Posts Tagged ‘Payment Processing’
Friday, July 30th, 2010
One of the reasons hackers breach direct marketing merchant sites is that’s where the card numbers are stored. Cardholder data is kept for a variety of reasons including: 1) providing customer service, 2) processing re-occurring transactions and 3) responding to chargebacks (representments). Fortunately, Visa recently clarified its Rules and advised merchants that they no longer need the entire 16-digit card number to cure a chargeback. Instead, merchants may use other clarifying information in addition to a truncated card number, in responding.
Visa has also mandated that issuers accept these truncated numbers. This is welcomed news for merchants and unless card numbers are absolutely needed, they simply should not be stored—helping to lessen the burden of PCI compliance. PCI compliance requires card numbers to be encrypted (if they are stored).
This does not eliminate an e-tailer’s responsibility to comply with PCI, as they are still processing card data; it merely makes the job easier. Further, direct marketers how are processing re-occurring transactions should consider utilizing a gateway that stores the data for them in an encrypted fashion.
Many gateways have re-occurring payment modules, which allow you to input the card data and to bill that same card on a regular basis, yet encrypts and stores that data in a PCI-compliant format. Since most e-tailers utilize a payment gateway, it behooves you to inquire if your gateway can perform this service for you. Doing so further allows you to concentrate on selling and eliminates enormous enterprise risk. Risk that could lead to substantial fines, the loss of your merchant account and a listing of your data on the MATCH file; further curtailing your ability to process transactions.
Think about the reasons you are storing card data. Do you really need to?
Ken Musante is president of Direct Response Payments in Eureka, Calif. Contact Musante at (877) 476-0570 or at kenm@eurekapayments.com.
Tags: Advertising, drtv, Electronic Retailer, Payment Processing, retailers
Posted in Advertising, Direct Response, Electronic Retailer, Payment Processing, Support Services, direct marketer, fulfillment | 3 Comments »
Tuesday, August 4th, 2009
Don’t take the initial setup phase for granted - Clients sometimes rush or don’t put enough effort into the initial setup phase of the fulfillment engagement. This can lead to miscommunications and mistakes that have long-term ramifications. It’s especially important to communicate who all of your vendors are, and make sure all offers and file exchanges are thoroughly tested.
Understand how the decline cycle works - Companies who are outsourcing their payment processing and fulfillment need to have a clear understanding of how the decline cycle works. New clients who don’t understand the difference between soft and hard declines, or that multiple charge attempts are being made always surprise me.
Make sure your refund policies are clear and reasonable - I see many situations where clients try to save money by imposing strict or unclear refund policies. These can lead to increased chargebacks and customer service calls, as well as BBB and FTC complaints.
Consult with your fulfillment company regularly regarding packaging - Packaging is very important when it comes to freight costs. Your fulfillment company can help you come up with the best packaging to keep your freight costs down. Remember, once a package is above one pound, an extra ounce can push you to the next weight tier.
Work with customer service to plan for call spikes and backorder situations - Avoid backed up call queues and long hold times by proactively planning for call spikes and backorder situations. Fulfillment centers don’t have infinite numbers of customer service agents, so you need to work with them in advance to make sure that staff is properly allocated. In backorder situations, sometimes it is better to outbound clients or send them e-mails to let them know what is going on and thereby reduce inbound customer service calls.
Be prepared for dry spells and unanticipated storage costs - Many DRTV marketers think they will never have a dry spell and are often caught flat footed when retail orders dry up or campaigns slow down. If they have over-ordered inventory, they can end up with higher than expected storage costs, which can definitely impact their bottom line. My advice is to develop a contingency plan and build adequate cushion into your budget for storage.
Tony Sziklai is president of Moulton Logistics Management.
Tags: blog, Direct Response, drtv, Electronic Retailer, fulfillment, marketers, marketing, moulton logistics, packaging, Payment Processing, storage, tony sziklai, warehouse
Posted in Advertising, Direct Response, Infomercials, Marketer, Online, Payment Processing, Retailer, Support Services, drtv, e-commerce, fulfillment, technology | No Comments »
Friday, July 31st, 2009
When it comes to the hard declines that almost every retailing campaign is going to endure, a forecast of bad debt is always established prior to launch to gain an idea of what the potential profitability will be. For the receivables themselves however, would a competent forecast in order to derive the ultimate work strategy towards recovery be as useful? The answer: Absolutely.
Measuring factors such as demographics, geographies, socio-economics and applying other predictive probability metrics is going to allow the proper strategy for both the lettering and calling to be as effective and impactful as possible. More importantly, if you can say that ten times fast you can surely follow the rest of the formula!
As an example: If I were to take a group of debtors that owe an average balance of $150 each and break down their respective state residence and compare that to historical data on the same type of balance within the same geographic location, I now have a better understanding of who will probably pay what over what time frame. If I further my analysis and add other probabilities such as median income and median debt to income ratio within that geography I can now begin to create a tier-level effect and a resulting rank ordering of a portfolio of debtors. Working that ranking allows more recovery, faster and smarter.
Where this all sounds potentially overwhelming and even almost unnecessary to the untrained eye, I assure you it is a very effective approach towards maximizing recovery of the receivables.Â
A $150 bill may not sound like much, but multiply that by several thousand debtors who have hard declined your campaign and I would imagine a very mathematical, almost scientific approach, towards hundreds of thousands of dollars owed becomes much appreciated. It can make the difference between a 10 percent return and a 20 percent return.
My question always is, if we take so much time to test, analyze and measure the campaign prior to making the bulk of our advertising, manufacturing and operational investment, why don’t we approach the money owed with the same cautious and calculated approach?Â
Come to think of it, this is America. We see the caloric value of the cheeseburger is 1270 but we order and eat it anyway! I say we change our thinking just a little bit; maybe we can shed some pounds and recover more money all at the same time?
When choosing an agency to partner with for the recovery of your receivables, make sure to inquire about the quantitative decision making tools they use or don’t use for their work strategy.
Louis DiGioia is a leading expert and analyst for the recovery of consumer receivables. He can be reached at ldigioia@retrievalmasters.com or 914-592-0055.Â
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Tags: blog, campaigns, consumer receivables, debtors, Electronic Retailer, louis digioia, marketing, Payment Processing, technology
Posted in Advertising, Direct Response, Marketer, Online, Payment Processing, Research, Retailer, Support Services, e-commerce, technology | 2 Comments »
Thursday, April 30th, 2009
Brian McGarry, national sales manager of TransFirst, welcomes Dillon Craig McGarry to the world. Congrats!
Tags: baby, brian mcgarry, Payment Processing, Photos, transfirst
Posted in Direct Response, Just for fun..., Marketer, Online, Payment Processing, Photos, Support Services, e-commerce | 2 Comments »
Thursday, April 2nd, 2009
Payment processing is often overlooked as a source of revenue creation and marketing intelligence, two of the most important concerns for merchants facing the current economic conditions. By looking at payments and processing as an opportunity to improve operations, merchants can increase their revenue by reducing declined authorizations, offering the right mix of payment options and focusing attention on their most profitable customers.
Law #1 - Don’t Concede to Commodity
Merchants scrutinize decisions about order management, fulfillment and customer service based on the ease with which they fit into their operations, show positive ROI across shorter-cycles and limit the additional infrastructure needs upon the organization. All payment processing decisions should be looked at in the same manner. Looking through the “lowest-cost†lens leads, in part, to minimized expectations that a processor can add value to the business. Choosing a low cost solution without understanding the value returned by all options is a luxury most merchants cannot afford in any part of their business.
Law #2 - One Size Does Not Fit All
Merchants today have more choice than ever when it comes to managing payments and choosing the platforms through which they run. Simply put, when selecting a payment processor and platform, “better for you†is more important than “most popular.†What the merchant sells, how it sells its products or services and the medium through which most of the payments are received should always dictate how a merchant processes those payments.
Law #3 – Don’t Get Tied Up in a Bundle
“Interchange†“assessment†“downgrades†— terms associated with payments transactions are abundant and confusing. If the cost of processing meets the bottom line need, it’s easy to think the specifics aren’t important. They are, and they should be to the processor as well. Merchants should be sure to monitor and audit where their money is going, which will help establish processing benchmarks as well as reduce or eliminate unwarranted processing charges.
Law #4 – All Payments Are Not Created Equal
Merchants should choose platforms that reduce declined authorizations, improve re-authorization success rates, lower the percentage of refunds, and help facilitate easy adoption of competitive service differentiators, such as alternative and international payments, which expose products and services to new consumer audiences and new revenue opportunities as a result.
Law #5 – Don’t Ignore Alternative Payments
The current economic conditions are fueling consumer adoption of alternative payments. By offering an alternative payment method such as PayPal, whose 70 million active accounts produced nearly $16 billion in total transaction volume in Q4 2008, merchants can take advantage of those accounts, which contain almost $3 billion in stored value that is spent every two weeks.
Law #6 – Watch out for Connection Overload
Rapid advances in retail platforms over the last decade have left many retail systems at the point of overload. A payment engine should be a major component in streamlining operations as they relate to all other business cycles in a merchant’s operation. The single point of failure for many retailers is that there are too many points of failure. By choosing a processing platform that connects directly with networks, merchants can dramatically minimize these points of failure.
These seven laws can all be reduced to one golden rule of payment processing: the more holistically merchants look at the value of payments, the more value-oriented, and less commodity-driven, their decisions will be.
Jason Pavona is vice president of product management for Litle & Co.
Click here to view Electronic Retailer’s 2009 Payment Processing Guide featuring further insights from Jason Pavona and other leaders in payment processing.
Tags: credit cards, Electronic Retailer, jason pavona, litle, litle & co., merchants, Payment Processing, payments, paypal, processors, transaction
Posted in Direct Response, Electronic Retailer, Marketer, Online, Payment Processing, Retailer, Support Services, e-commerce, technology | 2 Comments »
Thursday, January 15th, 2009
There is no question about it—the world is going through an economic downturn. Consumers are cutting back on their spending and businesses are facing tough decisions, perhaps the strongest signal for a stormy period to come. According to Forrester, a leading technology analyst, “Risks have grown that the U.S. and other major countries will experience a longer and deeper recession than we had expected. If so, the hi-tech market would see several quarters of declines in purchases, not just two or three quarters with little or no growth in late 2008 and the first half 2009.â€
With these findings in mind, what can e-commerce merchants do to keep their e-business boat afloat during times when budget cuts and financial declines are the daily routine? What should they particularly focus on to keep sales revenues at a decent level? The following are five navigation rules by a payment service provider for sailing in the e-commerce world in 2009.
Rule 1 – Increase your customers’ loyalty
This is the time when customer loyalty becomes more crucial than ever, as end-users will be acting very cautiously in regards to their spending and will most likely prefer to go back to a website with which they feel familiar and comfortable rather than to a new vendor. Knowing your customers and monitoring their purchasing behavior can turn your online business into a highly profitable operation.
VIP customer tools for merchants are able to differentiate between their “good†customers that should preferably be allowed higher purchase amounts and small, occasional or new end-users who should be limited to only certain purchase amounts. Having a VIP customer tool is a highly beneficial decision—it acts as a supporting device, allowing you to define the profitable customers VIPs and increase costumer loyalty.
Rule 2 – Expand your sales reach
Targeting new end-user markets is always significant when trying to keep revenue growing. The ideal payment processor should provide you with all major currencies; while at the same time allowing processing and settlement currencies to be kept identical, allowing you maximum processing flexibility. A payment service provider that provides all major currencies—while keeping processing and settlement currencies identical—allows you maximum processing flexibility. In addition, your PSP should have sophisticated risk management, enabling traffic from high-risk countries typically blocked by acquiring banks.
Rule 3 – Secure your online payments
As you enter 2009, you should be aware of the risks involved with acquiring a bank, no matter if your traffic is local or international. Finding the connected payment-service provider that has an array of acquiring banks in its portfolio and matching it with the specific processing needs of e-commerce operators is what makes the crucial difference. Any payment processor that offers you a solution with more than one merchant account with several acquiring banks under one roof spreads your online risks.
Rule 4 – Reduce payment processing costs
Your payment service provider can help you identify specific activities that can lower costs. They should offer direct merchant accounts with solutions that focus on accurate fraud prevention. In other words, they need to differentiate between suspicious transactions that will eventually lead to profitable sales and those that will lead to fraud and loss.
Thorough and accurate fraud prevention is a crucial factor in achieving high sales goals. Blocking fraudulent transactions and approving legitimate transactions while converting them to profit is an example of this. At the end of a processing day, the fraud prevention tools aim not only to increase sales, but also to prevent unnecessary chargeback fees and fines.
Rule 5 – Increase your traffic conversion
With an active online operation, every e-merchant seeks tactics to increase traffic. Your online payment service provider can play a crucial role in increasing online traffic conversion. Instead of employing a rough scrubbing system, which in most cases, cuts down valuable traffic due to a resolute filtering policy, a “Traffic Management†tool analyzes the traffic most accurately and improves the approval ratio of profitable transactions.
Well-established partnerships with leading acquiring banks allow your PSP to control incoming transactions by splitting them between the banks according to pre-configured ratio parameters and country attribution. This assists you, as online operators, in receiving higher approval ratio, thus in receiving higher sales conversion.
Sharon Gal Franko is SafeCharge’s director of marketing and sales.
Tags: consumers, conversion, e-commerce, Electronic Retailer, fraud, merchants, online shopping, Payment Processing, recession, safecharge, secure payments, sharon gal franko, traffic
Posted in Marketer, Online, Payment Processing, Research, Retailer, Support Services, Web Analytics | No Comments »
Saturday, October 25th, 2008
One of the most important dilemmas facing e-commerce merchants today is which shopping-cart solution to choose for their web stores. The sheer number of options can be daunting—a recent Google search on “online shopping cart†turned up 12.7 million hits, many of them offering shopping-cart products of their own. No wonder it’s a tough decision.
A good way to narrow the field is deciding what kind of cart is most appropriate for your needs: open source (available at no cost) or proprietary (available for a fee). There was a time when many in the e-commerce world frowned on open source products. Some said they were difficult to install and configure, while others bemoaned their lack of available features and technical support. Fortunately for online entrepreneurs on a budget, those days are all but gone.
The latest open source shopping carts offer pretty much everything you’d find in a proprietary solution, provided you have the basic technical expertise to install and configure them. Most have become much easier to install than previous offerings and include numerous developer contributions for increased features and customization. Technical support tends to come in the form of user forums, which at least for the most popular products, are heavily trafficked and often yield answers in a matter of minutes.
The grandfather of open source shopping carts and still among the most popular is osCommerce. In operation for more than eight years, it now claims 176,100 storeowners and offers 4,700 free add-ons. osCommerce is compatible with all PHP 4 versions and features automatic browser-based installation and an object oriented backend.
Another popular choice is ZenCart, which was initially based on osCommerce code but has developed dramatically and is a fully independent product. Known for its long list of added features, ZenCart is PHP-based and uses a MySQL database and HTML components. Its frequently praised gift certificate module allows merchants to create, distribute and manage digital coupons.
An alternative to these two somewhat similar options is Ubercart, a shopping cart product built on top of the leading open source content management system, Drupal. Designed to take advantage of Drupal’s core and other contributed systems, Ubercart gets high marks for its flexibility and intuitive layout.
These are just a few of the open source shopping carts available today. All three are free under the GNU General Public License.
Which of these (or other) open source products would be best for a particular merchant’s online store? That depends on individual business needs. Factors like design flexibility, search engine friendliness, reporting and backend functionality are important to weigh when choosing between products. Most product sites include demos and lists of live sites running the software, which can also help differentiate between competitors.
Are you uncomfortable with the technical requirements of setting up a shopping-cart application? It’s possible that open source solutions are not for you. Proprietary programs cost money, but generally offer configuration, design and support services that can take the headache out of launching a store for the less technically inclined. For others—especially smaller merchants with limited startup budgets—open source solutions can provide precious cost savings at a crucial stage of store development.
Erin Kroll is the PR/VAR marketing coordinator e-onlinedata.
Tags: e-commerce, e-online data, Electronic Retailer, erin kroll, merchants, osCommerce, Payment Processing, shopping carts, Ubercart, ZenCart
Posted in Marketer, Online, Payment Processing, Retailer, Support Services | 2 Comments »
Wednesday, October 1st, 2008
Everybody’s talking about Payment Card Industry (PCI) compliance and, if you’re an e-commerce merchant, you probably know by now that you have to bring your online store into compliance with the PCI Data Security Standard (DSS). But what does that mean to you? There’s a lot of confusion about what, exactly, you have to do to achieve full compliance.
One big myth that’s spreading among merchants is that payment gateway, shopping cart or web host compliance alone is all it takes. Get that established and you’re all set. Wrong! That’s a common misconception—and a potentially expensive one once PCI starts issuing fines and penalties against the noncompliant.
Think of it this way: if your house has four doors and only three of them are locked, is it secure against intruders? Of course it’s not. Any one of those locks is a great start, but no more than that. Until all four doors are locked up tight, that house will never be secure. The same goes for your e-commerce site. A compliant payment gateway, shopping cart or web host by itself is good to have but, without compliance in all areas, you’ve got a virtual unlocked door. With a great big welcome mat for intruders just outside.
The good news is that there are companies out there that can help. Just as there are websites that can guide you through completing and filing your taxes, there are many—like those of qualified security assessors (QSAs) and approved scanning vendors (ASVs)—that can walk you through the necessary steps to certified PCI compliance. It’s a complex but ultimately understandable process.
The Road to Compliance—All Gain, Little Pain
The PCI standards are pretty clear. Here’s what they are and some actions you’ll have to take to meet them:
• Build and maintain a secure network: take steps like installation and maintenance of firewalls, and ensure that vendor-supplied default passwords are changed.
• Protect cardholder data: be able to show that you’re protecting stored cardholder data and properly encrypting it for any transmission through networks.
• Maintain a vulnerability management program: use and update anti-virus software and ensure that all systems and applications are secure.
• Implement strong access control measures: take steps to definitively restrict internal access to cardholder data to need-to-know areas/personnel, establishing unique passwords and other identifiers.
• Regularly monitor and test networks: establish a program for testing all security systems and processes; monitor and keep records of all tests run and all access to networks and cardholder data.
• Maintain an information security policy: develop a policy and keep it updated as business conditions change.
Easy, right? Okay, it may seem like anything but. No worries—just take a breath and do what it takes to assess where you stand.
Here’s What You Have to Do (more…)
Tags: , e-online data, Electronic Retailer, erin kroll, merchants, payment card industry, Payment Processing, pci, pci compliance, pci data security standards, vendors
Posted in Marketer, Online, Payment Processing, Retailer, Support Services | 3 Comments »
Monday, July 21st, 2008
Thinking about adding electronic processing capabilities?
There’s a lot you should know.
There are countless reasons why a business should add credit card and electronic payment processing capabilities: transactional speed, convenience, increased customer satisfaction, improved cash flow, views into sales data and more. But perhaps the most important consideration is the sheer volume of consumers who use non-cash methods as their primary form of payment.
In 2005, credit card and electronic transactions accounted for an overwhelming $3.4 trillion of total U.S. payments, according to The Nilson Report. That’s 50 percent of all transactions nationwide for that year. More recently, Visa USA estimated that nearly 60 percent of U.S. consumers aged 18 to 25 use cards as their primary payment method.
So while the reasons for adding payment processing are clear, understanding all your options and which are right for your business is far more complex. This article will give you the information you need to get started in setting up payment capabilities for your business, and it will provide some of the essential details you need to consider when selecting a provider.
How Payment Processing Works
Some form of the modern credit card has been in use since the late 19th century, mostly as department store charge cards representing lines of credit. Things have changed and today, the step a merchant needs to take in order to accept credit card payments is to establish a merchant account with a bank or third-party payment provider. Once your account is live, the transaction process generally works as follows:
1. A customer presents a credit card for payment.
2. By swiping the credit card through an electronic point-of-sale (POS) transaction terminal, typically provided by the bank or payment provider, an electronic request is submitted to the processing network for authorization.
3. The processing network receives your electronic request and determines if the cardholder’s account is valid and if the funds are available. If so, a response called an “authorization code” is transmitted, guaranteeing your access to the funds.
4. A receipt is then printed for the customer using the POS terminal or your computer. The customer then signs the receipt and, for their part, the transaction is complete.
5. At the end of the business day, a merchant will electronically submit a final request to the processing network to “capture the funds” for all authorized transactions in a given day. This process is referred to as settlement. Once approved, a response is generated to your electronic terminal or computer.
6. From there, the funds associated with the batch you settled are deposited electronically into your business bank account, usually within 48 to 72 hours. Typically, the rate and any fees paid to your merchant account provider are deducted from your account at the end of the month.
7. At the end of the month, your merchant account provider will send a statement to you, detailing the credit card activity for the month and the associated fees you’ve been charged.
This process describes what happens in a traditional retail, or “brick and mortar†sales environment. For Internet and e-commerce merchants, the set-up process requires a few additional steps. (more…)
Tags: credit card, e-commerce, e-online data, Electronic Retailer, erin kroll, merchant, Payment Processing, pos, pr, visa
Posted in Electronic Retailer, Online, Payment Processing, Support Services | 5 Comments »
Wednesday, December 19th, 2007
As a merchant account provider, there’s nothing more heartbreaking than seeing a high-potential campaign coming to an untimely death. Anyone who’s survived managing a successful DR campaign can offer some sage advice about running the next one. Most of these lessons learned involve some variation of an “If I’d only…†story. Since there are no “do-overs†in DR, you better make the best of each and every opportunity. The trick then is learning what to look for when the next one presents itself. To that end, I’d like to share one of the more common pitfalls encountered by untested DR marketers in hopes of helping others avoid similar fates.
Imagine you just launched a homerun direct response campaign. You’re getting a 4:1 MER (media efficiency ratio). You have thousands of units flying out of your fulfillment house. You’ve just spent a million dollars for more media and are getting ready to order more units. Everything’s running perfectly. STOP. Your local business bank, which you’ve banked with for years and gave you a great deal on your merchant account, just notified you that it placed a hold on that transaction because you have exceeded your merchant account limit and it is uncomfortable with your recent merchant processing activity. WHAT?! (more…)
Tags: cambridge commerce, Direct Response, Payment Processing, travis gomez
Posted in Direct Response, Infomercials, Marketer, Payment Processing, Retailer, Support Services | 2 Comments »
