card processing security online relies on two main systems; the “AVS” and “CVV” numbers. Both of these systems allow consumers to enter their credit card details online with higher levels of protection if retailers require both forms of information from their customers when accepting credit cards as payments.

The “CVV”: Card Verification Value

On the back of a consumer’s credit card is a three or four digit number, known as the card verification value. The number is not found on a credit card statement, which means that an individual asked to enter the CVV when making a payment would have to have the card in his or her possession, and not just a credit card statement found in the trash. Many types of identity fraud and fraudulent credit card purchases are prevented by requiring the card verification value to process the credit cards, because most online credit card fraud is the result of an individual stealing a thrown-away card statement or receipt.

If an incorrect CVV is entered during the check out process, the credit card is declined and the owner of the card is protected against fraudulent purchases.

The “AVS”: Address Verification Service

Another method to reduce credit card fraud and improve online security for credit card processing is through the use of the AVS – Address Verification Service. This security measure checks that the address a customer enters into the order form when trying to pay for a purchase with a credit card matches the billing address associated with that credit card.

Unlike the CVV process, the address verification is not a required step for customers to place an order. It is up to you as the retailer to decide whether or not you will require an address entered by a shopper match the address associated with the credit card account. When a customer enters address details, your credit card processor will send you an email to show you whether the address matches the billing address of the card.

If an address is entered that does not match the address associated with the credit card account, the purchase is not automatically denied as is the case with an incorrect CVV number. Instead, it is left up to the retailer to decide if they want to process the sale as-is, or require the buyer provide additional information or re-enter the address to see it matches – to ensure they are the owner of the credit card before the transaction is completed.

Transaction Life Cycle for Credit Card Processing

Credit card processing tends to follow the same transaction life cycle, whether your customer pays with credit cards in person or uses a credit card online or by phone. The specific credit card processing events and activities may vary from one merchant or card issuer to another, but the basic life cycle is the same.

If you’re going to accept credit cards from your customers, it’s a good idea that you understand how the credit card processing life cycle works, how the money ends up in your account, and what happens if something goes wrong with the cycle.

Authorization of Card

1. The credit card user presents their credit card to make payment in person, or enters their details into a form or to a customer service representative by phone.

2. The merchant swipes the card or the account details are digitally entered into the system for submission to the merchant account for processing.

3. The merchant bank electronically requests card authorization from the card issuer (Visa, MasterCard, Discover, American Express).

4. The card issuer approves or declines the transaction, and sends the response back to the merchant bank.

5. The merchant bank sends response back to the merchant, and the merchant processes the transaction based on whether the card is approved or declined.

Clearing and Settlement of Payment

1. The funds from the credit card payment are deposited into the merchant’s bank, the merchant’s account is credited and an electronic submission of the transaction is sent to the credit card processor.

2. The credit card processing system, facilitates payment, pays the merchant bank, debits the cardholders account, and sends the transaction on to the card issuer.

3. The card issuer posts the transaction to the cardholders account and sends the monthly statement to the cardholder for payment.

4. Cardholder receives their credit card statement and sends payment.

Maintaining Consumer Credit Card Safety

As a merchant accepting credit cards, you should understand your role in keeping the credit card data safe throughout the credit card processing life cycle. Your data storage systems should not maintain any of the magnetic-stripe data received after a customer swipes a card and the transaction has been processed. After the card is authorized, all information taken from the swiping of the card must be deleted. You can maintain account number, expiration dates and names from credit cards if you do so in a CISP-compliant manner, but no other information can be stored.

If you use the CVV2 number for verification purposes in some or all of your credit card transactions, you must not store that data or document it in any way digital or otherwise.

Businesses are often liable for losses customers experience due to compromised credit card data that occurs due to merchant neglect and lack of adequate data security measures.

Incentives Offered To Encourage New Credit Card Processing Trends

American consumers are often under the false impression that the technology in use in this country is the top of the line and most advanced. In reality, many other countries are using newer technology in other areas from cars to credit card processing. Convincing millions of American consumers and merchants alike to embrace change, especially when there are many unresolved issues within the industry such as affordability and security could prove to be challenging for credit card issuers using other technology around the world. Here we look at how Visa is using incentives to encourage the use of new technology here in the US.

Visa’s Big Plan

As reported by DigitalTrends.com, “Credit card processor Visa has unveiled big plans to introduce mobile payment technologies to the United States market, announcing plans to roll out dual-mode chips in its credit card processing infrastructure that will support both Near-Field Communications (NFC) and Europay, MasterCard, and Visa (EMV) standard that has already seen strong adoption internationally.” The challenge for Visa is convincing US merchants who may be hesitant to embrace “new” technology to make the leap from the familiar to something that is new and somewhat untested in the US.

Benefits Of New Technology

 

Visa’s goal is to educate US merchants to the benefits of adopting new technology and they are willing to use incentives to make it more tempting.

Credit Card Processing Tips For Hotel Business

Whether you own a small quaint bread and breakfast in the mountains, a luxury resort on the beach or a business hotel in the city you will need to work with a credit card processing company in order to serve your clients and meet your business needs. Choosing a credit card processing company that can meet all of your needs can be a challenge. Here are some tips to follow.

What You Need To Look For In A Merchant Account

When you select a merchant account for your hotel, inn or other accommodation location you will first need to make sure that the account you select can meet all of your credit card processing essentials. Depending on what your needs are you may need to accept payments over the internet, once guest arrive at your location and even over the phone. You may also need to be able to take a deposit that you can refund once the guest checks out, be able to add on incidental charges during the stay and more.

Many merchants will offer special accounts tailored toward the accommodation industry and its specific processing challenges. You will want to specifically seek out one of these accounts.

Pricing

Pricing will be your next area to look at. Pricing can range from one credit card processing company to another and you will want to make sure that you choose an account that offers competitive pricing. You will want to check for application and start up fees along with monthly fees, minimum transaction fees, fees per transaction and more.

Credit Card Processing Equipment

Next you will have to decide what type or types of credit card processing equipment you will need. You most likely will need to be able to process customer’s credit cards on the internet if they are making their reservation on line, on site and maybe even over the phone. You will need to make sure you merchant account will have the capacity to cover all of your processing needs. Additionally, you will have to purchase or rent processing equipment for on site.

If you are a small inn or bed and breakfast you may want to consider an on line third party processor for your internet payment needs. If you do not do a lot of on line transactions you can usually save money by going this route. PayPal is one of the more common third party processors and it is fairly easy to set up an account with them.

Additional Items to consider

Many hotel owners also look for their merchant accounts to have additional services and benefits. You may want to consider looking at accounts that offer the following:

• An account with fast transaction capabilities. While some accounts you may have to wait several days to get your money, others may be instant or in just a few hours.
• A merchant account that has the capabilities to produce multiple reports that make running your business easier.
• A merchant account that has the capabilities of dealing with guarantees and when to charge the card.
• A merchant account that will help you with meeting PCI compliance.

Credit Card Processing Terms You Need To Know

If you own a business and accept cards as a form of payment it is important for you to have a basic understanding of credit card processing. Here is a look at some of the more common terms you will need to know.
 
Merchant Account: What business owners need to set up in order to process credit card payments. There are numerous account options available and you will want to shop around to find one to fit your business needs.
 
Application Fee: The fee that some processing companies charge to businesses when they open a merchant account.
 
Annual Fee: A fee that is often charged by payment processing companies on an annual basis in order to keep your merchant account active.
 
Transaction Fee: Fee charged by the processing company each time you process a customer’s card for payment.
 
Interchange Fee: The fee that the credit card companies charge for converting a card payment to cash and transferring the cash to your account.
 
Address Verification: Term related to account security. It is a process that verifies a card holder’s address before accepting payment. Address verification is most often used to help prevent fraud on both on line transactions and phone orders.
 
Card Verification Code: The card verification code is used to help with fraud prevention. Just like address verification it is most often used with on line transactions. The card verification code is a 3 or 4 digit number found on either the front of back of a credit card. When paying on line the card holder would need to enter this number in order to be able to use their credit card for payment.
 
Automated Bill Payment: An automated bill payment is an agreement between a business and a customer that allows the business to automatically bill the customer’s credit card for ongoing products, services or subscriptions. The customer’s credit card is automatically charged on the contracted renew date which can be weekly, monthly, yearly or whatever other time frame the business and the customer have agreed to.
 
Charge Back: A charge back is when a transaction is billed back to the business after payment has already been processed. A charge back is in favor of the customer and often occurs when a card holder is not satisfied with the product or service they received.
 
Mobile Credit card Processing: Mobile credit card processing is a way for businesses to accept credit card payments from customers when they are on the go. Mobile credit card processing uses a wireless processing machine to process credit cards and can be used just about anywhere,
 
Online Payment Gateway: An application that businesses use on their website that allows for the secure processing of credit cards. It is the means of connecting a customer’s shopping cart to the credit card processor.
 
Third Party Processor: A third party processor is a company that will process credit cards for you. They then most often keep a per transaction fee and deposit the rest of the sale into your account. PayPal is a popular third party processor.

Loss or theft of account information

A member or the member's service provider, or a merchant or the merchant's service provider must immediately report the suspected or confirmed loss or theft of any material or records that contain Visa cardholder data.

If a member knows or suspects a security breach with a merchant or service provider, the member must take immediate action to investigate the incident and limit the exposure of cardholder data.

If a Visa member fails to immediately notify Visa USA Fraud Control of the suspected or confirmed loss or theft of any Visa transaction information, the member will be subject to a penalty of $100,000 per incident.

Members are subject to fines, up to $500,000 per incident, for any merchant or service provider that is compromised and not compliant at the time of the incident.

How CISP compliance works

How CISP compliance works CISP compliance is required of all merchants and service providers that store, process, or transmit Visa cardholder data. The program applies to all payment channels, including retail (brick-and-mortar), mail/telephone order, and e-commerce. Compliance with CISP means compliance with the PCI Data Security Standard with the required program validation. The Payment Card Industry (PCI) Data Security Standard offers a single approach to safeguarding sensitive data for all card brands. Other card companies operating in the U.S. have also endorsed the PCI Data Security Standard within their respective programs. Using the PCI Data Security Standard as its framework, CISP provides the tools and measurements needed to protect against cardholder data exposure and compromise. The PCI Data Security Standard consists of twelve basic requirements and corresponding sub-requirements categorized as follows: PCI Data Security Standard Build and Maintain a Secure Network Install and maintain a firewall configuration to protect data Do not use vendor-supplied defaults for system passwords and other security parameters Protect Cardholder Data Protect stored data Encrypt transmission of cardholder data and sensitiveinformation across public networks Maintain a Vulnerability Management Program Use and regularly update anti-virus software Develop and maintain secure systems and applications Implement Strong Access Control Measures Restrict access to data by business need-to-know Assign a unique ID to each person with computer access Restrict physical access to cardholder data Regularly Monitor and Test Networks Track and monitor all access to network resources and cardholder data Regularly test security systems and processes Maintain an Information Security Policy Maintain a policy that addresses information security Top

Compliance validation Separate and distinct from the mandate to comply with the PCI Data Security Standard is the validation of compliance whereby entities verify and demonstrate their compliance status. It is a fundamental and critical function that identifies and corrects vulnerabilities, and protects customers by ensuring that appropriate levels of cardholder information security are maintained. Visa has prioritized and defined levels of compliance validation based on the volume of transactions, the potential risk, and exposure introduced into the payment system by merchants and service providers.

Cardholder Information Security Program

When customers offer their bankcard at the point of sale, over the Internet, on the phone, or through the mail, they want assurance that their account information is safe. That’s why Visa USA has instituted the Cardholder Information Security Program (CISP). Mandated since June 2001, CISP is intended to protect Visa cardholder data–wherever it resides–ensuring that members, merchants, and service providers maintain the highest information security standard.

In 2004, the CISP requirements were incorporated into an industry standard known as Payment Card Industry (PCI) Data Security Standard resulting from a collaboration between Visa and MasterCard to create common industry security requirements. Visa USA maintains CISP as the managing program for data security compliance endorsing the PCI Data Security Standard.

If you are a non-U.S.-based entity, please visit Visa International Account Information Security (AIS).

The new PCI Data Security Standard v1.1 has been released and is now available! Effective September 7, 2006, the PCI Security Standards Council ("PCI SSC") owns, develops, maintains and distributes the PCI Data Security Standard (DSS) and all its supporting documents. Visa USA will, however, continue to manage all CISP compliance enforcement and validation initiatives.

Chargeback Dispute Resolution

Chargeback Dispute Resolution provided by visa

Preventing Chargeback Most chargeback situations arise at the point of transaction—at the time the transaction is completed—and most can be prevented with a little training. Consider these 15 tips to avoid potential chargebacks Do not complete a transaction if the authorization request was declined. Do not repeat the authorization request after receiving a decline. If you receive a “Call” message in response to an authorization request, call your authorization center. Be prepared to answer questions. The operator may ask to speak with the cardholder. If approved, write the authorization code on the sales receipt. If declined, ask the cardholder for another Visa card. Make an imprint for all card-present transactions. If you have a point-of-sale terminal with a magnetic-stripe reader, swipe the card through the reader for every face-to-face transaction. If the terminal isn’t working or a card’s magnetic stripe cannot be read, key-enter the account information and make an imprint of the embossed information onto the sales receipt using a manual imprinter. Even if the transaction is authorized and the cardholder signs the receipt, if the receipt does not have an imprint of the embossed account number and expiration date, the transaction may be charged back to you for “no imprint” if the cardholder later denies participating the transaction. Obtain cardholder signature. The cardholder’s signature on card-present transactions is required. Failure to obtain the cardholder’s signature could result in a chargeback for “no signature” if the cardholder denies authorizing or participating in the transaction. Make only one imprint of the card for each transaction. Making more than one imprint can lead to duplicate deposits and increase the chance of a chargeback. If you need to redo a sales receipt because of an error, write “VOID” across the incorrect sales receipt, inform the cardholder, and tear up the incorrect sales receipt in view of the customer. Ensure that transactions are entered into point-of-sale terminals only once—and deposited only once. Entering the same transaction into a terminal more than once, or depositing both the merchant copy and the bank copy of the sales receipt with your acquirer, or depositing the same transaction with more than one merchant bank can all result in “duplicate transaction” chargebacks.   Top Ensure that incorrect sale receipts are voided and that transactions are processed only once. If your establishment has policies regarding merchandise returns, refunds, or service cancellation, disclose these policies to the cardholder at the time of the transaction. Your policy should be pre-printed on your sales receipts; if not, write or stamp your refund/return policy information on the sales receipt near the customer signature line before the customer signs (be sure the policy shows clearly on all copies of the sales receipt). Failure to disclose such policies at the time of the transaction will be to your disadvantage should the customer return the merchandise. Deposit sales receipts with your merchant bank as quickly as possible, preferably within one to five days of the transaction date—do not hold on to them. Failure to deposit in a timely manner can result in chargebacks for “late presentment.” Deposit credit receipts with your acquirer as quickly as possible, preferably the same day as the credit transaction is generated. Failure to process credits in a timely manner can result in chargebacks for "credit not issued." If a customer requests cancellation of a recurring transaction which is billed periodically (monthly, quarterly, annually), always respond to the request and cancel the transaction immediately or as specified by the customer. As a customer service, advise the customer in writing that the service, subscription, or membership has been cancelled and state the effective date of the cancellation. Failure to respond to customer cancellation requests almost always leads to chargebacks. Keep customers informed on the status of their transactions. If the merchandise or service to be provided to the cardholder will be delayed, advise the cardholder in writing of the delay and the new expected delivery or service date If the merchandise ordered by the cardholder is out of stock and delivery will be delayed or this item is no longer available, advise the cardholder in writing and offer the cardholder the option of purchasing a similar item or canceling the transaction. Do not substitute another item unless the customer agrees to accept it. By giving the customer notice and the option to cancel, you may help avoid a customer dispute regarding the merchandise and a possible chargeback. Ship merchandise before depositing transaction. Don’t deposit transactions with your merchant bank until you have shipped the related merchandise. If customers see a transaction on their monthly Visa statement before they receive the merchandise, it could lead to a preventable chargeback.

Services offered by TMS in Gas stations & convenience stores :

    Previously we discussed about the Services offered by TMS in Grocery Stores & Pharmacies. Now we can discuss about the services of TMS in Gas stations & convenience stores.

     Gas stations and convenience stores have always been at the forefront of adopting payment technology because speed and customer loyalty are among your top concerns. Today, many customers never even talk to a cashier or attendant, and point-of-sale technology is becoming increasingly more complex. We offer a full range of quick, secure payment and reporting methods to gas stations or convenience stores.

Make payments quick and secure
     As credit card fees and gas prices cut into profits, you need to keep costs as low as possible. The Merchant Solutions processes the entire range of electronic and check payments, so you reduce the number of vendors you work with.

Streamline operations
     Your Internet connection not only makes payment processing faster and more secure, it provides online access to transactional data, improves reporting capabilities, and makes back-office processes like managing charge backs easier.

We help you to get started with the right solutions of terminal equipment, and services that best meet your needs. You can reach us via Phone : 888-707-2836, 888-708-6732, Email : info@themerchantsolutions.com or online chat.