Merchant Guide

Merchant Account Basics

This article should give you a good working understanding of how secure credit card processing works.

If you are not quite ready to boost up your website with e-commerce functionality, don’t worry, the following information is valuable in evaluating your needs. If you are considering getting secure credit card processing on your website for the upcoming holidays, now is the time.

The internet represents a tremendous opportunity for your business – whether you’re an entrepreneur looking to market and sell your idea or a large corporation searching for new ways to increase sales.

Selling goods and services on the internet presents its own set of challenges — like how to set up and maintain a secure, reliable, cost-effective system for authorizing payments and managing transactions. If you don’t know what you’re doing – and sometimes even if you do – that can be a difficult, complicated, and expensive task.
Credit card processing removes the barriers that might prevent you from doing business on the internet.

You’ll need an automated payment system, a credit card merchant account, and a computer with an internet connection. You can do everything within your web browser.

Overview

What is Credit Card Processing ?

A real time credit card processing system is a transaction processing system that functions as a payment service using a secure transaction server on the internet. Merchants with a valid merchant account can use the system to submit, authorize, capture, and settle credit card or eCheck transactions without the need for a separate transaction terminal or processing software.

Methods Of Processing Transactions

Virtual Terminal

Virtual Terminal is hosted completely on our transaction servers, where merchants simply login using their favorite web browser and perform live transactions using their merchant account. A merchant can enter a transaction manually and a virtual terminal will process the transaction in real-time just like a physical card terminal would.

Web Link

Web Link allows a merchant to link their web site to the system in order to accept credit card payments from customers in real-time with complete automation.

ADC (Automated Direct Connect)

Automated Direct Connect provides a simple and straight forward mechanism to link more complex web sites with the transaction gateway server, including support for the merchant’s own custom programming.

Merchant Accounts

The system is separate from your merchant account. The terms and conditions of your merchant account are between you and your bank or merchant provider, and should be consulted for specific information related to your merchant agreement with your bank or merchant provider.

A merchant account is required to accept credit cards. A merchant account is a special account with a bank that is a member of the Visa and MasterCard associations. Such a bank has been certified by Visa and MasterCard associations and can provide you, the merchant, with all of the services related to your merchant account.

Once your merchant account is setup and “live” on the credit card system, you can accept credit cards from customers generally as follows:

1. A customer presents their credit card for payment

2. Using their credit card number, you submit an electronic request to the processing network for “authorization to capture funds” from the carholder’s credit card account in the amount of the purchase.

Traditionally, one would submit this request by swiping a credit card through an electronic transaction terminal provided by the bank. With the system, this request is provided electronically to our payment gateway servers, which then route the request along the processing network.

3. The processing network immediately receives your electronic request and determines if the carholder’s account is valid and if the funds are available. If they are, the processing network returns an electronic response to your terminal or computer. This response is called an “authorization code”, and is your guaranteed authorization to capture the funds. Typically, this code is a six-digit number. The transaction and its associated authorization are stored in a “batch”, where other transactions for that day reside.

4. You print a receipt for the customer using the electronic terminal or your computer and the customer signs the receipt. As far as the customer is concerned, the transaction is complete. As far as you the merchant are concerned, there is one more step to complete the transaction.

5. At the end of your business day (usually), a final request is submitted to the processing network to go ahead and “capture the funds” that you obtained authorizations for during the course of business that day. This is called “settlement” or “settling your batch”. With a traditional physical credit card swipe terminal, this settlement process must be initiated manually. One of the key advantages of our system is that this settlement process is initiated automatically every day on our end.

6. At settlement time, the processing network immediately receives your response electronically and determines if the capture amounts contained in your request match the authorizations for each item. If so, the request is granted and an “Accepted” response is returned to your electronic terminal or computer. A settlement report can be printed showing the grand totals by card type (Visa, MasterCard, American Express, Discover, etc) for the settled batch. Note: any corrections to your batch, such as voiding a transaction, must be made prior to settlement.

7. Within 48 to 72 hours (usually), the funds associated with the batch you settled are deposited electronically into your business bank account. Typically, the discount rate you pay to your merchant account provider are deducted from the deposit before it transferred to your bank account, resulting in a “net deposit” of funds.

8. At the end of the month, your merchant account provider will mail a statement to you, detailing the credit card activity for the month and the associated fees you have been charged for such.

Now that you understand the basics of how a credit card merchant account works, you can see the role that the system has in the processing of your credit card transactions.

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Every visitor runs through your checkout process with ease and getting your goods to consumers is a breeze… The dream of every ecommerce shop owner. Abandon rates in the checkout process are costing merchants thousands of dollars. Often times checkout processes are more complicated than they have to be, with little to no help given to the consumer are the most common reasons for consumers not to complete the checkout process.

Here are the TOP 4 ways to eliminate shopping cart abandon rates:

1. Design

By extracting the checkout process as far as possible the user can´t be distracted from any other content. A look Amazon’s checkout process will show you that they don´t even allow consumers to click “back”. The only way to go back is to use the buttons of your browser.

Not all ecommerce shops extract the whole checkout process, but the idea of Amazon is to tempt the user NOT to break-off.

2. OnPage or Multipage?

Best practice is to split up the checkout process into several steps. A complete checkout on one page will overwhelm many visitors. It´s easier for most visitor to break down serveral small barriers instead of one big barrier.

A great example how this is done using web 2.0 styles is the Magento Shopping Cart.

3. Gain trust, answer questions

3.1 Help your customers

Don´t let your visitor alone during the checkout process. Most of all visitors are worried to do something wrong. Every step needs a description. For big problems, offer an easy to use hotline or a live chat service. But it´s also important to describe pricing and shipping details directly on the page. Don’t make your clients guess.

3.2 Gain trust

To gain trust from your visitor you first need a professionally designed shop. The keywords here are quality and security. Use security seals from BBB, eTrust or McAfee. Use SSL certificates to give visitors a secure environment to do their shopping.

Show them also which payment methods you accept. Most importantly, accept all payment options. Not allowing your visitors to pay with American Express Credit Cards will decrease your sales.

4. After-Sale Service

The order is sent, and now?

Inform your customer about the next steps. Send a order confirmation email. Tell them when the product will be sent and when it will be delivered and where the customer can contact you if there are any questions.

This also is the best time to ask for feedback.

5. Summary

There many placements in the checkout process which can be optimized, but there are just as many things which can go wrong. Analyze the exit pages of your ecommerce shop and find the problems on this sites. Try to understand your target group and collect feedback.

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Introduction

Credit card fraud is something that can never be completely eliminated, but rather something that must be managed. Merchants must develop a delicate balance between using safeguards to prevent fraud and not creating too many hoops for customers to jump through. In Part #1, we talked about fraud prevention basics like AVS and how-to authorize transactions properly.

After a credit card processor or registration service approves an order, the merchant needs to perform additional checks, as fraudulent orders sometimes are approved. The merchant should not depend on the credit card company, or the registration service, to stop all fraudulent orders.

Tools to combat Fraud

There are many tools out there to help combat fraud and to list them all will easily fill another article. In order to identify the best solution or your business, you must clarify these questions first:

• Are you in danger of losing your merchant account by running chargebacks above 1%?
• Do you want to handle fraud and chargebacks yourself or focus on your main business instead?
• Out of 10 chargebacks, how many are due to fraud?
• How much time and resources (staff, money, etc.) do you currently spend on fraud & chargebacks?

One you have the answers to these questions you are fully prepared to seek the best solution for your business. For a great comparison of the most common fraud tools out there, subscribe to our newsletter and stay tuned for upcoming articles.

Card Verification Methods (CVM)

Card Verification Methods (VISA = CVV2, MasterCard = CVC2, and American Express = CID use a security code of 3 or 4 extra digits imprinted on the card, but not embedded or encrypted in the magnetic stripe. This verification code does not appear on credit card receipts. Since most fraudulent transactions result from stolen card numbers rather than the actual theft of the card, a customer that supplies this number is much more likely to be in possession of the credit card. VISA claims that the use of AVS with CVV2 validation for card-not-present transactions can reduce chargebacks by as much as 26%.

Merchants that accept Internet, mail-order, and telephone orders must be prepared to request the verification code when the cardholder is not present to help validate a transaction. Even if a merchant cannot confirm the CVV2 number, they can still ask for it, or provide a space for the number on their web order form. If the crook does not have the number, they could look somewhere else to commit their fraud. The merchant is not allowed to store the CVM numbers. This is against PCI compliance regulations and can cost you tens of thousands of dollars for every single violation. Be careful not to store the CVM codes at any time.

Payer Authentification Programs:

Authentification programs (Verified by Visa and MasterCard’s SecureCode) use personal passwords to ensure the identity of the online card user. If merchants use this program, card issuers may occur some of the losses for online fraud that was previously entirely borne by the merchants. If merchants do not participate, they remain liable for the losses.

The pop up windows for authentification can be blocked if card holders have installed software to disable pop-ups. This also adds an extra step in the ordering process. There is also an additional processing fee incurred by the merchant. Another loophole is if the customer claims they never received the merchandise. We have seen information indicating Visa always trusts their card holders, so the customer gets their money back and the merchant gets stuck with a chargeback.

Even if Visa rules against the merchant, the merchant can still take the customer to small claims court. If the merchant can prove the customer did receive the product, the merchant is entitled to recover the value of the product plus all their costs when they win. Most licenses included with software includes a clause concerning court actions. This is one more reason to keep accurate records, document customer phone calls, keep copies of emails, delivery signatures, and web logs.

BIN CHECK

The first 6 digits of the credit card are called the Bank Identification Number (BIN). You can determine if the credit card holder and the issuing bank for the credit card are located in the same country. Legitimate users sometimes use a credit card from another country. You can enter the BIN of a credit card number at http://www.bindatabase.net. The site provides the bank name, card type, and a 3 character code for the country.

CALLING THE CARD-ISSUING BANK

When you call the card-issuing bank, have your merchant number, your phone number, the customer’s full name, address, and phone number ready. You can ask the card-issuing bank to make a courtesy call to your customer to verify the charge.

DIFFERENT BILL AND SHIP TO ADDRESSES

Use Google to search for the numeric street address, street name, and zip code. The web site at http://www.anywho.com integrates telephone numbers, maps, and email addresses. Check for bogus billing addresses like 123 Main Street. Use resources like http://maps.yahoo.com to see if the address can be verified. If the billing and shipping addresses are different, request telephone numbers for both addresses. You can also establish a company policy and charge an extra fee to recover your costs to require a delivery signature (UPS, Federal Express, post office) if the billing and shipping addresses are different. You could require advance payment with a cashiers check or money order when different ship to and bill to addresses are used.

Be careful of remailing services, such as Mailboxes, etc. Remailing services can remail your packages to overseas destinations.

Coming up next week: Learn the advanced database management techniques that will make fraudsters frustrate. And don’t forget to enter the Sweepstakes at http://www.SocialBusinessBank.com/win. It’s payback time. Till then, I’m waiting to hear some feedback from you. Contact me personally at Twitter (personal account).



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Introduction:

This article suggests preventative methods and post-order procedures that merchants can perform to minimize credit card fraud. When a brick and mortar merchant accepts a credit card, and the charge is authorized, and assuming the merchant conforms to regulation, the merchant will get paid, even if a stolen card is used.

Want to win 1 year of free credit card processing? You should check out the Sweepstakes currently going on at http://www.SocialBusinessBank.com/win.

Liability for fraud shifts from the card issuer to the merchant for ‘Card Not Present’ sale (mail order, telephone/fax order, and internet sales). The merchant is generally liable for credit card charge backs, even when the bank has authorized the transaction. After a merchant is stung by a fraud, the credit card processors often hike their rates, citing increased risk. The merchant also risks losing their accounts with the card companies if their fraud rate gets too high.

Everyone points fingers at everyone else (processors, banks, VISA/MasterCard, and the merchants). Law enforcement and government agencies tend to only investigate big cases. No one takes the blame for credit card fraud.

Forbes claims most credit card numbers are still stolen the old-fashioned way. Unethical retail store clerks and restaurant employees steal card numbers often using hand-held skimmer devices. A scam artist can go through the trash of any merchant (brick and mortar or e-commerce) or customer garbage, get valid credit card numbers, and use them on the Internet.

Industry analysts and e-merchants claim the credit-card companies have yet to come to grips with the full scope of the problem. None of the credit-card associations disclose exact loss-rate figures for fraud – Visa, MasterCard and American Express claim to have a handle on the problem overall.

Follow the Rules

Your chargeback rate is the risk indicator used by all processors to determine your processing rates. High chargeback ratios equal high risk; and the higher your perceived risk, the more likely contingencies such as rolling reserves, pay-out delays and high fees will be part of your merchant agreements.

If you suspect a fraudulent order being placed with your company, place a verification call and inform your processor of any fraudulent transaction. Everyone wins when the processor, the card issuing bank and the card holder are notified of a fraudulent or suspected fraudulent transaction.

Authorize the Transaction

Authorization approval does not mean that the merchant is guaranteed payment. Approval only indicates that at the time the approval was issued, the card hasn’t been reported stolen or lost, and that the card credit limit has not been exceeded. If someone else is using the credit card number illegally, the card holder has a right to dispute the ‘approved’ charges.

Address Verification System (AVS)

In the US, AVS checks if the cardholder’s address and zip code matches the information at the card-issuing bank. AVS only uses the zip code and numeric portion of the billing street address. There are many reasons why AVS may fail (recent address change, AVS computers down, etc.).

If the address verification fails on any level, the merchant may decline the transaction. If the AVS fails for any reason, the merchant should contact the customer for additional information (for example, the name of the issuing bank, the bank’s toll-free telephone number, etc.).

If your current system of authorization approval cannot provide AVS, then you can get address verification from the card holder’s issuing bank for MasterCard and VISA. Discover and American Express purchases can be verified by calling them directly.

Once a fraudster has a legitimate customer name and the stolen credit card number, they can use the Internet to look up their victim’s telephone number, address, and zip code. This allows a software purchase to pass AVS, and the fraudster can download the software before the fraud is reported. With orders that are shipped, the thief can provide the correct billing address for AVS approval, but request a different ship to address.

Coming up next week: Learn the advanced techniques that will make fraudsters frustrate. And don’t forget to enter the Sweepstakes at http://www.SocialBusinessBank.com/win. It’s payback time. Till then, I’m waiting to hear some feedback from you. Contact me personally at Twitter (personal account).

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Kiva – Loans that change lifes

Kiva is one of the biggest non-profit organizations that helps people around the world to grow their businesses.

Some facts about Kiva

Kiva’s mission is to connect people, through lending, for the sake of alleviating poverty.

Kiva empowers individuals to lend to entrepreneurs across the globe. By combining microfinance with the internet, Kiva is creating a global community of people connected through lending.

Kiva was born of the following beliefs:

• People are by nature generous, and will help others if given the opportunity to do so in a transparent, accountable way.




• The poor are highly motivated and can be very successful when given an opportunity.




• By connecting people we can create relationships beyond financial transactions, and build a global community expressing support and encouragement of one another.

Social Business Bank and Kiva

Social Business Bank is proud to support Kiva. We have helped many poor entrepreneurs to start or grow their businesses. We are a social business, and it´s our mission to help other businesses to succeed. As a social business, our bottom-line profits are re-invested by providing more competitive rates to our current customers and to support non-profit organizations such as Kiva.

You can also become a member of Kiva and help poor business owners around the world.

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Social Business Bank has started  a new campaign called Win 1 Year Free Credit Card Processing. There is no requirement to enter the drawing; to participate visit

www.socialbusinessbank.com/win

“With this campaign every merchant in the United States has the chance to reduce his processing costs immensly”, says Samir Said, CEO of Social Business Bank.He adds

“There´s nothing more to do than filling out the contact form on our website. With this campaign,we want to show the world, that there are other values when applying for a merchant account than just bankable collaterals. This is the first step to show how Social Business can help businesses with meaningful actions. Trust and respect are very important in every business.

Our customers trust us and fell comfortable when they call us because they know there´s someone who helps them and solve their issues. Frankly, is there be a better job making a living by helping hard working people succeed in their businesses ventures? I don´t think so.”

Social Business Bank is Americas first Social Business Banking and Financial Institution. With Easy Shopping^tm and Easy Services^tm Social Business Bank provides full-service credit card acceptance and merchant account solutions for small businesses, social & non-profit entities and corporate organizations.

Introducing dignity back into the banking and financial services along with making social business a mainstream and well understood term are the two goals of Social Business Bank.

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Facebook and its community is growing every day. When we can trust the numbers of Facebook´s statistics, there are more than 400 million active users on Facebook.What a great place for companies to interact with customers and to promote corporate/product branding.

In this arctile we want to show, how easy it is to create a Fan Page for your company and brand. So, let´s get started!

Common Mistakes

Many companies want to use Facebook for branding, that´s great, if you do it right! A very common mistake is to create a group or a private profile for your company.

Facebook has designed Fan Pages exactly for companies, so why not use them? There are many advantages we can extract from Fan Pages, which you’ll find outlined below.

How to create a Facebook Page

If you´re currently logged in to Facebook, log out now. Go to facebook.com, at the bottom on the right you can see “Create a Page for a celebrity, band or business.“. Click on it or use the link given here. Now you can select the category of your page and also the name of your page. If you select “Do not make Page publicly visible at this time.” no one can see your page now, you can design it and publish it, when you think you´re ready.

Info, Picture, Tabs and more

Info

Logo

To show your fans who you are, create an amazing logo, you can also add your phone number and your website to the picture. Not to small, but: your images should not be larger than  600px (height) x 200px (width).

Tabs

Beyond the standard tabs, like Wall and Info, you can create your own Tabs and also create your own content for this Tabs. Use this feature to build a well-designed landing page! Here´s a how-to guide which will help you with this steps: Mashable: Build a Facebook Landing Page

Share your content

So everythings fine, but your Wall looks like the Sahara dessert. If you have running a Business Blog or a Twitter account, connect them your Facebook Page to fill your Wall with great blog posts and tweets. To share your blog content add the app NetworkedBlogs and click on “Register a new Blog” and fill out required fields. To add your Twitter account to your page, use this link and click “Link to Twitter”.

You need Fans

First rule: Ask all your friends! Why not? It´s  your business which you want to promote. Also add a Facebook-Badge to your Blog, so every blog reader can also become your Faceook Fan. Some Forums also have groups called  “Facebook Fan Exchange”. That´s another way to get friend on you Facebook Fan Page.

And if you share high quality content, your Fan group will grow constantly.

Another hint: When you have reached 25 Fans you can create your own Facebook Fan Page URL. Goto http://facebook.com/username and click on “Set a username for your Pages“, but be careful, once created you can never change this name.

Here you can see the Social Business Bank Fan Page, hop on the link and become a fan now.

Good Luck!

For startups and established companies alike viral marketing is a highly recommended way to boost brands and generate the sales. But what exactly is Viral Marketing?

Viral Marketing is a marketing technique where companies and organisations use social networks and other media resources like TV or Radio to broadcast an extraordinary or profound message. With this message, companies call attention to a product or a service they offer or promote brand recognition. It´s called “viral marketing” or “viral advertising” because the marketing campaign is designed to be forwarded from one viewer to the next. Viral campaigns can be spread out via many services, the most common services being Youtube, Twitter, Facebook, E-Mail and word of mouth.

Sounds great? Finding a unique and amazing – often humerous – message which triggers so much attention that viewers republish it takes some thinking “outside the box”. In many viral marketing campaigns the product or brand is harldy mentioned at all. We have collected some great campaigns for you to give you some ideas how to create your own amazing viral marketing campaign.

Guys Backflipping Into Jeans – Levi’s

“This video gets major points in the “wow, that’s mad” department, which is a tactic that seems to consistently go well with viral videos. Plus, Levi’s understood the importance of being understated in this video. Try to be subtle, if that’s hard on you – try to be a bit more british in your viral ad campaign. People really dislike the shill.”

Million Dollar Homepage: Pixels for sale on an “online billboard.”

“This campaign offered advertisers the unique chance to buy a spot on the MillionDollarHomepage at $1 per pixel. You could buy as many pixels as you want, and once all 1,000,000 pixels were sold the site would stay like that forever. Well this 21 year old college student quickly sold every pixel, earning a million dollars to comfortably live the student way of life.”

Blendtec: Will it blend?

“This series of online videos were made to demonstrate how powerful these Blendtec blenders really are. They would take common objects we all can relate to, such as an iPhone, and throw them in the blender to show you, well poor iPhone… Many of their videos have gotten millions of views, taking them from a brand most people didn’t know about to an established leader in their industry.”

Nike: A Touch of Gold

“A Nike rep was dispatched to give Ronaldinho his new Nike soccer cleats, with a camera man covering the whole thing. Ronaldinho proceeds to put the cleats on, and perform some amazing tricks with the soccer ball and his new Nikes. Ronaldinho’s performance is the touch of gold, and the people who were smart enough to decide to use this as a campaign made a really smart move. This has become one of the most viewed sports related viral videos online.”

Sheep LED

“Samsung goes extraordinary lengths to show the power of LEDs in one of the most genuine and breathtaking pieces of choreography you are ever likely to see – sheer brilliance (pun intended).”

Merchant accounts can become tricky and choosing a new merchant account provider without some background information can get quite pricy to your business. This blog features articles to help you learn more about this industry. Submit your email address on the sidebar and you´ll get our posts per email or add our feed to Google Reader or another Feed Reader.

1. LinkedIn as information provider

Another way to learn and inform yourself is to create an account on LinkedIn and join groups of interest. You can find groups by searching the with the search box. Get started by joining these groups:

• Social Business Bank LinkedIn Group
• Merchant Level Sales
• Merchant Partnerships, Credit Card Processing

2. Collect Blogs and Magazines

The next step is to read blogs like this one. Blogs are a great tool to learn and discuss. There are also some amazing onlines business magazines like inc.com or entrepreneur.com out there, where you will find useful articles about credit card processing. Most of the magazines have a feed for every category, so you can focus on what is most important to you. A feed reader like Google Reader helps you organize and collect all feed subscriptions; take your time to read them carefully, they may help you to establish new ideas and partnerships.

3. Talk, Talk, Talk

The very best you can do is talking to people. The web offers an answer for almost everything, but isn´t it easier to send a direct message,  email,  contact a blog author or call the company you´re interested in? People typically aren’t very secretive about their success. Far from it! They can give the answers you are looking for and help you reach out to new potential clients and partners.

Contact us know. We are looking forward to answer you questions: (888) 255-4162

If you want to know more about Social Business Bank visit http://www.socialbusinessbank.com or follow us on Twitter!

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Crack the code on your card processing bills. Part 1.

No one likes bills, especially those types of bills that are filled with cryptic codes and dozens of line items. That’s a pretty good description of a statement from a credit card processor or – if you already have one – your merchant account provider.

In order to accept credit cards like Visa, Mastercard, [...]

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