Paynetsecure Blog

A descriptor is identifying information about a merchant which appears on buyers’ credit card statements.  Descriptors remind cardholders of the details of the purchase and give buyers a way to contact the merchant.   It is advantageous to both buyers and merchants to use clear descriptors.

There are two major categories of descriptors: static and dynamic. Static descriptors, sometimes called hard descriptors, assign a single description and customer service number to all products and services.  Some merchant account providers allow only a single static descriptor to be used with each merchant identification number (MID).

Dynamic descriptors, also called soft descriptors, allow merchants to associate a distinct description and phone number with different products or services.  Dynamic descriptors give companies the option to use the name  of the product or service as the descriptor on the customer’s credit card statement.  This significantly reduces customer disputes and chargebacks.

Many companies offer a variety of products or services.   If a company name appears as the descriptor on customers’ card statement rather than the name of the product or service, the customer may not recognize the charge.   As a result, customer disputes/chargebacks occur because customers may not identify the company name with the specific product or service which was purchased.

This happens even if a company clearly advises the customer at the time of purchase of the name which will appear on the customer’s credit card statement.   Another common reason this happens is when the spouse who did not make the purchase handles the family finances.  The spouse may not recognize the name of company but would recognize the name of a product or service that was purchased.

Dynamic descriptors and phone numbers can help reduce the occurrence of customer disputes and chargebacks by clearly identifying the product or service on customers’ credit card statements.

For more information on payment processing visit paynetsecure.net

Consumers abandon shopping carts for several reasons.  But according to a recent study 22% of buyers said the absence of the payment method they wanted to use was the reason for abandoning the transaction and leaving the site.  This is a powerful reason to accept alternative payment options such as electronic checks.

The biggest reason for abandonment, accounting for 43% of abandonment, was the cost of shipping.  Consumers were surprised when shipping was higher than expected. Other reasons included: total cost of purchase ending up more than expected (36%); and a desire to visit other sites before buying (26%). Others reasons for shopping cart abandonment is that wallets or purses weren’t readily at hand at the time or fears that the site could not keep their card data safe.

With about two-thirds of consumers walking away from sites before completing transactions, checkout abandonment is a sizable problem for online merchants. A recent survey reveals that the average purchase amount lost each time is $161 (on an average of 2.4 items) for large merchants and $118 (2.2 items) for small ones.

To provide an incentive for issuing banks to issue more cards and acquiring banks to add more merchants and thus expand the network, the bank card brands established interchange.  Interchange allocates the costs and revenues of the completed transaction between the issuing bank and acquiring bank.

Interchange fee is essentially a compensation vehicle.  It helps ensure the cooperation and participation of the various parties in the payment processing system by balancing the incentives to increase the base of merchants accepting the card and the base of consumers using the card.  The value of the card to cardholders is higher if more merchants take the card and the value of the card to merchants is higher if more cardholders use the card.

Interchange fees are subject to increasingly intense legal and regulatory scrutiny worldwide which may have a material adverse impact on revenue, prospects for future growth and overall business.

Paynetsecure.net provides innovative ecommerce payment processing solutions.

Well, it was inevitable.  In addition to popular bank phishing scams, cybercriminals are now targeting naïve consumers by claiming to be government officials.  Scammers are sending emails that appear to be from the FTC, IRS, or DOJ.

The FTC reports that corporate and banking executives, as well as other consumers have been targeted.  Fake email purporting to be from the government agency, is sent with embedded spyware which then transmits personal information to the thieves.

Most of the IRS phishing emails sent to individuals inform recipients they are either under investigation or have an unclaimed tax refund.  The IRS has gotten over 23,000 complaints about phishing scams in the last 18 months.

That’s just the tip of the iceberg because the vast majority of scams are never reported.  According to the Treasury Inspector General for Tax Administration, the scams have been “unprecedented both in terms of sophistication and the volume of reports we have received,”

The GAO, Congress’s investigative arm, estimates that $1 billion dollars a year is drained out of the US economy by phishers.  Amazingly, despite all the attempts to educate consumers about the dangers of phishing, close to 10% of online households still submit personal information in response to phishing emails.

The phishers are no longer just casual hackers looking for an easy buck.  There is a vast underground criminal network running the scams.  Multilayered organizations make tracking and capturing the criminals difficult.

For example, some parts of the organizations specialize in sending the phishing emails.  Other parts sell the stolen identities.  Finally, top level criminal bosses steal and launder the money obtained from innocent victims’ accounts.

Merchants should guard against phishing attacks by using a secure payment processing gateway.  In addition, remember that internal security is vitally important.  Limit access to your payment processing system.  Watch your audit trails.  Change passwords on a regular basis.  And keep a close track of every employee and vendor that has access to your system.

Contactless card payments have been touted as the next big opportunity in payment processing.  With a contactless card, a consumer simply waves a card at a reader rather than swiping the card.  The best applications for contactless payments are high volume, relatively low ticket environments such as fast food restaurants.  In these situations, every second saved moves the line along faster and result in more potential sales.

Will consumers embrace the new technology?  It’s certainly been slow to catch on.  Most consumers still fear that personal data can be captured more easily with a contactless reader rather than a swipe machine.   Although the fear may be an overreaction, ID theft is still a big problem in the US with 8 million new cases of comprised identify data every year.

It’s a slow upward battle for bank agents selling contactless payments.  The technology seems to make sense but convincing merchants to buy is another story.  The extra few seconds saved at point of sale is not a big deal to most merchants.  In fact, some prefer to have the buyer spend some time at checkout because it is a good place to sell additional impulse items.

New technology is always fun and exciting.  But there must be a compelling business case to capture the attention of most business owners.  Contactless payments may be a nice to have item but not a have to have item in the mind of most merchants.

Put contactless card technology in your sales kit.  You’ll sell some occasionally.  But don’t expect it to add much money to your bottom line.

Here’s more information about payment processing.

EFT network NYCE raised interchange for issuers by 1.1 cents in October of 2009.  Competitor Star EFT is also changing interchange rates and eliminating fee maximums.  Both networks are doing so to incentivize banks to use their networks.

Merchants are the ones who will be absorbing the new fees and many merchants will be hard hit.  The ones suffering the most will be in the quick-service, medical, and small-ticket areas.

Consider a fast-food restaurant that currently pays 1.25% plus 3 cents in interchange.  Based on a $10 average ticket, fees will rise a whooping 77%, jumping from 27.5 cents from 15.5 cents. In addition, Star issuers will get an extra 2.5 cents, bringing the total cost of the transaction to almost 30 cents.

Star is also eliminating the existing 45-cent maximum, which would have capped the fee on all transactions over $24. Now the transaction fees will increase as the ticket size rises.

Medical providers often have co-pays of $15.  Under the new changes, the discount rate will stay at 1.2% but the transaction fee will jump from 5 cents to 20 cents.  As a result, processing fees the $15 average ticket will jump 65%, rising from 23 cents currently to 38 cents.  Star issuers get an additional 2.5 cents so the price rises even more, to over 40 cents.

Other small-ticket merchants will see transaction fees rise from 5 cents to 15 cents on all transactions.  Plus, an additional 2.5 cents for Star issuers.

Once again, merchants suffer while banks and processors manipulate the system to line their own pockets.

For payment processing information go to paynetsecure

Interactive television (iTV) has finally reached critical mass is posed for explosive growth within the next few years.

The CEO of Comcast said in a recent earnings call that 25 million U.S. cable-enabled homes will have access to iTV by the end of 2009. Combine this with the 30 million satellite and IPTV subscribers who already receive iTV and there are 55 million households that will be able to access iTV

iTV has huge money-making potential for programmers. Opportunities for programmers abound. . Programmers can offer shows with iTV functionality that lets viewers engage with favorite shows. iTV is already a huge success with shows such as American Idol and Dancing with the Stars where viewers are happy to pay a buck or two to vote for winners. Think as the possibilities sports broadcasting with access to statistics and other trivia.

iTV holds promise for distributors as well.  For example, iTV means advertising can be interactive. This lets consumers to respond to an ad in real time, highly beneficial for marketers and advertisers, driving immediate revenues, building brand awareness, and providing metrics.

Consumers will embrace iTV. Already used to interaction on the internet, consumers want more interaction with TV. The young generation, in particular, finds TV boring because there is no interaction. But, add interactivity and television goes to a whole new level.

Mobile payments and the communication benefits provided by mobile billing technology will be vitally important to the iTV industry.

Shopping cart abandonment is a big problem for ecommerce businesses. Shoppers visit a site, put items in the cart, click checkout and then do not buy. According to research by eMarketer, 60% of US online retailers are experiencing shopping cart abandonment rates of over 20% this year.

What are the most common causes of shopping cart abandonment? Reasons include lack of alternative payment methods and concerns over shipping costs. These issues are easy to solve. Of course, some consumers are simply comparison shopping or looking for coupons and do not plan to purchase, even though items have been placed in the cart.

Offering alternative payment options is an easy way to capture more sales at check-out. Credit cards are important but certainly not the only payment method. Based on your product and target market, consider electronic checks, mobile payments, international bank transfers, and ewallets. Promote alternative payments on the check out page as well as on homepages and product pages.

Make it easy for consumers to find out what shipping fees will be. Buyers should be able to easily discover what shipping will cost before getting to the checkout. If possible, offer free or low-cost shipping or give customers a choice of shipping options.