September 2010

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Electronic Check Processing! ICL Check Truncation

September 27, 2010 in Merchants by steve

ICL Check Truncation is an exciting new solution that was designed for clients with higher than average return rates and unauthorized transactions, or for clients who accept large dollar amounts over the Internet. Payliance’s patent-compliant process creates check images from a client data file — no paper check is required.
These transactions are governed by the Check 21 Act and Uniform Commercial Code – Not Regulation E, which means:
• No restrictions on percentage of returns
• No restrictions on unauthorized returns
• No maximum dollar amount
• No consumer authorization needed
• Less likely to be shut down due to high returns or UA’s
• All types of checks and money orders are accepted
• Provides you with access to more customer accounts than any other single payment method because you can accept all types of checks and money orders

Vision Payment Solutions  provides merchant accounts, supports all major credit and debit cards, e-check and ACH transactions, electronic benefits transfer, recurring bill payments, and gift and stored-value cards. As a proven leader in payment technologies, we offer advanced virtual terminal and payment gateway solutions that are fully supported by our in-house teams.

Business & Corporate Card Processing

September 24, 2010 in Merchants by steve

Save Time And Money By Processing Level III Data Through Vision Payment Solutions

Do You Currently Accept Credit and Debit Card Payments From Businesses Or Government Agencies Without Adding Level III Data? If you do, you’re likely paying significantly higher processing rates than you should!

In most cases adding Level III (L3) Data through Vision Payment Solutions will significantly reduce the fees that you pay for processing Business-to-Business (B2B) and Business-to-Government (B2G) transactions. Since the benefit is a reduced percentage rate, your savings increase with the size of your transactions.

What Is Level III Data?

L3 Data is additional information about a transaction which is commonly found on an invoice, such as: tax, product/service description, etc. Visa® and MasterCard® generally assess higher interchange rates for B2B and B2G transactions if L3 Data is not included with the transaction.

Why Should I Use Vision Payment Solutions To Process Level III Data?

VPS offers one of the only payment processing gateways certified to process L3 Data.  The proprietary solution identifies L3 transactions prior to prompting for additional information, significantly reducing excessive data entry. In addition, VPS’s solution automatically calculates and populates data for L3 transactions, further maximizing your efficiency.  In short, VPS is one of the few solutions that can process L3 Data, and we make the process as easy for you as possible.

Which VPS Solutions Support Level III Data?

Merchants using PT “Professional” are able to process L3 Data through any of the following methods:

• Virtual Terminal

• Mobile

• Shopping Cart

• API

• Recurring Payments

• Batch Upload

Vision Payments Solutions provides merchant accounts, supports all major credit and debit cards, e-check and ACH transactions, electronic benefits transfer, recurring bill payments, and gift and stored-value cards. As a proven leader in payment technologies, we offer advanced virtual terminal and payment gateway including level  3 data solutions that are fully supported by our in-house teams.

MINIMIZING CONFUSION OVER MINIMUMS

September 20, 2010 in Uncategorized by steve

We here at Visa wanted to take the opportunity to clarify a few recent posts about U.S. merchants setting a minimum purchase requirement for using a credit card. For our part, we want to proactively offer Visa’s perspective on this issue to minimize any confusion, particularly since Visa did not allow this practice in the past.

The answer is actually rather simple: We’ve changed our rules to conform to U.S. federal law.

Allowing minimums was one of the provisions of the recently enacted financial reform bill (the Dodd-Frank Act). This provision became operative as soon as President Obama signed the bill. So beginning July 21, the law gave U.S. merchants the ability to set a minimum on credit card transactions. The same law says those minimums can’t exceed $10.

It’s also important to note that this applies only to credit card transactions in the U.S.; the law doesn’t cover debit card transactions, and Visa’s no-minimum rule remains in effect for merchants who accept debit cards.

Not all U.S. merchants will decide to impose minimums for using a credit card. (In our view, that’s a good idea because it makes things more convenient for consumers.) There also may be some merchants who don’t fully understand the new law and will try to impose a higher minimum or one for debit. In those cases, consumers should let their card issuer know by calling the number found on the back of their card or on their monthly statement.

Posted by: Ted Carr, Visa Corporate Relations on September 2, 2010 at 7:44 pm

Advice to Issuers: Shift from Debit to Credit—And Soon

September 17, 2010 in Developers, Merchants, Partners by steve

(September 9, 2010) Hammered by the worst economic downturn in decades, consumers have been abandoning credit cards in droves, instead using debit cards as their plastic of choice. But new research suggests card issuers will soon have to revamp their credit card programs and beef up prepaid card marketing to offset an expected industrywide loss of income on debit card portfolios.

That loss will result from recent regulation, most prominently the Dodd-Frank Wall Street Reform Act of 2010, which includes a provision that gives the Federal Reserve authority to regulate debit card interchange rates for issuers above $10 billion in assets. The legislation, which was signed into law in July and takes effect next year, is widely expected to lead to an across-the-board haircut to interchange rates, severely crimping what is currently a $15 billion annual income flow for banks. Other, earlier regulation requires banks to obtain opt-ins from consumers for overdraft protection, threatening a portion of the overdraft-fee income banks earn on products like debit cards that are linked to checking accounts.

As a result, “debit can no longer be relied upon as a surefire source of strong issuer revenue,” says a research report issued this week by Javelin Strategy & Research, a Pleasanton, Calif.-based firm that follows the payments business. The report, entitled “Payment Card Issuer Strategies 2010,” estimates that as much as $12 billion in debit card interchange and overdraft- fee income could be wiped out by the new regulations.

Complicating matters is that recession-strapped consumers have clearly shown a preference for debit cards. The proportion of consumers actively using credit cards plummeted to 56% last year, down a startling 31 percentage points from 2007 and the lowest number Javelin has ever tracked in its surveys. Unless issuers act, the firm warns, they face a double whammy of withering credit card portfolios and regulatory limits on debit card income. “Issuers simply cannot afford to continue doing business as usual,” the report says. “if events are allowed to continue unchecked, only 45% of consumers will reach for a credit card in 2010.”

Issuers are likely to respond by injecting new life in their credit card programs and also emphasizing reloadable prepaid cards, which are not affected by Dodd-Frank. This will be a tricky proposition, though, given consumers’ historic move away from products that represent debt and unrestrained spending. “To rebuild [credit card] usage, it’s going to take some focus because there’s been a change in consumer behavior,” Beth Robertson, director of payments research at Javelin and author of the report, tells Digital Transactions News.

To meet that problem, issuers will have to market credit cards in a new way, the firm says. This should include high-premium rewards for high-income users, rewards for everyday purchases for everybody else, and features that help cardholders control spending and restore credit ratings. “Credit card marketing needs to promote logical spending among consumers by offering benefits that make credit cards the commonsense payment choice,” the report says.

Whatever banks do to promote credit cards, though, they must avoid their old penchant for penalty-fee income. “Increasing credit card use will be successful only if [the] focus is shifted from penalty fees to [a] positive image,” Javelin says. In part this is because fees late payments and over-the-limit spending will only alienate newly cautious consumers. And in part it’s because yet other legislation–the CARD Act, which took effect Aug. 22–restricts the fees issuers can levy.

Indeed, Robertson cautions, a new regulatory mindset means banks will have to be careful in how they market and price credit cards. “We’re not in the same environment we were in a few years ago,” she says. For one thing, she points out, there’s no guarantee regulators won’t come after credit cards. “If new fees are introduced, it’s like waving a red flag, [saying], ‘hey, come and regulate us next,’” she notes. She also points out that the Dodd-Frank Act created a new consumer-protection agency aimed at financial practices. “Cards are definitely on the radar and will stay on the radar,” she warns.

Visa Starts to Put Small Merchants Under Its PCI Microscope

September 14, 2010 in Merchants by steve

(July 18, 2007) More large merchants now meet the dictates of the Payment Card Industry data-security standard, or PCI, according to new numbers from Visa U.S.A. At the same time, Visa, the biggest payment-card network, is turning its security attention to small merchants, the source of the majority of data breaches.

Visa and the other general-purpose card networks consolidated their individual data-protection rules under the PCI umbrella in early 2005 and last year created the PCI Security Standards Council to foster broad adoption and future technological development of the standards. Each network, however, administers PCI.

Eduardo Perez, Visa vice president of payment system risk, tells Digital Transactions News that 39% of 327 so-called Level 1 merchants, those that generate more than 6 million Visa transactions a year, were PCI complaint as of June 30 compared with 18% about a year earlier. (Last year Visa said it had only 230 Level 1 merchants; today’s higher number, according to Perez, is the result of natural growth by some merchants and changes in the way some acquirers aggregate their merchant portfolios.) Another 50% of Level 1 merchants were in “remediation” as of June 30, which means they’ve gone through a compliance assessment and are working to correct identified deficiencies. That means 89% of the biggest merchants meet or are close to meeting PCI standards as Visa’s Sept. 30 Level 1 compliance deadline approaches.

Level 2 merchants, those generating 1 million to 6 million annual Visa transactions, aren’t as far along, though they have a later compliance deadline, Dec. 31. According to Perez, 33% are complaint while an additional percentage in the “high 20s” is in remediation. PCI compliance is at 52% for Level 3 merchants—those generating 20,000 to 1 million Visa e-commerce transactions annually. This group currently does not have an explicit compliance deadline.

Now Visa is turning its attention to its smallest, or Level 4, merchants—those that generate fewer than 20,000 Visa e-commerce transactions or 1 million total Visa transactions annually. In May, Visa distributed a bulletin to its 270 merchant acquirers saying they had until July 31 to submit plans on how they intend to bring their Level 4 merchants into PCI compliance. Visa disclosed the bulletin publicly last week.

Even though small merchants are the source of less than 5% of potentially exposed cardholder accounts from data thefts, Visa’s rationale for PCI compliance is that Level 4 merchants were the source of 80% of identified compromises since January 2005. Also, the sheer size of the Level 4 group—more than 6 million locations accounting for 99% of Visa’s merchant base—makes it too big to ignore. “We gave [acquirers] factors to consider in how they should risk-prioritize their population,” says Perez.

After setting compliance dates and sorting their portfolios by risk, the bulletin says acquirers should then focus most of their attention on their biggest and riskiest merchants. It further asks acquirers to state their plans to educate merchants about data security and PCI compliance. Compliance strategies are to include steps to eliminate storage of prohibited magnetic-stripe information such as Card Verification Value 2, or CVV2, and PIN data. Storage of such data, especially by older point-of-sale payment-processing software systems, is a major source of data breaches. Compliance strategies also must address the third parties acquirers use, such as independent sales organizations.

The May bulletin is unlikely to be the last word small merchants hear from the payment networks about card security. Perez says Visa is considering possible rules that would address vulnerabilities in payment-processing software applications, though he would not go into specifics. The bulletin says acquirers failing to meet the July 31 deadline are subject to “risk controls,” which it doesn’t define, but Perez says Visa isn’t trying to wield a club over them. “We obviously don’t want it to be a burden,” he says, noting that acquirers have considerable discretion in developing their compliance plans. “We do have the option of imposing risk controls and fines, but that’s not the path we want to go down,” he says. “We’re seeing a very positive response from our acquirers.” Some have already submitted plans to get incentives Visa is offering for accelerated PCI compliance, he adds. Merchant-acquiring executives familiar with the small-merchant sector say they don’t view Visa’s May bulletin as onerous. John Hamby, the senior vice president at New Haven Conn.-based NewAlliance Bancshares Inc. who oversees a portfolio of 3,500 mostly local and regional merchants that generate about $1 billion in annual card volume, says the bulletin is “reasonable in the broad sense. We need to know as the acquirer who our high-risk [merchant] is. This is sort of a wake-up call.”

Processing consultant Paul R. Martaus, president of Mountain Home, Ark.-based Martaus & Associates, says some sort of deadline for small-merchant PCI compliance is a good idea. “They have to keep moving forward or nothing ever will get done,” he says. But small merchants present their own security challenges, he notes. While many are not targets of hackers because of their low volume and because they still use dial-up POS terminals that don’t have Internet connections, some use voice-over-Internet connections that don’t encrypt transaction data at all.

According to a recent survey by Visa and the National Federation of Independent Business trade group, 57% of small businesses do not see securing customer data as something that requires formal planning, and 39% say they rely on common sense to keep data safe. Visa and the NFIB have developed free educational materials and tools that will become available Aug. 1 on the NFIB’s Web site to help small businesses guard against data fraud, Visa said in a release.

According to Perez, 96% of levels 1 and 2 merchants have affirmed that they do not store track data from mag-stripes. But all it takes is one breach at a big retailer to do serious damage, as shown by last winter’s disclosure by off-price retailer TJX Cos. that hackers had compromised sensitive data from more than 45 million card accounts stored on its computer systems (Digital Transactions News, March 29).

Vision Payment Solutions  provides merchant accounts, supports all major credit and debit cards, e-check and ACH transactions, electronic benefits transfer, recurring bill payments, and gift and stored-value cards. As a proven leader in payment technologies, we offer advanced virtual terminal and payment gateway solutions that are fully supported by our in-house teams.