Accept Payments

Tokenized Payments. Storing Your Customer Data in the Cloud

2009-07-10T11:59:00.000-07:00

Tokenized payments are all the rage so what are they all about?

What is cloud computing?
Cloud computing is a style of computing in which virtualized resources are provided as a service over the Internet. For our purposes, tokenized payments is a place to store your sensitive customer data like credit card numbers.

How do token payments work?
Simply put, the customer information name, credit card number and other information are sent to the provider or the gateway. The gateway returns a token. The next time you want to perform a transaction that token is used instead of passing the credit card number.

What are the advantages of token payments?
There are several advantages to offloading sensitive customer data.

Data is stored safely and securely
No storage of credit card numbers reduces the Payment Card Industries rules and regulations on your company. Expensive audits are reduced to a self assessment questionnaire in most cases.
Reduced programming costs
Some gateways offer eChecks and credit card data storage.
Rebilling is made easy since you have the payment information

Providers that offer tokenized payments.
Token payments are relatively new, but the list is growing.

Zopay.com

Cybersource

USEPay

Payments Gateway

5 tips to reduce your credit card fees now

2009-06-27T09:31:00.000-07:00

Fees usually vary because of the risk the provider takes on by letting your company accept credit cards. You may pay more or less credit card fees depending on your industry because of the type of goods or services you sell.

Here are 5 tips you can use to save money on your credit card processing

Check that your provider is using the correct merchant category code (MCC) for your business
Swipe the credit cards wherever possible
Get direct interchange pass through pricing
Review your bill make sure you understand what's on it and how it got there
Reduce chargebacks by using fraud tools such a AVS etc

There are many other ways to save money on payment processing, but these you should be able to determine quite easily. Remember it doesn't always come down to the lowest rate quoted. Hidden fees can make the actual costs you pay much more than the quoted rate.

ACH Credit Transactions

2009-05-17T07:02:00.000-07:00

ACH credit transactions are used everyday for any number of reasons. Whether its dividend payments from your broker or your monthly social security check ACH credit transactions are an important part of the ACH network.

ACH Credits Usage
ACH eCheck transactions happen when the Originator (usually a company) starts a transfer to move funds to a Receiver's (consumer) account. There are a number of reasons to perform an ACH Credit transaction.

dividend payments
b2b payments
interest payments
annuities disbursements
telephone bill initiated payments
pension
tax payments
refunds
Social Security payments
payroll
government vendor payments

Here is an example. You have a brokerage account at Bank of America and you own 1000 shares of Microsoft. As of this writing Microsoft pays a dividend. If your set up to be payed the dividend, you the Receiver would receive the dividend as an ACH credit to your account from Bank of America, the Originator.

ACH eCheck Payment Applications

2009-05-03T08:25:00.000-07:00

The ACH Network supports a variety of payment applications from different vendors. An Originator initiating entries into the system will code the entries in a manner to indicate the type of payment, such as a debit or credit, and whether an entry is a corporate or consumer. The ACH application is recognized by a three digit code or an Standard Entry Class Code (SEC) code. This SEC code appears on the record format. It identifies the specific record format that will be used to carry the payment and the related payment information. Here is a list of entry class codes.

ARC - Accounts Receivable Entry
CIE - Customer Initiated Entry
MTE - Machine Transfer Entry
PBR - Consumer Cross-Border
POP - Point of Purchase
PPD - Prearranged Payment and Deposit
POS - Point of Sale
RCK - Represented Check
TEL - Telephone Initiated Entry
WEB - Internet Initiated Entry
CBR - Corporate Cross Border Payment
CCD - Cash Concentration or Disbursement
CTX - Corporate Trade Exchange
ACK - Acknowledgement Entries
ADV - Automated Accounting Advice
COR - Automated Notification of Change
DNE - Death Notification of Change
ENR - Automated Enrollment Entry
TRC - Truncated Entries
XCK - Destroyed Check Entry

ACH eCheck Acceptance

2009-04-24T13:55:00.001-07:00

Many merchants that have been concerned about taking checks in the past have now seen the light. eCheck or ACH transactions compared to credit cards can save you big money. Check acceptance is less risky and easier than it used to be thanks to electronic check conversion. ACH transactions are now a cost-effective method of payment and a fast way for your customers to pay safe and securely.

eCheck Conversion
A check conversion application turns a paper check into an electronic one. The resulting check is sometimes called and echeck or e-check. This is also known as an ACH transaction. The merchant will use a check reader to scan the check at the point of sale. The scanner is can be hooked into a software program that sends the check to the payment processor or the payment gateway. The gateway will return a response that is echoed back to the user via the application. The eCheck will clear depending on the type of agreement with the processor debits are usually faster than a credit transactions standard four day hold time.

Merchant Benefits of ACH
When converting checks or ACH processing is used in conjunction with check verification the merchant benefits are huge. Along with the lower processing costs of eChecks the entire process has been streamlined allowing for the integration of a accounting programs such as QuickBooks, and MYOB. Mistakes from data entry are reduced, the closing and settlement process is also simplified by using ACH eCheck conversion.

What is ACH?

2009-04-19T10:44:00.001-07:00

This should have been our first post, but better late than never. Every once in a while we get the question "What is ACH?".

Automated Clearing House
ACH stands for the Automated Clearing House Network. The ACH network is a nationwide electronic funds transfer system. The network is overseen by the NACHA operational rules. They provide the interbank clearing for electronic payments for participants. The electronic payments network and the Federal Reserve are in the position of ACH Operators or the central clearing houses which financial institutions to receive or transmit Automated Clearing House transactions.

ACH Volumes
According to Nacha the number of ACH payments originated by financial institutions increased to 8.05 billion in 2002, up 13.6 percent from 2001. These payments were valued at $21.7 trillion. Including payments originated by the Federal government, there were a total of 8.94 billion ACH payments in 2002 worth more than $24.4 trillion.

ACH Types of Payments

eCommerce, web sites etc
eChecks payments
B2B (Business to business) payments
Mortgages
Tax payments made to local, state or federal government
Direct deposits, government benefits, Social Security, tax refunds, payroll
Insurance premiums
Mortgages, loans
Utility bills
Insurance
Other consumer bills

Basic ACH Terms
Originator
An entity, individual, corporation that initiates entries into the ACH network.

Originating Depository Financial Institution (ODFI)
A participating financial institution that originates ACH entries at the request of and by (ODFI) agreement with it's customers.

Receiving Depository Financial Institution
Any financial institution qualified to receive ACH entries that agrees to abide by the NACHA Operating Rules and Guidelines

Receiver
An individual, corporation or other entity who has authorized an Originator to initiate a credit or debit entry to a transaction account held at an RDFI.

Hope that helps, clear up some confusion. If you would like to know more about the ACH network or NACHA please visit their site or leave a comment.

Check Verification vs Check Guarantee

2009-04-05T14:25:00.000-07:00

If you accept ACH, echecks or just plain old paper checks you probably use either a check verification service or a check guarantee service. These services are designed to reduce your company's exposure to bad checks.

Check Guarantee
If one of the checks you accept results in an NSF (Non Sufficient Funds) the check guarantee company will reimburse you depending on if the check was accepting according to the guidelines they provide. These guidelines cover whether the writers drivers license is on the back of the check etc. By not following these guidelines the check guarantee company may refuse to pay. Even if they do pay they have the option to debit your account later if they cannot collect from the bad check writer. The fees check guarantee companies charge are pretty steep for the average merchant.

Check Verification
This method of check protection gives you the option to decline or accept a check during the payment process depending on the information and data provided. Verification can be done at checkout. A real-time query is made to check the status of the account. A number of items can be checked.

Is the account in good standing
Has the account been stolen or a victim of fruad
Is the account a non DDA account
Are there sufficient funds to cover the check
Is the account in NSF
Is the routing number and account number valid
Is there a stop payment on the account

Another optional item would be to have the check ran through a database of known bad check writers.

Compared to check guarantee, check verification is far less expensive.

Some service providers may not be able to offer the entire list above for check verification and may just offer the negative database. In that situation you may want to look at another service provider to get the full benefit of check verification.

Nacha ACH Return Codes

2009-03-28T14:20:00.000-07:00

If your company does any kind of eCheck ACH processing you'll want to get familiar with at least a couple of these return codes from NACHA.

Return Code	Description
R01	Insufficient Funds
R02	Account Closed
R03	No Account/Unable to Locate Account
R04	Invalid Account Number
R05	Unauthorized Debit to Consumer Account
R06	Returned per ODFIs Request
R07	Authorization Revoked by Customer
R08	Payment Stopped or Stop Payment on Item
R09	Uncollected Funds
R10	Customer Advises Not Authorized
R11	Check Truncation Entry Return
R12	Branch sold to another DFI
R13	RDFI not qualified to participate
R14	Representment payee deceased or unable to continuein that capacity
R15	Beneficiary of account holder deceased
R16	Account Frozen
R17	File record edit criteria
R18	Improper effective entry date
R19	Amount field error
R20	Non-Transaction Account
R21	Invalid company identification
R22	Invalid individual ID number
R23	Credit entry refused by receiver
R24	Duplicate entry
R25	Addenda error
R26	Mandatory field error
R27	Trace number error
R28	Routing number check digit error
R29	Corporate customer advises not authorized
R30	RDFI not participant in check truncation program
R31	Permissible return entry
R32	RDFI non-settlement
R33	Return of XCK entry
R34	Limited participation DFI
R35	Return of improper debit entry
R36	Return of improper credit entry
R38	Stop Payment on Source Document
R40	Return of ENR entry by Federal Government Agency (ENR Only)
R41	Invalid transaction code (ENR Only)
R42	Routing number/check digit error (ENR only)
R43	Invalid DFI account number (ENR only)
R44	Invalid individual ID number (ENR only)
R45	Invalid individual name/company name (ENR only)
R46	Invalid representative payee indicator (ENR only)
R47	Duplicate enrollment
R50	State Law Affecting RCK Acceptance
R51	Item is Ineligible, Notice Not Provided, Signature not genuine
R52	Stop Payment on Item
R61	Misrouted return
R62	Incorrect trace number
R63	Incorrect dollar amount
R64	Incorrect individual identification
R65	Incorrect transaction code
R66	Incorrect company identification
R67	Duplicate return
R68	Untimely Return
R69	Multiple Errors
R70	Permissible return entry not accepted
R71	Misrouted dishonored return
R72	Untimely dishonored return
R73	Timely original return
R74	Corrected return
R80	Cross-Border Payment Coding Error
R81	Non-Participant in Cross-Border Program
R82	Invalid Foreign Receiving DFI Identification
R83	Foreign Receiving DFI Unable to Settle
Change Code	Description
C01	Incorrect DFI Account Number
C02	Incorrect Transit/Routing Number
C03	Incorrect Transit/Routing Number and Incorrect DFI Account Number
C04	Incorrect Individual Name
C05	Incorrect Transaction Code
C06	Incorrect DFI Account Number and Incorrect Transaction Code
C07	Incorrect Transit/Routing Number, Incorrect DFI Account Number, and Incorrect Transaction Code
C08	Reserved
C09	Incorrect Individual Identification Number
C10	Incorrect Company Name
C11	Incorrect Company Identification
C12	Incorrect Company Name and Company Identification
C13	Addenda Format Error
C61	Misrouted Notification of Change
C62	Incorrect Trace Number
C63	Incorrect Company Identification Number
C64	Incorrect Individual Identification Number
C65	Incorrectly Formatted Corrected Data
C66	Incorrect Discretionary Data
C67	Routing Number Not From Original Entry Detail Record
C68	DFI Account Number Not From Original Entry Detail Record
C69	Incorrect Transaction Code

How to make your software application PCI compliant.

2009-03-15T14:13:00.000-07:00

If your a developer who maintains a software application that accepts credit card payments you may be wondering how to make your program PCI compliant. Your not alone, every piece of software that accepts credit card payments or stores credit card numbers is now forced to become PCI complaint or be fined. PCI or the Payment Card Industry regulates the storing and transmission of credit card numbers.

Your options
There are two ways to become PCI compliant.
1. Subject your software application to a PCI audit. Representatives from the Payment Card Industry will review your application and make recommendations for the storage and transmission of credit card data. The audit will be intensive and costly and will need to be redone annually.
2. Rework your application to stop the storage and transmission of credit card numbers. At first this sounds foreign but read on.

Removing the storage and transmission of credit card numbers from your application.
Lets say for example you have a software application that accepts rent. Landlords use it on their desktop computers. They select a renter and charge their credit card.
We need to remove the portion that stores the credit card and replace it with a payment token. The token is generated when the landlord enters the credit card on a PCI certified site from your payment processor. Once you have the token you can store it in your application instead of the credit card number. When your ready to charge the renter you send the token along with the amount. Its that simple, your now PCI complaint.

PCI compliance in a few steps.
It doesn't have to cost a fortune to become PCI compliant just a small change your application can make all the difference. Often the change can be made in a way that your customers won't even notice.

List of Payment Gateways

2009-02-24T14:28:00.000-08:00

Here is a list of payment gateways.

· Anacom, Anacom Merchant Services, United States
· Authorize.net, Authorize.net, United States
· Banco Comercial Portugues, Banco Comercial Português, Portugal
· Bank Merchant POS (BMP), Bank of China, China
· Beanstream, Beanstream Internet Commerce, Inc., Canada
· Bibit, Bibit Internet Payments, Netherlands
· Bill4me.com, Facilitate I.T. Inc., Canada
· Biz*Star PX, Shanghai Shared Data Network Co. Ltd (SSDN), Singapore
· Business Gateway Service, WorldCom, Japan
· Buy-Line, Bank of New Zealand, New Zealand
· CAFIS, NTT Data Corp., Japan
· Cambist, Cambist Merchant Solutions, United States
· Camtech, Camtech Corp., Australia
· CCNow, CCNow, Inc., United States
· Chinatrust, Chinatrust Commercial Bank (CTCB), Taiwan, Province of China
· CIBC, Canadian Imperial Bank of Commerce, Canada
· CIPAS Indonesia, PT. CIPAS Indonesia, Indonesia
· CitiBank India, CitiBank India, India
· ClearCommerce, ClearCommerce Corp., United States
· ClickBank, Keynetics Inc., United States
· ClickPay, Professo, LLC, United States
· CMB, China Merchants Bank, China
· Comtrust, Comtrust, United Arab Emirates
· CyberCash, VeriSign Payment Services, United States
· CyberMUT, Groupe Crédit Mutuel, France
· CyberSource, CyberSource Corp., United States
· DataCash, DataCash Ltd., United Kingdom
· DirectLink, Plug 'n Pay Technologies, Inc., United States
· DnB, DnB - Den norske Bank, Norway
· E-Commerce Africa, E-Commerce Africa, Netherlands
· E-Payment, Interactive Worldwide Limited, Australia
· e4Sure, e4asia Inc., Thailand
· EBS, Electronic Billing Systems AG, Germany
· Ecgate, Ecnet, South Africa
· ECHOnline, Electronic Clearing House, Inc.,
· eops, eops AG, Germany
· ePagos, ePagos Merchant Services, United States
· ePDQ, Barclaycard Merchant Services, United Kingdom
· eSec Payment Service, eSec Ltd., Australia
· eStores, Bank of America, United States
· EuroDebit, Moreband Corp. NV, Netherlands Antilles
· FirstEcom, First Ecom, HongKong
· GestPay, Banca Sella S.p.A., Italy
· HDFCBank, HDFC Bank, Ltd., India
· I.N.G, Internet Networking Group, Netherlands
· iBill, Internet Billing Company, Ltd., United States
· IntelliPay, IntelliPay Inc., United States
· IPGS, Visa, United States
· iVeri, eCompany Ltd., South Africa
· JustGiving.com, Justgiving, United Kingdom
· Ka-Chingg and TPG, iPayment Technologies, United States
· Kagi, Kagi, United States
· LinkPoint, CardService International, United States
· LiveProcessor, Paymentplus, Inc., United States
· MultiCards.com, De Postel BV, Netherlands
· NetBanx, NetBanx Ltd., United Kingdom
· Netbilling, Automated Billing Services, United States
· Online Charge, Innuity, Inc., United States
· OrderButton, OrderButton.Net, Inc., United States
· Pago PAY, Pago eTransaction Services GmbH, Germany
· PAY@db, Deutsche Bank, Germany
· PayCash.ru, Alkor Group of Companies, Russian Federation
· PayControl, Netcetera AG, Switzerland
· PayFlow, VeriSign Payment Services, United States
· Paymentservice, Paymentservice.at, Austria
· Payments Gateway United States
· PayPal, PayPal, United States
· PaySeal, ICICI ePayments Ltd., India
· PayWare, Trintech Group plc, Ireland
· PayWay, Nobil IT Corporation, Canada
· PlanetPayment, Planet Group Inc., United States
· QPAY and QTILL, QENTA paymentsolutions GmbH, Austria
· QSI Client Class, QSI Payments, Australia
· Secure-e-pay, Global Tele-Systems Ltd., India
· SecurePay, SecurePay Pty Ltd., Australia
· SecureTrading, SecureTrading, United Kingdom
· Setcom, Setcom (Pty) Ltd., South Africa
· SIPS, Siam Commercial Bank PCL., Thailand
· Solo e-payment, Solo Market/Merita Bank Plc, Finland
· Speedpay, E Commerce Group, United States
· SurePay, SurePay LP, United States
· Telecharge Canada, TeleCharge Canada, Canada
· Telecommerce, France Telecom, France
· Thirt, Thirt.com, South Africa
· TOPGate, Shanghai Bankcard Network Services Corp., China
· USA ePay, GorCorp Inc., United States
· VIP, Virbus AG, Germany
· WebCollect, GlobalCollect, Netherlands
· Webmoney.ru, WebMoney Transfer, Russian Federation
· Webpay, Transbank, Chile
· WorldPay, WorldPay plc, United Kingdom

PCI Compliant Credit Card Transactions

2009-02-07T14:31:00.000-08:00

As a follow up to our previous post. We are going to get into a little more detail regarding PCI compliant credit card transactions and the storage of credit card numbers.

PCI compliant
As a merchant you need to be PCI compliant, but it doesn't have to be difficult. The storage and transmission of credit card data is regulated by PCI or the Payment Card Industry. What this means is that if you accept credit cards you have to abide by certain rules to protect that data.

PCI Complaint Credit Card Number Storage
PCI says do not store credit card numbers. If you have an e-commerce store or web site that accepts payments do not store those credit card numbers in a database even if they are encrypted. It should go without saying you do not want to send an email to anyone even yourself with the full credit card number visible. So what do you do?

Accepting Credit Cards
In order to accept credit cards for the average merchant you should be using your processors securely hosted payment page. This way the credit card number is not entered in on your site and the number is stored securely. Make sure your processor is PCI complaint.

Off Loading Credit Card Number Storage
For an advanced application you can submit a credit card number for your customer to your processor and it will return an ID. The merchants application can store this ID, when they are ready for another transaction they just send that ID to the processor instead of a credit card number. The merchant doesn't need to store credit card information and is PCI compliant.

Merchant Account Fees Part 2

2009-02-01T14:33:00.000-08:00

Continuing on with the merchant account fees from our previous post. Remember not all fees are charged from all service providers. These are the most common.

Monthly minimum fee
Sometimes a processor will impose a monthly minimum fee. If the monthly minimum is not met, the merchant is charged up to the monthly minimum to satisfy the minimum fee requirements.

Statement fee
The statement shows how much processing the merchant did and the costs incurred.
It reflects the number of transactions, total dollar volume and average ticket. This is a monthly fixed fee. Normally the statement is $8 to $10.

AVS fees
An Address verification service is used for fraud prevention. It compares the billing address provided by the cardholder with the card issuing bank's records. It verifies that they match.
Normally a 5 to 10 cents per item.

Bankcard authorization and transaction fees
Bankcards issued by Master Card and Visa charge an authorization fee is each time a transaction is sent to the card-issuing bank to be authorized. Normally between 10 cents and 20 cents, plus the interchange cost.

Nonbankcard authorization and transaction fees
American Express, Discover, Diners, and electronic benefits transfer (EBT), gift and loyalty cards.
The authorization fee is charged every time a transaction is sent to the card-issuing bank to be authorized. Normally between 10 to 20 cents.

PIN Based debit fees
Debit cards require that every transaction be electronically authorized. Each transaction is secured with the PIN number. Here is how PIN debits are priced.

A single flat fee
A transaction fee plus cost for the debit networks.

Voice authorization fees
If a merchant calls in a transaction for telephone or voice authorization. Normally the cost per voice authorization ranges from $0.75 to $1.50.

Batch fee
Settling, or batching is the act of sending a merchant's transactions at the end of the business day to the bank for payment. Batch fees are normally 10 to 35 cents per settlement.

Online merchant reporting fee
Normally reports are free, included with your virtual terminal, but if not some processors charge for online reporting. It can range from 2.50 to $10 per month.

Terminal repair or replacement
A simple warranty program that extends repair or replacement coverage to POS equipment. Around $5 to $10 per month.

Retrieval fees
When a transaction is disputed, a retrieval request is initiated. This fee is typically charged whether or not the chargeback is successful. Normally the cost is $10.

Chargeback fees
Chargebacks can be $15 to $25, per transaction if successful.

ACH reject fee
The same as an overdraft fee on a paper check. Its the fee imposed on a checking account by a bank when a check bounces, normally its around $25.

Annual fee
The amount charged annually for the merchant account. Not normally charged.

Payment gateway
Gateway fees range from $5 to $20 per month. Some gateways do more than process transactions. They can also store customer sensitive data like credit cards, identity verification and more.

Wireless gateway
Some gateways have a wireless option, that fee may be broken out. These fees are normally part of the gateway fees.

Merchant Account Fees

2009-01-10T14:38:00.000-08:00

There are many different kinds of fees that go into credit card processing that the merchant may have to pay. Knowing the different types of fees can save you money.

Discount rates
The discount rate is the fee the merchant pays per transaction. There are different rates depending on the type of transaction.

Qualified rate
The lowest rate. This usually requires that the cards be electronically swiped and the transaction settled within 24 hours. Also known as Swipe rate.

Mid Qualified rate
This is the percentage rate merchants are charged whenever they accept credit cards that do not qualify for the lowest rate. Here are some reasons why this can happen.
non-swipe transaction

non-swiped credit card transaction
foreign car, business card or rewards card
batch not done in a timely manner (24-48 hours)

Mid qualify is also known as a partially qualified rate.

Non Qualified rate
This rate will be the highest charged. Here are some reasons a transaction would fall into the non qualified rate.

non - swiped credit card, no address verification
foreign card, business card or rewards card, with no additional fields entered
batch not done in a timely manner (24-48 hours)

Merchant Account Fees

2009-01-10T13:55:00.000-08:00

There are many different kinds of fees that go into credit card processing that the merchant may have to pay. Knowing the different types of fees can save you money.

Discount Rates
The discount rate is the fee the merchant pays per transaction. There are different rates depending on the type of transaction.

Qualified rate
The lowest rate. This usually requires that the cards be electronically swiped and the transaction settled within 24 hours. Also known as Swipe rate.

Mid Qualified rate
This is the percentage rate merchants are charged whenever they accept credit cards that do not qualify for the lowest rate. Here are some reasons why this can happen.
non-swipe transaction

non-swiped credit card transaction
foreign car, business card or rewards card
batch not done in a timely manner (24-48 hours)

Mid qualify is also known as a partially qualified rate.

Non Qualified rate
This rate will be the highest charged. Here are some reasons a transaction would fall into the non qualified rate.

non - swiped credit card, no address verification
foreign card, business card or rewards card, with no additional fields entered
batch not done in a timely manner (24-48 hours)

Pay Pal vs Merchant Account

2009-01-09T14:03:00.000-08:00

A proper headline would be third party payment processors vs a merchant account. Google checkout and Pay Pal are good examples of third party payment processors. In a recent survey only 44% of PayPal customers and 19% of Google Checkout customers rate their purchase experience as good or very good.* So what are the differences?

Fees
Third party payment processors don't require you to have a merchant account. In a sense your using their account and they are charging you for the privilege, but higher fees aren't the only differences.

Funds
Your money goes directly to your account usually two days faster with a merchant account. Third party payment processors store your money for you making you request it be deposited to your account. This can add 3 to 4 days before you see your money. When your money is in your bank it is FDIC insured, not so with third party processors.

Dispute Resolution
When your the merchant account owner you are represented by your acquiring bank and reseller, both of which want you to get paid. Google Checkout and Pay Pal are known to freeze accounts first ask questions later. The problem with this is that their customer support is non-existent, try to find a phone number for PayPal and when you email them you get back canned responses that are not helpful. Talking to a person is very important when your money is involved.

* Survey of online shoppers conducted January 2007 by J.P. Morgan

More on Shopping Carts

2009-01-03T14:05:00.000-08:00

There are tons of shopping carts to choose from it can and will get confusing. You need to choose one that you'll be happy with because your gonna be stuck with it for a long time. When and if you decide to move off a shopping cart it can be a time consuming task so try to avoid that. Here are some important considerations when choosing a cart.

Payment Processors
The most important thing your cart will do is process transactions. Not all carts work with all payment processors or payment gateways, so you need to check your carts supported gateways page. If they dont' have this page or it is hard to find you need another cart. If you already have your processor you can check their supported carts page.

Some carts will let you make an add-on, or module to support a processor, but its generally a better idea to use one that is supported out of the box. The reason being when they update the cart you will have to update the module. If the cart software provider supports your processor out of the box they will generally update it along with the new version of the cart.

Hosted Carts
If you don't want to go through the hassle of getting a web host and maintaining the cart yourself you can use a hosted cart. A hosted cart will usually charge you both a monthly fee and a percentage of the transaction. Shopify, and ProStores, are good examples of hosted carts. Some of these carts also put limitations on the number of products in your store. A hosted cart can get pricey, but for some its the only way to go.

Non hosted Carts
The non hosted carts come in all shapes and sizes and have a wide range of prices. Some of the best carts are free believe it or not. ZenCart and osCommerce are two widely popular open source carts that won't cost you a dime. BV Commerce a non open source cart can cost upwards of $500.

Before you run out and get the free shopping carts there are some differences you need to know about. The free carts don't have a customer service department on standby ready to help you when something goes wrong. The better ones do have a forum or knowledge-base that can help, but it can get frustrating, especially if it is a new problem no one has experiened before. Paid carts will at least have an email you can use for support the better ones will have a phone number to call or even a support chat. If you going to pay money for a cart make sure they have responsive support department. Ask them some pre-sales questions and see how fast they get back to you. If they don't respond quickly to a pre-sales question chances are they are even slower post sale.

Server Technology
When going the non hosted route you'll need to get a web hosting account. It isn't as hard as it seems, but you will need to choose a server type based on the type of cart your going to install. ZenCart for example uses PHP. PHP is the language the cart is programed in. A linux server is the best environment for a PHP scripted cart. The shopping cart your interested in will have a requirements page that will detail the scripting language, database and other items that need to be installed for the cart to work correctly.

Which is best for me
Make sure your payment processor is supported first. Hosted carts work best for the beginner, but if you have some technical ability the non-hosted cart would be a good choice. If you really need to customize your cart you have to go with an open source version.

PCI Compliant Customer Data Storage

2008-12-27T14:51:00.000-08:00

In a continuation of the post regarding storing of customer data we are going to dive into the subject a bit more.

PCI or the payment card industry doesn't want you to store sensitive credit card information. For example if you sell someone a widget on your site and they pay with a credit card. You are not allowed to store the credit card number without going through the pain of becoming PCI compliant for storage of credit card data.

Virtual Terminal Customer Data Storage

If your just using the Virtual Terminal provided to you from your merchant account provider you should be able to store sensitive customer information quite easily. Normally its as simple as entering in the credit card number on a screen and the next time you want to bill them just click their name. This is the easiest way to store sensitive information, but what if you need more control of your customers?

Storing Credit Card Customer Data
So lets say you want to rebill that customer or you need to credit their account. If you don't have access to the credit card number you will need to ask for it again. Rather than do that merchant account providers are offering to store your sensitive customer information as part of the service packages that they offer. Here's how it works. You send the processor the sensitive information once. They issue a customer token or customer ID say 2345. The next time you want to bill that customer you send to the processor, bill customer ID 2345, $50.00. Its that easy, your now PCI compliant and you have access to bill your return customers.

Integration into your Application
If you need even more control you can integrate your application via web services. For example if you have an existing application that maintains your customer information you can talk to the processors payment gateway via web services to make it a seamless user experience. Most processors offer these basic calls among others.

create a customer
update a customer
delete a customer
make a customer transaction
update a customers credit card
update a customers checking account

Having your processor store your sensitive information makes sense for most merchants. The savings is great when compared to the costs and time required to become PCI compliant to store credit card information. Ask if your processor offers sensitive data storage for your customer data, if they do take advantage of this great service.

Test Credit Card Account Numbers

2008-12-20T15:00:00.000-08:00

Here is a list of test credit card numbers. Often used by developers or merchants that want to test their merchant account.

American Express
378282246310005
371449635398431
378734493671000

Diners Club
30569309025904
38520000023237

Discover
6011111111111117
6011000990139424

JCB
3530111333300000
3566002020360505

MasterCard
5555555555554444
5105105105105100

Visa
4111111111111111
4012888888881881
4222222222222

Take Donations on the Web

2008-12-13T14:40:00.000-08:00

Accepting donations via the web is a fairly new trend that has been gaining a lot of momentum lately. Whether its a one time payment to the donors favorite charity or monthly tithing to their favorite church accepting donations via the web is here to stay.

Automatic Recurring Payments
Rather than ask your donors to mail a check you can simply forward them to your website for payment. It’s as simple as entering the payment information check or credit card and specifying the days to hit the account. The donor likes it because they can choose the day the monies will be processed. The merchant likes it because its entirely automatic. Every month the credit card or checking account is processed and the money is deposited directly into the merchants account. What could be simpler?

Credit cards vs Checks
Credit cards are convenient but on line checks are clearly the winner here. The merchant pays a low transaction fee and that is about it. The customer has the money drafted directly from their account like many other bills they have. Credit cards are going to cost the merchant more for protections the customer may not need for this type of transaction and they have to write a check every month. ACH or Checks are a welcome alternative.

Accepting Donation Payments
Most payment processors offer code the merchant can put directly on their site. The code usually creates a button or link that directs customers to a secure payment page. Recurring or single types of transactions can be done easily by the donor by clicking the link. If the merchant doesn’t have a web site they can send requests for payment via email.

Virtual Terminals
A Virtual Terminal is a web site that allows credit card or check payments to be made, reports to be ran and a host of other things depending on the processor. If the donor isn’t comfortable with sending payments on the web they can provide the payment information to the merchant for them to enter in the Virtual Terminal. Most payment processors offer a Virtual Terminal with the merchant account.

Accepting donations via the web is something every non-profit company should take advantage of. The costs are minimal especially if using an ACH or Check. Recurring donations are a breeze to set up and allow the merchant to more accurately predict future cash flow. From Tithing to fund raisers on line donations are having an impact on all types of charity’s bottom lines. For the better.

Customer Information Management

2008-11-30T14:44:00.000-08:00

Storing sensitive credit card customer information is something that used to be taken lightly, not any more. PCI or the Payment Card Industry regulates the storage of this sensitive information. This means if you accept credit cards, you and your processor need to be PCI compliant. Since PCI compliance for storage of cardholder data is usually out of reach for most merchants how can you rebill a return customer without asking for payment information and without violating PCI rules?

Customer Management
The simple way to comply with PCI and still have the ability to rebill your customers is to use a PCI approved 3rd party to store the credit card information. Its a relatively new concept but most processors are starting to offer this service. Here's how it works. The credit card payment information is passed securely to the payment processor. The payment processor issues a customer ID, the next time you need to bill that customer you just send the customer ID.

PCI Compliance
As the Payment Card Industry starts enforcing these rules on the merchant having the customer data stored elsewhere is going to gain popularity. This method ensures you are in compliance with the Payment Card Industries rules because you are not storing the credit card number of the customer. All that needs to be stored is the customer id.

How Can I Save Money on Payment Processing?

2008-11-28T14:45:00.000-08:00

A good question. The cost of payment processing seems to something most businesses just accept. While its true there is some flexibility from vendor to vendor there is one way to save a ton of money on your payment processing. Start accepting checks or ACH payments.

Credit card transaction fees include monthly, per transaction, and usually a percentage of the transaction. When you take a check your don't have to pay the percentage of the transaction fee. Why? MasterCard and Visa interchange fees are passed on to you the merchant.

It gets worse if you don't have a merchant account and use a company like 2Checkout or Paypal your per transaction fees will eat up most of your profits. If your serious about business please get a merchant account!

The best way to save money is to get a merchant account and accept ACH transactions (checks). All that is needed from the customer is a transit routing number and an account number. These are clearly printed on all checks.

Here is a very simple example for a $5,000 transaction.
Credit card
$125 2.5% of the transaction
.30 per transaction
$125.30 Fee total

Check
.30 per transaction
$.30 Fee total.

Start taking checks today. Its as easy as taking a credit card and the savings are tremedous.

Visa Sets Global PCI DSS Deadlines

2008-11-11T14:47:00.000-08:00

If you store cardholder data this affects you. Please read this press release from Visa.

"Visa Inc. (NYSE: V) today announced global mandates for compliance with the Payment Card Industry Data Security Standard (PCI DSS), creating a consistent framework for compliance among merchants, service providers and their agents.

The enhancements include a global set of requirements for merchants to validate their compliance with PCI DSS; and for the largest merchants, dates by which they must achieve validation. Deadlines are also set for large and mid-level merchants to demonstrate that they are not storing certain types of sensitive card data. Service provider levels and PCI DSS validation requirements have likewise been aligned under a global standard and compliance timeline. Compliance with PCI DSS will help protect businesses from financial and reputational harm that often results from cardholder data compromises. Visa data security compliance programs have provided compelling incentives for merchants and agents to properly secure cardholder data.
The new framework establishes the minimum requirements for Visa Inc. regions. As an independent company and licensee of Visa International for the business operations in European markets, Visa Europe's PCI DSS framework requires compliance validation and risk mitigation for Level 1 merchants; however the region will be adhering to a different timeline and process for executing compliance validation.
"Compliance with PCI DSS is vital to ensuring the integrity of the global payments system," said Eduardo Perez, head of global data security, Visa Inc. "Aligning compliance programs across the Visa regions is the latest step in our commitment to safeguarding cardholder data."
MERCHANT VALIDATION REQUIREMENTS
Alignment of Merchant Levels and PCI DSS Validation RequirementsA comprehensive set of international security requirements for safeguarding cardholder data, PCI DSS was developed by Visa along with the four other founding payment brands of the PCI Security Standards Council. Compliance is required of all merchants and any entity that stores, processes or transmits cardholder data. " more...

Accepting ACH or Check Transactions

2008-10-24T14:09:00.000-07:00

ACH transactions have been around a long time. 75 million Americans use checks instead of credit cards, and with the advent of the web and ecommerce they are easier than ever to use. ACH transaction fees are often much lower than credit cards so it makes sense that you should offer this option of payment to your customers.

Payments Gateway
Most payment gateways will allow you to send over a ACH or Check transaction. This can be done from your website or customized software. The gateway will return an Approved or Declined message similar to a credit card.

Checks by phone
Checks (ACH) can be collected by phone using a Virtual Terminal. The Virtual Terminal will allow you to login to a website and enter the check Transit Routing Number or TRN and the account number along with the customer information. Checks by phone or using the Virtual Terminal to perform check transactions allows you to get up and running very quickly. All you need is an internet connection.

Accept Checks Online
Ecommerce shopping carts are often integrated into the payments gateway out of the box. This means you can accept checks on your ecommerce site quickly and easily. Customers never need to mail in checks again when you start processing transactions at your web site.

Major Benefits of Online Check Acceptance

Accept transactions similar to credit cards using TRN and Account Number.
Offering an additional payment option will increase sales.
Access to funds within 48 hours.
Automatic deposits to your business checking account.
Low low transaction costs. Half the cost of credit cards..
No more paper statements.

Accepting Credit Cards

2008-10-17T14:12:00.000-07:00

So your customers are complaining that you don't accept credit cards. What do you do? Well you can accept cash only, or break down and get a merchant account. A merchant account will allow you to accept all major credit cards MasterCard, Visa, American Express and Discover.

The first thing the merchant account provider will ask is what kind of business are you doing. They are usually broken down in to three major categories. ecommerce and internet, retail, mail order telephone (moto). Depending on what type of business your doing and how your doing it will affect the prices you receive.

eCommerce and Internet
When doing e-Commerce type transactions you'll need a Virtual Terminal and a Payment Gateway. These should be included in your merchant account. The Virtual Terminal is like a credit card machine but for the web. The payment gateway allows you to perform transactions on your website.

Retail Credit Card Processing

Normally for businesses with a POS terminal. The terminal will allow you to swipe a credit card at your point of sale.

Mail Order and Phone
These types of transactions can be either done on a Virtual Terminal or physical terminal.

Quick Books Transactions
Quick books is a popular accounting software among small businesses. The software covers most types of businesses and allows you to perform transactions from within it.

Payment Gateways

2008-09-26T14:58:00.000-07:00

A payment gateway provides a way for a merchant to accept credit cards and in some cases eChecks or ACH transactions. The merchant can send transactions in a variety of ways, either from a website, terminal or even a batch. The transactions are encrypted using SSL (Secure Socket Layer). The gateway authorizes credit card payments by directing those transactions to the appropriate card association,Visa, MasterCard, American Express or Discover. The response is then directed back to the merchant securely. When done in real-time it say for a website can take anywhere from 2-3 seconds. eChecks work a little differently but are usually have the same response time.

Where can I get a Payment Gateway?
Payment gateways are usually offered by a merchant service provider. Normally they come standard with a merchant account, there may or may not be fees associate with using a payment gateway. Before you sign up for a merchant account be sure to ask if it includes a payment gateway among other things.

Sending Transactions

Most gateways allow multiple ways to send transactions.

Credit Card Terminals - Normally used in a POS environment.
Batch - Some merchants will close out at the end of the day and send them all at once.
API's - Used for e-commerce allows an instant response for a transaction.

Additional Features

Some payment gateways do more than just process transactions. Here are some additional features offered by some gateways.

Identity Verification - check on a customers address, drivers lic. etc.
AVS - Address Verification Systems check a customers address matches their credit card.
Check Verification - Can be used to verify if a checking account is closed, frozen, etc.