With smartphones, everything’s gotten so much easier. From staying in touch with friends and family, to updating social media, to doing your shopping, you’re able to do it all wirelessly and with the click of a button now. There are so many different ways that you can shop using your smartphone instead of your physical credit card, so let’s break a few of them down!

The best way to get started with shopping from your phone is to save your credit card information to the Wallet feature and to set up either Apple Pay or Android Pay. The Wallet saves your credit card information for easier shopping, and can also save things like your plane or concert tickets and your rewards cards for different stores. Apple Pay allows you to shop in real life using your phone to establish a wireless connection with the reader instead of using your physical credit card.

Apple Pay keeps your credit card information safe and secure when processing your various transactions, as it provides a unique transaction code instead of your actual credit card information. In addition, Apple requires a Touch ID confirmation before a charge to your credit card is processed via your phone. This means that even in the unlikely event someone else steals your phone and is able to bypass your password to access the Wallet or Apple Pay features, they will be unable to process any charges to your credit card since they do not have your fingerprints. This added security measure is one of the major benefits of shopping paperless and wireless.

The Wallet feature can be used when you are shopping on-the-go from your phone, meaning that when you visit a store’s website or use their app, your credit card information can be auto populated, making for a much faster transaction processing time. In addition, the Wallet can keep track of and add your rewards points after you make a purchase, both in-person and using a mobile site or app.

Many stores have made the decision to optimize their websites and online checkout processing for cell phones, so that customers can browse using wireless internet or on their data network with greater ease. Some have even taken the extra step by creating apps to shop on, which can be installed on your phone and can save your information. When you combine this with the Wallet and Apple or Android Pay features, you are able to create a one-touch checkout for an even faster purchase processing experience than before.

Overall, we’ve seen over the years that there are many ways we can use our phones, and technology is evolving every single day. Evolve along with it, and consider using your smartphone to go paperless and wireless with your credit card transactions by utilizing the efficient and time-saving features of Wallet and Pay that your phone comes with, to save yourself time and hassle in the future.

EMV Cards….. Providing Dynamic Authentication Processes
Currently, EMV (Europay, MasterCard, and Visa) chip cards are now the “trending topic” in the payments industry. EMV supplies authentications and security measures to help business owners and issuers reduce fraud. This new technology has left business owners with no choice than to educate themselves on EMV chip cards and upgrade their terminals and POS systems to accept these types of payments.
An EMV chip card is designed to go through a lot of authentications to produce additional security. All EMV chips are to go through static data authentication (SDA), dynamic data authentication (DDA), and combined dynamic data authentication and application cryptogram verification (CDA). These authentications are made possible due to the increased data byte storage, which has improved from a 26-byte maximum with mag stripe to 259 bytes of data storage on the EMV chip.
It is possible to permit the payment of a chip-based transaction using either an online or offline process. When online authorization is used, business or transaction information is sent to the card issuer for confirmation. But when an offline process is used, the information based on that transaction is transferred from the terminal directly to the chip card itself for authorization by the chip. Transaction authorization is determined by issuer-defined risk parameters stored in the chip, and not direct approval by the issuer. A hybrid process is also possible, whereby cardholder verification is conducted via offline PIN, and the transaction itself is authorized through online communication.
Online and offline authorization options both have advantages. The online authorization allows for an additional layer of security and fraud protection, since most fraud mitigation tools function online, in real-time. Online authorization also simplifies chip production, encryption key management, and merchant infrastructure, and it saves cost and reduces overall complexity. The primary advantage of allowing offline authorization is that it is consistent with global standards, ensuring compatibility and interoperability with international issuers’ payment devices. In addition, it allows for transaction authorization functionality even in the absence of online connectivity.
EMV has been successful at reducing fraud in countries that have been using this technology. EMV is being adopted at a steady pace by issuers, networks, and business owners throughout the United States. This technology will provide dynamic authentication processes in order to provide more security and protect business owners and issuers against fraud.

EMV…… The super-small computer
The United States is switching over to chip cards in an effort to curb credit card fraud. In fact, even though the United States has a quarter of the world’s credit card transactions, almost half of the world’s credit card fraud happens here. This is because magnetic-stripe cards use an outdated technology and easy for fraudsters to counterfeit. Chip cards, on the other hand, are way more secure. An EMV credit card chip is actually a super-small computer that’s extremely hard to counterfeit. When the data is transmitted during a card transaction, it’s encrypted which means even if bad guys intercepted the information, they probably wouldn’t be able to do anything with it. So as a country we’re switching to cards with EMV chips. The recent high-profile security breaches at some of the country’s largest retailers have added motivation to make the switch quickly.
The good news is, consumers are starting to adapt to the new normal — their first instinct now is to insert a chip, not swipe. In addition, Visa and Mastercard implemented new quick-chip technology last summer, to make the processing time faster for consumers. One of the biggest complaints off the bat was that EMV was too slow, taking 10-15 seconds, Now the EMV transactions have really gone back to the same speed as what it used to be with swipe transaction — from the consumer point of view, it has sped up dramatically.
Retailers, on the other hand, have struggled to get up to speed with EMV and have dealt with a variety of challenges, particularly due to vendor delays and the liability shift that has left them on the hook for chargeback.
Contactless EMV was supposed to go live last spring, but the processing rules for banks are not finalized yet. By October 2017, fuel pumps were also supposed to be EMV compliant — but due to a lack of hardware, this date has been pushed out to 2020.
For backward compatibility most merchants still accepts traditional magnetic swipe cards, although this is definitely going to change over time. However, the EMV technology of course is not a silver bullet that solves all problems. But it has proven that beyond any reasonable doubt, it’s still the best way to avert fraudulent practices when it comes to business transactions. Some food for thought as you carefully plan to take your stand on switching over to the EMV terminal.

Is EMV killing business?

Besides the fact that EMV can be annoying to most shoppers, is it really killing business to the local small merchant. Let’s look at the issues.

EMV is more secure: Yes EMV is more secure than the mag stripe cards. But if the merchant is not using the EMV dipping process there is no benefit to having the EMV enabled card. Right now there are 5 million EMV compliant terminals that are being used in merchant locations across the country. But, only 1 million of these terminals are being actively used. Swiping on an EMV compliant terminal is just another way to say come steal my information please. Merchants are just not using the dipping process as of yet.

Why are merchants not dipping if they have the terminal?

Backlogs in 2 steps of certification have brought the EMV chip rollout to a standstill. The first is the software integration for all the terminals. People do not realize, this was not a government roll out program. This was mandated by Visa and MasterCard, the merchant processors, and several big banks. The roll out process was not coordinated by any main group and the process was flawed. Roll out the terminals, Install the software, and create the certification process. There was no orderly plan in place to coordinate all aspects of EMV integration. You have several businesses, all working for themselves, with their own goals, all being told they would have to service these terminals and these businesses, millions of businesses, with no guidance from the banks and from Visa and MasterCard.

The installation of the software takes several weeks to become installed. And then to be able to take the EMV chip cards, need to be certified. This certification process takes some businesses weeks, even months. Some retailers, waited for months with no idea when they would be able to be certified.

After the certification process, the consumers were confused. They did not know what to do with the chip. Do I swipe, do I dip? What do I do. Then, when the customer did dip their card correctly, they did one of three things. Most pulled out their card too soon, and the transaction had to be repeated. Or they walked out, forgetting their cards, slowing down the process. Or they completed the card process correctly. Add this to the fact that EMV card transactions tend to be slower, high volume businesses were losing money because of the time lost in making their transaction.

The EMV process has been a slow, painful, process for many small businesses. When the dust finally clears, this should be a more secure, and safer way for individuals to pay for goods and services in stores and online.

You have probably noticed now when you pull out your credit/debit card to use for a transaction you may have two ways to pay. One of the most common things I have seen is the EMV enabled terminal with a sign taped over the card dipping area that reads no chip, and force people to slide. I have also experienced the clerk telling me to swipe or dip, it is my choice. What are you supposed to do?
18 months ago, a deadline to meet for all merchants was forced on the nation’s retailers. Become EMV compliant or face serious financial penalties. This marked the big switch from the old-style mag stripe cards to the new, computer chip enabled, EMV card. Even with the roll out 18 months later, most of us are still swiping instead of dipping our cards many times a week.
At first, it was thought, that the slowdown was caused by the initial investment merchants would have to make for each terminal of over $500 per line. But hardware does not seem to be the issue. The EMV compliant terminals are everywhere, but they just have not been turned on yet.
Only one out of five enabled terminals have been correctly processed and turned on to accept the new payment protocol. That means over 80% of the terminals that are in merchants stores right now and ready to accept EMV are not available to process them.
Merchants have taken to the courts as they feel the big banks are conspiring to pass the bill for fraudulent transactions from them to the store owners. New rules went into effect and have since been changed to pass all fraudulent transactions onto the store owner, if they are not using the new EMV terminals correctly. Two small Florida stores, in court papers, have claimed that their fraudulent transactions bill has increased 2o fold since the issuers changed the rules. Across the country, smaller stores are being taken for real money, big money.
But the use problem does not seem to be just a hardware problem.
Software Issues
The new terminals need to be programed with a new, 2 step procedure. First they must be programmed with the new software, and then they must be certified. Both steps cost money, and the delay for certification before a store can accept EMV can be weeks and even months.
A Florida liquor merchant has been waiting for months for the certification process to be completed with no end in sight. In October of 2016, while waiting for certification, they incurred 9200 dollars in charge back on 80 incidents. This is after the deadline was mandated, but no certification could be given to them to take care of these chargebacks. In retrospect, the year prior, they incurred 3 Chargeback for the same period of time. Because the certification process has been so long, they have been forced by Visa and MasterCard, to operate outside of the protection of the banks for fraud, not because they were non-compliant, but because the certification agencies were so backlogged, they could not perform their duties.
Short of taking on the business killing decision to not take plastic, these small businesses are forced to endure this cost of doing business, to keep their doors open.

For people engaged in online business, it is pretty essential to accept credit cards online. Online business owners should rate this scheme as among their marketing strategy to be able to cope with the demands of the stiff competition that this kind of business they need to deal with. With competition getting stiffer day by day, it is important for online merchants to explore all possible ways to increase sales and stay afloat with the competition.

 

Business owners should see the need to accept credit cards online with the fact that most if not all shoppers all over the world are now enjoying the shopping convenience using their credit cards. Many online merchants are now adopting this marketing strategy to cope with the stiff competition. Having to adopt this payment scheme is certainly beneficial to both shoppers and merchants.

 

This particular payment scheme is beneficial to shoppers from all walks of life in different parts of the world. Aside from the fact that they get to enjoy the shopping convenience of simply doing it right in the comforts of their room, there is also no more need to have as much as cash when you need to buy something of urgency. For shoppers, this is a big saving on both times for not having to hop from one store to another and savings on their cash for not having to payout right then and there when they need to purchase just anything imaginable.

 

Merchants regardless of their business genre also get lots of benefits having to accept credit cards online. This payment scheme makes their business more credible for shoppers to reckon with. It has also been proven to increase sales as most of the shoppers are enjoying the convenience of shopping.

 

For an online business to accept credit cards online, maintaining a merchant account is important. Hence, it is essential for online business owners to go choose the right bank which shall take the burden of having to process the credit card payment for your business. Hence, you need to have certain parameters in choosing where to open up your merchant account for you to be able to accept payment electronically.

 

One of the most important things you need to remember in dealing with this thing is the reputation of the bank where you shall have your merchant account. The amount which it shall charge you for such service should be taken with utmost care. You need not have to spend too much on this thing.

 

You should, therefore, deal with one that will not charge you beyond what is fair and just. Online businesses can now accept credit cards online without having the merchant account. This is most widely done with Paypal which has a higher rate for its service charge. This is why despite this scheme many online merchants still prefer to accept credit card payments thru merchant account.

 

Having this knowledge, it is hoped that most online business owners now see the need to adopt this payment scheme. Aside from keeping them abreast with the latest in modern technology it also gives them great chance to increase sales. Hence, it is essential to accept credit cards online.

Running a small business in the US is amazing. The freedom, the profits, being your own boss are several reasons more people are choosing this route. Yet, Americans have so many challenges in running their own business from the government to customers, that the headaches can be insurmountable. Some would hope that accepting credit cards for your business would not be a problem but an benefit for you, but it can prove to be a gigantic hassle

Here are several reasons for and against the accepting credit cards for your business.

The advantages of accepting credit cards in your business.
Increase your customer base: Your chance of bringing in more customers increases as you expand how you are going to let your customers pay for their purchases. Statistically, only 23% of all customers use cash to make point-of-sale purchases.
Bigger total purchases: Several studies of consumer behavior have proven that they are likely to spend more dollars when they use a credit card vs cash. Cash is real, tangible, and psychologically harder to part with. A credit card is just plastic and does not let you see the spending damage until you receive your bill at the end of the month.

Ease of use: Easy to use for both the customer and the business owner. It is easier to carry one single card than a large amount of cash. And for the business owner taking credit cards streamlines your accounting, inventory and other metrics of your business so sales are easier to track.

Using cards is safer: Who wants to carry a large sum of cash in their wallet or pocket and have something happen where it gets lost or stolen. It is not insured, and 99% of the time you will not get it back. Credit cards are guaranteed by the issuer against loss or theft. They can be canceled and re-issued with-in days with no financial loss to you.

The negatives of accepting credit cards for your business

There is an expense: Of any drawback to accepting credit card payments, paying your merchant expenses can be their biggest detriment. Monthly statements, Interchange and other processing fees add up. You may also have to pay fees for monthly charge minimums. There are also charges from PCI compliance that will be passed on to you.

Chargebacks: Consumers are protected with their credit card purchases and have the legal right to dispute charges made to their account. You may get hit with chargebacks if a consumer is unhappy with a purchase or dissatisfied with your product. This can happen without warning and your account could be frozen.

Fraud: You may be held liable by your bank and issuer for different types of fraud that may occur on their system. If fraudsters make multiple charges with fake or stolen credit cards then you could be out more than just the product that was “stolen” from your business
The bank may look to you for reimbursement if too many fraudulent charges happen at your business. Also, your account could be terminated by your processor. If this happens, it will be very hard for you to get another processing account. You will be blacklisted, so in a case like this, your business can suffer greatly.

The choice is yours….
Should you or should you not? If you are doing lots of transactions and lots of business, credit card acceptance is an easy choice. If you are a merchant with lower volume and smaller dollar purchases, then you must weigh the options carefully and decide if the costs of taking credit cards outweighs benefits.

There are many unfamiliar merchant services industry terms you may have never heard of before. Here are a few of the most important for you to know.

Authorization Fee: There will be times when the customer or the card are not present for your transactions. If you want to get your best rate, you will have to verify the cardholder’s address. Your merchant processor will charge you a flat fee per transaction for this verification. This may be a listed fee on your invoice or bundled into your rate.

Card association: The credit card association is a network of the issuing and acquiring banks that process the transactions.
Chargebacks: A cardholder has the right to dispute a charge on his statement within 60 days of the charge. The complaint will go to the issuing bank. Then a retrieval request will be sent by your bank and you will be asked to pay $10-$50. Make sure that your response is timely or you could face more fees or lose the transaction completely. If you have to give a refund, then you will probably lose the interchange fee from the original transaction as well as the sale.

Downgrades: If one or more of your qualifying requirements are not met and because of this your exposure increases, you could face a downgrade. This could result in a higher risk rating for you, and you will pay more to the merchant service provider. Common reasons for receiving a downgrade include not settling with in the required 2 days of initial authorization, missing data, invalid data, corrupted date from the swipe process and the absence of address verification on any manually keyed transactions.
Interchange fees: There is a fee called an interchange fee for the processing of each transactions.

You are charged different fees depending on the type of merchant account you have and how the transaction is sent over. This fee will cover the costs of getting the funds to your merchant bank and all of your billing information to the issuing bank.
Issuing Bank: This is the business that extends the credit to the consumer and offers them a payment card.

Merchant Bank: This is the financial institution that offers you a merchant account. They handle all aspects of the transaction from payment to the credit card processing itself.

Merchant service provider: This is the business that makes sure your business is set up correctly to handle the credit card transactions on both the front and back ends. They also serve as a liaison in communications with the card associations, processors, and your bank.

These are some of the most popular terms that are used in the merchant processing business arena.

In 2015, Barclays noted, that the United States was responsible for 47% of the worlds credit card fraud worldwide.  This statistic despite the fact the United States only accounted for 24% of the entire worlds credit card volume.

In 2014 54% of data breaches were related to data were related to identity theft.  Conversely, identity theft fraud creating fake credit cards is higher in the United States than it has ever been.   Here are some examples of the most highly publicized data breeches in recent years.
• Home Depot: 109 million records accessed.1
• JP Morgan Chase: 83 million records accessed.1
• Michael’s Stores: 3 million records accessed.1
• Staples: 1.16 million records accessed.1
• Domino’s Pizza: 650,000 records accessed.1
• Sony Pictures Entertainment: 47,000 records accessed.1
• Target: 40 million credit card numbers and 70 million addresses accessed.2
• Niemen Marcus: 350,000 cardholders impacted.2

EBay: 145 million records accessed.

What does all of this mean?  Well chances are, if you have shopped at one of these places, that your information has been compromised.  What do you do?  First thing you do is change all of your passwords for all of your banking, financial, and log in sites.  Any place that may have your credit card information.  Second thing to do is to subscribe to a credit monitoring site.  Set up alerts for your personal and business accounts that will let you know if someone tries to access your credit.  There are numerous companies that will monitor your credit for free or a nominal monthly fee.

What do you do if you are breached?  First thing is to alert the credit agencies. Inform them in writing that you have been breached.  Cancel all of our credit cards and have them reissued.  You may have to go as far as to change banking accounts, and financial investment accounts.  This will be a painful process for you, but you have to keep focused with the credit reporting agencies and very vigilant.  In some cases, you may have to find legal representation to work your case.

Identity theft is the biggest threat to everyone in the world’s online presence.  You cannot stop security breaches at major companies as we have detailed.  But you can protect yourself by monitoring and paying attention to your credit and your bank accounts.

 

What does the term card –not –present mean?  The card-not-present transaction is a payment card transaction that does not involve the physical presentation of a card by the cardholder for the visual clarification and examination by the merchants. In such a transaction the Cardholder and the credit card need not be present at a point of sale. It is good to note that, the absence of the card is the main consideration in the definition since the card holder may transact at a merchant store after physical view of the goods. Mostly, the CNP transactions are done through mail order, online purchase, and order or through a telephone order.

Mail order- the merchant receives the order through fax (email) from the customer. To transact, the customer sends his/ her credit card details but not the signature or the PIN to the merchant to and the goes on with the transaction. Mostly the processing occurs after the goods delivery.

Telephone order- Merchants receives an order through a telephone call and then asks for the details of the buyer’s credit card.

Internet Sales- The sales are made online and the merchant provide secure payment details that take the customers card details that are sent to the PSP (payment service provider).

The fraud in the card-not-present transaction

The CNP are among the major routes for credit card fraud in the USA. The CNP frauds pose major challenges to the merchant since it is hard for the merchants to verify whether the transactions are made by the actual holder of the credit card. The authorization of the purchase does not require the presence of the cardholder nor does it require the PIN code or signature verification. Thus, the fraudster may steal credit card, or duplicate its information and transact using the credit card.  This is one reason why some people complain about wrong data in their credit report whereas their card information reflects in their transaction.

Who is reliable if the CNP fraud is reported?

When a fraudulent CNP transaction is noted and reported, the acquiring bank (issuing bank) hosting the merchant`s account takes the accountability of the of the transaction for accepting the money without keen verification of the card legitimacy. The high-risk rate for the CNP transaction is the reason why most of the card issuers in the USA charge high transaction fees to the merchant to cover the potential fraud cases.

Did the October 1st liability shift affect the CNP fraud liability?

In a short answer, I would say no.  The liability shift only applies to the credit card transaction that occurs at the point of sale where the transaction requires physical presentation of the credit card.

Therefore, merchants who make sales online in place of in-store purchase don’t have to worry about the liability shift that took effect on Oct 1st, 2015. The EMV chip technology is not applicable to online sales as it needs to be physically read by a payment terminal.

Note that the CNP has its control measure to prevent the frauds.