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What Exactly is a Contactless Payment?

The modern credit card industry and credit card processing began in the 1950s, and the first credit cards were simply a platen upon which a number was stamped so it could be transferred to a carbon paper receipt through the use of an imprinting machine. These receipts were then “deposited” through merchant accounts to serve as records of transactions.

These machines formed the foundation of the credit card payment system for many years until electronic payment systems made it possible to read information stored on a magnetic stripe on the back of each credit card. Although manual payment machines are still in use, banks charge more to process manual transactions, which makes electronic systems more economical.

Now, the industry is ready to take the next step with a process called “contactless” payments. The new chip and PIN regulations and upgrades for credit card processing equipment and merchant accounts will make it possible for cards so equipped to broadcast an encrypted signal when placed near a machine designed to read that signal and process a transaction.

The card and the machine never need to come in contact with each other. This is why the system is called “contactless.” A second type of contactless payment system makes use of a design called a QR code. QR stands for “Quick Response.” It is a symbol unique to a certain combination of information that can be “read” optically with the use of a camera or specialized scanning equipment. To make a payment using this system, a merchant can provide a customer with a code unique to their transaction, or the customer can alternatively provide their account identity with the QR code in much the same way they provide the same information with a credit card.

The reason this kind of contactless payment system is growing so fast is because it is possible to integrate QR codes with mobile devices as easily as snapping a picture or putting the phone viewing screen in range of an optical scanner. Because the information is changeable, it also means that each transaction can be keyed to a particular customer, making fraud and inaccurate transaction records nearly impossible.

These kinds of payment systems are generally lauded for their speed, but merchants and customers are increasingly finding the enhanced security features of such payment devices are worth the extra expense and the shallow learning curve as businesses grow used to using the new card readers, optical devices and are comfortable with the use of a customer’s mobile phone as the transmission device for payments, coupons and other kinds of business-to-customer interactions.

How Smart Chips Will Make Electronic Transactions More Secure

For the typical business person who runs across fraudulent transactions involving credit cards, credit card processing with smart chip technology adds an extra security measure to purchases. When customers pay for purchases with credit cards featuring embedded chips, merchant accounts are protected because all purchases receive special validation codes. Once the card produces a validation code, fraud is less likely to occur because the code is unique and one-of-a-kind. With smart card technology, another transaction cannot have the same validation code.

Customers Must Enter Pin Numbers or Sign for Transactions

While it is true that some merchants require signatures whenever customers use credit cards, most business owners currently do not ask for signatures unless the purchase amounts exceed certain limits. But, with the new technology centered around embedded chips, all credit card processing via card readers require either pins or signatures. Customers who feel uncomfortable using pins when making credit card purchases may have options to sign.

Card Readers May Enable Customers to Bypass Pins

Some card readers accommodating cards with embedded chips have options to bypass pin requirements, while some banks issue chip-and-signature cards that do not require pins. Many credit card users never use pins. There is no reason to use a pin with a credit card unless the consumer wants a cash advance featuring a high withdrawal fee and mandated interest payments. In Europe, some card readers require pins, so Americans traveling abroad may want to make sure they know their credit card pin numbers for credit card processing purposes. Another option is to use debit cards instead of credit cards.

Why Smart Chips are Better than Magnetic Stripes

Consumers may wonder why their old-fashioned debit and credit cards with magnetic stripes need upgrades. Traditional cards with magnetic stripes are more vulnerable to exploitation. While the newer card readers that accept credit and debit cards with embedded chips do not guarantee freedom from identity theft or fraud, the extra protection makes a difference.

Cards Featuring Smart Chips Have Good Track Records

Credit and debit cards featuring smart chips are gradually replacing cards with magnetic stripes because smart chips offer merchant accounts and customers better security measures. According to statistics generated by countries already using smart chip technology, track records show that fraud is less prevalent when consumers use cards with smart chip technology. For this reason, cards featuring smart chips help protect identities and stop fraudulent transactions.

What To Do With All of Your Company’s Receipts

As the electronic age has started to take over more businesses, much of the information that used to be stored on paper is now done so on hard drives and other devices. However, even with this transformation within business, most still have numerous receipts from credit card transactions. With the number of receipts still growing, many companies are looking for ways to store or dispose of receipts.

How Long Should Receipts Be Kept?
Customers who pay by credit or debit card have up to 18 months to dispute any charges on their bill. Therefore, it is imperative that all credit card processing receipts be kept this period of time at a minimum. This can become important when a dispute arises, because if a merchant does not have the receipt as proof of the purchase, the credit card company can side with the customer and force a refund to be paid. Likewise, the credit card company can also debit a merchant account for a charge-back.

Receipt Storage
Credit card receipts contain sensitive information that identity thieves can use to make illegal purchases on the accounts of unsuspecting customers. To guard against this, most companies have very strict rules when it comes to receipt storage. For companies that keep hard copies of credit card processing receipts, the Federal Trade Commission recommends storing them in a locked room or file cabinet. In addition to this, the number of employees who have access to the information should be limited to management personnel only. Companies that keep digital files should make sure the files are not only encrypted, but that parts of the encryption keys are given to two or more employees. This way, no one person can access the file alone.

Receipt Destruction
Businesses with merchant accounts, after having kept receipts an acceptable period of time, often decide it is safe to have the receipts destroyed. Just like storage of receipts, the Federal Trade Commission has established general guidelines for receipt destruction. According to the FTC Disposal Rule, companies with merchant accounts should at a minimum shred all receipts, and in most cases burn them as well. For those with digital files, using a security program that deletes and rewrites the file until it is unrecognizable is recommended.

By following these guidelines, companies with an excess of receipts should be able to reduce their vast amounts of information while keeping customer’s sensitive information protected.

The Ins and Outs of Your Credit Card Processing Bill

When businesses open merchant accounts for credit card processing, there are many ins and outs to be learned. Aside from learning how to operate their POS system, they must also learn about the fees associated with the bill. While it may seem overwhelming, it is in fact relatively simple to understand by asking a company representative for explanations to various terms.

Start Up Fee
Also known as an annual fee, this covers the administrative costs associated with the merchant account. Generally, these range between $25-$50 and cover the costs of starting the account as well as the hardware and software used for payment processing. While many companies charge annual fees to merchants, others charge no annual fees in an effort to attract new businesses.

Discount Rate
While sounding like a business is receiving a discount on its services, this fee is actually the percentage of the transactions as charged by the bank. Since virtually all credit card processors have their own rates, shopping around for the lowest per transaction rate is crucial to most businesses.

Transaction Fee
One of the most important fees on any credit card processing bill, the transaction fee is the amount taken for each transaction. Usually these can be shown as a fixed fee of 10-25 cents per transaction on the bill, and like many other fees businesses should look around for the best rates when examining merchant accounts. For businesses that process a high volume of transactions each month, the fee usually goes down as their monthly purchasing volume increases.

Termination Fee
All contracts for merchant accounts have clauses that allow for a business to end the relationship. However, when doing so a termination fee is almost always charged. A standard within the industry, termination fees can be calculated as either a flat fee or an amount based on how many months are left on the contract. As with other aspects of these agreements, businesses should shop around for the best deal. As more businesses have started to balk at these fees, some processing companies now charge no fees for early cancellations and don’t require businesses to sign contracts.

While understanding credit card processing bills may take some time, eventually the terms associated with them will become as familiar as those on any other statement. By shopping around for the best deal, there will be few if any surprises when the next bill arrives.

Protecting Your Business Against Credit Card Fraud

The number of credit card fraud cases are increasing throughout the world. There are steps you can take to reduce your risk against credit card fraud and other crimes. Protect your merchant accounts from and credit card processing problems by using strict hiring practices and performing background checks on employees. Perform an additional credit check on employees who handle cash.

Credit card processing fraud is also found in customer returns. Never give a customer cash for their returns. You can offer credit, or authorize the money to go back directly into the credit card account. Establish strict guidelines for handling cash and credit cards on all merchant accounts. If you have an online business, then ensure you have security software that will protect you from cyber-attacks.

Purchase Inventory Software

There are excellent software programs that will help you manage your inventory. This will help prevent theft from employees and help you order new inventory with ease. A large number of retail stores rely on surveillance cameras to keep theft to a minimum. Shred all documents that have customer’s credit card information. Thieves often steal business trash to obtain credit card numbers for fraudulent activities. Go over the business finances on a regular basis and look for suspicious activity.

Educate Your Staff

Train employees to make every customer show a form of identification with every credit card purchase. This can reduce the number of fraudulent cases in your business. Employees should be taught to recognize when identification does not match the credit card. Be sure to report credit card fraud to your local law enforcement agency. If fraudulent activity occurs with your online business, then contact the department for Internet crime reporting. Your business can lose thousands of dollars each year to credit card fraud. The most frequent source of this type of fraud is credit card abuse.

Tips for Preventing Fraud

Some forms of fraud come from a lack of security at your business or online. Keep your personal and business accounts separate. Do not give your company credit card number over the phone if you are not familiar with the business. Untrained employees make your business vulnerable to credit card fraud. Trained employees will be your best defense against fraud. Look for training resources online to stay ahead of credit card fraud. Purchase business insurance that will cover your damages when you become a victim of credit card fraud.

How to Know if You Have a Good POS System

A good POS system can make running any business easier. Whether it is a restaurant, clothing boutique, or other business, a POS system can make credit card processing quick and easy for both businesses and customers. However, to make sure a business has the best possible POS system, there are several factors to consider.

Easy to Use
Before opening merchant accounts, most businesses examine several POS systems to determine which will work best for them and their customers. Most companies will allow merchants to test their systems, and the most reputable companies will offer demonstrations from their sales reps. Some systems have more controls and functions than others, thus allowing service businesses and restaurants to add gratuities to their POS systems. As a rule of thumb, if a system seems confusing to a business and its employees, chances are customers will also feel the same way.

Strong Customer Support
No matter how good a POS system is at credit card processing and other transactions, inevitably problems will arise. Whether it’s a software issue or broken equipment, it’s vital to have customer support that is there 24/7 and has enough experience to handle the most difficult emergency situations. Some companies that open merchant accounts skimp on customer support, thinking they will rarely if ever need it. However, all it takes is one breakdown with the system for them to realize just how important that support is to their business.

Pay-As-You-Go Pricing
While larger businesses often do not hesitate to make a large upfront investment once a POS system is chosen, smaller businesses and those just starting out often prefer to have systems that can be paid for on a monthly basis. However, some of these systems can have cancellation fees and other costs associated with them, so businesses interested in these systems should always ask about contract terms before any final agreements are reached.

Reporting Capabilities
The best POS systems not only allow for excellent processing of credit and debit cards, but also allow business owners to run reports that give them additional data on their business. Reports on profit margins, returns, sales, and more can be added benefits of a POS system.

Business owners who research and test various POS systems are often able to find ones that not only fit into their budget, but are also easy for employees to learn as well as for customers to use.

How Does an NFC Payment Work?

These days, smartphones are more technologically advanced than ever. However, one of the most common features available in many devices over the past few years is NFC. Also known as near-field communications, this is a technology that allows a smartphone to be used to be paired up with another Bluetooth device for sharing content or mobile payments made directly from a smartphone. It is often unclear just how NFC works, but an explanation can bring about understanding of this important technology.

First and foremost, in order for NFC to work, devices must include an NFC chip. In terms of mobile payments, a user can store his or her credit or debit card information in a wallet function of their phone. When making a purchase, the user must ensure that they have merchant accounts and that the store accepts mobile payments. There are various types of mobile payments being used today – Apple Pay is available for the iPhone 6 and iPhone 6 Plus, Google Wallet is for Android and Softcard is available multi-platform for Android, Windows Phone and BlackBerry.

Many popular retailers accept mobile payments via NFC on smartphones, such as Macy’s, Target and Walgreens. Although there are notable concerns that the technology may not be the most secure, hacking is difficult due to the way the mobile payment system works. This is largely because certain systems require a passcode or fingerprint scan when the payment is made, which is the only way a transaction is accepted. In other words, if a person has his or her iPhone 6 stolen, the thief would not be able to make a payment with the device via Apple Pay because the fingerprint wouldn’t match that of the actual owner. Therefore, credit card processing would not be successful.

In addition to actual payments being made via NFC with merchant accounts, users are also able to store rewards cards, coupons and other content on their smartphone. This means that when the individual is shopping, he or she can access a card digitally and scan it to gain reward points. Items such as airline boarding passes can also be stored digitally, which makes things more convenient as they are right at the person’s fingertips on their smartphone.

Essentially, making mobile payments through NFC technology is something that is only growing. Eventually, most users will rely on it as a means to make purchases. Perhaps one of the best aspects of the technology is that if a person leaves their home and forgets his or her wallet, it would still be possible to buy items simply via their smartphone.

The Basics of Starting a Business

Starting a business doesn’t have to be overwhelming. There are some steps to take that tremendously increase the odds of success. Turn ideas into demand, take care of legal and regulatory obligations, as well as caring for customers and employees is important. However, a critical step is to establish merchant accounts and associated credit card processing capacity. Without credit card processing, a business is shut off from a vast and constantly-growing revenue source.

Turn Idea Into Demand
Many people starting a business have ideas, yet new businesses often fail. The trick is to turn those ideas, services and products into demand. Here is where appeal to emotion and style becomes important. Note that highly successful businesses such as Apple often generate continued demand for their services through continued appeal to a key market demographic, savvy marketing and delivering quality products.

Take Care of Legalese
Permits, licenses and regulations will vary with the location and nature of the business. It is very important that a business owner take care of all such paperwork prior to starting operations. An attorney or accountant is crucial as business law is complex and at times counter-intuitive.

Managing Customer and Employee Concerns
When starting a business, two groups of people will determine its success or failure. Customers and employees. Though an individual customer or employee is unlikely to have tremendous bargaining power with the business owner, bad news and poor reputation can spread and is hard to overcome. Large businesses might overcome poor employee opinion or harsh customer reviews be levying their strengths, pricing power and, in some cases, importance in providing critical products. Small businesses don’t have that leverage and therefore must take care to ensure that customers and employee concerns are addressed promptly and competently.

Credit Card Relevance and Processing
Credit card processing is important to a new business. Insisting on cash-only transactions is a guaranteed way to lose reputation and patience from customers, many of who rely exclusively on cards and don’t want the bother or fees associated with ATM cash withdrawals. Merchant accounts facilitate credit card transactions that are crucial to bringing in revenue. The costs and paperwork associated with merchant accounts are small and well worth the price.

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What Exactly is a Contactless Payment?

The modern credit card industry and credit card processing began in the 1950s, and the first credit cards...

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