Due to the fraudulent incidents associated with credit card, a new program is implemented for the convenience of merchants to eliminate and control fraudulent purchases. With the help of this new technology, a new chip is inserted in the credit card to avoid swiping of the cards. Instead of a card with a magnetic stripe authorized and swiped by a signature, the chip card is inserted at the terminal where it is kept for the PIN to be entered. This PIN is a secret numeric password with the help of which the user’s right to the card is authenticated.
What Is Chip Compliance?
This new technology with implanted security microchip in the credit card was first used by Visa and MasterCard in Europe and this technology is now being implemented in Canada where the credit cards with magnetic strip won’t be accepted any longer by the merchants by the year 2015. It is necessary for the merchants to switch their terminals to the latest chip compliance for enabling the use of chip cards instead of magnetic cards. If they don’t do this, this will result in disconnection and inability of continuing transactions for services or purchases. Financial institutions are sending notices to the merchants with non-compliant terminals warning them in advance about their disconnection. Hence it is necessary for the merchants to have their credit cards terminals upgraded in order to carry out their business smoothly.
Advantages of chip cards
It is necessary for every agency or merchant who accepts payments by credit cards from the local corner store to the Department of Transportation to have chip compliant terminals. Following are some advantages of a chip credit card.
• Signature can’t be reproduced fraudulently
• Since the chip information cannot be duplicated or copied, a chip credit card offer better security
• It is possible to store more programs and information on a chip credit card compared to a magnetic stripe
• Unauthorized usage is protected by security programs in the chip credit card
• The use of chip credit card ensures reduced fraud and increased security
• The processing time of purchases is saved with the use of a chip credit card
Demerits of chip credit cards
• Like with any other technique or technology introduced in the field of security, a chip credit card has its own disadvantages as well. Some of the disputes associated with this new technology are as follows.
• It is necessary to bring new chip credit card terminals; otherwise disconnection will occur making the purchases impossible.
• There are still chances of fraudulent transactions, if the PIN is known to other person.
• It is difficult to prove fraudulent purchases especially for services/purchases in foreign countries.
Canada has certain excellent merchant services which are very useful to small businesses with the purchase of chip credit card machines, minimizing the existing costs, payment processing fees, and any other worry that may confuse or obstruct the business owner. When a merchant account is set up with any of these service providers, guidelines and information is provided by the service providers in a cost-effective manner for the business. The service providers also help to prevent any kind of obstacles because of out-dated information, thus making the switch easier.
Most of the merchant services also offer chip-ready credit card terminals which a business owner can lease or purchase and this is the most favorable option. The solutions for credit card processing are offered by these service providers that best suits the budget as well.
Wednesday, July 27, 2011
Friday, July 22, 2011
Understanding Transactions Involved in a Merchant Account
The merchant account along with the processing services will help you take the money your customers want to give you and place it into your account.
Understanding Transactions
When a customer shows you a debit card or a credit card, there are several stages that will take place when the merchant swipes the card.
Authorization -- The authorization process takes place after the computers conducting the transaction connect to one another. The cash register or retail terminal will receive word about whether the credit card was declined or approved. When a transaction is approved, the computer used by the clerk will contact the bank issuing the cart to start the transfer of funds. No money has changed hands yet.
Merchant Stage -- This part of the process, also called merchant balancing, has the computer add up the amount of the sales.
Data Capture -- The computer that handles the transmission sends the information back to the point of sale terminal. After this stage, the transaction goes into the clearing stage. When it's all done, the two systems agree to disconnect.
How Debit Card Transactions Work
Debit card transactions go through all of the same steps that the credit card will go through. There are several preliminary stages. As the reader knows, he will swipe his card at the terminal. If the cashier selects a debit card option, the point of sale terminal will the user for his pin. The payment processing service will check the users account, if there is money in the account, it will be deducted automatically. If the funds are not there, it will be declined rather than overdrawn.
Why Use Credit Card Processing
Not every business uses a credit card processing company. Small businesses may find that it does not benefit them greatly and that the cost may be higher than they expected. A business owner is within his rights to have a minimum transaction for credit cards, but he should not go without a credit card processor. The trick is finding the right service for a business of any size.
Almost any bank will offer this service to a customer who is willing to pay the fees. Some banks will charge a per transaction fee while others will charge a service fee. What a business owner wants to look for in this type of service is customer service that is good as what he offers to his customers. Many people will find that the banks offer better customer service than what they can offer to their customers, but this has to do with size rather than an individual's level of dedication.
Monday, July 18, 2011
The Right Merchant Account Makes a Major Difference for Smaller Businesses
Can Canadian Businesses Keep Consumers' Credit Card Data Indefinitely?
For good reason, many might ponder whether it is legal for Canadian commercial concerns to retain details of customers' credit cards. The correct answer to this query is a resounding "yes." Unlike many other jurisdictions, federal law in Canada permit establishments that utilize merchant services to keep consumers' individual credit card data on file for up to six years after a transaction.
There are, however, certain applicable restrictions on this rule. When maintaining such records in an electronic format via a merchant account, businesses must implement various safeguards for such sensitive information. Online and conventional "stick-and-brick" establishments are both held to these rigorous security standards. If you are a small entrepreneur, there are many firms that offer credit card-related legal compliance services for holds of merchant accounts.
Paperless Documentation
Every business that accepts credit card payments via computer must maintain, retain, and secure customers' credit card details. Firms utilizing any computerized platform to process payments must strictly adhere to various consumer financial privacy regulations. Also, accurate computation of taxation and other business-related benefits and obligations rely upon scrupulous adherence to such standards.
Retaining Consumer Credit Data
Many reasons exist for Canadian businesses to keep purchasers' credit card data on file for a few years:
- Canadian businesses are legally required by the Revenue Canada to retain such information for up to seven (7) years;
- Online purchases nearly always entail credit card use for transaction consummation. Businesses are legally-bound to ensure that such sensitive data remains secure at all stages of its transmission, by appropriate encryption technologies;
- If a purchaser should demand a refund, full documentation of the transaction is required for its prompt processing. The final four numerals displayed on the credit card face demonstrates the absence of any fraudulent attempt to obtain cash or its equivalent.
- Quite often, consumers instigate refund requests many months after buying merchandise. In such instances, proper record retention facilitates ease of access needed for a full investigation as to the underlying cause of the request.
- If an online merchant maintain some form of automated renewal process such as is common for subscription-based service providers, prior capture of the credit card data is necessary to complete subsequent charges via the online payment processing system.
- If a credit card purchase is ever cancelled, the ability to quickly retrieve customer credit card data permits prompt charge reversal and refund processing.
Consumer Privacy
Sales persons and other business representatives remain under an affirmative duty to duly ascertain the accuracy of credit information. Such information should never be repeated aloud from stored database sources, however. Individual credit card information that is written or conveyed telephonically should reference only the final four digits of the account number. The consumer is then requested to verify this sequence, along with other personal identifiers.
Merchant Account Services for Small Canadian Businesses
Owners of smaller firms should be able to benefit substantially from retaining a reliable merchant account service provider. If you operate a small business in Canada and want to accept credit card payments to facilitate increased sales of the services or products you offer, find a merchant accounts servicer with an established reputation that you have rapport with. Choosing the proper merchant services vendor from here carries a major impact on your long-term business success by reducing the headaches and hassles of alternative payment processing and record keeping methods.
For good reason, many might ponder whether it is legal for Canadian commercial concerns to retain details of customers' credit cards. The correct answer to this query is a resounding "yes." Unlike many other jurisdictions, federal law in Canada permit establishments that utilize merchant services to keep consumers' individual credit card data on file for up to six years after a transaction.
There are, however, certain applicable restrictions on this rule. When maintaining such records in an electronic format via a merchant account, businesses must implement various safeguards for such sensitive information. Online and conventional "stick-and-brick" establishments are both held to these rigorous security standards. If you are a small entrepreneur, there are many firms that offer credit card-related legal compliance services for holds of merchant accounts.
Paperless Documentation
Every business that accepts credit card payments via computer must maintain, retain, and secure customers' credit card details. Firms utilizing any computerized platform to process payments must strictly adhere to various consumer financial privacy regulations. Also, accurate computation of taxation and other business-related benefits and obligations rely upon scrupulous adherence to such standards.
Retaining Consumer Credit Data
Many reasons exist for Canadian businesses to keep purchasers' credit card data on file for a few years:
- Canadian businesses are legally required by the Revenue Canada to retain such information for up to seven (7) years;
- Online purchases nearly always entail credit card use for transaction consummation. Businesses are legally-bound to ensure that such sensitive data remains secure at all stages of its transmission, by appropriate encryption technologies;
- If a purchaser should demand a refund, full documentation of the transaction is required for its prompt processing. The final four numerals displayed on the credit card face demonstrates the absence of any fraudulent attempt to obtain cash or its equivalent.
- Quite often, consumers instigate refund requests many months after buying merchandise. In such instances, proper record retention facilitates ease of access needed for a full investigation as to the underlying cause of the request.
- If an online merchant maintain some form of automated renewal process such as is common for subscription-based service providers, prior capture of the credit card data is necessary to complete subsequent charges via the online payment processing system.
- If a credit card purchase is ever cancelled, the ability to quickly retrieve customer credit card data permits prompt charge reversal and refund processing.
Consumer Privacy
Sales persons and other business representatives remain under an affirmative duty to duly ascertain the accuracy of credit information. Such information should never be repeated aloud from stored database sources, however. Individual credit card information that is written or conveyed telephonically should reference only the final four digits of the account number. The consumer is then requested to verify this sequence, along with other personal identifiers.
Merchant Account Services for Small Canadian Businesses
Owners of smaller firms should be able to benefit substantially from retaining a reliable merchant account service provider. If you operate a small business in Canada and want to accept credit card payments to facilitate increased sales of the services or products you offer, find a merchant accounts servicer with an established reputation that you have rapport with. Choosing the proper merchant services vendor from here carries a major impact on your long-term business success by reducing the headaches and hassles of alternative payment processing and record keeping methods.
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