Credit Card Machines and Functionality
Not every terminal is built the same. Different terminals have different features and perform different sets of functions. The same goes for merchants; not every merchant is the same and not all require the same functions from their credit card terminals. If you are looking to purchase the POS equipment that best fits your business, you will first need to know how you’ll be conducting business. In addition, you’ll need to know which kinds of payments you’re looking to accept. Determining what you actually need, instead of having someone telling you what you should buy, can keep you from spending unnecessarily.
First, how will you be conducting business? Are you generally going to see the customers or do you do business via the Internet or telephone? If business is done face to face and payments are accepted directly at the point-of-sale, you’ll probably want to purchase a credit card machine. However, MOTO or Internet merchants may want to consider an Internet Gateway, which integrate with a website’s shopping cart, or with a Virtual Terminal such as MerchantWare. One advantage to using an Internet Gateway, Virtual terminal, or both, is that these can be used on a computer with a broadband internet connection. If you already have this in place, all you have to buy is the software or a license. Not having to invest in new hardware will save you both money and work-space.
Secondly, for regular Retail merchants, do you have customer demand for more secure, PIN-based transactions? If so, you might want to get a POS terminal with an internal PIN-pad (no additional hardware to purchase, besides the terminal itself), or one that is compatible with an external PIN-pad. If you have a compatible terminal, I would recommend that you get an external PIN pad. With the external option, the PIN-pad is usually already facing the customer so there wouldn’t be a need for you to hand over the entire credit card terminal for the customer to use. This also means that your credit card terminal is more secure and there is less of a chance of the terminal falling into the wrong hands, literally. Using a customer-facing, external PIN pad should also cut down on transaction time.
Credit and Debit transactions aren’t the only electronic payments you can accept as a merchant. Gift Cards could be a great way to strengthen customer loyalty, beef up your customer retention, and broaden your customer base. If you are considering taking these cards, you will need to either make sure that your existing POS solution can work with your Gift Card service provider, or purchase a new solution which will.
However, like I first mentioned, not all terminals are the same and different merchants will require different functions out of their terminals. If you want to learn more about how to accept Gift Cards, Debit, or even simply credit card transactions and want to know what POS solution will best suit your needs, give a call to Merchant Warehouse and allow one of our friendly and knowledgeable Account Representatives to assist you. They can help you figure out what kind of merchant account you will need and what POS Solution will best fit your business. Check back for my next blog which will discuss POS Solution connectivity.
Joseph Fitzgibbons - Senior Support Specialist
The right stuff - Get the credit card machine that’s best for your business
Working in the merchant services industry with the Technical Department of Merchant Warehouse for the last 4 years has put me in steady contact with merchants and their POS solutions. Over that time, I’ve worked with and helped out countless merchants who were experiencing difficulties with their credit card machines and equipment. Many times, merchants will experience technical difficulties that are caused not by defective credit card equipment itself but by buying the wrong equipment in the first place; there are many problems that can be avoided by buying the right solution the first time.
There are many types of credit card terminals out there and many times a particular terminal may not be the right stuff for a merchant and their business. Finding the correct POS solution isn’t very hard, as long as the merchant knows what they need to be looking for. I’d like to impart some advice, some general guidelines to search by for the merchants out there who believe it is upgrade time or just need to replace an existing solution.
I’ve been around the POS block long enough for it to become clear to me that there are three important things to be looking for when purchasing POS equipment. I’ve never been in the merchant’s situation of needing to find the best solution for my business, but if I was and had thought about what kind of functionality I needed to get out of my POS equipment, how I would fit this technology into my current business environment in terms of connectivity, and where I could find the best deal on this POS equipment, I would be ahead of the game and would probably be setting myself up for smooth sailing when it comes to accepting all sorts of electronic payments.
To explain a tiny bit more what it is the merchant should consider heavily, they should know
A) The types of payments they want to accept be they Credit, Debit, Gift Cards, or Checks;
B) What kind of telephone or Internet services they have (usually both nowadays, but sometimes there is neither!) which the POS equipment would work on so that transactions can take place; and lastly
C) Where to find the best prices for these solutions.
This does not really paint the entire picture of the landscape a merchant must take a good look at and think on. It’s only exposing the outlines which need to be filled in with accurate information in order for a merchant to make sense out the whole thing and to come up with the best POS equipment for their business. In forthcoming blogs, I will be explaining this further and hopefully helping merchants choose wisely and make informed decisions concerning the technology they’ll use to accept electronic. This should make business for the merchant much easier and hopefully even much more successful in the long term. Stay logged on!
Joseph Fitzgibbons - Senior Support Specialist
Keeping Ahead of the Thief: PCI Compliance for the Small Business
TJX, Hannaford, Okemo Mountain and others have drawn massive attention as large merchants who have
been breached and had millions of consumers’ data compromised. While breaches at these large
corporations certainly represent more data than that of most of the 6 million small merchants nationwide,
small businesses are not exempt from having consumer credit card information stolen, or from meeting
the same requirements for protection of sensitive consumer data. In reality, it is imperative that these
businesses begin to see themselves as targets and put steps in place to combat data theft.
However, there is a lack of education for small merchants about data security and compliance issues. According to Visa and the National Federation of Independent Business (NFIB), 57 percent of small
businesses do not view securing customer data as something that requires formal planning, and 39 percent say they rely on ‘common sense’ to keep their data safe. What these businesses must realize is that common sense is simply not enough to comply with the payment card industry data security standards (PCI DSS), which must be met by any merchant accepting credit card payments. And as more and more of the larger merchants become compliant and the high-profile breaches slow, industry attention will turn to the small merchant.
PCI DSS compliance can be costly; large companies are spending millions on complex technologies to protect cardholder data. But there is good news for small merchants: depending on the method of
processing and transaction volume, compliance can be achieved relatively easily and quite affordably. Here are several steps small businesses can take to work towards the safety and security of customer’s
data and that can also aid in becoming PCI compliant:
- View compliance as a necessity, not an inconvenience. Merchants should view compliance as an opportunity to improve and verify the security of their customers’ card data.
- Educate yourself on PCI. Research the recent data losses and the growing acronym PCI DSS. Additional information can be found at https://www.pcisecuritystandards.org/tech/saq.htm.
- Keep yourself up-to-date on compliance. Requirements and timelines for compliance are continually amended; small businesses need to ensure they are armed with the most up-to-date knowledge and
equipment. This is especially important for those considering opening their own establishment, since new Level 4 merchants must be compliant by October 1, 2008. There are merchant education strategies for those independent merchants seeking reliable direction in addressing PCI DSS.
- Opt for services that ease the burden of PCI compliance. When implementing your POS system; look for solutions that simplify PCI compliance by choosing a solution that encrypts card data at the ‘read
head’ such as the MerchantWARE solution from Merchant Warehouse - to ensure sensitive customer data is never exposed. With no access to consumer credit card data or personal information businesses will automatically meet five of the twelve PCI DSS security standards, including the most intensive and costly.
While adhering to these tips will not guarantee compliance or that a business will not be hacked, they can help forge a path towards better safety and security for customer data, while building a solid foundation for mandatory compliance requirements. And just as important is the invaluable asset of customer trust; putting customers’ minds at ease by informing them their data is safe and secure will only contribute to their ongoing loyalty and keep business growing.
Henry Helgeson - President
The Free Terminal program
Ever hear the old phrase “Nothing is for free?” Every day we are given “free” offers from numerous fast food chains, restaurants, and more. Now think back to whether you’ve ever heard the phrase “Buy none, get one.” Or, “Free small coffee, no purchase required.” Doesn’t happen too often, does it?
While researching merchant account services providers and equipment you must certainly have seen offers for free terminal deals. But before you walk into a trap, ask yourself the following questions:
What is the contract or termination fee? Always ask for the schedule of fees and the program guide to make sure that neither the provider nor the back end processor has a contract or termination fee. When you’re locked into a contract, you might be paying for that “free” credit card terminal with increased rates every three months or a surprise “added” annual fee. Merchant Warehouse has no contract or termination fee, which means that A) We have every incentive to keep you happy and processing with us for a very long time, and B) We can’t arbitrarily raise our rates or provide lousy customer support, since it is so easy for you to leave us.
What kind of terminal are they giving me for “free”? Our site is a good point of reference for you. Since we buy all of our equipment wholesale, we can offer credit card terminals at guaranteed lowest prices. So, if you are a new business being promised a “free” terminal that is worth hundreds of dollars on our website, that should raise a red flag. If you own a fine dining establishment, would you run a promotion where you’re giving away free lobster tail and filet mignon?
What happens if the terminal breaks? If you read the terms and conditions, you may find a hidden clause that states if the terminal breaks you have to wait weeks while it’s being repaired. Merchant Warehouse’s free terminal program includes overnight replacement insurance. If you drop the terminal, spill something on it, or it’s struck by lightning, we overnight you a replacement, no questions asked.
What is the condition of the equipment you are purchasing?
Is it new or used? Merchant Warehouse only sends out new units for our free terminal program that are programmed and tested in house before it gets to your door.
So remember, if a deal seems too good to be true, it is. Make sure you are getting the best package deal, because when you think about it, if you walk into a car dealership and try to get something for free or with no strings attached, you’re likely to end up with a piece of junk that breaks down on the highway.
Shannon Andrade - Account Executive
MerchantWARE and BINsmart in the news
Merchant Warehouse’s new credit card processing cost reduction tool, the BINsmart Interchange ManagerTM for MerchantWARE, was unveiled back in July, and the response has been overwhelming. Various trade publications covered the release, and both Merchant Warehouse and MerchantWARE have been featured in articles related to electronic payment systems and credit card fraud issues. Here is some of what they had to say:
ISO&Agent Weekly
On July 24, 2008, ISO&Agent Weekly announced the release of Merchant Warehouse’s BINsmart Interchange Manager, the latest addition to the MerchantWARE payment gateway.
BINsmart determines whether a card used is credit, debit, or a corporate card by reading the first 6 digits (called the Bank Identification Number, or “BIN”).
“If the system identifies the card as a debit card, it will send back a response to the point of sale system to prompt for a PIN number”, said Henry Helgeson, President and Co-CEO of Merchant Warehouse.
BINsmart complies with the Payment Card Industry Data Security Standard for payment applications because it does not store credit card number. BINsmart is also free to developers that add Merchant Warehouse’s payment gateway.
Merchants could benefit from lower interchange fees for debit transactions as their system can identify card type.
Cardline
On July 25, 2008, cardline announced the release of Merchant Warehouse’s BINsmart Interchange Manager.
Currently working with integrated point of sale systems, BINsmart enables systems to prompt for a PIN number when a card is determined as ‘debit’.
BINsmart complies with the Payment Card Industry Data Security Standard for payment applications because it does not store credit card number. BINsmart is also free to developers that add Merchant Warehouse’s payment gateway.
Merchants could benefit from lower interchange fees for debit transactions as their system can identify card type.
Transaction World
In the August, 2008 issue of Transaction World, Jim Romeo looks into the effects of electronic payment systems and interchange fees on the current state of the U.S. economy. Henry Helgeson, President and Co-CEO of Merchant Warehouse, discusses the potential affect of the Credit Card Fair Fee Act of 2008 and how important it is to capture the attention of legislators and educate them on the how interchange fees are established.
Beverage Media Group
In the August, 2008 edition of Beverage Media Group, Ian Griffith discusses the rise of credit card fraud over the past three years in the U.S. and how compliance with PCI-DSS (Payment Card Industry Data Security Standard) can help. PCI DSS represents a methodology with 12 requirements to help increase card data protection.
Although very few wine stores process over 6 million credit card transactions per year, stores below this threshold qualify for conducting a self-assessment questionnaire along with a quarterly network scan conducted by a third party.
Henry Helgeson discusses a new product released by Merchant Warehouse called “MerchantWARE”, which encrypts card information at the point of swipe.
RIS – Retail Info Systems News
On August 7, 2008, RIS Online announced that Merchant Warehouse released a new tool to help small and mid-sized merchants reduce their overall processing costs.
The solution, called the BINsmart Interchange Manager, allows retailers to identify card type (credit, debit, or corporate card) at the swipe by reading the first 6 digits (called the Bank Identification Number, or “BIN”).
Selecting Credit Card Processing Software
More and more merchants are taking advantage of the powerful credit card processing software products available to them. These are systems for virtually any type of processing environment from retail stores to websites.
All have their advantages, but selecting the right credit card processing software for your business is very important. Before making a decision merchants should ask themselves a few questions:
Will you be accepting credit cards over the Internet?
- If so, merchants should lean towards using an online payment gateway in conjunction with their shopping cart. Payment gateways are a type of credit card processing software which is hosted by a third party on a server outside of your business. Your shopping cart, or other payment software, communicates with the payment gateway via the internet and it manages the actual transactions. Merchant Warehouse sells several payment gateways including: Authorize.net, VeriSign, and LinkPoint. We also offer our own product, MerchantWare Payment Gateway, which has all the features, flexibility and compatibility standard to these products.
How many credit card transactions will you need to handle at any one time?
- For most merchants the answer is usually only one, but some merchants who have more than one user or customer running transactions at the same time will need a more robust credit card processing software solution. If there are multiple internal users and they are on a network you can use PC Charge Pro. If the users are not on a network, then a merchant can use a virtual terminal such as the one offered by of Authorize.Net. This virtual terminal will allow users to log in using their web browsers and charge cards from anywhere they have Internet access. Transaction information is centrally located and can be accessed from anywhere.
Will you be charging the same customer’s cards on a regular basis?
- Merchants whose customers are frequently reordering or those who bill their customers on a monthly basis may wish to use credit card processing software that stores credit card information and can charge customers at specified intervals. PC Charge Pro has this feature built in and makes it easy to manage charging customers.
If you have any further questions regarding credit card processing software, please feel free to contact our sales team for information and advice on selecting software by calling the number at the top of your screen.
Does Your Business Need a Wireless Credit Card Terminal?
Is your business suffering because you’re unable to accept credit cards while on the road? Or worse, are you losing sales to declined credit cards processed off-location, without the customer or card present? If so, your business may need a wireless credit card terminal.
For mobile businesses (i.e. Transportation and Towing services, Contractors, Delivery services, Direct Sales, Trade Show and Flea Market merchants, etc.), a wireless credit card terminal enhances business mobility and efficiency, simplifies the billing and payment process, and increases sales and revenue.
Wireless terminals allow mobile merchants to:
Accept payments from anyone, anywhere, anytime:
- Wireless terminals offer mobile businesses a solution for accepting credit card payments in real time and on-location.
- With connections to multiple cell phone networks, wireless coverage is provided throughout the country.
- To enable continued operation in low-coverage areas, wireless terminals have a “Store and Forward” security feature that provides an offline capture of transactions.
Enjoy efficiency and convenience:
- Wireless terminals deliver a rapid check-out process, with verified transactions received in 2-3 seconds.
- Wireless terminals are compact, and easy to deploy and use.
Reduce the risk of financial losses:
- By accepting payments real-time, you can avoid losing sales from declined credit cards processed off-site.
- By accepting credit cards on-site, you can reduce the risk of carrying large sums of cash or receiving bad checks.
Operate with low processing costs:
- Wireless processing is an affordable solution for mobile merchants; since swiping a credit card with the customer present involves less risk, processing costs are lower compared to manually key-entering card information at a later time.
Wireless credit card terminals offer mobile merchants a simple and dependable payment solution from a handy device. So take advantage of the many benefits and capabilities supplied by a wireless credit card terminal, and start processing mobile credit card transactions today!
Selecting Credit Card Equipment
With so many different types of credit card equipment on the market these days, choosing the correct type for your business can be a confusing task. In order to help guide you towards the correct choices, here are some questions you should ask yourself when shopping for credit card equipment.
Will customers be using their credit or debit cards at my physical business location or will I be collecting the card information through another means?
- If you will be swiping cards directly from your customers, your best option for credit card equipment is probably some sort of credit card terminal and printer combination. If you will not be swiping the cards manually, many merchants will want credit card equipment that is more suited to their specific needs. Software packages are available if there is a PC at the business location or a standard terminal and credit card printer may work just fine.
Is a contactless payment solution the right choice for my business?
- Merchants who have "quick service" retail operations, and whose average ticket is $25 or less, may benefit from Contactless Payment credit card equipment. The "tap and pay" technology has proven to be most valuable for convenience stores, fast food restaurants, pharmacies, movie theaters and other merchants who rely on faster transaction times and shorter wait times for customers. Merchants can also upgrade their existing credit card equipment to a contactless payment reader without disrupting their operations.
Is there a phone line or broadband internet access available at the business location?
- Most businesses have at least one phone line at their business location and, these days, most have some sort of “always on” internet connection. For these businesses, there are many choices for credit card equipment. Most credit card equipment can share a phone line with a fax, or even the main phone if calls are infrequent and some of the newer terminals can utilize broadband internet for even faster transactions. If no phone or intent is available, such as at a trade-show or for delivery companies, etc, merchants should consider either a battery powered credit card terminal or wireless credit card machines that work over the cell phone networks.
Will you be accepting PIN-based debit card transactions?
- For those merchants that think they will be accepting debit cards they should consider adding credit card equipment like a PIN Pad to give their customers additional payment options. As described in this article about debit card processing, accepting PIN based transactions may save you money and add value to your customer’s experience.
How many merchant accounts will you need for your business?
- For almost all businesses the answer is one. There are examples however where multiple merchant accounts are either desirable or a necessity. These merchants will want a piece of credit card equipment that can handle more than one merchant account. There are inexpensive terminals which handle two accounts and more robust units which can handle up to 99. A qualified merchant account sales person should be able to recommend the correct credit card equipment for your specific situation.
Which terminal brands should I consider?
- Since most of the major credit card equipment manufacturers are producing high quality and feature rich products these days, you really can’t go wrong whatever brand you choose. That said, some of the processors may work better with a particular brand of credit card equipment and some newer pieces of equipment are not certified at every processor immediately upon their release. Again, this is a situation where it is best to let your merchant account sales representative guide you as to the best options given your particular processor and needs.
If you have any further questions regarding credit card machines, please feel free to contact our sales team for information and advice on purchasing equipment by calling the number at the top of your screen.
Credit Card Authorization Process
Ever wonder how credit card authorization really works? Where does the credit card information go once you enter it into a credit card terminal or POS?
When a credit card is swiped and a credit card authorization process is initiated, the information is sent directly to a credit card processor. From there, the information is transmitted to the card-issuing bank through a bankcard association, where the transaction is either approved or declined. Finally, the bankcard association transmits the approval or decline back to the terminal or POS device.
During the credit card authorization process, a card may decline if it is expired or has insufficient funds. The transaction may also be declined if the card has been reported missing or if there has been suspicious activity on it. To further protect your business, banks now require credit card authorization for all paper-based transactions.
In order to process credit cards and initiate a credit card authorization, a business must sign apply for, and receive, a merchant account. Once a merchant account is set up, credit card authorization may take place through the use of an equipment terminal/POS.
Contactless Payment Terminals
Contactless payment terminals have become the present and future of credit card transactions. Also known as "tap and pay," contactless payment provides benefits to retailers and consumers alike, particularly in the areas of speed and convenience.
Contactless payments are simply transactions that do not require physical connection between your customers’ credit card and the terminal. Smart chip technology, otherwise known as RFID, is supported by a secure controller, internal memory, and a small built-in antenna that transmits information to a reader through radio frequency.
The primary advantages of a contactless payment reader over traditional swipe cards are speed and convenience. Consumers can just tap the contactless payment terminal, eliminating the need for a transfer of hands with a credit card and a receipt signature. In turn, check-out lines become shorter as transaction times become faster.
Contactless payments are best suited for quick-service retailers, such as convenience stores, fast-food restaurants, movie theaters, pharmacy / drug stores, and gas stations and for those whose average ticket is $25 or less.
Retailers with major POS terminal providers can easily upgrade their existing system with a plug-and-play contactless payment device.