To many chargebacks can put a merchant out of compliance. Both Visa and MasterCard have chargeback ratios they use to determine whether or not a merchant is in compliance.

Visa has a charge back ratio threshold of 1% of total sales volume (for any given month) and up to 100 chargebacks. Master Card is exactly the same scenario, only their threshold is a 0.5% ratio, and 50 total chargebacks in any given month. In addition, you can find more information regarding these programs at:

• MasterCard Chargeback Manual
  
• Visa Card Acceptance Guide
  

You can calculate your charge back percentage by dividing the dollar volume of chargebacks in a month by the total dollar volume of Visa/MasterCard transactions processed in that same month.

If you are concerned about chargebacks please contact us immediately. Platinum Payment Systems specializes in handling higher risk accounts and helping the merchant reduce their chargebacks and chargeback costs. We can also fight your chargebacks for you through our Consumer Credit Mediation and Chargeback Defense Service.

Here is how the Chargeback Process Works

1. One of your clients or shoppers has a problem with a transaction that took place at a merchants site.
2. The shopper informs their credit card issuer about the problem and asks for their money back.
3. The card issuing bank then reimburses the shopper the amount of the disputed transaction.
4. The card issuing bank then starts a special process, called chargeback, and obtains funds from the merchants processing/acquiring bank that will in turn debit the amount directly from the merchants bank account along with the chargeback processing fees.
5. The acquiring bank sends a Notification of Chargeback (NoC) and a Request for Information (RFI) to the merchant.
6. The merchant provides documentation to the shoppers issuing bank to dispute the NoC.
7. If the merchant provides sufficient amount of documentation to show they did not deserve the chargeback then the card issuing bank will reimburse the merchant and debit the shopper the disputed amount. If the information is not sufficient then the merchant looses the chargeback dispute and the money is gone for good.

Ever tried to process a higher ticket transaction for a client and have it repeatedly come back as declined only to have the client tell you that they are positive they have a sufficient limit and funds on the card for the transaction, and are even somewhat offended by the fact you are telling them it was declined? Many merchants have experienced this frustration and are wondering what the right answer is.

The truth is the customer usually does have a sufficient limit and funds on the card for the transaction. However, because the transaction is outside of the customers “traditional” or “normal” spending habits or they are using a card they haven’t used for some time the issuing bank that gave the customer the credit card will automatically decline the transaction as a precaution against fraud. Customers will have to contact their credit card company and request that they authorize the transaction. They can then go back to the merchant and purchase the good’s or service’s with no problem.

A good message to have on your check out page or to read to your customers would be the following:

“If this purchase exceeds your regular purchasing pattern or you have not used the card you are about to use in a long period of time, please contact your credit card company or your issuing bank and inform them of this purchase. In doing so, you will avoid the possibility of your credit card company and/or issuing bank declining the card due to irregular purchasing activity or possible fraudulent activity.”

We are excited to announce a new Check21 service that is now available to our clients and prospective merchants.

Check21 is a transparent process that converts a paper check or your client’s online billing information to payment of goods and services.

If your tired of Visa and MasterCard telling you what you can or can’t do or even shutting your business down without warning then Check21 is the solution. You won’t have to deal with anymore chargebacks, high reserves, PCI compliance fees, high risk chargeback monitoring programs, and NACHA (Check21 is not regulated by NACHA).

Read more about our Check21 product here or contact us today for a free evaluation.

We are excited to be able to offer a new mobile payments solution.  The payment platform can be used on any web enabled mobile phone or PDA, it turns a mobile phone into a credit card terminal without the need for any extra equipment, making it possible for merchants to accept credit card payments virtually anywhere they can receive a cell phone signal. All credit card activity is processed in real time and merchants have the option to email a receipt of the transaction to customers.

Mobile payments are great for those merchants who are constantly on the move, work at home, sell products at craft fairs, conventions, and boutiques and want to be able to accept credit card payments to increase their sales.  With a web enabled mobile phone they can now accept credit cards and not have to worry about purchasing an expensive credit card terminal or pay the expensive lease fees that come with them.

Some Benefits include:

• Convenience
• Safe and secure
• Significant savings over the cost of wireless terminals
• No per transaction fee
• PCI Compliant
• Immediate approval or decline notice for transactions
• A business can use one merchant account but have a remote workforce processing payments using mobile phones.

Contact us today for more information!

[via Visa Inc. Press Release]

“We are disappointed that Senator Durbin has decided to force unrelated legislation into the financial reform package at the eleventh hour without a hearing or debate.

“Thursday’s vote is another step in a lengthy legislative process. We’re hopeful that when the issue is fully reviewed by members of Congress during the next phase of negotiations, they will conclude the amendment harms consumers, credit unions and community banks and should be eliminated from the bill.

“Visa will continue to work with policymakers to educate them about this flawed legislation that imposes price controls on debit products and allows retailers to dictate which payment card is used by consumers at the point of sale.

“Debit products deliver significant incremental value over cash and check, including guaranteed payment to merchants, greater security and increased sales, all of which the Durbin amendment ignores.

“At the direction of Congress, the U.S. Government Accountability Office (GAO) has twice examined the potential impact of proposed interchange legislation, and confirmed that there is little evidence to suggest that consumers would benefit. In Australia, where price controls have been implemented, consumers have not seen a reduction in retail prices, and instead have experienced reduced consumer benefits and increased costs.

“We hope Congress sees today’s amendment for what it is – an attempt by retailers to increase their profits at the expense of consumers.”

New PCI compliance standards will being going into effect this summer. Not being PCI compliant increases your chances of undergoing a data breach, which has significant repercussions and could cost
you your business. If businesses don’t comply to the PCI standards they may be fined anywhere from $10,000 to $500,000 or more per breach. Incidents currently lead to a
minimum of $12,000 in forensic investigation and legal fees. Merchants can be liable for chargeback fees, costs to cover fraudulent
purchases, re-issuance fees at $5-25 per compromised card, and possibly paying to supply security monitoring of all compromised
accounts. Businesses may also face the possibility of having their ability to accept credit cards revoked all together.

A detailed description can be found here.

Senate passes amendment on debit and credit card swipe fees that allows stores to give customers discounts for paying with cash or using cards with cheaper fees, and it would permit retailers to set price thresholds for accepting credit cards.

This could be great, especially for the small businesses, it keeps more money in their pockets and allows them to grow which is vital in our current economy.

You can read the article here.

Authorize.net has been a trusted partner of Platinum Payment Systems for many years. At Platinum we have seen Authorize.net grow and become a powerhouse in the payment gateway industry. Authorize.net was acquired by CyberSource, another leading payment solution provider, approximately one year ago, and we are now happy to announce that Visa has entered into an agreement to acquire CyberSource.

The press release states:

“Visa Inc. and CyberSource Corporation, provider of CyberSource and Authorize.Net payment management services, today announced that they have entered into a definitive agreement for Visa to purchase CyberSource.”

To read more from the press release click here.

Platinum Payment Systems is excited to announce it’s recent partnership with GLOBA Inc.

GLOBA is a new and simple way to send and receive money, buy or sell products and services, and stay connected via your mobile phone. Enhancing the usual banking needs with our safe and easy-to-use GLOBA mobile application, anyone can enjoy the benefits of easy money transfer, flexible payment via mobile phone, and secure management of their money when on the go. You can make purchases and settle bills without having to run across town or stand in a boring bank line. GLOBA is your money!

GLOBA also offers an extensive list of merchant tools which have been developed to give our merchants the ability to integrate GLOBA into their online and mobile products. For more information regarding these tools and our merchant program visit our merchant section. If you want to stay informed about new developments or new features regarding Globa feel free to monitor GLOBA’S blog at http://blog.globa.com.

You can access the FREE GLOBA application on your mobile phone by going to m.globa.com. Start adding your friends and enjoy easy access to your money from Globa anywhere anytime!

GLOBA is also available through your phones WAP browser or via standard SMS.

Whether you are a mobile merchant, online retailer, sending money to a friend or relative, advertiser, or affiliate marketer, GLOBA has the solution to fit your needs.

We would like to inform everyone of changes expected from the Payment Brands regarding practices that are considered “Brand Damaging”.

Both Visa and MasterCard are taking action in response to increases in consumer disputes related to card-not-present and direct response products and services.

MasterCard, specifically, has received written correspondence from the U.S. Congress (Senator Rockefeller) regarding cardholder complaints against continuity program merchants. The cardholder is typically unaware that they are automatically set up for automatic recurring billing (referred to as negative option renewal), and many times are also sold and billed for additional products.

MasterCard has recently warned the Acquiring community that “Negative Option” enrollment will be considered a “Brand Damaging” business practice. “Brand Damaging” is a very broad term and is still being defined. Indications are that MasterCard will require immediate termination of merchants identified as using this business practice, along with any other practices considered “Brand Damaging”. This follows recent policy changes from Visa regarding descriptor formats and disclosure of corporate entities related to Direct Response offers, with the intent to enforce all chargeback and transaction monitoring programs as defined by the associations.

To date no formal announcement has been received from the card associations, however we are issuing this communication now in an effort to educate and assist our agents/merchants in complying with anticipated Payment Brand mandates and actions.

We cannot accept merchant applications for products and/or services employing “Negative Option” enrollment, in addition to the following practices:

• Marketing models that employ “Free-Trial”, “Deferred Billing” and/or “Shipping Only”. Customers must be receiving a tangible good or contracted service in exchange for charging of payment cards. Incentivized discount offers are acceptable when the cardholder is receiving something in exchange for payment, however we will be unable to support accounts engaging in hidden or delayed charges and ‘free’ offers that are not truly free.
• “Cross-Selling” and “Up-selling” business practices. All sales should be directly between the business entities (merchant) processing the transaction and the cardholder, with cardholder authorization for all purchases.
• Per Payment Brand guidelines, the use of multiple merchant accounts, billing descriptors and merchant processors may be viewed as an attempt to avoid chargeback monitoring programs and is prohibited. Perceived non-compliance has led to termination of processing relationships. PowerPay will review the business consideration for opening multiple merchant accounts to ensure compliance with Payment Brand guidelines.
• Transactions generated from internet traffic and all other lead sources must be managed and monitored for potential fraud using an approved system. Third Party service engagement may be a requirement for account approval.

The FTC has recently published guidelines regarding “Negative Option” enrollment programs and is taking a very aggressive position against merchants utilizing/employing this business practice. Recommendations take in part from the FTC’s website may include but are not limited to the following:

• Material terms should be disclosed in a clear, concise manner. Unnecessarily long or inconsistent terms are viewed as an attempt to mislead the consumer.
• Terms should be disclosed in a conspicuous manner, clearly placed and labeled on websites in a location that indicates the importance and relevance to the transaction. Fonts and colors must be easy to view.
• Material terms must be disclosed prior to completion of the transaction and before a financial obligation is incurred by the consumer.
• Customers must provide affirmative consent to any offer, examples include a mandatory “I Agree…” statement checkbox, where the customer is acknowledging the Terms and Conditions of the offer and consents to be entered into continuity program as a result of completing the transaction. Pre-checked boxes do not qualify as affirmative consent.
• Merchants must not discourage or make difficult in any way the disclosed cancellation procedures and all cancellation requests must be honored in accordance with the stated terms of the transaction.