Debit vs. Credit: Which is Safer to Swipe

Credit card fraud is on the rise. You need to protect yourself from identity theft. Both debit and credit cards offer solid protection to account holders. However, debit cards are linked to your checking or savings account. In the event of theft or fraud, credit cards provide an extra layer of defense because you have a better chance at getting your money back than if you paid with cash.

Fraudulent charges on a credit card can be reversed fairly quickly (usually 24 hours or less). However, it can take two weeks or more to restore funds to a debit card checking/savings account. And keep in mind, if your credit card information is lost or stolen, all major financial institutions and card issuers promise zero liability for fraudulent transactions. The same can not be said about protection for debit card purchases or ATM withdrawals. Under the Electronic Fund Transfer Act, consumers aren’t responsible for more than $50 if a lost debit card or fraudulent charge is reported within two days (however, your liability increases with time).

The recent data breaches at Target and Neiman Marcus have shown that your information isn’t always secure with merchants. However, at Banc Certified Merchant Services, we help keep your data secure with our PCI Customer Support Team.

To promote the security of the credit and debit card payment systems, the major card brands established the Payment Card Industry Council (PCI) to oversee its Data Security Standards (DSS). The PCI-DSS is the standard to which merchants and service providers must adhere for the complete protection of cardholder payment data. To protect cardholder data and mitigate financial exposure, it is imperative that all merchants validate and demonstrate PCI-DSS compliance.

HOW TO GET COMPLIANT

When it is time for you to validate your compliance, you will do so through your Processor. All Merchants are given an online Annual Self-Assessment Questionnaire (SAQ). The process takes roughly 30 minutes. BCMS will help you every step of the way with our dedicated PCI Customer Support team.

For more information on PCI Compliance, please click here.

 

For additional details, please contact BCMS at (877) 861-8008.

*Portions of this blog post are from Yahoo! Finance.

Why Are Electronic Payments Important?

The Strawhecker Group, in coordination with the Electronic Transactions Association (ETA), has developed a new infographic entitled, “Why Are Electronic Payments Important?

WHY

Can You Benefit from B2B/B2G Level III Processing?

Do you currently accept payments from other businesses or Government agencies? Are you a manufacturer or distributor? If so, your account should be established as a Level III Processing account, not as a retail merchant account. Nearly 100% of businesses are set up as “retail,” which results in 30 to 50% higher costs to process commercial and purchasing cards.

Why do retail merchants pay higher fees than B2B/B2G merchants to process the exact same credit card and transaction?

Level 3 Processing for B2B and B2G BusinessesThe average storefront retail merchant processes credit cards by swiping the card at the point-of-sale.  This payment processing environment is referred to as card present or swiped.  Swiping a credit card is considered a low risk transaction. Because the physical credit card is there, you can request ID and compare signatures if you choose (less risk).

When a retail merchant types in a credit card number (like a B2B/B2G, manufacturer or distributor typically does), it’s processed as a keyed or card-not-present transaction. The cost to process keyed/card-not-present transactions goes up significantly. The cost to process credit cards increases along with the risk and/or costly programs associated with specific card types (rewards, detailed procurement reporting, etc.).

MasterCard, Visa, American Express, and Discover all provide drastically lower interchange rates (for substantial savings) for merchants properly set up as B2B and processing Commercial Cards.

How do I know if  I am processing as a retail or a B2B/B2G account?  

Contact Banc Certified Merchant Services to get a FREE ANALYSIS of your current processing rates. We guarantee that we can lower your rates or else we will give you $1,000!

What are Interchange Fees?

Credit CardsInterchange fees account for the majority of credit card processing expense, and a familiarity with interchange is vital knowledge for any business owner or manager. Interchange is the cost of the money transferred from the acquiring bank to the issuing bank for each bankcard transaction. These interchange fees are established by the card brands (Visa, MasterCard, Discover, JCB, Union Pay).

Interchange fees for the two largest card brands may change twice annually in April and October. The interchange fee schedules for Visa and MasterCard can be found here:

Here is an infographic from the Strawhecker Group that illustrates an explanation of what merchants pay to accept credit cards, why it’s paid, and the benefits provided to merchants and consumers:

At BCMS, we guarantee the lowest processing rates in the industry, so you never have to worry if you’re paying too much for processing. We offer a cost-plus pricing structure which is the basic interchange rate plus a few basis points to cover our services. To lessen the impact of interchange fees, you may follow this guide:

Interchange Qualification

A number of factors are used to determine where a transaction qualifies at interchange. Some of these factors can be controlled or influenced by the merchant while others can’t.

Factors that merchants can influence include:

  • Processing method: Card-present and card-not-present are the terms used to generally refer to the different ways of processing a credit card transaction. Card-present interchange categories carry smaller fees than card-not-present categories.
    • Card-Present: Card-present transactions are those where a merchant actually swipes a card through a terminal or by an imprinted and signed credit card draft.
    • Card-Not-Present: Card-not-present transactions (CNP, MO/TO, Mail Order / Telephone Order, MOTOEC) are made where the cardholder is not physically present with the card at the time that the payment is effected. This situation is most common for internet, mail-order, or fax transactions and is a major route for credit card fraud.
  • Transaction data: The information supplied with a credit card transaction impacts how it qualifies at interchange. Proper and complete transaction data is especially important for merchants that process card-not-present transactions and for those that deal with corporate and government enhanced data.
  • Merchant Category Code: Specific interchange categories exist for businesses that fall under a certain merchant category code (MCC) designations.

Interchange qualification factors that a merchant can’t control include:

  • Card Type: Separate interchange categories exist for credit and debit card charges.
  • Card Brand: The brand of a bankcard will impact interchange qualification. This criterion is typically associated with credit cards that yield some type of reward for the cardholder.
  • Card Owner: Whether a credit or debit card is issued to an individual, business, corporation or municipal agency impacts interchange qualification.

The extent to which interchange can be optimized for your business depends on several variables. To learn more about interchange fees, please contact us today.