Card Brand Updates for April 2019

stack-of-credit-cards-for-card-brand-update-blog-postIn April 2019, a series of updates are being implemented by the card brands. Some of these changes will affect pricing in certain categories and regions.

What follows is a summary of the fee changes, category modifications, and pricing adjustments that will result from these changes.

 Visa International Service Assessment Fee Changes

On April 12, 2019, Visa will be increasing the International Service Assessment Fee rates, which are assessed on transactions from merchants located in the U.S. when the card was issued in another country. The Fee Rate Levels below are determined by the settlement currency; the Base fee rate applies to transactions settled in U.S. dollars and the Enhanced fee rate applies to transactions settled in a currency other than U.S. dollars.

Visa Network Acquiring Processing Fee – Changes to International Fees

On April 1, 2019, Visa will be increasing fee rates for International Credit and International Debit and Prepaid transactions.

The Network Acquiring Processing fee is applied to all authorizations, both approvals and declines. Previously, domestic and international credit transactions were assessed the same fee rate. The same was true of the fee rates for debit and prepaid transactions (domestic and international transactions were assessed the same fee). The rate for U.S. domestic transactions will not be changing.

Mastercard Interchange Rate Adjustments for Existing Consumer Interchange Programs

Effective April 12, 2019, Mastercard will be adjusting the fee rates for the existing interchange fee programs categorized below:

Mastercard Commercial Interchange Rate Adjustments and Structure Changes

On April 12, 2019, Mastercard will be changing their U.S. Commercial Interchange structure and renaming some existing interchange programs as part of the consolidation of commercial interchange programs.

The fee rates for the existing interchange fee program categories are:

The fee rates for the new Mastercard Interchange Programs are:

Discover Interchange Fee Rate Adjustments

Effective April 12, 2019, Discover will be modifying interchange fee rates for some interchange program categories. With these changes, transactions in the impacted categories may qualify at the new fee rate amounts.

American Express Industry Category Rate Changes

On April 12, 2019, American Express will adjust existing pricing in the B2B/Wholesale, Restaurant, and Services & Professional Services Industry Categories.

Here are the pricing changes by industry category:

Payscout’s Mobile Payment Processing Options Can Help You Stay Ahead of Industry Trends

Young People Work In Modern Office

Is your organization equipped to accept payments from a smartphone? Are you at the forefront of the frictionless payment movement?

If not, you could be missing your opportunity to access new customers and emerging markets across the globe.

The global mobile payment market is worth over $600 billion and is expected to hit $4,574 billion by 2023, according to a recent report. Payscout can help you and your organization tap into this growing, lucrative market with customized mobile payment processing options for your business or non profit.

Mobile payments refer to transactions that are made on a mobile point-of-sale system, usually through an app, website, or mobile payment processing system on a smartphone, tablet, or other mobile electronic device. Mobile payments differ from traditional payments such as cash, checks, or debit and credit card information that require a stationary touch screen or computer.

The mobile payment market is expected to grow at a compound annual growth rate of 33.8%, meaning that retail, hospitality, transportation, healthcare, and utility industries are all poised to see a substantial expansion in transaction opportunities.

Payscout offers a broad array of solutions, processing transactions from utility payment processing to healthcare industries and more. Payscout’s integrated payment capabilities give your business greater flexibility to engage customers through frictionless payment options, allowing each of your users to pay a bill, review annual rebates, or receive monthly updates through a mobile device.

Payscout’s mobile web portal, Condor, facilitates bill-payment transactions, and Payscout offers a direct gateway connection for real-time data transfer. This fully integrated system works with over a dozen software applications, letting you reach customers in new and innovative ways.

This technology isn’t just driving more efficient operations in the business sector. Payscout can also help non profits tap into the mobile payment market. With a non-profit payment processing system, non-profit organizations can streamline donations through a centralized merchant account, regardless of whether donors are online, on-site, or using a mobile platform.

Increased mobility and security can help your non profit operate more efficiently. Payscout’s PCI-compliant, web-based donation forms enable non profits to reach out to volunteers and manage recurring donations securely and effectively either on- or off-site.

Payscout’s integrated payment system connects merchants and consumers across six continents via credit, debit, ATM, and alternative payment networks. Integrated with over a dozen software applications, Payscout wants to help you optimize your payment processing system. Payscout can help your organization or non profit find personalized solutions to meet your payment needs.

Use Payscout to help grow and streamline your business or non profit. Find out more at www.payscout.com

 

Global B2C Ecommerce is Expected to Grow to $1 Trillion by 2020

Young entrepreneur woman using tablet work at home office looking at camera.

Is your business ready to tap into the international ecommerce market? If not, you could be losing out on access to millions of potential consumers and their online purchases.

The global business-to-consumer ecommerce market was valued at $230 billion in 2014, but is expected to reach $1 trillion by 2020, according to  a report from global consulting firm Accenture and AliResearch, the research arm of Alibaba Group. This marks a pivotal opportunity for small- and mid-sized firms and global entrepreneurs who are interested in tapping into emerging markets.

Cross-border ecommerce is a segment of the global B2C market where consumers make online purchases from businesses physically located in other countries. One of the easiest and most secure ways to facilitate global ecommerce is through an international payment processing system.

Experts estimate that by 2020, international ecommerce will account for almost 30% of global B2C purchases. According to the report, more than 900 million people around the world are expected to participate in online international shopping.

If you see potential to grow your online retail operations, you can’t afford to miss out on this trend. An international payment processing system can help smooth the transition into global markets by helping you navigate foreign rules and compliance issues and streamline payment processing. Look to work with a company that offers an international payment processing system and that can also help you connect with international contacts and experts in new markets such as Brazil, Canada, and Europe.

Global analysts and investors are also carefully following China’s growing economy. Global ecommerce grew by more than 70% in 2015 in China alone, driven partly by China’s growing middle class, higher standards of living, and increased exposure to foreign markets.

An estimated one-quarter of China’s population will soon be shopping either directly on a foreign company’s website or shopping through third parties like Alibaba, JD Worldwide, or Amazon. This equates to over 200 million ecommerce shoppers in China over the next five years, totaling over $245 billion in ecommerce transactions.

In addition, international ecommerce is expected to see compound annual growth of over 27% in the next five years. This is double the current rate of B2C shopping worldwide.

Even if you don’t anticipate venturing into international markets, which might be the case for local businesses like a regional healthcare provider or a utility company, you still need a payment processing system that is efficient and secure.

A healthcare payment processing system should integrate with other software applications, customer accounts, and financial institutions to facilitate fast and secure payments. Reliable, integrated banking solutions are a central component to electronic payments.

Also look for payment processing systems that support frictionless payments. This emerging concept integrates a customer’s banking information with point of sale transaction through an app or mobile device, allowing customers to pay a bill or make a purchase from their phone instead of physically swiping a debit or credit card.

Whether operating domestically, internationally, or moving between global and local markets, your payment processing provider should ensure excellent customer service, mobile capabilities, personalized solutions, and API connection for real-time data transfer.

 

 

 

The Mobile Payment Market is Expected to See Steady Growth in Coming Years

The global mobile payment market was valued at over $600 billion in 2016, but is expected to surpass $4,574 billion by 2023, according to findings published by Allied Market Research.

That is a compounded annual growth rate of 33.8%.

The Asia-Pacific region accounted for the most revenue in the mobile payment market in 2016, a trend that is likely to continue in coming years. In that same year, the retail industry accounted for nearly one-third of mobile market transactions, but the hospitality and transportation industry exhibited the fastest growth rate. Other industries listed in the report as also benefiting from the rise of mobile payments include healthcare, energy, and utilities.

The term “mobile payments” refers to any transaction for a product or service that is made through an app, website, or mobile payment processing system on a smartphone, tablet, or other mobile electronic devices. In most cases, payment information is encrypted for security purposes.

This technology isn’t just driving revenue for the business sector; it’s helping streamline donations and operations for non profits as well. With a non profit payment processing system, organizations can streamline donations through a centralized merchant account, regardless of whether donors are online, on-site, or using a mobile platform.

Non profits can also use mobile payment systems to help achieve greater efficiencies. Using PCI-compliant, web-based donation forms, non profits can reach out to volunteers and manage recurring donations securely and effectively.

There are several factors driving growth in the mobile payment market:

  • With the rise of smartphones, almost everyone has access to the mobile payment market, whether or not they use it.
  • Though many consumers still have concerns over privacy breaches and data security, the ease and convenience of mobile payments often supersede those security concerns.
  • The widespread adoption of smartphones in emerging economies like China is propelling the growth of mobile payments. As the middle class in countries like China and India continue to grow, so too will mobile payments.

While some companies utilize what is known as frictionless payments, where transactions are submitted through an app without swiping a debit or credit card, not all mobile payments need to be truly frictionless.

Businesses that do not yet have access to a frictionless environment can easily access the mobile payment market with a mobile card reader attachment. This allows vendors to process customer credit or debit card payments on-site, making them perfect for mobile retail sites like farmer’s markets, trade shows, or fundraisers—or a brick-and-mortar business that wants to streamline the checkout process.

A mobile payment processing system is a safe and easy way to complete sales quickly and send customer e-mail receipts, all through a smartphone. Select a system that is compatible with Apple and Android mobile platforms and supports a range of devices, including multiple generations of iPhones and iPads.

When deciding between payment processing systems, look for companies that offer full compatibility with Apple and Android and do not charge a fee for set up, early termination, or cancellation. If possible, find a payment processing company that will provide a mobile card reader for free, as well as 24/7 technical support.

About Payscout

Payscout connects merchants and consumers via credit, debit, ATM, and alternative payment networks across six continents. With Payscout, it’s easy to manage payments on-site and across online and mobile platforms. With customized services for healthcare payment processing and utility payment processing, Payscout offers customized API connections and integrates with over a dozen software applications.

 

Discover how to grow your business at www.payscout.com

The Secret to RegTech: Four E’s

Regulatory technology or “RegTech” helps entrepreneurs maintain compliance with various regulatory requirements in an efficient and cost-effective manner.

Payscout, which provides RegTech solutions for merchants in a wide array of verticals, has developed their solutions over time by deploying a surprisingly simple framework: Education, Enablement, Enforcement, and Evolution (the four E’s).

In a complex ecosystem such as the payments industry, financial regulation impacts every element of the system, from the consumer and their issuing bank, to the merchant, acquiring banks, service providers, and many more. All of those individual groups represent key stakeholders in the system.

Decisions that impact the group should begin with a process of Education, wherein all stakeholders are engaged at the outset. By beginning with education (and ensuring all relevant stakeholders are engaged in the process), both regulators – and the systems providers who help business owners navigate compliance issues – share all of the available information for use in creating the most optimal outcomes. Good examples of the education phase in action include events such as the Electronic Transactions Association’s Fly-In and FinTech Policy Forum, of which Payscout is an active, year-round participant. The events provide a forum for stakeholders to come together and bilaterally engage in the education process.

The second stage is the Enablement phase, which refers to the development of policies, processes, and systems that enable entrepreneurs to conduct business in a compliant manner. Payscout, at its core, is a systems provider who builds the processes that enable merchants to conduct payment transactions in a compliant manner. It is essential that the enablement phase (the development of systems) follows, as opposed to preempting, the education phase.

The third stage is Enforcement, and this refers to the critical steps required to remove bad actors from the systems once they have been developed and deployed. Enforcement is an essential part of any functioning system, but like the Enablement phase, it is critical for this stage to follow and not precede Education and Enablement. Only after all stakeholders have been meaningfully engaged in Education, and systems have been developed on the basis of that education, should enforcement be undertaken. If and when enforcement precedes Education, the system begins to break down.

Lastly, Evolution refers to the necessary contiguous nature of the regulatory environment and the need for the systems that support it to continue to mature. The key in this phase is to return the cycle to Education, specifically, by reviewing and evaluating what worked and did not work in the policies, procedures, systems, and enforcement inherent in the regulation.

The Four E’s model has broad implications, but in RegTech, it serves as an essential foundation for sound regulatory policy.

Contact Sales@Payscout.com today to learn more about how our RegTech solutions can help you grow your business responsibly. 

Chargeback Changes for CVV2 Mismatch

Change in Visa Chargeback rules in case of a CVV2 mismatch

Effective April 14, 2018, Visa card issuers are no longer able to chargeback a transaction if the original authorization was approved but included a CVV2 mismatch response. Let’s look at this in simple terms and understand its implications on merchants and issuer banks.

The CVV2 or Card Verification Value is a 3 digit number located at the back of a Visa card and is separate from the main credit card number itself. It is a secure number that protects merchants from fraudulent transactions in card-not-present situations, including over the phone (MOTO) or online. It serves as proof of possession of the card by the customer, especially since Visa strictly prohibits merchants from storing CVV2 numbers as a part of the customer’s data.

CVV2 numbers come into play when the customer first enters their credit card details. The issuer bank verifies the card details and ensures the customer’s account has the amount needed to make the purchase. Once the verification is completed, the issuing bank ‘authorizes’ the transaction.

Next, the authorization (along with the CVV2 code) are sent to the payment gateway. At this point, the CVV2 code entered by the customer is “matched” with the correct CVV2 code and a response is generated.

These are the response codes:

M – If the codes match

N – No match

P – Not processed; the code was not validated.

S – Should be on card but not indicated; customer left the field blank

U – Issuer does not participate in the CVV2 program

The payment is captured by the gateway if the codes match.

Now, imagine a situation in which the customer complains they have been billed for a transaction that wasn’t done by them. The merchant checks their records and notices that the same transaction was declined at their end. This essentially means that the transaction was ‘authorized’ by the issuer bank but was ultimately declined once there was a CVV2 code mismatch.

Regardless, a chargeback is issued to the merchant. The merchant then looks at the response code to determine whether the customer was in possession of the card for this transaction. If the response received is ‘N’ or a ‘No match’, the merchant seeks protection from the chargeback.

With the new rules implemented by Visa, the issuer can no longer issue a chargeback to the merchant in a situation where the payment has been authorised but the CVV2 code has mismatched.

Key takeaway: As a result, this change will likely lead to an increase in the number of authorization rejections when the CVV2 provided is incorrect, as issuers will take more measures to protect themselves.

If you’re a merchant, please be reminded that the CVV2 should always be used as part of your fraud prevention measures for one-time, card-not-present transactions and continue to capture the correct CVV2 to help ensure that the used card is in the cardholder’s possession.

 

Learn more about Payscout’s e-commerce solutions and how we help keep our merchants safe and secure: www.payscout.com/eCommerce

 

 

 

Visa’s New Claims Resolution Process: What it Means for Your Business

Visa is introducing a new process called Visa Claims Resolution (VCR) to resolve disputed transactions or chargebacks. While the goal is to simplify and expedite the claims resolution process, these changes will have an impact on your business. Payscout is here to help you understand how.

What does VCR mean?

With VCR, Visa is moving away from a “litigation based” dispute processing model to “liability assignment” based model. This essentially means that instead of each case of chargeback being treated like a “courtroom trial,” with several rounds of back-and-forth between all the stakeholders, Visa will automate a large part of the process and assign liability to the concerned party. This will reduce the amount of communication taking place between the issuer, merchant, and acquirer. The intention is to save time, resources, and cost. There will be human intervention only in case of complex cases of chargebacks.

Why is Visa making this change?

Visa found that it took an average of 46 days to resolve a chargeback, and in certain cases, up to 100 days. The objective of VCR is to simplify the process of addressing disputes and make it more efficient. This will reduce cost and wait times for you (the merchant) – but it will also reduce your response time (more on that further down the post). VCR aims to resolve chargeback issues within 31 days or less.

When will these changes go into effect, and who will be impacted?

VCR will be effective on April 13, 2018. The new rules will be applicable to all merchants, acquirers, and issuers worldwide. Ultimately, it will also impact your customers.

What is changing?

Under the current system, you can file a chargeback under 22 different Reason Codes. To simplify the process further, VCR will now allow cluster these reasons into 4 broad categories called Dispute Categories:

  • Fraud
  • Authorization
  • Processing Errors
  • Consumer Disputes

There are now two new process flows for tackling the disputes in these categories: Allocation and Collaboration.

Allocation will be used to resolve disputes under the Fraud and Authorization categories. Visa Resolve Online (VROL), the existing platform for filing disputes online, will play a pivotal role of automating the process. It will run an automated check of the chargeback filed by the customer and then automatically reject it:

  • if the customer’s timeframe for lodging a complaint has elapsed
  • if a return issue has already been filed in your system for the customer

Automatic blocking of redundant or ineligible requests will reduce the annual number of chargebacks by 14%, according to Visa, thereby shortening timelines.

In a case where a customer’s dispute qualifies, VROL automatically assigns the liability to the merchant.

While the majority of disputes will fall under the Allocation Workflow, some disputes would necessarily need several rounds of interaction between the merchants, issuers, and acquirers. This is particularly true for Processing Errors and Consumer Disputes categories.The process of Collaboration is the same as the current process of filing and resolving disputes.

What are the key takeaways business owners should know?

  • Your response time decreases from 14 days to 10 days. You will have to develop a mechanism that allows you respond fast and accurately. Using electronic dispute processing options and enrolling for email notifications is strongly advised.
  • Under allocation workflow, you will be able to defend a chargeback only if you have compelling evidence. This means that you will have to record and maintain evidence for every transaction.
  • This blog post. We’ll keep updating this blog as we hear more from Visa on this new development.

Source: VCR Efficient Dispute Processing for Merchants

Global Ecommerce to Reach $1.84 Trillion in 2017

Global ecommerce remains a tremendous opportunity for enterprising entrepreneurs.  A new report from the Ecommerce Foundation shows global B2C ecommerce will grow by 17% in 2017, reaching $1.84 Trillion by year’s end.

The Ecommerce Foundation, an independent non-profit with a mission to foster global digital trade, has released a report showing the global ecommerce market is continuing to grow at an astounding rate.  According to the report, global ecommerce sales will reach $1.84 Trillion in 2017, up 17% from 2016.

Asia represents the fastest growing segment in the report, rising 20% year-over-year.  Europe comes in at a close second, up 19% from 2016.  In the United States, which is the world’s most advanced ecommerce market, the growth rate in 2017 will reach 10%, according to the report.

“The data shows that we are far from a growth plateau in the global e-commerce market,” said Ecommerce Foundation research coordinator Sara Lone.  “The rate of growth continues to increase, possibly due in large part to healthier economies, improvements to infrastructure and higher rates of cultural acceptance for e-commerce.  As we evolve into a more connected world, with substantially more people accessing the Internet, we see new opportunities to create online shoppers, as well as increase the amount of goods/services online shoppers currently purchase.”

As the amount of goods and services online shoppers purchase continues to grow, so too does the opportunity for ecommerce merchants to expand their businesses.  With international locations in Asia (Shanghai, China) and Europe (where Payscout is now a licensed Financial Institution), Payscout is uniquely positioned to help entrepreneurs leverage the growth of global ecommerce.

Contact Payscout today to Go Global Now with efficient international ecommerce processing!

Trends in Mobile Payment Processing

Today, the most common methods of payment in almost any business industry are via debit and credit card. If you are not accepting card payment, you are most likely losing out on sales. After all, statistics show that three out of every four retail transactions done in the United States are preformed using a credit or debit card, and often times, these transactions occur via an online marketplace. Gone are the days when merchants are tied to counters and conventional offline stores.

Mobile card processing also enables retail business owners to reach their target market wherever they go.

Retail business owners can now leave their store behind and go to where the consumers are. Regardless of the industry you are in, you will definitely benefit from mobile payment processing.

One up-and-coming mobile payments trend that retail owners should be paying attention to is the use of mobile wallets. Mobile wallets are apps that allow you to pay with your credit card using your phone instead of a physical card. This is a huge advancement in payments technology, merging the security of a payment card with the ease and convenience of a smartphone. Mobile wallets are available on both iPhone and Android enabled devices and are gaining swiftly in popularity, with 11% of the American population making use of these apps.

Make sure you are staying on trend as a business owner; contact one of our customer service specialists today at 888-689-6088 to see how you can begin accepting payments from mobile wallets.