PCI DSS Compliance: A Basic Guide

PCI DSS (Payment Card Industry Data Security Standards) were created by the most popular credit card companies in the world. They were developed to prevent frauds related to credit card use whenever stores and other entities process credit card transactions. PCI DSS sets requirements for security policies, management and procedures that will keep consumer’s identity and credit card information safe.

Why do I need a PCI compliance is a common question asked by many merchants today. This is quite natural because with all the laws and regulations many of them simply don’t want to get involved in something that is not required by the law. However, every merchant must understand that PCI security standards are all about making sure that you, as a responsible merchant, are doing your best to protect your business and your clients/customers by complying with the latest security standards that guarantee secured credit card processing.

Why is it important to have PCI DSS Compliance if you are a merchant?

First of all, this compliance is mandatory for every merchant that processes, stored or transmits credit card data. If you are not compliant, then the major credit card companies can restrict your privilege to process such transactions. In addition, there is a risk of fines too.

In order to understand why it is important to have this protocol, it may be a good idea to learn more about what PCI DSS does for merchants. For example, it keeps cardholder data safe when it is transmitted over a firewall security system.

Furthermore, it keeps the cardholder data stored in the system safe and doesn’t allow physical access to this data. The transmission in these networks is encrypted for added security and safety.

Another interesting fact is that PCI DSS compliance is mandatory for every online merchant that accepts debit and/or credit card payments over the Internet. This is quite logical because the information provided by consumers is sensitive. And it must be protected in the best possible way. So, when consumers are using an e-commerce website that is PCI DSS compliant, they know that they can conduct secure online payments. The main objective of PCI DSS is to lower the chances of credit/debit card data loss. With this protocol, merchants can learn how to prevent, detect and react in cases of data breaches. PCI DSS protocol provides protection for consumers and merchants.

Why should a merchant care to choose a provider with this protocol?

There are many PCI DSS solution providers out there, but they can be quite different. Your basic objective as a merchant should be finding a provider that will make PCI DSS compliance easy and simple. Of course, you can always take care of PCI DSS compliance on your own, but this takes time and effort. With the help of professionals in this field, you will be able to use secure payments systems without worrying about security and PCI DSS compliance. The best idea is to opt for tailored solutions.

See also:

Accepting Online Payments for Startup companies – Why to Create a Merchant Account

4 tips for merchants how to prevent chargebacks

Open Payment – the Future of Payments?

Open Payment – the Future of Payments?

Modern merchants are focused on providing payment solutions that are modern and friendly. This is exactly how open payment platforms can be described. This concept supports open source platforms that are freely available. They are getting quite popular because they provide more options to both merchants and clients and simplify the transaction process.

So, open payment relies on open-source networks that provide freely available and clear APIs. These platforms can be utilized, distributed, shared, improved and developed by 3rd parties in any way they want. In theory, any individual can improve this concept by providing ideas, feedback and other things that can improve the development process.

What’s the science behind Open Payment?

According to some experts, open payment has the potential to alter the future of payments. In order to find out why, you must learn more about how this method works. Thanks to open payment, add-ons, plug-ins and integration, solutions can be offered to merchants for free and without any limits. So, this is one of the free merchant services that can have a significant impact on their work.

It is good to mention that open payment is a concept that existed since the early 1960s. However, thanks to modern technology, this system and concept are now more advanced and available to literally every type of business. We can separate the advantages that open payment brings into two categories. The first one is focused on the consumers.

The Advantages of Open Payment

With the help of open payment, consumers get the necessary convenience when they are shopping. These systems are also quite safe which is very important today when identity thefts and other similar crimes are on the rise. Finally, open payment allows better online functionality. As we all know, more and more people are buying items and services online.

On the other hand, the integration costs for merchants are much lower on accounts that come with standardized interfaces. Additionally, merchants can set up and open their shops more quickly because this integration is automated and very transparent. We should also highlight the fact that open payment data is easily accessible. Also information like new features and updates can be accessed quickly. Ultimately, they can benefit from increased conversion rate thanks to open payment systems.

When we take a closer look at all these things, we will understand why so many experts say that open payment is going to be huge in the near future. There is no doubt that this concept is important for the payment industry. However, many people want to learn more about the future of payments.

It is difficult to predict how open payments will develop in the future, but experts agree that there will be a few future payment methods that will help both merchants and consumers to simplify the payment process. The payment methods in the next decade will be even more secure, mobile and online-centered and user-friendly. We expect that digital currencies will become popular worldwide.

See  also:

Credit card fraud: a Scarecrow to an online business

Facts to consider before selecting a payment provider

 

4 tips for merchants how to prevent chargebacks

Chargeback is a term that is well-known to modern merchants. For most of them, this term doesn’t bring positive feelings! So, what do chargebacks really represent?

Businesses accepting credit card payments are aware that credit card transactions can be disputed by the cardholder. In cases like this, their business’ bank will simply notify them of the chargeback request and eventually charge a chargeback fee. There is no doubt that these bills can be quite costly. Online, mail and phone merchants (card-not-present) are the most affected categories of merchants. The good news is that there is a way to prevent chargebacks.

Tips for merchants on how to avoid credit card chargebacks

Refund policy

First of all, you should have a clear refund policy. In cases of ordinary brick and mortar stores, unsatisfied customers often are given the option to get refunded. There is no reason why you should not apply the same practice if you are running an online store. Make these refunds as quick as possible if you want to avoid chargebacks.

Avoiding duplicate transactions

How to avoid chargebacks is a common question these days. There is actually more than one good solution to do this. The next option is to prevent duplicate transactions, which is also another common reason for chargebacks. The majority of online stores set clear warnings on the checkout page, which states that the ‘Buy’ button should never be clicked twice because they will be charged twice. According to many experts, this may cause confusion to some buyers. The more discreet and effective option is to adjust the checkout page  code and disable the checkout button once it is clicked. You can also make the page process only the first transaction and prevent processing any further transactions that were made after a very short period of time (within seconds).

Conducting a follow-up

Furthermore, you can also perform a follow-up once the transaction is completed. The best way to do this is to send an automated email thanking your customer for the purchase and asking them for feedback.

Adding a phone number to the transaction statement

Finally, you can also ask your bank to include your customer care phone number in your descriptor. So, when a customer has a complaint or inquiry, the phone number provided on the descriptor could prevent a potential chargeback. Keep in mind that these are only some of the many tips for merchants to avoid credit card chargebacks.

 

 

Non-cash payments on the rise

Along with the development of technology, the way how people pay for goods and services they purchase have also changed. Therefore, it is important to take a look at the payments future 2017 and get a better understanding about the trends.

Non-cash payments on the rise

Non-cash payments are on the rise! We know that, we’ve seen that and most of importantly stats back up this fact. As per estimations, non-cash payments will reach £1.44 trillion and $46 trillion within UK and US respectively by 2026. Current value of non-cash payments measure £1.14 trillion and $33 trillion within UK and US respectively. Therefore, a significant growth within non-cash payments is expected within the next decade.

 

The convenience associated with non-cash payments has contributed a lot towards its popularity. As a result of the increasing popularity of online shopping and card payments, you have got the opportunity to order anything you want at the comfort of your own home. Credit card processing is quick and rather safe. Moreover, fraud and risk management measures taken by merchants and retailers have helped online shoppers by preventing payment fraud. This has created trust within the minds of online shoppers and they tend to purchase whatever they want online without thinking twice.

 

A few more interesting facts about non-cash payments  expected by 2026; a recent study conducted by YouGov and the Centre for Economics & Business Research shows more than 76% of all transactions done within US will be non-cash based.  63% of all transactions done within UK will also be non-cash based transactions. Along with such trends, businesses have to adapt accordingly in order to remain competitive. By 2026, more than 82% of businesses within the US will accept non-cash payments. Furthermore, more than 70% of businesses in UK will follow. More details on this study can be found in the “Future of Payments” report of Paul Hastings.

 

Reduction of payment fraud risk

The reduction of payment fraud risk would create a tremendous impact on the increasing popularity of non-cash payment methods. This is the primary expectation of consumers within the US and the UK. With 48% of consumers from the US and 53% consumers from the UK agreeing to this. Other factors that may contribute towards the popularity of non-cash payments are competitive rates and enhanced accessibility.

 

One can safely assume that due to technological progress, more and more diverse methods of non-cash payments will be made available to several markets. It is surely interesting to see to what extent non-cash payments will be applied in our lives within the next decade. Cryptocurrnecies, mobile payments, NFC, ewallets – lets wait and see!

Prevent Credit Card Fraud – better than cure

Credit card fraud has received much attention in the recent past. According to recent stats, more than $16 billion losses have been accounted for the banks during 2015 as a result of credit and debit card fraud activities. In fact, it has the potential to create a tremendous financial impact on any business. Therefore, to all merchants and retailers, be aware of this and how to prevent credit card fraud.

6 tips / methods how to prevent credit card fraud

  • Educate yourself on the common behaviors of fraudsters – If you want to prevent credit card fraud, it is imperative that you to have a clear understanding on behavior that is exhibited by fraudsters out there in the world. This will give you the opportunity to stay away from the risk associated with bogus transactions during credit card processing. Some industries and countries are more prone than others, therefore do your research – every industry could potentially have different traits.
  • Request cardholder information – You might find this one conflicting. If you gather more information, you might reduce conversion rates on your web site. Nonetheless, this is something that you personally must analyse and judge for yourself. It is well known that the more information gathered during the transaction, the less the possibility of credit card fraud. Furthermore, fraudsters tend to prefer easy targets – such as sites requesting basic card information only. Gather date of birth, full address (perhaps your payment service provider can utilise Aaddress Verification System to validate the transaction.
  • 3D Secure – We have written another post regarding this. 3D Secure is a brilliant way to prevent credit card fraud. Read this 3D Secure article to understand what it is and how it can prevent credit card fraud.
  • Prevent fraud within your retail business– Markings on cards and suspicious behaviour. You can offer proper training to all cashiers to look out for  suspicious behaviour. For example, people who purchase large amount of goods or perhaps customers who repeatedly purchase a large amount of goods within a very short time-frame. If the card is not pin-driven but rather the ‘old style’ signature based cards, request a copy of their ID.
  • Monitor addresses – Orders (either online or via phone) with differing billing and shipping addresses can be suspicious. It might be a casual coincidence, but accompanied with other fraud-look a like circumstances can be a hint of a fraudulent transaction.
  • Use third-party services – There are tons of fraud prevention services out there. Such as Iovation or Maxmind. These are systems you can connect to your shop. These systems filter transactions and share real-time alerts with you. Prevent credit card fraud by utilising such services!

Hope you have a better understanding on preventing credit card fraud. Don’t beat yourself up if you are unable to implement all of the above, however adopting a few will surely help!

Facts to consider before selecting a payment provider

When managing your online business, you will need to pay attention to a variety of factors when accepting payments. Selecting the most appropriate online payment provider for your business is the first! Here is a comprehensive guideline that you can keep in mind in order to select an online payment wall.

Who are the parties associated in an online payment transaction?

When it comes to online transactions, three primary different parties are involved. They include:

  • Your customers – Customers are the individuals who pay you in order to obtain the products or services that you offer.
  • Your online payments provider – In order to accept payments from your customers, you should have an agreement with a payment service provider. A payment service provider, also known as a PSP, normally work with an acquiring bank to supply merchants (business owners like yourself) with a merchant account.
  • The technology – This is the middle layer in between your customers and your merchant account.

How does payment processing work?

One of your potential customers would purchase something from your online store using their credit or debit card. The card information entered by your customer would then be sent to the payment processor for validation (a variety of checks are done including address, cardholder name and at times – phone number and date of birth). Then the payment processor sends a request to the acquiring bank which in turn submits the payment to the payments network (example Visa or MasterCard). The payment is directed to the issuing bank of the customer where the funds are debited (the issuing bank is the bank that issued the credit or debit card).

 

If the bank responds positively (after a series of checks including if the cardholder actually holds enough funds), your customer would be allowed to proceed! The customer would then receive a message saying that the payment has been accepted. If not, the customer would be asked to try again and a reason for the decline provided – all this occurs in just a couple of seconds, pretty fast huh!? The acquired funds would then be deposited in your merchant account. However, you will not be able to withdraw funds in your account right away due to some regulatory restrictions and policies implemented by the acquiring bank or/and the PSP.

 

What are the policies and processing fees associated with?

Now you have a clear understanding about how a secure payment processing system works. The next item on the list is to figure out more information about the fees. Here is a list of the fees that are normally involved in processing credit or debit card payments:

  • Interchange fee – A pre-negotiated percentage is paid to the issuer on every sale. Interchange fees vary depending on the industry, type of card used, location of cardholder (whether the transaction is considered from intraregional markets or interregional sectors).
  • Markup – The acquiring bank would take a percentage cut through a markup fee.
  • Assessment – The credit card association, such as MasterCard or VISA would charge a pre-negotiated fee which is also included in your overall fee.
  • Processing – The payment service provider would also take a fixed amount during the credit card processing stage. Areto Systems never charges any additional fees and requests commission payments directly from the payment service provider or the acquiring bank!

Payment services provider and pricing model

Some payment service providers are able to offer various pricing models. Two of the main models include:

  • Interchange plus pricing – The payment provider would get a fixed fee on top of the interchange fee. This is known as the interchange plus fee. It is important to keep in mind that there are more than 300 interchange plus fee types so pricing with this model can become quite complex!
  • Flat rate pricing – This is the most straightforward model applied by most payment service providers. You basically have to pay a fixed percentage amount, called the Merchant Discount Rate (MDR) for any transaction process, regardless of the card brand used or source of the transaction.

If you keep these facts in your mind, you will be able to figure out the best credit card processing service out there for you. For most merchants, Areto Systems can supply very competitive flat rate pricing!

How does online payments processing work?

Understanding the basics of online payments

https://www.youtube.com/watch?v=bNV7RGj71zk

Payments, payment gateway, payment processor & networks, merchant accounts. Have you ever wondered, how the payment process happens? What are payment processors and payment gateways? This video will briefly show you the mechanism of accepting payments from your customers.

See more about What is a Payment Gateway

Credit card fraud: a Scarecrow to an online business

One of the biggest threats of running an online business is credit card fraud. If you want to fight fraud effectively, it is important to understand the mechanisms of how fraud is executed. There are various ways how can fraudulent activity may  appear on your credit card.

Simply said, Credit Card Fraud is when an individual uses another individual’s credit card for personal reasons. Of course leaving the owner of the card completely oblivious. Furthermore, the individual using the card has no connection with the cardholder. In addition has no intention of either contacting the owner of the card or making repayments for the purchases made.

Credit card fraud can be committed in various ways

  • Mail Intercept
  • Stolen Cards
  • Results in Internet Order /Mail Fraud
  • Skimming
  • Carding
  • Institutional Identity Theft

Mail Intercept

This is one of the most common methods of  how credit card fraud  crime is carried out. Fraudsters will  always stake out mailboxes they can easily access. Once a target is identified, they peruse through the ‘unsecured’ mail, checking for any existence of credit card-related info, like a a paid bill or a statement.

Stolen Cards

Stolen cards refers to when  a debit card or a credit card is stolen or  lost. A lost or stolen card is a pot of gold for fraudsters, until the cardholder cancels their card. This is why most financial bodies have a 24-hour hotline dedicated for stolen or lost cards (tip: check the back of your card).

Results in Internet Order /Mail Fraud

In today’s card-not-present marketplace, consumers order products through the Internet as well as via mail without ever entering a shop. This makes credit card fraud more prone and very simplistic to conduct. In these cases, the merchant relies on the cardholder to provide accurate information for the order since they cannot physically observe and verify the card/cardholder.

Skimming

Skimming, also referred to as cloning is an increasing form of credit card fraud theft, to the tune of over $350,000 in losses per day just in the United States alone. It is where tiny electronic devices, recognized as skimmers, are applied and used to capture all of the credit/ debit card’s details within the few seconds someone takes to swipe the card through the machine.

Carding

Carding describes a process which authenticates  a stolen card data. For instance, if a criminal attains stolen card info using a means such as phishing, this where someone determines whether or not the card is still activated. To achieve carding, criminals create smaller purchases on “real time” websites where they will be able to determine whether or not the card is still ´live´. After which, they can move on to other fraudulent transactions.

Institutional Identity Theft

This is another common type of fraud that occurs when fraudulent sites modify some portion of their domain name system that governs the Internet.

Contrary to popular belief, merchants are far more at risk from credit card fraud than the cardholders. While consumers may face trouble trying to get a fraudulent charge reversed, merchants lose the cost of the product sold, pay chargeback fees, and fear from the risk of having their merchant account closed.

 

See also: What is an Automated Clearing House?

Expert explains what is the future of payments

PayPal CEO Dan Schulman explaining his believe, that mobile payments will become huge in couple of next years. So how will the future of payments look like according to Schulman?

From WSJDLive Show in Laguna Beach, California.

See also: What are an E-wallets and how do they work

Site Navigation

> Home

> Solutions

> Payment Methods

> Consulting

> Partners

> About

> Careers

> Contacts

> Blog

Resources

> Privacy Policy

> Terms and Conditions

> PCI Certification

> SRO VQF Membership

Developers

> API Documentation

Your ARETO Profile

> Sign In

> Apply Now

Compliance

DISCLAIMER

Areto Payment Processing Services AG is a licensed Financial Intermediary and member of the VQF, a self-regulatory body approved by the Swiss Financial Market Supervisory Authority (FINMA) for the supervision of the financial intermediaries.