credit card processing Archives - The Future of Payment Processing is Here!

December 20, 2019December 16, 2019

And the Best Credit Card Processing Service Is . . .

Most businesses have to accept both credit and debit cards today – it’s the most convenient way for customers to pay. If you don’t have the technology in place, you’re likely losing customers. That leads many to shop for the right credit card processing service, but what is that? Is there a list somewhere that will tell you who to hire?

And the Credit Card Processing Service For You Is . . .

So, ready for that name? It’s not here. That’s because credit card processing companies vary widely because credit card processing is different for every single business. High risk businesses like those that involve gambling often need a very different service than a simple Mom and Pop gift shop in a tourist town. So, without the name of the service to choose, what do you do? Some research would help. As you shop around, make certain you’re looking for services that provide:

*Low Fees: Fees abound when it comes to any credit card processing service, and you want to make sure the fees meet your needs. Look carefully at how your customers pay and think about whether you want to rent or buy equipment. Ask about the interchange plus fee (the cost of each transaction), and don’t forget to find out if there are minimum processing amounts you must meet.

*Added Support: Most businesses want a 24/7 support hotline as opposed to a digital library of content you can find to simply fix the problem on your own. Some DIYers, though, would rather not pay for those added support hotlines, so figure out exactly what level of help you might need every step of the way from the initial set up to the day to day running of your business.

*Fraud Protection: PCI compliance is required from all card processors. Other protections, though, like encryption and tokenization simply aren’t. Find out what each processor is doing to help protect your business and your customers before you sign a contract.

*Perfect Contract Terms: Some companies will work with you on a month to month basis. Others want you to sign up for a year or more. There’s no right answer on this one but understanding what those terms look like on paper is nothing short of a must.

Get quotes from several credit card processing services before you choose the right one to meet your needs, then don’t be afraid to shop around continually until you find a service you truly love.

November 21, 2019November 21, 2019

In Processing, What’s the Real Difference Between Credit and Debit Cards?

Your customers are likely to use both credit and debit cards when they make a purchase from you, and while these two payment vehicles look like the same thing, they’re actually quite different when it comes to processing. For the customer, the biggest difference is simply the source of funds. Credit cards are borrowed money while debit cards take money directly from an account to pay the merchant. For stores like yours, though, the difference runs much deeper.

Where They’re Processed

The difference between payment process solutions for both cards begins from the moment the customer presses credit or debit on the PIN pad. If they choose to press credit, it will be processed through a credit card network, like Visa or MasterCard. The details go through your payment processor to the network, then on to the issuer to get the signal of acceptance. Then the decision backtracks to your point of sale. Credit card processing sounds complex, but it happens in just a few moments.

Debit card processing, though, requires a PIN to complete the transaction. Once that is entered, it moves through an entirely different network. Star and Interlink are two of the biggest. Then approval is given or denied, and the decision works its way back to you.

The Cost

The physical space in which these two cards are processed isn’t the only big difference. The fees can vary, too. You pay an interchange fee on every debit or credit card transaction you handle. The fee, though, can vary by the type of card. If you’re running a card not present transaction, you’re likely to pay the same fee for either a credit or a debit card. If you’re handling an in-person sale, though, the interchange fees on debit cards are often less than they are on credit cards.

No matter what type of card your customers are using, understanding how the process works is key to getting you the rates and perks you deserve from your processing equipment.

Contact Y2Payments today at 888-693-1850 to learn how we can help provide you with a superior payment system.

July 19, 2019July 11, 2019

EMV Chip Cards – Are They More Secure?

Credit card processing has changed significantly in the past several years, and one of the biggest advances came with EMV chip cards. Because processing credit cards could frequently involve fraud, card issuers knew something had to change, and they believe EMV chip cards may make the process more secure, but is this really the advance necessary to keep customer data safe?

Credit card processing formerly relied on a magnetic stripe. Initially developed in the 1960s, this technology is the same used to develop the cassette tape, and while the US was a leader in early credit card technology, it was quite slow to adopt anything after the magnetic strip. Other parts of the world, though, quickly upgraded to the EMV chip for a number of reasons. First, the cards are quite difficult to clone. Technologies fraudsters were using to clone cards, like skimmers, don’t work with the chips, and that means in places where the EMV is common, some types of fraud have declined dramatically. More than that, though, EMV cards have better encryption technology build directly into the chip. That means the data isn’t broadcasted when a customer pays.

Fraud is a multi-billion dollar industry. In 2017 alone, more than 14.2 million credit card numbers were exposed, and that makes this a serious problem for banks and merchants alike. While EMV cards aren’t the only answer to this fraud problem, they are one that may prove useful in fighting fraud wherever possible.

For merchants, that may mean an equipment upgrade to help meet this new standard of security, which will likely present an initial upgrade cost, but it’s worth it to ensure that every customer in your store can shop safely and know that you’re going to do everything possible to keep credit card numbers safe during each transaction.

Contact Y2Payments today at 888-693-1850 to learn how we can help provide you with a superior payment system and fraud protection.

July 11, 2019July 11, 2019

How Credit Card Processing Works

To a customer buying an item from you with a credit or debit card, paying is a fairly simply idea. The customer swipes, and the transaction is complete. For a business accepting that credit or debit card, though, the process is not quite that easy. It’s not as if the card is swiped and the money lands in your business’ bank account. Instead, it’s a pretty complex process.

The key to understanding how credit card processing works behind the scenes is understanding exactly who is involved. First, you have the cardholder. Then there’s the merchant (that’s you). Beyond that, you have the acquiring bank, which is the bank responsible for getting the payment authorization request from the merchant and sending them to the acquiring bank or processor. That bank/processor (sometimes called a merchant services account provider) is the company you contract with to accept credit cards. It sends those details from the swipe to the credit card network, then back to the acquiring bank. The credit card network is the card company itself (like Visa, MasterCard, and others). The issuing bank is the organization that gave the card to the consumer. Some good examples of this are Capital One or Bank of America.

Now that you know who is involved, it may be a little easier to understand what happens when a customer swipes a card or enters that card information. The first step is the actual authorization. Here, a customer swipes his/her card at a terminal or enters it into a website. The card’s details – which typically include the card number, expiration date, billing address, CVV, and payment amount – are sent to the acquiring bank. The acquiring bank sends the details to the credit card network. The card network sends it on to the issuing bank asking for authorization. At that point, the issuing bank works to authenticate the transaction. It ensures the credit card number is valid and that the customer has the funds available to make the purchase. The purchase is then approved (or declined), and it’s sent back through those same channels – to the credit card network, then the acquiring bank, then the merchant itself.

When a purchase is declined, it can happen for a number of reasons, and the merchant doesn’t always understand why. It’s possible the credit card number was entered wrong. The expiration date could also have been entered wrong. The customer could have insufficient funds in his or her account. It’s also possible that the customer made too many purchases at once, and the issuing bank was concerned about fraud. Finally, technical issues within networks do happen, so that could also be behind a rejected charge. In the event your customer’s charge is rejected, you may have some technical support within your merchant services account to rely on to help your customer understand why it happened.

If a payment is authorized, the issuing bank places a hold on the funds in the cardholder’s account. At the end of the day, the merchant’s software pushes the approved authorizations in one big batch to the acquiring bank. That bank then sends it on to the credit card network. The card network sends the information to the issuing bank, and they then send the funds back to the network. Before that happens, though, they deduct an interchange fee that is then shared with the credit card network. The card network pays the acquiring bank, and that bank credits your merchant account for the final total (minus fees from the acquiring bank). Those fees can vary widely depending on the type of purchase and the players involved.

The result? The customer pays his or her bill with the merchant, and the merchant (eventually) gets paid. The good news, though, is most of this happens within just a few seconds. Maybe the slowest part is waiting for the funds to arrive in your business’ bank account, but that can vary depending on the merchant account provider with whom you work.

Processing credit cards is an absolute must for businesses today, but it’s not quite like accepting cash. Understanding how it works can give you an advantage as you try to find the right merchant services account company. For information on Y2Payments Merchant Accounts, give us a call today at 888-693-1850.

June 19, 2019June 4, 2019

About Card Not Present Transactions

card not present transactions y2payments

When a customer chooses to use a credit card with your company, you can process it one of two ways. The first is to swipe it through your payment processing terminal. The second, though, is to have you process the card without the swipe. This tends to happen with phone and online orders, but it is possible to key in a card entry in a traditional brick and mortar setting. When you key those credit cards in without swipes, you’ve processed credit card not present, or CNP, transactions. They’re more common than you think today, but in the world of credit card processing, they can actually cost you quite a bit more than you expect.

What are Card Not Present Transactions?

A better definition of card not present transactions is any time a seller doesn’t have to physically use the card to process the transaction. If, for example, a person could simply recite the pertinent numbers from the card to complete the transaction, you’re completing a CNP sale, and it could really change your overall fees.

Why Does It Matter If the Card Is Swiped?

Card not present transactions change the entire processing equation for one simple reason – they involve a much higher risk of fraud. Any time you’re taking an over-the-phone order, a mail order, or even an online order, there’s a chance the cardholder didn’t authorize that move. That means that there’s a possibility that the transaction may fail at some point during the process.

In any type of pricing module, whether you’re looking at interchange-plus pricing or something completely different, you’re going to pay added costs because the processor doesn’t want to deal with the potential risk of a CNP transaction. In some cases, even when you don’t see those interchange costs directly, you’re paying for them in a marked-up base rate because the processor has to accept some of the risks.

Keep in mind, though, that not all CNP transactions will mean the same risks for your company. Online transactions, for example, have built-in security measures. Often, they ask for address or CVV verification. Keyed-in entries, on the other hand, don’t have those added layers of security, and that can mean even higher rates you may end up paying.

Preventing CNP Fraud

If fraud occurs during a CNP transaction, you could end up bearing the brunt of the costs. A 2010 LexisNexis study found that merchants tend to lose about $310 for every $100 of credit card fraud. Preventing fraud, then, can help your company save quite a bit of money in the long run. These tips may help.

Minimize CNP Sales: If possible, make sure you’re processing card present transactions. If you have a choice between the two options, have your customers swipe their cards through an actual terminal.
Increase Online Security: Make sure you’re gathering as much information as possible when you process online sales. Ensure you have the cardholder’s name as it actually appears on the card. Get the expiration date, the billing address, and the card’s CVV or security code too. If you have a way to store information about when an order was placed and other details about the order, you should do that as well.
Ensure PCI-DSS Compliance: If you take phone orders, make certain your company is PCI DSS compliant when you handle a customer’s confidential data. Additionally, you should keep copies of all the information provided by customers until the customer has received his or her order and the transaction is complete. Most companies keep this information on file for twelve to twenty-four months.

The Complexities of Credit Card Processing

Processing cards, whether you have customers swiping them or you’re dealing with card not present transactions, can be complex, but the reality is that the more you know about how to safely process a customer’s card, the less likely you are to be the victim of fraud of any type. What’s more is that you could be saving hundreds in credit card fees with just a bit of added knowledge.

To learn more about how we can save you money with every single CNP transaction, contact Y2Payment Systems today.

December 31, 2018March 6, 2019

The Difference Between Credit Card and Debit Processing

Most merchants can process both credit and debit cards. The two work very differently, though, for both the customer and the merchant. For the customer, those differences are obvious. The source of the funds on a credit card is an account the consumer holds with that company. It’s often an agreement to borrow money from that company and pay it back. A debit card, though, gets its funds from a bank account. From a processing perspective, that difference is less obvious.

Credit Card Processing

When a customer chooses to use a credit card to make a purchase at your store, the processing takes place through the major digital networks of each credit card company. The payment processor sends the details to a credit card network like Visa or MasterCard, then the card’s issuer accepts or declines the transaction. Naturally, the entire process takes only a matter of seconds. Interchange fees on a credit card transaction tend to be higher than those on a debit card, and those fees increase with web or mobile credit card transactions.

Debit Card Processing

When a customer swipes a debit card, the data can go through Visa or MasterCard, but it can also go through other options like Interlink, STAR Network, or Maestro, just to name a few. That data is then forwarded to the issuing bank, and then the transaction is either approved or denied. Debit cards have a unique set of regulations that govern payments. Processing costs are lower, but the amount depends on whether the card is regulated or unregulated. It may also depend on the total amount of the transaction. Additionally, the smaller the bank, the more likely a PIN or signature will be required, which can affect the fee structure.

What works for your company will depend a bit on the differences between payment processing solutions and what forms of payment your company currently accepts. Search around to find the best payment processor not just for you, but for your customers as well.

Contact Y2Payments today at 888-693-1850 to learn how we can help provide you with a superior payment system.

August 27, 2018September 5, 2018

Get Faster Payments with Credit Card Invoicing

If you’ve ever managed a business’s accounting, you realize that the job gets misrepresented a lot. Accountants are often represented with their noses in spreadsheets, furiously sweating minuscule financial details. Sometimes that’s the easiest part of the job. The hard part is tracking down clients who still haven’t paid, and negotiating a path between a business that doesn’t want to lose that client but does need to get paid by them. Accountants are often diplomats just as much as they’re financial specialists. That job can be made easier with credit card invoicing and credit card processing.

Why Accept Credit Cards?

When you manage your own business or do the accounting for it, you’re also managing your time. Time is money. If you spend it chasing clients, you’re using up time that could be devoted to developing other aspects of your business. The more you can streamline your invoicing and processing, the more time you save.

You’ve probably heard that statistic, the one that says most businesses fail in their first two years. This usually isn’t due to someone failing to produce a good product or deliver a good service. By the time someone is ready to step into starting a business, they’re talented and knowledgeable enough to know how to deliver products and services well. Chances are, they’ve already been in that industry for years and their clients are already very happy with them.

Credit Card Invoicing Eliminates Wasted Time

The difference between a successful business and one that fails is where time gets wasted. When you’re waiting on invoicing and processing, in chasing down clients and reminding them to pay, they’re wasting your time. You can’t dump them outright. You walk that fine line between keeping a client with good payment potential, and getting them to actually live up to that potential.

And yet it doesn’t change the fact that every time you do this, they’re wasting your time. This holds you back from developing other aspects of your business, including product revision, adding services, customer service, and making your marketing more effective. That’s a big enough difference to make your business sputter and collapse before it gets its feet under it.

Rewards, Enabling Future Purchases, and Security

Credit card invoicing is quicker. It enables customers and clients to utilize credit card reward programs. You get paid right away, which eliminates both the time spent with your nose in a spreadsheet and the time spent playing diplomat with clients. Payment information is easily encrypted and stored, which puts customers and clients at ease about making future purchases.

Customized reporting and analysis is easy to produce, allowing you to analyze your customers’ and clients’ spending habits. Security liability shifts at this point from you to your credit card processing provider. Why accept credit cards? There’s a long list, and it begins and ends with making sure your time isn’t wasted, so you can choose how to spend more of it.

August 16, 2018September 4, 2018

Not All Credit Card Processing is the Same

Have you ever seen those commercials where customers are paying with a particular credit card and the store they’re buying from runs like clockwork? Then one customer comes up with cash, fumbles around with it as if they just learned how to use their hands, and throws the whole process off. The ads talk about how credit card processing is so much smoother than traditional payment methods, but it doesn’t take high risk merchants into account.

What Does This Say about High-Risk Merchants?

What’s funny is that this doesn’t hold true for high-risk merchants. Sure, the retail industry is catered to because there are alternatives out there.

Merchants who rely on credit card payments and don’t have those alternative options of payment? They aren’t always offered the smooth side of the credit card processing industry. They’re offered increased rates by services that have spent the last few decades updating technology to meet old philosophies that no longer serve high-risk merchants. At the same time, they cut costs everywhere they can, including and especially customer service and customized reporting.

This approach is bad enough when it’s aimed at customers. When this approach is aimed at high-risk merchants, it falls apart. High-risk merchants are the ones who need responsiveness and customization in payment processing the most. They need new philosophies based on new technology from their merchant account processor.

The rest of the industry wouldn’t want to admit it, but high-risk merchants. . . they’re the ones who take the risk to pioneer new payment processing territory that will become mainstream down the road. They should be given the most dynamic tools available, not treated like an afterthought.

The Y2Payments Difference

High-risk merchants shouldn’t have to take on additional risks at unreasonable costs. Some cost increase compensates for the risk. That’s reasonable, it comes with the possibility of hazards. At the same time, that territory and cost should bring better tools, technology, customization, and reporting to the table. You ought to get something more for that cost, not something less. You’re in a business that is deemed risky – sometimes unfairly – but your money shouldn’t be worth less when you work with a merchant account processor.

If you pay more because of those perceived dangers, you should also get more. You should get benefits like training, integration with your technology, customized reporting, fraud and chargeback protection, interchange pass-through pricing, and more. There should be a difference.

Cooperation, not Competition

Moreover, that’s not an empty promise. If you’re a merchant account processor who works with high-risk merchants, you should want to see them do well. The better they do, the more stable and flexible you can make them, and the more loyalty and business they give you in turn.

High-risk merchants have to remain on their toes because of their industries, but this doesn’t mean they can’t be supported by businesses built to serve them. If Y2Payments can make your business more capable, both parties benefit and make the other side of the fence a little less dangerous.

Want to learn more about our credit card processing? Contact Y2Payments today!

July 14, 2018August 3, 2018

Credit Card Companies Dropping Signature Requirement

credit card processing signatures y2payments

Businesses are always looking for ways to make checkout faster. With advancing technologies and a need for faster credit card processing, many credit card companies have decided to drop the need for signatures on payment slips and checkout terminals. This makes your payment processing options even faster.

Dropping Signature Requirements

Mastercard, Discover, American Express, and Visa have all dropped the signature requirement as of April 2018. Technology and anti-fraud capabilities have advanced far enough that signatures are no longer necessary to fight fraud. This is because they’re no longer among the most effective pieces of evidence considered in anti-fraud work.

This isn’t a radical or sudden idea. It’s long been considered and weighed as an option. If anything, credit card companies have waited longer than they have to before doing away with the need for signatures.

What about Chargebacks?

The ACH payment system has no real use for signatures either. Regardless of ACH and the decisions companies are making about credit card processing, some businesses are still taking things step by step. This is especially true for high risk merchants, since signatures are still used as evidence when considering chargebacks.

There will likely be a period of time until the approach to chargebacks catches up with the dropped signature requirements. Many businesses have reported this, and so are still requiring customer signatures.

Chip cards help eliminate the risk of this, but not everyone uses them, and there’s still a need for some departments to get on the same page. When weighing whether to request customer signatures or not, try to balance your risk of chargebacks against your need for speed in your payment processing options.

Balance Your Needs

If you need to accelerate customers through credit card processing, dropping signatures achieves this. If your business risks a higher rate of chargebacks, you may wish to keep requiring signatures for the time being. Credit card companies should catch up on this sooner rather than later.

Contact Y2Payments today at 888-693-1850 for a free no risk statement review & audit!

June 18, 2018June 27, 2018

Streamline For Better Payment Processing

Credit card processing fees aren’t always fair. Payment processing can seem limited, and built to punish small businesses, low volume sellers, and the business-to-business industry. These businesses need better payment processing options that can fully cover a range of payments, including ACH/EFT payments.

Better Credit Card Processing

The solution is interchange plus pricing. This model is less complicated and more straightforward than traditional credit card processing. It’s also more flexible in terms of satisfying many modern requirements that businesses have.

The best approach is to compare the two options. For many large volume sellers or large franchises, they see beneficial credit card processing deals with friendly rates. Their payment processing options are beneficial to them because processors want to secure their business long-term.

Even Footing for Small Businesses

For most businesses outside this range, they just don’t see the same benefits offered to them. Processors are less confident in these businesses and so they look to make more money out of them in the short-term, unconcerned with the impact on a long-term partnership. This benefits them, but not your business.

Interchange plus pricing is an approach to credit card processing that relies on giving you the information you need to make a decision up-front. You can even see an audit of your current fees and compare these to what they’d look like under Y2Payments.

Y2Payments Conduit

Our platform is called the Y2P Conduit, manages these payments. It’s fully PCI DSS compliant. You can securely run transactions across six payment channels. This includes payments made by internet or phone, by mail, or at point-of-purchase, whether it’s through credit, debit, or ACH. Reporting according to your organizational structure is rolled into this. This allows you the benefit of increased analytics and reduced risk on purchases, transactions, and chargebacks.

With the Y2P Conduit, you don’t have IT implementation expenses or changes in how your staff performs their jobs. Other credit card processors aren’t concerned with your quality of service.

The Y2Payments method of better payment processing, payment structures and the Y2P Conduit’s ability to quickly reduce transaction fees, gives you more control over your business and gives your business a better deal than with other processors.

Contact Y2Payments today at 888-693-1850 for a free no risk statement review & audit!