Best Practices for Secure Payment Processing

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Payment processing security is important to all businesses to guard against breaches and safeguard payment processing operations.  Here are the top 10 best practices list to secure payment processing:

  • Perform background checks on new employees and contractors before hiring.  This is simply common sense.  Yet, it’s amazing how many companies fail to perform the most basic background checks, creating serious vulnerabilities in internal security.
  • Maintain internal and external software-security training and certification.  Keeping software up to date and constantly updating security training for all employees is vital to safe payment processing.
  • Keep a common software-development life cycle across payment applications and make sure all new software versions are PA-DSS compliant.
  • Continually conduct vulnerability detection tests and code reviews against common weaknesses.  If you are not identifying weaknesses, you can be sure cybercriminals will do it for it.
  • Be sure to not store payment processing card data unless absolutely necessary.  If necessary, you must comply with the PCI regulations.  Most companies find it more cost-efficient simply offload this burden to PCI certified payment gateways and processors using tokens and other encryption methods.
  • If a payment processing breach does occur, notify all affected customers in a timely fashion.
  • Implement an installer, integrator and training and certification program that enforces adequate data-security processes.

How are you protecting your payment processing?


How Payment Gateways Protect You

High risk merchants must be constantly vigilant and on guard against fraud.  Proper use of your payment gateway fraud protection tools is important to mitigating the risk of fraud and the potential loss of revenue that result from fraudulent transactions.

Payment gateways include tools and strategies such as commercial fraud risk scoring systems, positive and negative database lists, and automated decision systems using rules based settings.  Risk settings should be automated and tailored to the specific dangers of fraud within particular industry types and specific criteria of an individual business.

Automated decision systems are highly effective and will reduce manual order review loads while making that the reviews that do occur are more effective and efficient by consolidating all available decision data for manual review.

In industries where risk of fraud is exceptionally high, merchants can consider outsourcing fraud management control to outside vendors who specialize in managing merchant account fraud.  If you do not have the expertise necessary to set and maintain fraud protection parameters and controls, the money spent for outside management will more than repay itself in increased orders and peace of mind.


Proper use of your payment processing gateway helps mitigate processing risk. Implement the fraud fighting tools available to you within your gateway to safeguard your business operations.

Are you using all the tools available in your payment gateway?


Financial Ratios &  High Risk Accounts

Financial ratios are an important part of the underwriting of a high risk merchant account.  Financial ratios help determine the strengths and weaknesses of company operations and judge the stability of a company. 

Here are a few of the most commonly used financial ratios in underwriting a high risk merchant account.

Profitability Ratios

Profitability ratios determine the use of assets and control of expenses to generate a rate of return.

  • Gross profit margin = (Net sales – Cost of goods sold) / Net sales
  • Return on Sales (ROS) = Earnings before interest and taxes / Sales
  • Net profit margin = Net profits after taxes / Sales
  • Return on investment (ROI) = Net income / Total assets
  • Current ratio = Current assets / Current liabilities
  • Acid-test ratio (Quick ratio) = (Current assets – Inventories) / Current liabilities

Activity Ratios

Activity ratios measure how quickly a company converts non-cash assets to cash assets.

  • Average collection period = Accounts receivable / (Annual credit sales / 360 days
  • Average payment period = Accounts payable / (Annual credit purchases / 360 days)

Debt Ratios

Debt ratios measure an organizations ability to repay long-term debt. Debt ratios measure financial leverage.

  • Debt to assets ratio = Total liabilities / Total assets
  • Debt to equity ratio = (Long-term debt + Value of leases) / Stockholders’ equity
  • Long-term debt/Total asset (LD/TA) ratio = long-term debt / Total assets

Market Ratios

Market ratios measure investor response to owning a company’s stock and the cost of issuing stock.

  • Payout ratio = Dividend / Earnings
  • P/E ratio = Price / Earnings per share
  • Price/cash flow ratio = Price of stock / present value of cash flow per share


Underwriters ask for financials statements for high risk merchant accounts to determine the financial stability of your company. Keep this in mind as you prepare your application. Present your financials in the best light to increase account approval.  

How do your financials affect approval for high risk processing?

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Utility Companies Embrace Card Processing

For years utility companies did not accept credit cards for payments of bills.  The biggest issue was that it was too expensive for them to accept cards as payments.  That’s changing as card associations, hungry for new business, are marketing to the utiltiy market with aggressive interchange rates

Electronic bill presentment and payment (EBPP) is expanding rapidly as more utility companies have started taking advantage of special low discount rates.  Consumers and utility companies can both benefit.

Consumers Want to Pay with Cards

Consumers want to pay by credit cards for many reasons.  Some simply do not have money to pay the bills at the end of the month.  Paying by credit card gives them a way to literally keep the lights on.  Of course, it’s an expensive way to pay the bills, considering the exorbitant rates some issuing banks charge as interest.

Consumers are used to using debit cards for all purchases.   Customers with and without bank accounts can use the cards to conveniently pay utility bills without the need to write a check or get a money order.


For utility companies, EBPP provides significant savings on traditional printing, mailing, and remittance processing.  Business processes are streamlined and productivity increases.

How is your utility company accepting card payments?