What is an Acquiring Bank?

An acquiring bank is a financial institution which processes card payments on behalf of a merchant. The term acquirer indicates that the bank accepts or acquires credit card payments from the card-issuing banks and processes them on behalf of the merchant.

Four Functions Performed by Acquirers

• Signing up and Underwriting Merchants.  Obviously, merchants must be solicited, underwritten and signed up to process credit cards.  Underwriting determines if the business has the financial stability to be accepted as a merchant. This is crucial to the acquirer since it is the acquirer that ultimately assumes the liabilities associated with merchant processing.
• Authorization and Capture.   Operationally the acquirer authorizes and captures the payment processing transactions.  Authorization means that the payment is guaranteed, unless there are future disputes between the merchant and the customer. When an authorization code is sent, the amount of the purchase is set aside from the available credit on the cardholder’s account.  The authorizations are captured and sent to the acquirer either at the end of the day or in real time.
• Clearing and Settlement. The transactions are sent through the appropriate payment network which routes them to the card issuing banks.  Clearing and settlement involves collection of the money from the cardholder’s issuing bank and reimbursement or settlement to the merchant
• Statements and Information Services. The acquirer compiles the transaction data and presents a statement to the merchant.  Statements can be mailed, emailed, or accessed online.  Most acquirers provide analytics and other services that enable merchants to effectively manage their accounts.

Conclusion

Acquiring banks process card payments for merchants.  Issuing banks issue cards to consumers.

The acquiring bank being used to process your transactions is clearly identified on your high risk merchant account application.  

Are you a high risk merchant that wants to establish or diversify payment processing accounts?

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Fraudsters Con Card Holders

The numbers on the back of your credit card are supposed to help present fraud.  The theory is that if the buyer knows the numbers, the buyer has physical possession of the card

In the latest scan, card holders are receiving phone calls where the caller represents himself to be a representative of the card company.  The caller already has the card number, expiration date, and billing address.

The caller says that there has been fraudulent activity reported on the card.  In order to investigate further, the caller says he needs to have the numbers off the back of the card.  The caller says the numbers are needed to verify that you have your card and that the card has not been lost.

Unsuspecting consumers give the caller the security code number from the back of the card.  The caller can now purchase items over the internet.  By the time a consumer realizes the mistake made in giving out the information, the card is already maxed out.  The fraudster has already moved on to the next easy target.

Don’t be a Victim

Don’t be taken in by this scam.  Think about it.  Why would a credit card company never need to call you for the numbers on a card that they issued to you?  Obviously, the card company already has access to that information.

These fraudsters are top-notch scammers.  The caller sounds legitimate.   And your caller ID may even reveal a phone identity of the caller.  The caller catches you in the middle of your day, when you are busy.  They scare you with the fear of identity theft.  And, it’s easy to not think through to the real reason of the call.

Conclusion

Rule of thumb?  Never reveal any information to someone calling you out of the blue.  Regardless of whom the caller says he is, the truth is you are being lied to.

Interested in secure payment processing for your business?  

Contact info@paynetsecure.net today

Corporations Pay with Cards

These days everyone is using plastic to pay. 

And that “everybody” includes corporations.  More and more corporations are making purchases on corporate or purchasing cards.  It’s a wise decision for the company since record keeping and account reconciliation is a breeze.

Corporate cards provide an additional level of data to the purchasing business, allowing them avoid the costly administrative process of creating purchase orders, while still providing the data they need to reconcile, control and track expenses for smaller ticket items.

Corporate cards require a payment gateway that accepts as Level II and Level III cards.  The extra levels refer to the additional amount of data captured from the cards known as Level II and Level III data.

Conclusion

Accepting corporate credit cards is essential to satisfying the payment needs of corporate clients.  Merchants accepting cards save the cost of invoicing and get better control DSO (Days Sales Outstanding).  

Contingent liabilities are minimized, collections are easy and invoicing procedures are shortened or eliminated all together.

Interested in accepting corporate cards to increase your profits?

Contact info@paynetsecure.net today

Alternative Payments Continue to Grow

According to Javelin Research alternative payment methods accounted for $33 billion in internet purchases in 2009.  This was a increase of 50% from 2008.  Alternative payments now account for about 16% of online payments.

Javelin predicts that alternative payments will account for $40 billion in online sales in 2010.  By 2014, alternative payments will account for $79 billion, which will account for 19% of online purchases..

Total internet sales volume was $205 billion in 2009.  This was an increase over the $185 billion of 2008 online sales.   Internet sales will rise to $237 billion in 2010 and almost double to $400 billion in 2014.

Card Use Declining

As the economy makes a recover, credit cards will rebound as a payment option for online purchases, but they will never again be the sole payment option offered by many merchants, as was the case a few years ago.  By 2014, credit cards will account for 39% of purchases made online

Debit card payments will continue to rise and will account for 26% of online purchases by 2014.  Prepaid cards will continue to gain market share with predicted volumes to reach 9% of internet purchases by 2014.

Echecks Most Popular Alternative Payment for US Shoppers

In the US, electronic checks are second only to cards for online payments. Millions of shoppers regularly purchase goods & services with echecks.

With echecks, payments are debited from buyers’ bank accounts. Funds are electronically deposited to your business bank account.

When you accept checks online, you get orders from shoppers that don’t have cards, are maxed out on cards, or who simply to prefer to pay with an echeck.

Conclusion

Alternative payment methods such as echecks increase sales.  And save you money on payment processing.

Echecks processing rates are lower than cards. Sales made with electronic checks result in higher profit margins than those for paid for with a card.

You can encourage buyers to use alternative payments by offering discounts on purchases or extra loyalty points.  You can also offer consumers an alternative payment method if a credit card is declined.

Do you want to incerase sales and profits with alternative payments?

Contact info@paynetsecure.net today