Jul 17 2008
Protecting Your Business From Credit Card Fraud
Protecting Your Business From Credit Card Fraud
Credit cards are used as forms of payments now more than ever. There are also more online businesses and most of these businesses accept credit card payments. Therefore, protecting your online business from credit card fraud is vital. For businesses that are offline, the challenges of accepting credit cards as payment can be the same. Fraud is such an ugly word and we want to avoid it at all costs. Thankfully, there are steps you can take, whether your business is online or offline, that will help to eliminate your risk of being a victim.
Steps For Online Business Owners
Although most consumers think being a victim of credit card fraud, particularly when purchasing a product online, it is actually much more likely that the merchant will be the victim rather than the consumer. Here are some tips to help you avoid this.
First, always verify that the address the consumer has given you is correct. Your merchant account probably offers an Address Verification System that will verify that the address you have been given matches the billing address of the cardholder.
If you’re shipping a product to a consumer, make sure the shipping address matches the billing address. If it does not, you probably should investigate the transaction.
Be leery of unusual orders. Since a thief would have no idea of the consumers purchasing history with you, if something gets ordered that is completely out of the ordinary check it out. Phone the customer if you can. Even if it’s legitimate, they should be grateful that you called.
Take as much information from the buyer as you can when they are filling out the order form. In addition to their name, address, and telephone number, ask for the name of the bank that the card is issued from as well as the 3 or 4 security digits that all cards have now.
State on your web site that you have anti fraud devices in place and operating at all times. This will give the thief pause before entering your web page.
Steps For Offline Business Owners
Since you are actually going to see the person that is trying to use the credit card, your chances of being a victim of fraud are diminished, but problems can still happen. Here are some tips to help protect you and your business from credit card fraud.
Never take a credit card without getting identification. Check the name and signature to see if they match. This will not offend most customers who are on the up and up. Most will even be grateful.
Check the credit card for forgery by knowing what characteristics are found on legitimate cards. Many cards now contain a hologram that changes color in the light. Check the signature panel to make sure the signature cannot be erased. If it can, it’s fake. Look for the magnetic strip and make sure it is intact.
You should also use the Address Verification Service. This will help you as well.
Keith Baxter made it his mission after college to educate as many people as possible to the advantages and disadvantages of credit through a widespread re-education initiative. You can find out more about Keith and what he's up to at <a href="http://www.credit-card-debt-consolidation.net" target="_blank">http://www.credit-card-debt-consolidation.net</a>
A Brief Primer on Merchant Account Discount Rates
You just obtained a merchant account at a quoted discount rate of 1.79% for your store. But, lo and behold, when your account statement for your first month’s processing arrived, you discovered to your dismay that many of your customers’ transactions were processed at a much higher rate than the one quoted to you. Not a pleasant surprise. You are not alone. In fact, we bet the majority of merchants don’t really understand how merchant account discount rates are applied and calculated. So let’s see if we can shed at least a little light on what’s happening here. A Discount Rate is a charge that is levied on each transaction you process through your merchant account and is calculated as a percentage of that transaction’s dollar amount. The Discount Rate that most applicants are quoted when searching for a credit card processing solution is what is known as the Qualified Rate. Your processing company determines the Qualified Rate by initially looking at the InterBank Exchange rate that VISA and MasterCard levy - this InterBank Exchange fee charged by the credit card companies is the same for all banks and processing companies. The banks and processors then add on a further percentage to that fee (this is part of the profit they make) to determine the Qualified Rate they charge to their merchants. In the case of a retailer, the current Qualified Rate is in the 1.70% to 1.85% range - and for phone and mail orders, as well as internet processing, the range is commonly 2.25% to 2.49%. The latter range is higher because of the fact that in those types of transactions, the merchant does not have the customer’s physical credit card present - so the risk of fraud is greater than it is for retail ‘card present’ sales. So far so good - most merchants understand things to this point. But there are certain risk factors that can cause your transaction to be levied with an additional percentage charge. These surcharges are extracted on ‘Mid Qualified’ and ‘Non Qualified’ transactions. The surcharge for Mid Qualified transactions is usually in the .75% to 1.25% range and for Non Qualified is generally 1.50% to 2.00%. Remember, these are charges on top of the standard Qualified Rate. So what are the most common circumstances when either Mid or Non Qualified surcharges may apply? * Mid Qualified: (a) for phone and mail order as well as internet transactions, where there is no AVS (address verification) match; and (b) where a retail merchant manually keys-in the transaction because the credit card is present but cannot be swiped, or keys in an order where the card is not present (e.g. a phone order). * Non Qualified: (a) for phone and mail order and internet sales, where the transaction is keyed-in but is not part of a daily batch out of that day’s transactions. (Note: where a person keys in his information on a website, the large majority of gateways do the ‘batching’ automatically. Therefore for internet processing, this is not generally a concern); (b) where a retail merchant doesn’t batch out daily; or (c) where the transaction is made utilizing a corporate, a non-U.S., a business or a government credit card. So, if many of your customers reside outside of the United States, or use corporate, government or business cards, you can do yourself a big favor by negotiating as low as possible Non Qualified Discount Rate. Unfortunately, there are another fifty or so other factors that can affect the discount rate you’ll be charged (no-one said it would be easy to understand all this!). These include: * high risk merchants can expect higher discount rates across the board * Visa Signature Reward Cards and MasterCard World Cards have surcharges applied * if the customer’s order is not shipped within 24 hours, a surcharge may be levied The bottom line? Prior to signing on for your merchant account make sure that you carefully read the provider’s complete array of criteria for evaluating what discount rate will be applied to a particular sale. And speak with your agent if you have any questions.
Colin Albert is the founder of The Merchant Account Explorer, a website devoted to providing businesses with advice on <a href="http://www.merchant-account-explorer.com/">credit card merchant accounts</a>. The site also offers recommendations regarding leading Internet and retail merchant account providers.
Merchant Account Set Up
Owners of small businesses who hope to increase their profits may have questions about a merchant account set up. Although perhaps interested in applying for this special type of account through a banker or preferred lender, they may be unsure of the costs and other requirements for getting equipped to process credit card payments. Since it is always wise to find out about required expenses before asking for a new account, business owners should carefully review the terms and fees associated with a merchant services account, along with any other information that will help them understand how to set up a merchant account.
One of the first things you will need to know is how to apply for a merchant account set up. This part is easy enough. You just have to do an Internet search to find a list of the available lenders who are eager to offer your company this valuable service. Those that seem to be a little iffy you will want to avoid, naturally. These are the companies with whose names you are unfamiliar or who have not been in business very long. It is probably a good idea to look for companies with a solid reputation or history. In fact, you may want to ask trusted business colleagues for a recommendation. Another option is to check with the bank where your company has its accounts at present. Perhaps that lender offers a good rate on a merchant account.
After being approved for a merchant account set up, the next step is to decide what type of services you would like your business to implement. Do you want to set up a simple credit card processor for checkout transactions in addition to check and debit processing? This could speed checkout time as well as please customers who prefer to use a credit card instead of cash or check for your products or services. Another way to use your merchant account is to purchase or lease a wireless credit card processor for point-of-sale payments, which will help you avoid the added step of mailing invoices and then awaiting payment.
Your merchant account set up will be based on certain fees, possibly including but not limited to an application fee, set up fee, gateway expense, or annual membership cost. Don’t forget that there will be a per-transaction fee or monthly percentage rate that you will need to pay for merchant account services. If you decide to put up a company Website, the merchant account could cover basic set up fees and maintenance service, though you will need to work this out with your account provider. Make sure you understand all of the terms and conditions of your merchant account before you sign an agreement.
Your company can enter the world of electronic commerce, or “e-commerce,” almost immediately and bring your customers into the 21st century of bill-paying when you qualify for a merchant services account. Start browsing offers by established lenders today to find the best deal for your merchant account set up.
Shane Penrod is the founder of <a href="http://www.merchant-account-quotes.com" title="http://www.merchant-account-quotes.com" target="_blank">http://www.merchant-account-quotes.com</a> Specializing in allowing merchants the ability to shop and compare multiple quotes from national merchant account providers. For free quotes on merchant account rates and fees, please go to <a href="http://www.merchant-account-quotes.com" title="http://www.merchant-account-quotes.com" target="_blank">http://www.merchant-account-quotes.com</a>
Apply For A Free Merchant Account Online
Get a free merchant account online when you locate interested lenders who want to work with your company. Although many potential lenders charge $100 or more for an online merchant account application, others will forego this fee and some other related expenses in order to attract your business. You can get approved quickly and set up within a few days afterward to start accepting online credit payments. But first you have to make a suitable match with a merchant account services provider who is willing to help enhance your company’s e-commerce capabilities.
You can start your search by checking the larger name banks and lending institutions to find those that offer a free merchant account online. Many offer different types of merchant accounts, but you will have to carefully compare prices and terms to make sure you get a good deal. Even top-name banks are capable of botching a merchant account offer, so don’t choose a bank based solely on its name or past performance. Instead, the terms and conditions of its merchant account application. Make sure to ask about costs that are not included on the price list, and get a reply in writing that you can keep on file for future reference if needed. Click through each page of the Website where merchant accounts are featured to be sure you understand all the details of this important privilege. Look for a company that offers the best payment method for your business interests. For example, some require a fee-per-transaction payment, while others bill your account at a low monthly percentage rate. You can always discuss either or both options with the lender’s customer service representative if you aren’t sure which one will work best with your clients.
After selecting the best free merchant account online offer for your business, process your application online, if possible, or print and complete it before mailing. Within a few days you should receive an email or postage reply to confirm or reject your application. If accepted, you can immediately begin to set up credit processing services for your customers. Discuss your equipment needs with the lender to decide the best direction for your company. For example, you will probably want to establish a Web presence unless you already have done so. When your Website is up and running, you can add credit processing options to it so that shoppers can browse anytime, shop at their leisure, and pay by credit card. You won’t have to hire customer support to be available 24/7 at your Website, although it is a good idea to have someone on call from time to time or as needed to answer shoppers’ questions or to address unexpected glitches. Your Website credit processing link will let customers enjoy the ease of ordering and paying from their homes, their jobs, or anywhere else they can find a computer a few minutes of browsing time.
Take steps now to learn more about how to upgrade your customer payment services when you apply for a free merchant account online.
Shane Penrod is the founder of <a href="http://www.Merchant-Account-Quotes.com" target="_blank">http://www.Merchant-Account-Quotes.com</a> Specializing in allowing merchants the ability to shop and compare multiple quotes from national merchant account providers. For free quotes on merchant account rates and fees, please go to <a href="http://www.merchant-account-quotes.com" target="_blank">http://www.merchant-account-quotes.com</a>
Business Banking ” Professional Advice
At the beginning, you will be offered plenty of advice and support to set up your business ” enterprise schemes often run seminars and give out free software to help you manage your accounting, for example. Local mentoring schemes can provide a useful way to make contacts with other people who have set up in business and excellent chances to network. When it comes to tax and accounting, however, you may want to enlist the help of specialists. Particularly if your business has a large turnover or complicated finances, using an accountant can make a world of difference. While some people are put off by the thought of paying fees to accountants, the costs involved can actually be relatively low, and often your tax bill can be significantly reduced. Taking on an accountant may save you money as well as a lot of hard work! Some offer additional services, such as advice and auditing that could help to make your business more profitable. If you run a business you are legally required to keep records of certain things. For example, if you employ staff you will need to keep PAYE records, and VAT records if you are VAT registered. All businesses must submit a tax return every year ” you can now do this online. If you have an annual turnover of over 5.6 million you are legally required to have an annual audit, which must be carried out by a qualified and registered auditor. Choosing an accountant is a matter of knowing what you want from your relationship, and finding someone whom you trust to do the best job. While personal recommendations from family and friends are a frequent reason for choosing an accountant, you may also want to consider whether they have particular experience in your sector, how much the practice charges, and what additional services they may be able to offer you. Qualified accountants must be registered with one of the professional bodies that regulate them: The Institute of Chartered Accountants (in England and Wales, Scotland or Ireland respectively) www.icaew.co.uk The Association of Chartered Accountants www.accaglobal.com Chartered Institute of Management Accountants www.cimaglobal.com Tax is an immensely complicated subject, but the Inland Revenue do attempt to make it as easy as possible to understand the basics. They offer a starter pack for new businesses, and a helpline for the newly self-employed. Check www.hmrc.gov.uk for full details.
Joe Kenny writes for the UK Loans Store where you will find information and reviews of the latest <a href="http://www.ukpersonalloanstore.co.uk/">loans</a> and offer more information on <a href="http://www.ukpersonalloanstore.co.uk/compare_personal_loans.html">personal loans</a> and other loan topics available on site.<br> Visit Today: <a href="http://www.ukpersonalloanstore.co.uk/">http://www.ukpersonalloanstore.co.uk</a>
Roles of An Online Merchant Account for payment solutions
A retail business has special needs to handle their all the transaction when it comes to accepting credit cards it is very necessary to chose the best services of Merchant credit card services. There are number of service providers available in the market, before choosing out of them one should always take precautions. Today, it s very easy to take the services of Online Merchant Account. To manage all transactions needs, an array of the latest equipments and software those meet all the particular needs of all types of businesses and more. It’s no happenstance that one has complete answers for market requirements.
As a retail Merchandiser, We should know what we are acting when it comes to selecting online Merchant account provider and a POS Software terminal solution. Choosing the wrong merchant account provider services can make us paying high priced services on Credit card receivables terminal that our business does not in need of, and forced to pay high monthly fees. Beware of these types of surprises! Here my aim is to aware you all about merchant account, to help in selection of a Merchant Account Provider and Selection of the right Terminal through this article.
What is a Retail Merchant Account?
Before you go to choose a right merchant Solutions provider, you should know what a merchant account is and how it works? Internet credit card processing needs an account called Merchant account that can be opened for a business to receive and process the credit card. When a customer swipes his credit card through a given terminal, all the information of customer transferred securely to a processing bank. The bank which is responsible for this process checks the customers account information whether the required credit amount is available in customers account or not. And if credit amount is available, then they deduct the appropriate amount from the account. If there is not enough credit amount available, then card is rejected to process further and terminal screen displays message regarding problem. If the credit is available, then the money is transferred to merchant s Account within 48 to 72 hours.
In this process, bank also checks the status of the credit card i.e. whether card is not reported expired, theft or lost. If any of these problems occurs, transaction immediately rejected.
How to settle Your Retail Storefront?
When you are going to settle your Retail Storefront before taking the services of a merchant account provider. It is very important to decide where exactly you want to install the credit card processing equipment. Some of the aspects to decide where to install credit card processing equipment are:
1. Need of customer friendly access terminal
If you are going to accept debit cards, you need to install PIN Pad. In this case you require a terminal called PIN Pad to enter the pin or password.
2. Speed of Credit card processing
When it comes to the speed of processing, Customers never wish to wait that s why place your terminals in the easily accessible area of your shop. Because of your service turns a new customer in to a permanent one.
3. Installation of telephone jacks
and always makes sure that terminals should be placed near to telephone jacks for connection. Ask your local telephone company to install jacks where you will be installing credit card processing equipments.
4. Types of equipments Available
Always try to go for all in one terminal instead of separate equipments. As per your requirement you can choose the equipments from wide range of verities available. E.g. All-in-One Terminal/Printers, Printers, POS Software, Wireless Terminals/Printers, Pin Pads, Terminals, Check Readers etc.
Michael Braganza is an eminent analyst and writer in Software and Technology related topics. He has authored many books on Technology and <a href="http://www.themerchantsolutions.com/">Online Merchant Account</a> like <a href="http://www.themerchantsolutions.com/services.htm"> Merchant credit card services</a> Now he is rendering his services to http://www.themerchantsolutions.com/
Enjoy The Benefits Of A Credit Merchant Account
A credit merchant account can make your business more productive than ever. That’s because a merchant account will let you start accepting credit card payments from customers in any part of the world at any time of the day or night. Could business possibly be better than that when conducted in any other way? That is why you need to know more about potential benefits of a merchant account.
Your credit merchant account will let you grow your business in ways you may not have imagined. For example, in addition to taking credit card payments on location at your store, you can take a wireless credit card processor with you to customers’ residences or places of business and accept payment on the spot. This makes it easier for the customer to pay the charges and not give another thought to the transaction. You, on the other hand, likewise benefit when the bill is paid promptly without the hassle of waiting for payments that may never arrive. You can hire few billing clerks and accounts receivable employees when you accept credit transactions that are processed instantly.
Another way that a credit merchant account can serve your business is when you implement a phone order and payment system. A digital program will let customers call a toll-free number, listen to messages about products and services or select other options, such as “payment” or “catalog request,” and then finish up by processing a credit card for any purchases made during the phone call. You don’t even have to hire someone to answer the phone; the entire process can be automated, although you may want to have a customer service rep available at certain hours of the day if needed.
The credit merchant account benefit that is creating quite a buzz in the business world is the Internet credit card processing option. More companies are putting up a Website in cyberspace to get their names out there and to attract a larger, more global client base. You can enjoy these benefits, too, when you get approved for a credit merchant account and hire a Web designer to create an artistic or thoughtful Website that represents your business to customers around the world. Registering with search engines will bring thousands of visitors to your site by accident, but they may decide to remain when they find exciting features on your home page, such as a survey, a helpful hint, or links to product lists and descriptions. They can shop in any time zone or region in any continent from a computer with Internet access. Think of the possibilities for building a super-size client base!
Give some thought to applying for a merchant credit account from a trusted lender or underwriter. This special account will confer professional merchant status and allow you to collect credit payments in a timely manner instead of working through a time-consuming billing process that may render less fruitful results. Shop soon to compare prices and terms for your credit merchant account.
Shane Penrod is the founder of <a href="http://www.Merchant-Account-Quotes.com" target="_blank">http://www.Merchant-Account-Quotes.com</a> Specializing in allowing merchants the ability to shop and compare multiple quotes from national merchant account providers. For free quotes on merchant account rates and fees, please go to <a href="http://www.merchant-account-quotes.com" target="_blank">http://www.merchant-account-quotes.com</a>
7 Keys to Internet Business Success Posted By : Aleen Peterson
Starting an internet business can be as simple as opening a Yahoo Store. And as complicated as building your own dynamic e-commerce web site. But no matter how you go about it, you need 7 key ingredients to ensure the success of your internet business.
Reduce Chargebacks to Your Merchant Account
27 Ways to Reduce Your Merchant Account Chargebacks
When your merchant account provider reverses a customer’s transaction as a result of his disputing the charge, then, unless you successfully challenge the reversal, you lose the sales proceeds, incur any shipping & handling costs and are levied a chargeback fee of $25 to $50.
And, an excessive history of chargebacks may result in the disastrous consequence of losing your merchant account and your ability to accept credit cards.
So, it’s obviously important to take prudent steps to minimize the occurrences of chargebacks - especially if your transaction volume is high.
The disputes are usually based on a customer’s claim that he did not receive the product or service that he ordered from you; that what he did receive was somehow defective or not what he ordered; or that he did not in fact order anything at all from you.
The causes for such claims generally result from:
* Fraud . Someone other than the authorized cardholder used his card or the information associated with card. Claims for fraudulent use of a cardholder’s card are especially common with internet and other ‘card not present’ transactions. Many billions of dollars of online transactions are the result of fraud annually.
* Customer Error . Again, this type of error is increasingly common for internet transactions, where the customer may not recall whether or not he purchased your product or service - especially if your website’s name and the name he sees on his credit card statement don’t match.
* Your Error . Your system for managing and tracking transactions - or your bookkeeping may be at fault.
* Bank Error . Banks do make mistakes - an unusually high number of them in fact - and you should keep a close watch on your merchant statements to minimize bank error.
With that in mind, here are 27 specific things you can do to reduce chargebacks against your merchant account .
1. The Address Verification System (AVS, for short) compares the customer’s stated billing address with the address the credit card company has on file. If your ‘customer’ has stolen the credit card, he probably won’t know the right billing address, so AVS is very useful in detecting fraudulent orders. Failure to use AVS will also result in higher discount rates on your transactions.
2. Be careful with orders from developing countries (e.g. former Eastern block countries), which have a higher than average rate of chargeback claims.
3. When processing in person, make sure that, if for some reason the swipe terminal isn’t working or the credit card cannot be read, the card information is keyed in and that you make an imprint onto the sales receipt. In order to avoid a possible chargeback later, both the card’s account number and its expiry date must show up on the receipt.
4. A common cause of customers’ disputes for online sales is that they don’t recognize the description of your company that appears on their monthly credit card statement. So make sure that description reflects your website’s name - and include a toll-free number in their statement’s description, so they can phone you if they have a problem.
5. For websites, make sure you provide a toll free phone number for customers to call, so they can hopefully resolve problems prior to instituting a dispute via the card company. And have a ‘frequently asked questions’ section on your site to further clarify issues that might otherwise lead to a complaint.
6. Be careful when accepting online orders if the customer uses a free email service - for if the card was stolen, his identity may be next to impossible to identify later. To be safe, you could ask him to confirm the sale by phone or fax.
7. Set up your shipping process so that the customer’s signature is always collected when the product is delivered - and have the shipper forward you a copy of the signed acknowledgement or upon request.
8. A recent development in fraud control is the IVR terminal (www.voicestamps.com) which can record a customer’s voice. If he later claims he didn’t order your product or service, the voice verification is e-mailed to you so you can prove he did in fact make the order.
9. If you manually process transactions, but don’t do so promptly, you may be hit with a chargeback for late presentment.
10. If you are selling via a website, offering a liberal returns and guarantee policy ensures fewer customer complaints and therefore fewer chargebacks.
11. If an order’s billing address and shipping address are different, consider contacting the customer for an explanation for the discrepancy.
12. Be proactive, by sending your customers e-mail notices regarding orders, shipping, etc. An informed customer is a happy customer.
13. If you process a high dollar volume of transactions you should consider purchasing fraud prevention software (do a search on that term, if you wish to locate and compare software offerings). Depending on the product, these can be very sophisticated, monitoring the risk of each transaction prior to processing to see whether it should be declined (examining things such as the IP address, email server & domain; validating the zip code; and comparing or “scrubbing” the data against lists of previously identified fraudsters).
14. For manual processing and voice authorizations, always note the authorization number on the sales receipt.
15. If you are a retailer, you should always check the expiry date of the credit card, confirm that the card is signed and that the signature thereon matches that on your sales receipt. If there is not a match, require photo ID.
16. Implement a management system to flag suspicious transactions. Have a “to be checked” file and have your staff contact customers whose orders are flagged by the system. Reasons for flagging can include many of the items mentioned above, such as free email addresses; high dollar orders; international shipping addresses, etc.
17. For internet and phone/mail orders, if the purchaser is a new customer and the sales price is high, require a faxed copy of his credit card and his driver’s license.
18. If you are selling over the Internet, place a warning on your transaction webpage stating that your site employs safeguards against fraud.
19. Be on the lookout for unusual ordering activity - including multiple orders of the same product, ‘rush’ orders, and the same cardholder making multiple orders within a very short time span.
20. Ensure that all the magnetic stripe or chip information required by the card processing company is actually being recorded. Also, compare the card’s account number with the number printed out on the receipt. And check that the signature on the receipt matches that on the reverse side of the card.
21. Always get an authorization from the processing company. If your request for an authorization is denied, do not complete the transaction.
22. When you are concerned about the veracity of a cardholder’s information, ask him for the phone number he supplied to his card company - and then call the company to verify it and call him as well, to ensure he is actually the cardholder and that he placed the order in question. You can also ask him to fax you a copy of his signature as well as the front and back of his credit card.
23. Shipping addresses containing only a P.O. Box are much higher risk than actual physical addresses.
24. For internet sales, always require the card’s verification number (CVC2 and CVV2), which is the 3 digit number on the credit card’s back side. According to Visa itself, this measure alone reduces chargebacks by over 25%.
25. Whenever a claim for a refund is made, and it has any merit - give the customer the refund. Doing so can significantly reduce chargebacks.
26. Disputes will happen, and when they do you will require all the appropriate documentation to support you - so make sure you store the documentation in a safe place and in an orderly fashion.
27. When a customer disputes a transaction you will receive an enquiry letter. Always respond to it within the stipulated time period. Your copies of face-to-face transactions must legibly display the card’s account number, the date of the transaction and its amount, the card expiration date, your company’s name and address, and the signature of your customer.
We also suggest you review the rules and suggestions for limiting chargebacks supplied by each of Visa, MasterCard, American Express, etc . These not only give you guidelines for preventing chargebacks, but will also detail the documentation and steps involved when disputes do arise - as they invariably will.
Colin Albert is the founder of The Merchant Account Explorer, a website devoted to providing businesses with advice on <a href="http://www.merchant-account-explorer.com/">credit card merchant accounts</a>. The site also offers recommendations regarding leading Internet and retail merchant account providers.