Slamming is the term that explains the theft of a merchant account by a sales agent or an ISO from another processor. Slamming is of course deceitful, but it is a common activity practiced across all sectors of credit card processing, be it retail or e-commerce. More common among smaller store owners, slamming has a negative impact on the business that switched, the merchant service they switched from and on the credit card processing industry in general.

This is how slamming works. A person claiming to be an agent with your credit card processing company may visit your store one day, and say he has come to ensure that your credit card terminal is working fine. He may take a few names at the credit card processing company that you are familiar with. You immediately trust him, allow him to meddle with your credit card processing terminal, randomly sign wherever he asks you to, and you’ve been slammed!

You discover that somethings amiss only when at the end of the month you receive two bills. One from your original credit card processor and the second one from a merchant services provider you do not even recognize. Slamming is illegal, but you have still ended up with two merchant accounts. This is different from switching your processor, as that happens with your full knowledge and as a result of you making a choice to move instead of you being forced into it. And, in such cases, just about anything is possible. For all you know, the technician who visited your store could be some cheat who is routing your money into his bank through a stolen merchant account.

Slamming can hurt your business in the following ways:

• Your current processing company is deceptive.
• You are paying extra fees with two merchant accounts.
• You will now also have to pay the termination fee to close the fraudulent account.
• There is a huge possibility of your original merchant placing you on the TMF / Match file.
• Your new account being fraudulent, it opens more avenues for credit card theft through your business!

Slamming also hurts the merchant service industry. When a genuine and a reputed credit card processor provides you credit card processing services, he invests a great deal on staff, training, and equipment to support your business. It takes months, and in some cases, even years to recover the amount spent. If in such a case, your merchant account is stolen away by another service provider, the original credit card processor incurs loss, which may be explained as being similar to what shoplifting has on a retail businesses. Profits dip, and it is hard for the provider to keep the fees and other charges low. This affects the entire industry, as the lost revenue has to be somehow accounted for.

Slamming exists, because these small companies are unable to get merchants as customers solely on the basis of the inadequate services they have to offer. If you have been slammed, the first thing to do would be to find out all there is to know about it. make sure that there is no termination fee in the new account and that you are not placed on the MATCH file because of this. It would also depend on what papers you have unknowingly signed. Whatever be the case, you are a victim, and shouldn’t have to pay even a penny! If a provider slammed you themselves, going straight to the bank they are registered to, or to Visa and MasterCard may be the best resolution. Additionally, filling reports with the BBB can go a long way in helping you.

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Credit card terminals are widely used in all businesses today. The main features of a credit card terminal include its price, speed, and reliability. The three main types of credit card terminals are traditional, wireless, and virtual.

A virtual terminal is the best option for processing credit card payments. With the help of a virtual terminal, you can manually process the credit card payments by phone, fax or e-mail. It also has an added flexibility, as you can access it from any internet connection in any part of the world. They are most suitable for all types of businesses and operates on a browser-based interface that accepts credit card payments and transactions by phone, fax or e-mail. It is very safe and you will not require a physical credit card terminal at all.

Its a processing terminal, where you log into a secure web site. Here you are allowed to enter and process your credit card transactions. When using hardware terminals, you swipe the cards, but in case of a virtual terminal you enter the data on a secured web page.

The virtual credit card terminals when used in a business, greatly reduces complexity and costs. These terminals are commonly used in utility companies, mail order businesses, call center operations, newspapers and magazines, insurance companies, charities, and service companies. Virtual terminals are beneficial and can be used in various ways like, entering credit card transactions manually for mail or phone order sales, refunding of money to a customer’s credit card, automatically bill customers for recurring charges, checking the status of transactions and also for capturing previously authorized transaction.

Virtual terminals are actually software-based credit card terminals which cater to fast and easy transaction management. The credit card transactions can be captured and authorized in real time by using these terminals. While working with virtual terminal, once the process is over, the merchant receives an authorization number and the transaction information will be stored in the server. So the transactions are automatically settled at the end of the day and within three business days the reports will also be generated.

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With the rapid growth of online purchases, fraud is a big reality today. One needs to be cautious as the fraudulent activities like identity theft as well as credit card number theft is increasing day by day. However, new fraud protection services are helping to decrease the incidence of identity theft and credit card fraud.

In this era of technology, millions of customers purchase everything online from a kitchen sink to office equipment, from batteries to custom clothing and anything and everything as it is convenient and delivered right to their doorstep. Yes, no doubt, purchasing goods through telephone and internet is fast and easy, but is it safe? This is a typical question that both merchant and consumers ask.

With all the fraud activities going on everywhere, consumers and the merchants today want an assurance that their account information is safe. So, now the customers want to be careful and are anxious to know whether the data and information submitted at your website is secure and remains confidential. Using merchant account fraud protection methods is highly beneficial for you as a merchant as well as for your customers.

Some fraud protection methods are -

Ask for card expiration date It is important to know the card expiration date. The date in the authorization request helps to verify if the card and transaction are legitimate. Any transaction containing an invalid or missing expiry date is a sure indication of unauthorized use of the card.

Ask for CVV2 All the online credit card payment transactions are verified by Cardholder Verification Value or CVV2. CVV2 is a three-digit security number printed on the back of Visa cards. This is very essential to validate if the customer has a genuine Visa card in his/her possession and also to check whether the card account is legitimate or not.

Ask for a Code 10 authorization for fraud protection Call up your authorization center asking for a Code 10 authorization. This shows that you have concerns about a transaction. Always, try to verify and recheck by asking the customer for additional information if you feel suspicious about any transaction.

Set a Personal Identification Number (PIN) A PIN is just like a password. Creating this ensures that only you can use your card online, as your credit card will be protected with a password created by you.

Fraud protection methods have many advantages. All these fraud protection methods are simple and easy to use. Use of such methods greatly help to reduce fraudulent credit card transaction and also helps in reducing charge back volumes. They are low on implementation costs too.

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All the business transactions today are revolutionized by e-commerce. Online commerce in India has seen a rapid growth in recent years. So, with the high speed evolution of this digital economy, e-commerce business models in India will require reliable and state of the art online payment solutions.

An account with a financial institution or bank, which enables you to accept credit card payments from your clients is called a merchant account. The transmission of the billing information to the internet merchant account provider is carried out by the payment gateway. Using a payment gateway is the safe and easy means to carry out online payment transactions.

A business must be qualified for a merchant account and the requirements depend on the merchant account provider. A credit card transaction can be processed only if there is a merchant account. Most of the banks and local finance institutions generally do not provide online merchant accounts. However, a good merchant service provider enables your business to streamline financial operations and consolidate your bank accounts in a safe and secure manner.

As a result of huge competition, many payment gateway service providers today provide a secure, scalable and flexible internet payment platform. This enables businesses all over India to accept secure online payments via credit cards, debit cards, bank transfers, by phone, fax or mail through one single account and payment-processing system.

By registering with a payment gateway service provider, online merchants and individuals can immediately start accepting all major credit card as well as bank transfer payment online.

So choose a reliable payment service provider who aims to provide a universal range of payment options for you to accept through a single merchant account. The merchant account provider must cater to merchant account activity online 24 hours a day 7 days a week. Be sure that the provider should be secure, trustworthy and good for your business.

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Subscription based websites consists of a public area used for the promotion of benefits related to becoming a subscriber, and a password protected area so that the members can access the best content. Instead of selling products individually, a subscription sells periodic (monthly or yearly) use or access of a product or service.

The subscription based business market is growing rapidly and these websites have unlimited use of a service or collection of services. You have a huge variety of subscription based websites available.

Charging a consumer is always said to be risky and its of more risk when they are charged on monthly basis.

So a great risk of chargebacks and fraud is always there. You will never know if some party wishes to see what you have to offer and will use a credit card number that is not in his name. By the time that you realize, they could potentially have used your services may be for a couple of months. So, you need to be careful as a few of these can potentially ruin a merchant.

There are a plethora of options available for you to consider and opt for. Once you decide that you have made up your mind to protect your merchant account, you can also think of using a third party processor to process your transactions. The option of choosing a third party processor will greatly help in “scrubbing”. Scrubbing is a useful process where the transaction will go through a few fraud prevention tools during the phase of transaction verification.

Many organizations combine their IT expertise and technical infrastructure to rapidly build, launch and grow subscription websites for their clients and partners. Regarding usage, these websites may be used for personal & non-transferable services. Sometimes under specific cases, these websites are also used for a group utilizing a single service at the same time.

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Security is a major concern for customers while making online payment. All sensitive information, including personal details as well as credit card information must be kept confidential through encryption and using other security standards.

Online payments are processed by websites and these websites require encryption of some kind. Customers look for security on the site and want to have a secured feeling that their information is safe. The customers give you their personal information in a shopping cart. So, you must ensure that the information is safe and protected. Education and awareness are a must to identify fraud and identity theft.

There are many ways to tamper with the shopping cart. The username and password can be hacked, the visitors can tamper with forms used to send items to the shopping cart, and the database can change values according to the parameters submitted from the web site and so on.

A shopping cart is used as a measure to sell and increase profitability. Many times security issues start from drawbacks of the software itself. Hence, it is essential for shopping cart developers to consider security measures and provide tips on how to avoid most common and frequent problems.
Some of the security measures to develop a shopping cart software are -

• Encryption of Password and sensitive information.
• Perform Admin password verification test.
• After the transactions are processed, a good support for credit card record deletion.
• Catalog stock operations must be recorded.
• Taking snapshots for verifying the amount charged for each product in each order.
• Support for blocking purchases from free e-mail addresses.
• Support for blocking chargeback customers or troublesome customers.
• With each order, recording the customers’ IP without fail.
• Resetting of global customer password when threatened by intrusion.
• Delivery of database error reports to the administrator by email or SMS

Just by taking few necessary precautions, you can avoid the security breaches and give your customers a safe mode of online payment.

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The US credit card companies in the world namely, MasterCard, Visa, American Express, Discover Financial Services and JCB came together to form an organization to manage the on-going development of PCI data security standards which focus on improving payment account security throughout the transaction process.

The organization would be called the Payment Cards Industry (PCI) Security Standards Council.

DSS or Data Security Standard is the main theme behind the PCI council which says that a company processing, storing, or transmitting payment card data must be PCI DSS compliant or risk losing their ability to process credit card payments and being audited and/or fined.

The key purpose to establish this council was for dissemination and regulation of certain standards by which each member of the Payment cards industry would need to comply. PCI DSS will be a mandatory requirement on all organizations and it includes a set of compliance requirements applicable to all entities that process, store or maintain credit card information.

The PCI corporation was formed with an aim of providing security in the e-commerce environment to all customers. It helps in ensuring that the merchant or acquirer who is handling the credit card information has sufficient security checks and facilities in place to prevent the potential for fraud which is a major concern worldwide.

PCI compliance is a compulsory requirement for any merchant, third party credit card processor or acquirer, who is storing, processing or receiving credit card information in any form. It proves to be a necessary standard that must be adopted everywhere for security purposes and to stay one step ahead of the increasingly coordinated efforts of cyber thief networks.

The PCI council is eligible to levy fines (upto $500,000) under noncompliance situations, if a merchant is not PCI compliant. Some penalties can permanently prohibit the entity from credit card activity.

PCI standards are set up to help businesses with better practices. So being PCI compliant is a smart and wise business decision.

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A Chargeback code 53 occurs in event of following scenarios that trigger negative customer response in his notifying the issuing bank for:

• Products/services that were not the same as displayed or described on the website, or on the sales receipt or any other documentation the cardholder was given initially.
• Products/services that turned out to be contrary to the merchant’s verbal description for a telephone transaction
• Products/services that were shipped to and received by the cardholder were damaged or defective

Please note here that the privacy policy of a merchant website has no bearing on Reason Code 53 disputes. The cardholder, to demand a chargeback, must have already made valid attempts to resolve the dispute or return the merchandise by requesting the merchant to come and retrieve the goods at their own expense.

The following are the most common causes for Chargeback code 53:

• Wrong merchandise Sent to the cardholder
• Merchandise damaged during shipment
• Inaccurately described merchandise or services.
• The merchant did not cancel the services purchased by the cardholder
• The services were not performed by the merchant as described
• Refusal of the merchant to accept the returned merchandise
• The merchant accepted the returned merchandise but did not credit the cardholder’s account

Some Tips to protect yourself from Chargeback code 53:

• Verify and ascertain whether or not you have received the returned merchandise and also to check if the cardholder has cancelled his order or service. Advice your merchant bank regarding the same and expect the
• cardholder to make valid attempts to return the merchandise in question.
• If you have proof that you described the merchandise in its exact true form, then forward the same to your merchant bank along with invoices to refute the cardholder’s claims.
• If the merchandise was replaced or repaired at the cardholders request or returning the same, evidence of the same must also be provided.
• Again, if the services provided by you absolutely match what was described to the card holder in the first place, then forward evidence supporting your stand refute the card-holder’s claims.. The more specifically you address each and every point the cardholder makes, the better!

In event of the cardholder’s complaint being valid, simply accept the chargeback. Do remember, the acceptance process itself works for returning the cardholders credit, and you do not have to issue one separately.

To prevent Chargeback code 53:

• Let the descriptions of your goods and services be identical to their actual form in catalogs, your website, sales receipts, as well as in the telephone order-taking scripts.
• A strict check on your shipping and handling processes will make for accurate filling out of orders.
• Train your staff to ensure that proper procedures are being followed as far as taking and filling orders is concerned.

Things you should know about Chargeback Reason Code 53

• The chargeback amount cannot be more than the cost of the merchandise returned or services cancelled . It may further comprise of the cost incurred in shipping back the merchandise in question.
• In case of returned merchandise, the card issuer must wait at least 30 calendar days from the date the cardholder returned the merchandise before generating a chargeback.
• Chargeback code 53 may also be generated for quality disputes (for example, a car repair situation).

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There are different levels of data in merchant account business, buzzwords that a layman probably never hears about. However, they are fairly common in the industry and have been around for quite some time. This three level system decides whether or not a transaction is qualified. When changes are implemented in the credit card processing industry, there are also changes in the regulations on how this data is processed. Here is what level I, Level II and Level III data comprise of :

Level I data includes:

• Date
• Merchant Name
• City
• State
• ZIP Code

This information is not prompted by the terminal, and the merchant has to further enter the purchase amount including sales tax.

Level II Data includes:

• Date
• Merchant Name
• Tax ID
• Merchant Type Code
• Merchant Category Code (MCC)
• City
• State
• ZIP Code

This information will automatically programmed into your terminal and you should not need to enter it. In Level II transactions, the merchant is prompted by the terminal to enter some information, such as, purchase amount excluding sales tax, sales tax, local tax indicator and customer code (when using a purchasing card).

Level III Data includes:

• Date
• Merchant Name
• Tax ID
• Merchant Type Code
• Merchant Category Code (MCC)
• City
• State
• ZIP Code

This information will be automatically programmed into your terminal and you should not need to enter it. The terminal will however prompt the merchant to enter more information for level III transactions such as purchase amount, excluding sales tax, sales tax, local tax indicator, customer code, and full line item details.

Level I transactions are usually standard retail transactions, where the card holder uses his credit card, issued to him by an American bank. Level II transactions comprise of corporate cards issued by an American bank. Level III transactions are government credit cards or corporate cards. Level I and II transactions can be run through a standard credit card terminal or PC processing program if setup correctly. Level III transactions require special software to transmit the extra information required to qualify the transaction.

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Quite a few merchants assume and believe that their swiped merchant account will work just fine as an e-commerce solution as well. When a merchant is given a swiped merchant account, it is on the basis of a mutual understanding that the merchant will take all necessary steps to verify the credibility and authenticity of the credit card holder before giving the transaction the go ahead! This has to be ensured by adhering to the security guidelines as outlined within Visa’s credit card security features or MasterCard’s security features. Make a Code 10 call if you smell something fishy!

Acquiring a merchant account means acquiring some risks and responsibilities. Along with the merchant, all other parties involved such as the the merchant account provider, acquiring bank, issuing bank, and the card associations, all assume a share in the risks involved.

There are two basic types of merchant accounts - one for your brick and mortar store, also known as a swiped account, and second an Internet merchant account, and a mail-order / telephone (MOTO) account. The latter are also known as keyed accounts and following are the risks involved:

Higher Risks
The risks are heightened in keyed accounts owing to the fact that cardholder verification is difficult. The risks that the merchant assumes is usually passed through as a discount rate. Since the risk is greater on a merchant keying in a transaction, usually the merchant account provider will downgrade this transaction. The result is a higher discount rate charged on the transaction.

Risks involved in the Storage of Cardholder Data
What adds to the risks involved is that the merchant may have to store cardholder data, for which PCI compliance is of course mandatory in order to get the credit card number. Non-compliance can prove costly, especially for small business owners.

Read your Merchant Account Agreement
Read all the small print in your merchant account agreement to check if a limit has been set to the number of transactions you may swipe in a month. You have to be careful because if you violate this agreement you would be liable for legal action. Besides, if you continue to key in transactions beyond the set limit, your merchant account provider can simply raise the rates to over 3% on a swiped account.

Internet Merchant Account
With an Internet merchant account, following are the few big differences that come to mind:

• You won’t be doing anything that goes against your contract that could get your merchant account terminated, with you ending up on the MATCH File
• Your customer knows immediately if his / her order was approved or denied
• It is much more professional to have the transaction processed on your secure website
• It is time-saving.
• You can rest in peace knowing that no credit card numbers will be compromised if your website is hacked
• There is no compulsion to be PCI Compliant (even though it is a good idea), saving you hundreds of dollars up-front.

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