How To Give The Gift That Keeps on Giving

Okay, it's the holiday season which is, of course, a time for giving.  Do you have people on your shopping list that are always hard to buy for?  By chance, are any of those people business owners?  Well, I've got a gift idea for you that will blow their socks off.  Let me tell you a little about it.

You see, for those of you that have read this blog for any length of time, you know that I am a 61 year old retired merchant services rep.  I owe my to success to always taking the time to thoroughly educate my merchants on how the credit card processing industry works.  I educated on the three main pricing models that exist today and we discussed which was absolutely best for their business.  Each program offers benefits differently to each business based on how they typically transact business and what their average ticket is.  My huge client base was directly as a result of building mutually rewarding long-term relationships with them.

Did you know that every merchant services provider has the exact same cost basis?  It's called Interchange!  Do you know what interchange is?  Ask any business owner you know personally, or wherever you shop, if they totally understand all the rates and fees they pay for the "privilege" of accepting plastic in their business.  I'd venture to say that the majority, if not all, will answer with a resounding "NO". 

Well, since I'm no longer active in the field seeking new business, I decided it was time to give back.  So, I created a 40 page eBook on the topic of credit card processing.  It is so thorough that even new reps to the industry, have used it to get their education.  This is precisely the kind of information that your provider doesn't want you to know....for obvious reasons.

Do yourself, and your business friends a favor and send them on over to MY WEBSITE WEBSITE so they can check it out.  How often to you get to give a gift (My eBook) that keeps on giving and giving (in reduced costs and increased profits)? 

CLICK HERE TO START SAVING NOW

LET THE GIFT GIVING BEGIN

How much are you paying customers to shop with you?

There isn't a week that goes by that a new credit card offer doesn't show up in the mailbox. Credit card issuers are constantly trying to lure new customers to transfer balances or, at the very least, apply for a new and improved credit card. New and improved in that every time you use it, you will earn some form of "reward". Sounds good to the consumer who uses plastic anyway so why not get paid something back for doing so.

But, here's the issue. These newer breed cards are great for the consumer but not so great for you, the merchant. Every time you accept one of these cards for payment, you are paying an increased discount rate over what you would pay for a plain old "generic" credit card.

Today, I met with a merchant (hair salon) that is currently on a Four Tier pricing model. Thirty two percent of her volume is in Tier Three which is clearly rewards type cards. She is paying over 3.08% + $.03 for each of these sales. Also in this category would be card not present type transactions which she says, they do maybe ten of those a year. In taking a look back during the same time period last year, her Tier Three volume was a much smaller percentage of the total. So, it's obvious that more of their customers are receiving, and using, these cards for the perks they receive.

So, obviously, we'll be moving her over to a Cost Plus Pricing model so that at least, since she's already receiving these cards, she'll be able to pay less for them. It's a tough game out there these days people, just trying to stay profitable. You need to look at any way you can to reduce your cost of doing business.

Let me encourage you...take a detailed look at your monthly credit card processing statement...EVERY MONTH. Compare to the previous month and even, take the time to compare to the same time period a year ago. Look for any noticeable changes. Also, make sure that you totally understand all the fees that you are being charged. Ask your rep, if you can even find them, to explain in detail what everything is. If they don't know, themselves, which isn't too uncommon, find someone that can enlighten you. My contact info is also available here if you so desire.

The bottom line here, and in all my posts is to GET EDUCATED. Accepting credit cards for payment in your business is a necessary evil. You must, therefore, do all that you can to ensure that you are paying fair and accurately for the "privilege" of this service. Thanks for reading!

Using Debit Cards as Credit Cards

A few weeks ago, my wife upgraded her cell phone with our provider. The phone she selected came with a $50 rebate which sounded good to us. The rebate, we discovered, was to be issued in the form of a Visa prepaid debit card. All sounds good so far but here's what I discovered when the card came in the mail today.

You see, to the every day individual, this wouldn't be any big deal but as an individual involved in the processing business, here's what I want to tell you about. You see, with banks, it's all about fees. That's how they generate the majority of their income rather than interest on loans. Anyway, this "prepaid debit card" was issued by a Visa member bank (a large one at that). Okay back to my reason for this post.

The Visa card, clearly marked "debit" on the front also had a sticker plastered prominently on it as well. Here's what the sticker said "Always choose "CREDIT" when using the card for your purchases". Here's what happens when the customer requests that it be processed as a "CREDIT". You, the merchant, will be charged your "discount rate" from your provider at whatever you are being charged for swiped Visa DEBIT transactions. Of that amount, this issuing bank will receive the Interchange Rate on this card that is being processed as a CREDIT card. Currently, on this $50 sale, the issuing bank will earn close to $.70. You, on the otherhand will likely be paying somewhere in the neighborhood of $1.00 to process the sale.

Now, if you had processed it as a pinned DEBIT card, your cost would have been probably in the neighborhood of $.60-$.65. And, processed as a pinned DEBIT card, do you know how much the issuing bank makes? Zero, Zilch, Nada! Are you beginning to see why the issuing bank put such a sticker on the card? Many banks that issue Visa or MasterCard branded debit cards, try to encourage their card holders to "just say CREDIT" for what are now, obvious reasons. To the cardholder, it really makes no difference because the funds simply come directly out of their account no matter how they run it. The diffenence is in how much it is costing you for the process.

So, while this may only translate into minimal amounts on individual transactions, it will certainly add up to something significant over a period of months or years. So, the lesson to learn here is that when you take a card for payment, that says DEBIT on it, do all you can do to get the customer to enter their pin number.



Good luck and I wish you much success in your business. If you have any comments, or questions, please post them here.

How Compliance Affects You

Are You Protecting Your Customers

Did you know that 92% of card data compromises take place in small businesses with low volume? Many merchants think that the majority of data compromises take place utilizing internet transactions. In fact, 70% of the compromises take place at brick and mortar businesses rather than on the internet. As a business owner, you absolutely need to make certain that you are compliant with PCI DSS standards. Just because your credit card processor is billing you for PCI compliance fees, does not certify that you are specifically compliant.
The opportunity to process credit/debit cards is a great way to grow your business and give your customers the payment options they have become accustomed to. In order to make the most of this opportunity, your customers have to trust that their card information will be handled in a responsible manner and that they can safely utilize these cards for purchases. We all share in the opportunity to demonstrate that credit/debit cards are a safe and convenient way to pay.
Merchants today are at risk for lawsuits and fines from the card associations for any type of data breach. In addition, the reputation of your business can be placed at serious risk if it becomes publicly known that your customers’ card information has been compromised."
Do yourself, and your customers a favor and CLICK HERE to get compliance facts. There you will find a checklist that will guide you thru important issues that you need to be aware of and will point you to specific corrective actions that you should take.

PCI Compliance…Are you at risk?

AS A MERCHANT, HAVE YOU EVER...

• Processed a credit card transaction at your business and noticed the receipts contained the full credit card number and the expiration date? How about your copy of the receipt? If so, you are NOT COMPLIANT AND AT RISK.
  
• Stored credit card numbers in a binder or on your computer in a spreadsheet for recurring billing? NON-COMPLIANT!!!
  
• Configured your router or computer and used a easy, generic password such as 1-2-3-4? HACKERS LOVE THIS….YOU, AND YOUR CUSTOMERS ARE AT RISK. Create your own password and never use default passwords.
  
• Had your terminal go down and started keeping credit card data written in a spreadsheet on your computer to charge the client later?
  
• Imprinted a card and written down the CVV data (3-digit security code on back or 4-digit code on the front of the card)?
  
• Not renewed your anti-virus software on your computer?
  
• Spent years storing your receipts in a shoe box in your back office?
  

You may have seen in the news in recent months of the huge data breaches that took place which resulted in millions of credit card numbers being compromised. A couple huge payment processors and a major retailer were hacked into. You would think that these types of entities are the main targets of these international fraudsters. However, due to increased security being put into place, hackers and thieves are beginning to focus their attention on small, local, mom and pop type organizations. Consequently, you absolutely need to be aware and alert for the safety of you, your business and your customers.

PCI DSS is the real buzz phrase in the payments industry these days. It stands for Payment Card Industry Data Security Standards. Compliance is a standard of security established for any business that processes credit cards. Whether you have a computerized POS system, process over a phone and do manual imprints, process through a credit card terminal or have an e-commerce website taking orders, PCI establishes a series of best practices and minimum security protocols that must be observed for your business type.

Through the Fair and Accurate Credit Transactions Act of 2003, Public Law 108 to 159, the U.S. congress preempted what some individual states mandated on credit and debit card truncation to set a national standard. Under Title 1, Section 113 of the act, only the last five digits of the card account number can be printed on electronically printed receipts provided to the customer. The laws vary by state regarding truncation of the merchants copy. Some states carry it even further and say that the expiration date can't appear on receipts either. To be on the safe side, I would suggest that you make certain that both copies are truncated totally. If your receipts are showing more than is allowed, contact your processor, or POS vendor, immediately and have them assist you in becoming fully compliant.

While you're at it, ask your processor about any PCI compliance fees they may now, or in the future, be charging you. Some are using this as a new revenue stream and charging excessive monthly, annual or a combination of both, fees with no corresponding benefits.

Check your statement monthly

I can't tell you how many times merchants hand me their credit card processing statement still sealed in the original envelope. But, I can't say as I blame them as many of these statements are difficult to decipher. In fact, most processors know, from experience, that a very small percentage of merchants really take the time to look at them. Good for them....bad for you.

If you feel that it is near impossible to really understand your statement, and all it's various charges, you need to ask the questions. You could contact your rep, if they're still around. The Customer Care department of your service provider, would be another suggestion, and they should be happy to walk you thru it, line by line. Or, you could contact me and with my years of experience, and I'll be able to help you figure it all out.

Often, you will see at the top of your monthly statement, something called "Important Notice" or "Statement Messages". Here is typically where you will see notes on upcoming changes to your statement and subsequently, your processing costs.

Here's an example of what I'm talking about. With the increased credit card fraud and data breaches of late, most processors are passing on some sort of "fee" to you to help "protect" you and your business. Typically, they will notify you in the Statement Message section of your statement of upcoming charges. One processor I know of, notified their merchants of a monthly $9.99 Data Breach Service fee that was going to be charged to them. They gave merchants a couple months for free with the opportunity to call in and opt out if they didn't want it. However, the majority of merchants never read those little notes and months later, some of them start calling in asking what the fee is and who authorized it.

I've also seen merchants that are still getting statements from processors that they previously did business with, and are still paying monthly minimum fees to because they never cancelled the agreement. This, of course, is just money being thrown away.

Probably the most disturbing thing I find is that, over time, a merchants rates have continued to rise, without the knowledge of the merchant because they haven't looked at their statement in detail each month. Or, there are services they are paying for, but not utilizing and therefore costing them unnecessarily.

So, the bottom line here is....how is this affecting your bottom line? Let me urge you, please, please, please, take the time, each and every month, to look at your statement in detail. Make certain that you fully understand every charge and why you're paying it. If, when you make your call, you feel as if you're getting the runaround, please don't hesitate to contact me utilizing any of the contact methods found on this blog.

Thanks for taking the time to check out my blog. Be blessed and be a blessing.