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One Day Event to Master Payments Processing

Come join PLC and Subscription Insider this October, 22nd in Boston for a one-day event to help recurring billing merchants master payments processing.  We will feature a keynote presentation by Paul Larsen, discussing the most current trends that are impacting your subscription business.  The rest of the day will include panel discussions from industry leaders and case studies highlighting what you can – and must – be doing to reduce involuntary churn and increase lifetime value of your customers.

PLC Clients will receive a special rate.

To register for this event, visit Subscription Insider.

Is EMV the Solution to Recurrent Data Breaches

 

There has been a recurring theme over the past 12 months as major retailers across the U.S. are continually hit with malware attacks to their POS systems, compromising tens of millions of credit and debit cards, costing consumers and the industry hundreds of millions of dollars.

Recurring merchants are especially hit hard. Adding to the normal 30% annual churn rate of credit cards, recurring merchants can expect significantly more accounts to be closed. Tools available to help combat churn include account updater from Visa and MasterCard, and updater program from Discover, and a comprehensive decline recycling strategy combined with well-timed submissions to account updater programs can save scores of subscription customers. However, it will add to the overall cost of processing and there will remain some fallout with those issuers who don’t participate in the updater programs. Businesses who are not employing those tactics stand to lose about half or more of their customer base.

Beyond the immediate impact of card reissuance, card-not-present merchants are at risk of experiencing increased fraud down the road. Why? The proposed solution that is moving forward – and being pushed into play by many retailers more quickly than the October 2015 Visa and MasterCard mandate – has proven to drive up fraud for online merchants. EMV cards (aka chip cards or smart cards) have been in existence in Europe for many years. Since their rollout in the EU in 2002, fraud in card-not-present channels increased by more than 100%. While offline fraud was reduced to almost nothing, the fraud itself did not decrease; it merely shifted to less secure channels. This same pattern has been seen everywhere EMV technology […]

By | 2014-10-21T15:05:42+00:00 October 21st, 2014|Categories: Blog Post|Tags: , , |0 Comments

Impact of Data Breach for Target

An estimated 1.1M customers have had their personal and financial information compromised, thanks to the security breach via the malware now known as BlackPOS at Target, Neiman Marcus, Michael’s, and potentially other retailers.  That number could climb as additional retailers come forward.

The impact could be long-reaching for consumers, merchants, and financial institutions.  Target may be on the hook for fines anywhere from $400M-1B, not to mention potential lost revenue as consumer confidence wanes and usage of the Target labeled cards decreases.  The consumer confidence issue is something that could impact other retailers, too.  As fears of privacy mount, consumers are less likely to make purchases in stores, online, and via mobile devices.  Financial institutions are already bearing a brunt of the cost as they are reissuing cards, to the tune of $10 per card reissued.  So far, about 15.1M cards have been reissued for a cost of $150M.  They also stand to lose some revenue as consumers revert to cash for more purchases and save their credit cards for higher ticket items only.

Every player has skin in the game here, but one solution that is being touted by the card associations as providing much more security for brick and mortar stores could actually open up online and CNP merchants to additional fraud.  EMV (Europay,MasterCard, and Visa) chip technology (also called chip and PIN) has been in use in Europe and other industrialized nations for more than 20 years.  While it has proven effective at reducing fraud at the point of sale, CNP fraud has increased with the adoption of EMV.  Fraudsters are more able to get fraudulent transactions through in a card not present space with chip cards than they are in person, thereby driving […]

By | 2014-02-03T18:44:59+00:00 February 3rd, 2014|Categories: Blog Post|Tags: , , , |0 Comments

More Fallout from the Target and Neiman Marcus Data Breaches

As the numbers of people and retailers hit by the data breach at Target, Neiman Marcus, and likely other retailers who have not yet come forward are increasing, credit card issuers are tightening the reins to help mitigate the risk of fraud.  JP Morgan Chase recently issued a statement to their customers informing them of lower daily limits for charges on certain cards.  If a card reaches the daily limit, the decline code will come back as a  Do Not Honor decline code.  Recycling strategies for these codes during this time could change.  Since the limit will reset the next day, that account will likely be approved the following morning.

Tracking decline recycling and recovery success is going to be increasingly important in coming months.  Flexibility to change the rules will also be key for recurring billing CNP merchants.  As the investigation into the Target data breach continues, and the affected population increases, it is very likely other banks will also implement temporary credit limits or other fraud filters that could impact your recurring business.

Stay tuned for updates on best practices as the landscape shifts.

 

By | 2014-01-20T20:44:13+00:00 January 20th, 2014|Categories: Blog Post|Tags: , , |0 Comments

Visa MasterCard Interchange Fee Settlement

 

If you are a merchant who has accepted Visa or MasterCard at any time between January 1, 2004 and November 28, 2012, you are eligible to receive an interchange fee settlement from the $6B class action lawsuit filed against the card associations.  There is an additional $1.2B interchange fund allocated for merchants accepting Visa and MasterCard from July 29, 2013 through the subsequent eight months. The amount to be distributed to merchants from the interchange fund is 1/10th of 1% of total Visa and MasterCard transaction volume for the eight month period beginning July 29th, 2013. The suit was filed in the state of New York with the claim that Visa and MasterCard conspired to charge excessive fees to merchants accepting their cards.

 

The settlement was recently finalized, and all merchants fitting into the above classification are now eligible to get their payout.  However, not everyone considers this a win for merchants.  To find out why, we can look to the “big guys” who have rejected the settlement (the deadline to do so has passed).  19 of the largest retailers in the U.S. have opted out of the antitrust lawsuit in order to retain their right to bring another suit against Visa and MasterCard at some point in the future, and to prevent the release of future liability of anticompetitive actions on the part of the credit card associations.  The retailers include Walmart, Lowe’s, Costco, Starbucks, Gap Inc., J. Crew, 7-Eleven (Alon), and others.

 

Not only are they opting out because of the future release of liability, but also because they don’t believe the settlement does enough for merchants of any size to help reduce costs of credit card processing, and therefore to help reduce prices for […]

By | 2013-12-23T19:57:21+00:00 December 23rd, 2013|Categories: Blog Post, Uncategorized|Tags: , , , |0 Comments

Is Visa Charging Me For Lack of Integrity?

Is Visa Charging Me For Lack of Integrity?           

Honor, truth, veracity – integrity embodies all of these, but now Integrity also means an extra $0.10 for Visa transactions on debit or prepaid cards that don’t meet certain Custom Payment Service (CPS) qualification criteria.

 

How to Avoid the Fee

There are a few ways to avoid the fee.  For CNP merchants, avoiding them could be a bit trickier than for POS merchants, but here are the basic guidelines:

  • Always authorize and settle for the same amount
  • Always obtain an exact AVS match – in some cases, requiring an exact match can erode overall conversion and lifetime value to the point that it’s not worth saving the $0.10 fee, so this would need to be evaluated on a merchant by merchant basis, or perhaps by affiliate or other marketing channel
  • Ensure your processor is submitting the correct indicators and MCC with your transactions

 

Again, it’s important to remember that this fee only applies to debit or prepaid cards, regulated or non-regulated.  Each merchant’s file will be different and best practices may need to be tweaked by merchant, transactional division, source of orders, product line, BIN, or more.  For questions on how to best implement this for your specific business, contact us.

By | 2013-11-26T15:21:21+00:00 November 26th, 2013|Categories: Blog Post|Tags: , , , |0 Comments