What’s the Difference Between Chip and Signature and Chip and PIN Transaction?

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It seems nearly every major credit card issuer has gone to chip-enabled cards, and for good reason. These cards have far more fraud-prevention features than others available today, and that not only protects the credit card companies that issue them but merchants as well. There are, however, two different kinds of cards available – those cards that are dubbed chip and signature cards and those called chip and PIN cards. What’s the difference between the two, and which is the best payment type for your business? Take a look.

Chip and Signature Cards

At the heart of the difference between these two kinds of cards is how customers buy merchandise. A chip and signature card means the customer inserts his or her card, then signs for the purchase. This should be a pretty familiar process, as it’s a bit like the older, magnetic cards. It’s fast, it’s convenient, and it’s a familiar process for many consumers. There is a drawback, though. Signatures can easily be forged in this system.

Chip and PIN Cards

With this type of card, a customer puts it in the chip reader, then keys in a PIN, personal identification number, to complete the transaction. This system is probably the safer of the two, and while customers are familiar with the swipe and sign, as debit cards have become more and more important across the United States to consumers, they’re more familiar than every with entering a PIN for purchase. Studies have shown that fraud losses plummet with the adoption of a chip and PIN system for all cards.

Do You Have a Choice?

Just because there are two kinds of cards available doesn’t mean you have a choice of which ones to accept. Most of today’s updated terminals read both chip and signature transactions and those that require a PIN, so you don’t have to worry about choosing between the two. In fact, few payment processors even require a different fee for one over the other. What you do need to know, now, is that there is a difference, and should an option pop up in the future, you may want to go with chip and PIN to protect your business.

Learn more about payment processing options for your business at Y2Payments.

The Difference Between Credit Card and Debit Processing

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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.

What is a Remotely Created Check or a RRC?

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Many payment methods are available today, and among them are remotely created checks, or RCCs. They’re a convenient way to take payments from customers, and for more than two decades, they were a dominant way for customers to pay bills or merchants. That, however, may change in the near future.

A Bit of History

RCCs aren’t created by the account holder’s bank, and they don’t include the signature. Instead, they include the account holder’s printed name, and the merchant takes the customer’s bank and routing number through the web (or over the phone), then prints a check with that information and processes it just like they normally would.

RCCs came from Check 21 legislation. Created in 2004, the checks were not subject to ACH rules. The goal was to create a way for customers to easily use checks to make purchases over the phone or online. The legislation also made remote deposit a possibility.

The Problems with RCCs

The biggest problem for most who deal with RCCs is that there is a pretty high risk of fraud involved. It’s easy to debit a customer’s account without consent, and the method is used today by online scammers on a regular basis.

The other frustration for many is that it’s hard to detect and control any fraud in this arena, which means there’s a higher rate of return on these checks. One study found that rate of return as high as 70%, which is as frustrating for payment  processors as it is for merchants.

Lawmakers are currently taking a closer look at RCCs to decide whether they will continue to authorize their use. It is possible that at some point in the near future, RCCs will no longer be legal tender for businesses.

Are They All Bad?

RCCs can be a really good solution for high-risk merchants, especially if they want to be able to take electronic check payments. Because many cannot qualify for ACH processing, RCCs give them more possibilities than ever. As with other payment methods today, though, they are not without their potential problems.

Merchants and Payment Fraud: The Guide You Need

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It’s a sad reality that payment fraud is something all business owners have to think about. While we wish it would simply disappear, it’s not going to go away any time soon. The big problem with payment fraud, aside from it being a serious hassle, is the fact that there isn’t just one kind of fraud that business owners have to worry about. There are many different types, including account fraud, credit card chargebacks fraud, friendly fraud, and the list goes on and on.

It’s important for business owners to understand that they need to have strategies set up in order to help detect, prevent and manage any sort of fraud situations that may occur because when it comes to merchants and fraud? It’s not a possibility that you’ll eventually have to deal with it, it’s an absolute certainty. That’s why having a company to help you with handling fraud is so important.

It’s important to note that when a customer is compromised, they not only are going to be much less likely to come back to your establishment, they’re likely going to put reviews up giving you some negative press and potentially harming your business greatly.

Learning about credit card chargebacks is especially important because it can definitely be a huge hassle for a business owner. This is because the chargeback is actually initiated by the credit card holder which could result in a return of funds to them, even if they continue to keep the product they purchased from you or continue to use the service you sold to them.

Getting the right fraud protection for merchants is definitely important, and learning about fraud insurance is something that any business owner should consider as well. Merchants and fraud do go hand-in-hand, but with the right company, like Y2Payments, behind your business you’ll find that you don’t have to worry about the fraud as much as you would if you were handling things on your own.

For example, Y2 oftentimes deploys a technology called 3D Secure (3DS). It is a Visa/MasterCard fraud prevention tool designed to eliminate such cardholder claims. When 3DS validates a card transaction if also completely eliminate the chargeback fees for the merchant. Having a shield up between you and those who would defraud you is definitely something that can help your business.

Interchange Plus Pricing is Great for Profitable Businesses

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It’s time for a bit of truth. You can’t own a business now without being able to accept debit and credit cards. The average consumer often doesn’t even carry any cash, which means that you need to accept credit or debit cards in order to be able to run a profitable business.

Many business owners, however, get frustrated with this because they realize that in order to process debit or credit card payments, you need to take on an additional expense. To process credit or debit card payments you’ll have to pay a processing fee, and the amount you’ll pay depends on which company you go through to process those payments.

It’s important to not only know what there are differences between payment processing solutions, but also to determine what the best payment processors are for your business. It can also be confusing to try to figure out who gets a take of the processing fee and to understand why it’s so high. There are a many other companies that get a piece of the credit card pie, from the merchant bank to the associations (like MasterCard and Visa), and whatever company that processes the card.

One thing you should understand as a business owner is what interchange plus pricing processors are. To begin with, interchange plus pricing helps you to understand who you’re paying when you pay a fee for a credit or debit card charge. It makes the transaction much more transparent so that you know exactly what rates are being charged.

It’s also important to note that interchange plus pricing processor rates are generally much lower than flat or tiered rates. While it’s important to understand what interchange plus pricing processors are, it’s also essential to make sure that you find a company that you trust to help you to figure out the best payment processors for your unique situation and business.

At Y2Payments, we pride ourselves on helping to ensure that our customers get the right processing for their business. To learn more about how we can help, contact us today.

ACH, PCI and other Payment Acronyms You Need to Know Now

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Owning a business comes with something of a learning curve, and it’s one reason why so many promising young businesses close before they’ve even gotten the chance to fly. Partnering with businesses that can help you achieve your financial goals is one way to help ensure that your company keeps its doors open.

At Y2Payments, we’re committed to helping our clients understand all of the different payment processing options they have available to them so that they can make an informed decision and discover what will work for their business.

An ACH payment processor (Automated Clearing House) is a processing option that processes large volumes of transactions, like debit or credit, in batches. If you add an ACH payment processor to your company, you’ll be able to open up your available payment acceptance options to a much wider group of people. You’ll be able to allow your customers to make purchases that are hassle-free from their checking or savings account.

In giving your customers an option like this you’re enabling them to have greater options to choose from when ordering your services or products. This means that you’ll have a much higher chance of completing sales.

At Y2Payments, we also can help our customers to become a PCI compliant processor. But what is a PCI compliant processor and how can becoming one help your business? PCI compliant stands for Payment Card Industry compliant. A PCI compliant business is one who is able to accept credit card information and safely store and process it.

The goal of being PCI compliant is to be able to protect any stored cardholder data that you may be handling with your business. No business owner wants to be responsible for credit card leaks. Not only will it anger your customers, it will significantly increase the possibility of losing any future customers as well.

At Y2Payments, we fully understand PCI compliance and will be able to help you bring your business up to speed and fully protect your customers credit card information.

To learn more about how we can help your business move forward, contact us today.

Y2Payments and Customer Service Go Hand In Hand

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The world of consumer products is a customer service oriented world. Actually, thanks to the internet and the fact that any information is instantly available, any business that deals with customers or clientele needs to have high quality customer service.

At Y2Payments, we understand how important it is to have the right customer service agent available when you need them. The world of commerce and sales doesn’t stop for anything, especially if you’re an online retailer. The Y2Payments difference is that we have a customer service associate here and ready to help you, 24 hours a day, 7 days a week.

One of the reasons we try to make sure that we’re available at any point in time is due to today’s retail climate. Customers want to be able to buy what they want, when they want it. The last thing you want to have to deal with is any sort of payment issues.

At Y2Payments we can help you immediately so that you don’t have to wait until the next day to get things solved. We’re even available on the weekend, which means your Monday will be a little less stressful as you’ve been able to take care of any payment issues over the weekend.

Friday evening you decide to look over the Conduit report and you discover something that doesn’t make sense? No problem. We’re here to help! Just give us a call at 888-693-1850. It does not matter the time of day, we’re available and ready to help you understand the report. If there are any problems, our agents are fully capable of taking care of them for you, or knowing what process needs to be followed to get everything fixed properly.

With Y2Payments, you don’t have to worry about being left in the dark or floundering with a payment issue. We pride ourselves on making sure that our customer service is top notch so that you can provide high quality customer service to your customers!

To learn more, contact us today.

What is a Payment Processor?

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A payment processor is a company that handles transactions for a merchant. Obviously, the merchant themselves can handle cash transactions. The payment processor handles payments involving credit cards, debit cards, and more recently, cryptocurrencies. Are there differences between payment processing solutions?

We’ll examine these. The best payment processors provide more than just the basic service. They can help you implement payment processing solutions, solve problems that arise, provide solutions to better handle chargebacks, as well as produce reporting that helps you analyze how your customers spend their money.

ETA Certified Payment Processing

Certified payment processing exists to act as a trusted and accountable mediator between your business and various financial institutions. The payment processing industry holds certain standards and requirements that enable financial institutions to feel comfortable entrusting many businesses with more extensive payment processing solutions.

Certified payment processing means that a processing company has been certified by the Electronic Transactions Association (ETA). This ensures you that a payment processor meets and maintains certain standards that are important to client businesses.  And, yes, Y2Payments is a long-time member of ETA.

High Risk Payment Processing

There are differences between payment processing solutions. To start with, many businesses are classified as high risk. Not all payment processors will provide their services to high risk businesses. If they do, their terms won’t be very favorable because this type of client falls outside their specialty.

A payment processor that handles high risk clients will often be able to provide better terms in your payment processing rates. Not only this, they’ll also be able to provide you more complete service. The best payment processors will help you implement all your payment processing tools, give you training so that you know how to use them, will respond to inquiries, can explain things, and will produce valuable reporting you can use to analyze customer habits and needs.

Payment processing deals with technology is first and foremost, but it excels when personal communication allows for the kind of flexibility that businesses need to operate within high risk industries.

For more information on Y2Payments payment processing, contact us today.

How to Reverse Chargebacks

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Handling chargebacks is a process fraught with frustration. You have to convince the bank that a chargeback dispute isn’t legitimate. It’s difficult – the system is built to favor customers for some good reasons. However, when credit card chargebacks should be reversed, it’s difficult to get it done easily. There is chargeback protection for merchants, like chargeback insurance. Let’s start from the beginning about what you can do.

Challenge the Chargeback

The most important step is to dispute credit card chargebacks when there’s a good reason to do so. If you absolutely know the customer’s in the right, and wasn’t provided a product or service, then don’t waste your and their time. However, if you’re in the right, then challenge that dispute. Most merchants either challenge fewer than half their chargebacks or never contest chargebacks. You should challenge every chargeback that you feel shouldn’t have been made. There’s evidence that this helps reduce the overall number of chargebacks you’ll face down the road.

Chargeback Insurance

Chargeback protection for merchants is available in the form of chargeback insurance. It was mentioned above that many chargebacks are made legitimately. These could be the result of stolen credit cards or credit card information, for instance. In this case, a merchant with chargeback insurance has protection. Such insurance policies may only cover transactions made through a particular payment processor, so be aware how and when you’re covered.

Chargeback Time Limit

Remember too that there is a chargeback time limit. Cardholders in general only have 120 days to file a chargeback related to fraud. There are time limits set up for every step of the dispute and challenge processes as well. Make sure you’re aware of all the time limits at play – they’ll vary by card and other factors – so that you’re able to assess the dispute’s legitimacy as well as your own timing and ability in responding.

For more information on Y2Payments Chargeback protection and how it works, contact us today at 888-693-1850.