USA rank 3rd in the world for card fraud incidents

On average, 30% of consumers globally have experienced card fraud in the

Greg Blackman/ USA rank 3rd in the world for card fraud incidents

past five years. Even more, 14 out of 17 countries saw an increase in fraud between 2014 and 2016. However, the US is one of the hardest hit which saw 47% of consumers experience fraud, has the third-highest rate of fraud worldwide, and was the only country to remain in the top three from 2014 to 2016.

Consistently high US fraud is likely due to two key factors. Because card spend in the US is so high, fraud rates in the country are likely to be high. But two ongoing issues exacerbate US card fraud in particular:

• (1)Dragging EMV adoption: Once implemented, EMV will vastly improve the security of card-present transactions. But just 2% of US card-present transactions were EMV-compliant in 2015. That’s because, on the issuer end, it’s costly and time-consuming to upgrade all customers to chip cards, which has slowed down the process. And on the merchant front, a bottleneck in certification and installation has prevented merchants from switching on EMV terminals, which has delayed their ability to accept chip card transactions. That means fewer transactions are secure, which could lead to increased fraud.
• (2)-Growing  eCommerce fraud: But at the same time, digital shopping is increasing — Security First Merchant Services, LLC forecast that e-commerce will grow to $632 MMM* by 2020, up from $303 MMM* in 2014. And as the EMV migration accelerates and begins to improve in-store payment security, fraudsters will shift focus toward e-commerce sites, which could contribute to overall fraud growth. cardholders and Merchant Reactions

• Customer trust and loyalty decreases following a fraud incident.
  In the US, just 6% of customers change financial institutions following fraud incidents. But up to 30% of users opt to use cash or an alternative payment method following a card fraud incident.
• If it continues on a large-scale, that could impact costs for card providers.
  That’s because when fraud does occur, it’s expensive — credit card fraud cost issuers roughly $10 Dollars per card issued in the past year, for example. That, combined with the consequences from shifting trust and loyalty, like decreased card usage or required investments in new customer acquisition and brand reputation, could rack up costs for these providers.Fraud cost U.S. retailers approximately $32 MMM*  in 2014, up from $23 MMM* in 2013. To solve the card fraud problem for all merchant types in store (retail/restaurant), online (shopping carts), and mobile payment solutions (card readers); payment for companies (SFMS) and merchants are implementing new payment protocols that could finally help mitigate fraud incidents.

  *MMM=Billion
  
  Security First Merchant Services, LLC Solutions are:
  Tokenization increases the security of transactions made online and in stores.
  Tokenization schemes assign a random value to payment data, making it effectively impossible for hackers to access the sensitive data from the token itself. Tokens are often “multi-use,” meaning merchants don’t have to force consumers to re-enter their payment details.
  
  Point-to-point encryption is the most tightly defined form of payments encryption. In this scheme, sensitive payment data is encrypted from the point of capture at the payments terminal all the way through to the gateway or acquirer. This makes it much more difficult for fraudsters to harvest usable data from transactions in stores and online.

  EMV Cards embedded microchip for added security. The chip also generates dynamic cryptograms when the card is inserted into a payment terminal. Because these cryptograms change with every purchase, it makes it difficult for fraudsters to make counterfeit cards that can be used for in-store transactions.

  Security First Merchant Services, LLC since its 2008 inception has offered fraud prevention protocol at no additional cost to all our merchants hence, our company name and obvious value add in our industry.

Visa expands Tokenization service in Europe

Visa Europe today announced the expansion of the Visa Europe Payment Tokenization Service to enable financial institutions and others to integrate Tokenization into a variety of payment methods; including cloud-based mobile payments, retailer-specific checkout offerings and card-on-file payment options as commonly used by leading online retailers and merchants.

“People throughout Europe are encountering innovative new technologies that offer fast and friction-less ways to pay wherever, whenever and on whatever device they choose,”  By 2020, industry projections are for one in five consumers to pay for items using their smartphone on a daily basis and for payments on mobile or tablet to account for more than 50 percent of Visa transactions. Looking at con-tactless as an early indicator, where adoption has doubled and spend has trebled in the last year, we believe this projection could well be a conservative estimate.

 

This move should widen Visa Europe’s existing support for mobile payment that rely on Tokenized information within a mobile device. Tokenization is a random series of numbers that replaces the traditional 16-digit account number linked to a Bankcard.

Security First Merchant Services is a business-focused payment solutions company that provide payment processing, small business loans services with a high level of detail and flexibility.

Growth Capital 2016

Business Owners Anticipate Growth in 2016

CEO’s are feeling increasingly optimistic about the outlook of their businesses.  67% of privately‐held businesses believe growth opportunities will increase over the next 10 months, with more than half (57%) planning to hire additional workers. For many small and medium-sized businesses however, securing sufficient capital to support growth remains an ongoing challenge.

Sourcing Growth Capital for Your Company

Nearly 89% of business owners disclosed having the enthusiasm to execute growth strategies, yet just 52% report having the necessary financial resources to successfully execute growth strategies.

Challenges 

Because of the increased regulatory constraints placed on banks as well as the fragmented nature of the commercial finance sector, securing sufficient capital to support growth remains a challenge for many small businesses. Even the commercial finance sector is facing increasing constraints on lending because bank leveraged lines are being reduced and underwriting criteria are becoming more stringent for their lines of credit. As a result, nearly two-thirds of small and medium size businesses reported that it is currently difficult to raise new external financing.

Many loan applicants seeking additional working capital or growth capital are thriving enterprises that for one reason or other fall outside the standard parameters for traditional bank finance, and now even commercial finance. Often, they approach the wrong type of lender or fail to present their application in the best way from a lender’s perspective.

How Security First Merchant Services, LLC can help?

Our firm has a proven and well-developed capability for providing growth capital for smaller enterprises. Security First Merchant Services, LLC offers debt financing off its balance sheet, co-investment and syndication, and equity financing, always intelligently structured to meet the particular needs of its clients.

If you would like to know more about how your business can secure the funding it needs? Email Greg Blackman, President/CEO, at gblackman@securityfirstms.com or call 877-671-2511.

Motion Picture Financing

Greg Blackman/Motion Picture Financing

Security First Merchant Services, LLC is appending our corporate funding offerings with motion picture entertainment opportunities across the Continent of the U.S.A. extending financing to high quality motion picture and television production projects. We are based in San Francisco, California for the past 7 years and have solidified a strategic partnership with major name brand banks and private investment firms in our state that offers 100% financing of your quality project.
To garner our consideration and committed credit facility or loan, is subject to the examination of the following information for approval of your submitted entertainment opportunity or projects:

1. Budget and Cash flow schedule.
2. Shooting location and tax credit estimates if, any.
3. Sales agency agreement with a reputable sales agent.
4. Sales sheet with actual sales (we don’t bank estimates only)-sales are required to be in the form of minimum guarantee.
5. Name the Completion Bond company. (FFI, Prosight & Unifi are pre-approved)
6. Financing plan. (meaning: amount of equity already in the picture if, any)
7. Synopsis.

Upon the reception of the above items which can be redacted to 3 items: 1) Synopsis, 2) Distribution Agreement, 3) Letter of Intent from the Completion Bond Company; will allow us to review and contact you on the terms and conditions of the committed credit facility, financing or loan for your motion picture and or television projects. Please feel free to contact us at your convenience with the above information for full consideration of your opportunity.

Security First Merchant Services is a business-focused payment solutions company that strives to provide payment processing, small business loans and investment banking funding with a high level of detail and flexibility

Growth through Acquisitions

Greg Blackman/Growth through Acquisitions

CEO’s in the US are showing renewed interest in growth through acquisitions. Find out how Security First Merchant Services and its Strategic Partnership can provide your company with the custom acquisition financing it needs to grow.

This year, we’re seeing private businesses sharpen their focus on growth activities. After several cautious years, more private companies are also showing renewed interest in pursuing growth by acquiring other businesses. Nearly one in five private companies reported plans to grow through acquisition—compared with just roughly one in ten reporting that a year ago.

Financing Your Acquisition

Acquiring a business can be a complex undertaking, and often requires multiple sources of financing. Generally, there are three basic ways, other than cash, to finance your acquisition and grow your business to the next level:

1. Loans against specific business assets

An acquisition often involves the purchase of new business assets, such as buildings or equipment. Security First Merchant Services since 2013 has provided asset-backed loans of $500,000 to $30 million to finance acquisitions and other growth initiatives. Assets that qualify for such loans include accounts receivable, inventory, purchase orders, real estate, machinery and equipment, and even intellectual property.

2. Loans against cash-flow and enterprise value

Security First Merchant Services can arrange growth-capital term loans of up to $50 million. Businesses with a competitive advantage in a fast-growing industry can consider subordinate financing, which may lead to higher loan amounts. Unlike conventional bank loans, this formula allows flexible repayment terms.

3. Equity financing

Security First Merchant Services also participates in and helps businesses source private equity capital to meet a variety of growth objectives, including funding add-on acquisitions. In raising private equity capital, SFMS always make sure the deal structure is appropriate for a client’s specific needs.

Customizing Your Acquisition Financing

Often, the best financing solution for a company is an intelligently structured mix of cash (if available) and debt, with some equity. SFMS and its Strategic Partnership can, structure and provide an optimal combination of a growth capital term loan together with some equity financing. This offers a minimally diluted option to a straight equity raise, allowing you to retain greater ownership of your business.

Security First Merchant Services is a business-focused payment solutions company that strives to provide payment processing, small business loans and investment banking funding with a high level of detail and flexibility

Security First Electronic Payment/EMV

Greg Blackman/Security First Electronic Payment/EMV

The evolution from typical static magnetic stripes cards to more intelligent devices such as EMV chip cards and NFC mobile phones. Visa is paving the way to increase the security of mobile payments by quickening the migration to EMV contact and contactless chip technology in the US.

 

The EMV technology will speed up adoption of mobile payments.

This new chip technology has the added benefit of the ability to reduce use stolen payment card data. If data is compromised, a counterfeit card would be unusable without the presence of the card’s unique elements. Dynamic elements to transactions will make account data hard to steal or compromise, thus making merchant systems safer and more secure.

Europay, MasterCard & Visa (EMV) sets the global standard for operation of chip cards, point of sale terminals, ATMS, etc. and starting in April of this year, MasterCard, Visa, American Express and Discover will require acquirers and service providers to have the capability to process any EMP transaction. This includes contact and contactless payments, such as use of credit card or mobile device respectively.

All of this is in preparation of a liability shift that is set to occur in October 2015.

This shift in liability will hold that an issuer or merchant who does not support EMV will assume the liability for counterfeit card transactions. If a merchant has not adopted, at least, the contact chip terminals and a contact chip card is presented, liability for counterfeit fraud will shift to the merchant’s acquirer.

This shifting liability strongly encourages chip adoption.

As an added bonus, as of October 2012 – Visa’s Technology Innovation Program eliminated the requirement for eligible merchants to annually validate their compliance with PCI Data Security Standard if at least 75% of their Visa transactions originate from chip-enabled terminals (must support contact and contactless chip acceptance).

Security First Merchant Services is a business-focused payment solutions company that strives to provide payment processing, business loans, and credit repair services with a high level of detail and flexibility

Non Cash Payment growing in Asia

Greg Blackman /Non Cash Payment growing in Asia

Driven by both economic and behavioral changes, non-cash payments continue to grow quickly both globally and regionally. Underlying an ongoing global shift toward non-cash payments, Security First Merchant Services through its strategic partnership believes that the relative popularity and growth of different types of payments reflect the nuances of individual markets.

Many economies in Asia Pacific still rely mostly on cash payments, with some countries moving away from cash faster than others. For instance, in Indonesia, 99.5 percent of transactions are conducted using cash – and the number of cashless transactions is growing at an annual rate of 23 percent.  Conversely, in Malaysia 92.5 percent of transactions are in cash, but electronic transactions are growing at a comparatively modest 9 percent annually.

TaiwanMoney contactless Smart card in use, a combined credit card, Electronic money and public transport payment card. It is in use in the Taiwanese city of Kaohsiung.

Like other macro trends in the global economy, the most significant changes in payment behavior are occurring in the developing world, driven by rapid urbanization and a growing middle class. According to the World Payments Report, 40 percent of the major credit card schemes’ payment volumes now originate from emerging markets. Asia Pacific remains the world’s fastest growing non-cash transactions market, enjoying approximately 9.5 percent compound annual growth – with emerging Asian markets growing 20 percent annually. China recently recorded a 32.7 percent annual increase in the number of non-cash transactions. Vietnam’s payment card market has become one of the most rapidly growing markets, increasing at an annual rate of 37 percent between 2008 and 2012. And according to Euromonitor, India’s debit cards are growing at 13 percent annually, with credit cards growing at 7 percent.

Credit cards Français : Cartes de crédit Italiano: Carte di credito Русский: Банковские карты Tiếng Việt: Thẻ tín dụng 中文: 信用卡

Security First Merchant Services is a business-focused payment solutions company that provide payment processing, small business loans services with a high level of detail and flexibility.

A Layered Approach to Security [Encryption / Tokenization

Greg Blackman / A Layered Approach to Security [Encryption / Tokenization

Several card brands have taken the position that EMV is the preferred way forward for reducing payment card fraud at the point of sale (POS) in the United States. EMV is already an accepted standard in every major market except the U.S., and it has proven its worth in other regions. Recognizing the positive outcomes elsewhere, Visa and MasterCard have announced EMV initiatives in the U.S., with requirements and deadlines that affect merchants, issuers, acquirers/processors, and ATM operators.
Consequently, merchants need to understand the business and security implications of moving to the EMV standard, as well as what EMV will—and won’t—do to help them.
Vulnerabilities that EMV doesn’t address
EMV represents vast improvements over the basic security that is inherent to the decades-old legacy technology of magnetic stripe cards, but is fundamentally designed as an authentication technology rather than a data security technology.
Accordingly, the implementation of EMV alone does not protect the entire payment transaction process. In particular, there are key areas of vulnerability in the payments process that EMV alone does not address: 
1. From the point of card insertion or tap, when the card data is transmitted in the clear to the processor or is later stored by the merchant post-authorization
2. Other transactions where a chip-enabled card is not present.

Credit cards Français : Cartes de crédit Italiano: Carte di credito Русский: Банковские карты Tiếng Việt: Thẻ tín dụng 中文: 信用卡

I- Currently, in the majority of both EMV and non-EMV transactions, payment card information is sent from the point-of capture to the acquirer/processor “in the clear,” i.e., in an unencrypted form. Historically, when the majority of transactions traversed private phone lines, this was less problematic. However, as more and more terminals and point-of-sale systems have begun using Internet technology for data transmission, the ability to capture that data “in flight” has been exploited by criminals to steal millions of card numbers from unsuspecting merchants. While a dynamic cryptogram provides some level of protection, the payment card information still travels in the clear and could theoretically be counterfeited onto a magnetic stripe or used in a card-not-present environment. The primary method of eliminating this form of attack is to encrypt the payment card information at the point-of-capture, rendering the data unusable to thieves.

TAP

II- EMV is designed for instances where a payment instrument is presented in person. Recall from the definition of EMV above that the smart chip in the card (or fob or phone) must connect with a reader in the POS terminal. The connection can either be physical (i.e., touching) or wireless using near-field communication (NFC) technology over distances of mere inches. As a result, EMV does not address the fraudulent use of payment data when there is no direct connection, such as when the data is entered into an eCommerce application or given over the phone or through the mail—in other words, card-not-present situations.
Step ONE Encrypt:
The point-of-capture can be the swipe of a mag-stripe card; the insertion, tap or wave of a chip-enabled card or other payment instrument; or the manual entry of data into a terminal (such as when a sales clerk types the account number) or into a web-based form (such as for eCommerce). Once encrypted, any data that may be intercepted within the merchant’s POS system or during transmission to the acquirer/processor cannot be used without the master key, which itself is safely stored in the processor’s vault.
Encryption of either the data itself or the transmission path the data takes along the network, or both, can vastly reduce
the vulnerability of the data, which in turn reduces a merchant’s business risks.
Step TWO Tokenize:
Tokenization, returns a “token” to the merchant in lieu of the live credit card number in the authorization response. Tokenization is the process of replacing sensitive data with surrogate values that remove risk but preserve value to the business. To tokenize a payment transaction, the PAN is sent to a centralized and highly secure server called a “vault” where it is stored securely in a PCI-compliant environment. Immediately after authorization from the card issuer, a random, unique, token number is generated and returned to the merchant’s systems for use in place of the PAN.

Tokenization

Closing:

Merchants are a primary target for criminals intent on stealing payment card information. Regardless of the possible future implementation of EMV, there remains an immediate need for increased security in the merchant community. There are viable solutions available today that enhance security and reduce fraud risk in our payment systems. These solutions can be implemented independently of EMV today, and should be utilized in combination with EMV when it becomes standard.
Security First Merchant Services offers a single source for the most in-demand business financial services; small business loans,  provide payment processing
 

Related articles

• Visa Expands U.S. Roadmap for EMV Chip Adoption to Include ATM and a Common Debit Solution (sacbee.com)

Plastic for Smartphones??

Greg Blackman / Plastic for Smartphones??

Mobile payments may be where things are headed, but most Americans are still holding tight to their debit and credit cards.

According to a Harris Poll of 2,383 adults, only 4% had used a smartphone to pay for a purchase. Another 8% had seen someone else pull out their smartphone at the register. Even though they aren’t using them much now, two-thirds of those surveyed believe that smartphone payments will replace credit and debit cards for most purchases in the future.

Who and when?

That future is more than five years down the road according to the 67% of respondents that said plastic cards are going the way of the dinosaurs. When asked if this will happen in the next five years, only 32% said yes. And many of them don’t see it in the picture for themselves. Only 16% of current smartphone users said they were “very interested” in using their phones to process payments.

Predictably, younger people were more excited about the possibility of using their phones to make payments. The study grouped respondents into four age demographics – Echo Boomers (18-35), Gen Xers (36-47), Baby Boomers (48-66), and Matures (67 and older). The youngest group, Echo Boomers, is the most likely to make use of smartphone payments options, with 40% of them expressing interest compared to only 18% of Baby Boomers.

A diagram showing the reverse side of a typical credit/debit card. (1) is the magnetic stripe. (2) is the signature strip (3) is the CVC2 code.

Men and women also differed in their responses, with 32% of men interested in smartphone payments compared to only 22% of women. People with children were slightly more interested as well – 38% of parent surveyed as compared to 22% for childless households said they were interested in the new technology.

Concerns about security not the only issue

As they anticipate a card and cashless future, many people are worried about security, though that was not the only reason cited as a deterrent. Survey participants who were not interested in paying with smartphones gave the following reasons for their disinterest (results do not add up to 100% because multiple responses were allowed):

• 52%  Content with cash and cards, see no reason to switch
• 51%  Worried about storing private information on phone
• 50%  Don’t even use a smartphone
• 40%  Worried about transmitting personal information to merchant devices

Mobile payments on the horizon

Apple iPhone 3GS, Motorola Milestone and LG GW60.

Although consumers have yet to fully embrace the mobile wallet trend, new digital wallet apps are being developed every day. The idea of being able to leave wallets at home and use a phone instead may only interest 30% of the folks surveyed, but consumers are unlikely to be able to resist the wave of the future. Just as debit cards replaced checkbooks for the most part, mobile payments may eventually replace wallets.

Security First Merchant Services is YOUR Singular Source for payment processing, small business loans, and credit repair services with a high level of detail and flexibility.

Small Business Owners Common views on Data Security

Small business owners may think they can’t afford the time or the money necessary to ensure their business is compliant with Payment Card Industry Data Security Standards. The fact is, they can’t afford not to as data thieves are increasingly targeting small businesses.

Excuse: Data thieves aren’t interested in my small business. They go after the big guys.

Nearly 80 percent of the small merchants in a resent survey felt they had no risk or very little risk of a data compromise however, their confidence is misguided. Hackers and data thieves originally focused on merchants with the highest transaction volumes, those retailers have made the effort to become PCI DSS compliant. In turn, data thieves are focusing on easier targets; such as small businesses and using automated tools to probe for vulnerabilities.

The understanding isn’t there that it’s not a personal attack, but an automated attack where these technologies are actually fishing through the Internet or fishing through payment systems to find those that are vulnerable; simple.

More and more small merchants have their payment functions connected to the Internet, they’re increasingly vulnerable.

Small businesses owners may think “I’m just a small mom-and-pop store. Why would anyone attack me?”It’s not that hackers are going after Simbo Foods convenience store. They are simply creating an automated tool or tools that probe the Internet and if Simbo Foods convenience store has a vulnerability they’ll pounce on the merchant.”

More proof that you’re at risk? In a June 2012 communique from Visa; Visa said that 97 percent of the data breaches in the USA reported to the company in 2011 occurred at small merchants.

PCI Data Security Standard

Excuse: If the big guys can’t stop them, Neither can I.

Whether a retailer is large or small, hackers look for easy access to data. For example, they’re more likely to go after merchants who don’t use strong passwords.

Hackers are not going to spend countless hours trying to break into a small merchant,  If the merchants protect themselves with some basic components, they’re not going to be 100 percent bullet proof however, they will have taken a step that will significantly mitigate a breach event.

Excuse: PCI DSS compliance is too complicated.

67 percent of eCommerce merchants were knowledgeable about PCI DSS; only 51 percent of brick-and-mortar merchants said they were familiar with it. But only half of those who know about PCI DSS actually validate that they are compliant. The rest state they don’t understand it, don’t have the resources to handle it or are still working on it.

Business owners can learn more about PCI DSS by talking to companies that specialize in it or by consulting with their own service providers.

Security First Merchant Services, LLC  look at that as a key role for us hence, our company name. We do everything in our power to educate and to reinforce the critical need for PCI compliance.  As part of standard pricing, for example: SFMS offers its customers the resources to help all merchants make their credit card processing much more secure.

However, we can’t do it for the merchants; merchants must be willing to invest a short amount of time to gain some basic understanding of the concept of data security.

Data storage – old and new

Excuse: PCI DSS compliance is too expensive.

Data breach would cost a lot more; merchant’s direct costs of recovering from a security breach average $194 per stolen record. So if a data thief stole roughly 200 customer records, your costs could be almost $39,000 in total

The costs of becoming PCI DSS compliant will vary according to merchant;s size and the type of retail business they’re running.

Placing a lock on the backend of your business to secure your data by complying with PCI DSS isn’t much different from, physically securing your store.

In closing, You wouldn’t trust your neighbors not to come into your store if you didn’t put a lock on it, you’d invest in a lock and may be a security system as well and write it off as another cost of doing business; Contact your Security First Merchant Services Account Executive today ~ 877-671-2511.

Security First Merchant Services,LLC~Computer Security

Security First Merchant Services is YOUR Trusted Financial Services for Small Businesses and Individuals.

Security First Merchant Services is a One Stop business focused payment solutions company that strives to provide payment processing, small business loans, and credit repair services with a high level of detail and flexibility.

Trends in Mobile Shopping by Verifone

Greg Blackman / Trends in Mobile Shopping

Mobile shopping is expected to increase dramatically in the next couple of years and retailers are getting ready.
According to a new report by Juniper Research, the number of customers buying items via mobile devices is predicted to increase by almost 50 percent over the next two years.

This year’s number of mobile shoppers (approximately 393 million) will jump to 580 million by the end of 2014. Some restraints still do exist, the majority of retailer sites are not optimized for mobile browsing and customers are concerned about transaction security.

A separate study by Yankee Group, asked retailers “Is your organization currently able to accept credit or debit card payments via mobile exchange for goods or services rendered (meaning your employees can accept payment in person using an accessory or attachment for card swipes)?, they answered:

0% – Do not understand the question
20% – Considering deployment, but no definite/immediate time frame
23% – Already deployed
25% – Plan to deploy within the next 12 months
32% – Not deployed and no plans

Mobile App Launch Party attendees line up to have the pre-release app loaded onto their mobile devices by app developer Jeremy of Spark design.

Security First Merchant Services offers mobile solutions that are secure and enable merchants to break free from the confines of just four walls for mobile retail activities.  Visit securityfirstms.com to learn more about  our preferred Mobile Retailing and Mobile POS.

iPhone Mobile Payment 100 Euro

Security First Merchant Services is a business-focused payment solutions company that strives to provide payment processing, small business loans, and credit repair services with a high level of detail and flexibility.

Your eWallet or Mobile Payment Boundaries

Greg Blackman / Your eWallet/Mobile Payment Boundaries

The last few months have been notable for a wave of new eWallet launches, while the Mobile Payment Solutions that were launched in the last year are already being refined and tweaked to adapt to what is becoming a rapidly evolving space.

If recent statistics are to be believed, we have already passed the tipping point of consumer smartphone adoption, and as consumers increasingly interact with their smartphones, this will undoubtedly have an impact on how they pay with their phones.

Logo of Groupon

While these eWallets have different characteristics and different technology backbones, they are all competing for the same consumers. The eWallet wars are most definitely heating up especially with Groupontossing their hat into frey just a few hours ago, but who will be the victors? Will they be tried-and-tested financial services organisations that consumers trust?

PCI Data Security Standard

The mobile payments space, the budding mobile POS area is also becoming increasingly competitive. As merchants baulk at paying to replace existing POS terminal infrastructures, mobile phone card acceptance devices are proving to be cost-effective alternatives for the merchants.

What does this mean for the eWallet or Mobile POS Terminal Industry?

Fraud in the payments industry remains an ever-present threat and we are most definitely in a new era of cyber-crime, as organised criminal gangs or individuals plot new ways to breach payment industry security defences. There is clearly a need for different payment players, and don’t forget to thank Heartland for our new PCI Compliance and Data Security Standards every time you are charged a PCI compliance Fee or is required by your current processor to upgrade your Credit Card Terminal so that you are compliant;  indeed we welcome new players, to share more information in order to identify emerging fraud patterns and reassure consumers that our industry is much more secure today than yesterday.

Security First Merchant Services is a business-focused payment solutions company that strives to provide payment processing, small business loans, and credit repair services with a high level of detail and flexibility.

EMV=Europay, MasterCard & Visa AKA the Chip Card

Greg Blackman / EMV=Europay, MasterCard & Visa AKA the Chip Card

Since the Summer Olympics of 1992 when I first joined the ranks; the “Smart Chip” as many in our industry coined it back then stated that Americans love their privacy too much to allow the introduction of this technology into our market place.  Just a few hours ago MasterCard has announced that in Oct. 2016 it will start shifting fraud liability for ATM transactions in the U.S.The liability shift is an extension of the  that MasterCard introduced last January, and will apply a road-map towards EMV adoption to all transactions with MasterCard branded products in the U.S.

MasterCard logo used on cards 1997 to present.

EMV-enabled cards are acknowledged to be more secure and fraud-proof than the magnetic stripe technology used by most credit cards in the U.S. Card companies, including MasterCard, have started announcing that they will not be held liable for fraud associated charges after a certain date for magnetic stripe cards in a move to push merchants, issuers and acquirers to introduce necessary hardware and software upgrades to enable acceptance of EMV’s. This announcement is intended to push for the similar upgrades to enable EMV at ATM’s that accept MasterCard branded products.

It is here and it is here to stay

The EMV standards define the interaction at the physical, electrical, data and application levels between IC cards and IC card processing devices for financial transactions. There are standards based on ISO/IEC 781 for contact cards, and standards based onISO/IEC 14443 for contactless cards (PayWave, PayPass, ExpressPay).

The first standard for payment cards was the Carter Bancaire M4 from Bull-CP8 deployed in France in 1986 followed by the B4B0′ (compatible with the M4) deployed in 1989.  Germany also predates EMV. EMV was designed to allow cards and terminals to be backwardly compatible with these standards. France has since migrated all its card and terminal infrastructure to EMV.

The most widely known Chip Card Implementations of EMV standard are:

• VSDC- Visa
• M/Chip – MasterCard
• AEIPS – American Express
• J Smart – JCB
• D-PAS – Discover/Diners Club International (it is a shame that the card that started this Industry isn’t here for this phase; Diners)
  

  HSBC BankCard

Visa and MasterCard have also developed standards for using EMV cards in devices to support card-not-present transactions over the telephone and Internet. MasterCard has the Chip Auth. Program(CAP) for secure e-commerce. Its implementation is known as EMV-CAP and supports a number of modes. Visa has the Dynamic Password Authentication (DPA) scheme, which is their implementation of CAP using different default values.

A chip from a credit card, with a normal sized pin for scale

In February 2010 computer scientists from Cambridge University demonstrated that an implementation of EMV PIN entry is vulnerable to a man in the middle breach; however, the way PIN’s are processed depends on the capabilities of the card and the terminal, showing that attacks against card security are possible depending on the implementation.

In May 2010, a press release  indicated that United Nations Federal Credit Union in New York would become the first EMV card issuer in the US, offering an EMV Visa credit card to its customers.

Chip and PIN vs. Chip and signature

According to issuer preference, some EMV cards are “chip and PIN” cards that require the customer to supply a 4-to-6 digit Personal Identification Number (PIN) when making a purchase at PIN-capable terminals. The chips in these cards feature “PIN” at the top of the list of possible cardholder verification methods (CVM), but with a fallback option to signature (or even no verification at unattended terminals).

Other EMV cards are either signature-only or prefer signature over PIN in their CVM list (signature at the POS, but PIN at unattended terminals or ATMs). These are often called “chip and signature” cards.

Signature-only cards will not work in POS that allow no CVM other than PIN, such as some unattended ticket kiosks in Europe, whereas signature-preferring cards might work. Attended POS which are staffed by merchant personnel are required by the credit card agreement to accept magnetic stripe cards, as well as chip and signature cards. Chip and PIN cards have not been adopted in the US as of 2012 for a variety of reasons, including lack of PIN management features in ATM machines.

ING BankCard

As of 2012, chip and signature cards are more common in the Australia, New Zealand and some European countries (such as Germany, Austria and Denmark), whereas chip and PIN cards are more common in other European countries (the UK, Ireland, France and the Netherlands) as well as in Canada.

Security First Merchant Services is a business-focused payment solutions company that strives to provide payment processing, small business loans, and credit repair services with a high level of detail and flexibility.

American Express OnePoint

Greg Blackman / American Express OnePoint

Since American Express issues merchant accounts directly, the company also governs its own discount rates. Therefore, the rate that a business pays to accept an American Express card will remain the same regardless of the credit card processor it uses to process Visa, MasterCard and Discover transactions.

A credit card processor that claims to offer lower American Express credit card processing fees than its competition is simply being misleading. American Express sets its own discount rates which are exactly the same for all credit card processors.

English: no original description (Photo credit: Wikipedia)

American Express operates on a closed loop network. This means that American Express issues credit cards directly to its cardholders, and opens merchant accounts directly for business that accept its cards.

The closed loop network of American Express gives the company a competitive advantage over open loop networks like Visa and MasterCard.

Unlike American Express, Visa and MasterCard do not issue or acquire credit cards. Instead, these companies maintain an open network that allows various issuing and acquiring banks to communicate in order to facilitate the credit card processing system.

It’s easiest to think of American Express’s closed loop network as a dictatorship, and the open loop network of Visa and MasterCard as a democracy.

Since American Express does not have to answer to any other financial institution for issuing or acquiring, the company is free to set its discount rates at whatever level the market will bear. This is why businesses pay significantly more to process American Express credit cards than they do to process MasterCard or Visa credit card transactions.

American Express? (Photo credit: the justified sinner)

American Express Discount Rates

American Express discount rates are based largely on a business’s Merchant Category Code (MCC). Unlike Visa and MasterCard interchange fees, American Express discount rates have relatively few qualification factors.

American Express discount rates for retail stores and restaurants will downgrade (meaning the rate increases) if a transaction is keyed-in rather than swiping a card, but most rates are the same regardless of transaction method.

American Express does not charge a credit transaction fees and a discount rate for every industry category. Many rates consist of a percentage-base charge (discount rate) without a transaction fee (flat dollar amount, i.e. $0.10).

However, virtually all credit card processing service will charge a fee to process American Express transactions through their network. So, even if American Express does not charge a transaction fee directly, a business will inevitably have to pay a transaction fee to its credit card processor for processing American Express transactions.

The following table outlines basic American Express discount rates. Keep in mind that discount rates are subject to change, and you should check with American Express, or your credit card processor for the latest rate information.

American Express (Photo credit: Wikipedia)

Business Type	American Express Discount Rate & Transaction Fee
Fast Food Restaurant	3.50%
Lodging	3.50%
Mail Order & Internet	3.50%
Restaurant *	3.50% plus a $0.05 Transaction Fee
Telecommunications	3.50%
Other Transportation	3.50%
Independent Gas Stations	3.25%
Retail *	2.89% plus a $0.10 Transaction Fee*
Services, Wholesale & All Other	2.89% plus $0.15 Transaction Fee*
Office-based Doctor, Dentist, Orthodontist	2.55%
Healthcare not office-based	2.89% plus $0.15 Transaction Fee
Tuition	2.40%
Supermarket	2.30%
* A surcharge of 0.30% will apply to transactions that are not swiped. For example, keyed-in, e-commerce and other card-not-present transactions will be charged a discount fee of 3.80% instead of 3.50%

English: A typical credit card terminal that is still popular today. visanet (Photo credit: Wikipedia)

American Express Settlement

In addition to charging hefty discount rates, American Express transactions take longer to settle when compared to Visa and MasterCard. This means that deposits for American Express credit card sales take longer to show up in your business checking account than deposits for Visa and MasterCard sales.

Barring a processor-imposed risk hold, Visa and MasterCard transactions are generally settled within 24-48 hours, meaning that deposits will show in your business checking account 24-48 hours after approved authorizations are sent to the processor for settlement.

With the exception of American Express OnePoint, which we will shortly; American Express transactions typically take almost twice as long to settle as Visa and MasterCard transactions. Deposits will generally take three to seven business days to show up in your business checking account.

English: American Express – Italy HQ (Rome) Italiano: American Express – Sede per l’Italia (Roma) (Photo credit: Wikipedia)

American Express OnePoint

American Express OnePoint is a program offered by American Express that makes it possible for participating processor to streamline the authorization, settlement and reporting of American Express processing volume.

The main advantages to American Express OnePoint are faster settlement of American Express transactions and reporting that is easier to reconcile.

American Express OnePoint makes it possible for a processor to settle American Express processing volume along with Visa, MasterCard and Discover volume. Instead of receiving a separate, delayed deposit for American Express transactions, all credit card sales are sent in a single deposit in the time it takes to settle Visa and MasterCard volume. This means that American Express volume settles roughly one to four days faster through OnePoint than it does with a traditional American Express merchant account.

OnePoint also streamlines the reporting of American Express volume. Instead of receiving a separate statement for American Express transactions, OnePoint makes it possible for a processor to report the card volume and charges for Visa, MasterCard, Discover and American Express on a single monthly statement.

Seinfeld and Superman walking in “A Uniform Used to Mean Something.” (Photo credit: Wikipedia)

Security First Merchant Services is a business-focused payment solutions company that strives to provide payment processing, small business loans, and credit repair services with a high level of detail and flexibility.

Give yourself a raise every day

Give yourself a raise every day.

Security First Merchant Services, LLC

Security First Merchant Services, LLC is looking for experienced sales professionals to join our team who will develop new merchant processing relationships with small to medium size businesses. This role will acquire new merchant services relationships through prospecting external sources such as association relationships, centers of influence and vendor relationships among others. This position will be responsible for developing a strong pipeline for new revenue growth as well as developing and maintaining relationships with existing accounts and strategic accounts to identify/solicit new revenue growth opportunities that support mutual Small Business goals.

This position provides an aggressive compensation plan [Bonuses Paid Weekly, Monthly in addition to Residuals] – top performers can earn total compensation in the six figures within the first year. Minimum Qualifications High School Diploma (Associate’s Degree or Bachelor’s Degree preferred) 1-2 years of sales experience (preferably in Merchant, Bankcard or Financial Services) Previous client…

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