RetailTerminals.com - Retail Credit Card Machines and Merchant Accounts

I’d be willing to bet my next paycheck that if you’re reading this article, you’ve probably done your fair share of shopping using that small, rectangular piece of plastic that fits so snugly in your wallet. Credit cards have revolutionized our purchasing power. They are extremely simple to use- just swipe and sign or type and click. And as easy as they are to use, they can be dangerous if the information they carry ends up in the wrong hands.

Consequently, one might ask, “Are there any measures that can be implemented to decrease the risk involved when using a credit card?” The answer to that would definitely be yes. Since most cases of credit card fraud stems from card-not-present (CNP) transactions, such as online shopping or mail ordering, the most obvious and effective method would be to just use common sense. Be wary of where you shop. Do your research and make sure the merchant is reputable.

There is however, an added security measure designed especially for CNP transactions, and its located directly on your credit card. This is known as the Card Verification Value 2 code (CVV2). You probably know it as the 3-digit-number at the back of your Visa, MasterCard or Discover, right under the magnetic strip on the right hand side. Or for those of you with American Express, it’s the 4-digit-number on the right hand side of the face of the card. This might lead you to wonder, “If this is the CVV2, where’s the CVV1?” The CVV1 is encoded onto the card’s magnetic strip and is used only in card present transactions.

So now you know what is and where to find it, how can it help you? I’m glad you asked. First of all, let’s make it clear that the CVV2 code is not stored in the magnetic strip like the CCV1 or the card number itself. Hence, the CVV2 is never recorded when the credit card is swiped. This would limit the ability of a fraudulent merchant to capture the magnetic stripe details of your card, in an attempt to use it at a later time for a CNP transaction. Online merchants who require CVV2 codes to process transactions are forbidden by Visa to store the code after the transaction is authorized and completed.

This regulation is part of a larger collection of regulations known as the Cardholder Information Security Program. CISP is instated to reduce credit card fraud.

"All merchants are prohibited from storing CVV2 data. When asking a cardholder for CVV2, merchants must not document this information on any kind of paper order form or store it on any database."

Although the CVV2 code decreases credit card fraud. It is not without some limitations. Since MasterCard only introduced this measure in 1997, and Visa in 2001, it is not mandatory for merchants to require the code. This decreases the overall effectiveness. However, transactions processed without a CVV2 code might be subjected to higher scrutinization for fraud. A transaction deemed to be fraudulent that was processed without a CVV2 code tends to be resolved in the favor of the cardholder.

So now that you’re all caught up and hopefully a bit more knowledgeable about your credit cards, I bid you good luck in all your future charging endeavors. Just remember, charging can be easy and safe, but charge responsibly, and with a reputable business. If you’re an online merchant, accepting CVV2 should be a given. For other questions about CVV2 and other fraud-prevention measures, give us a call at 800-546-1997.

Some recommended additional reading:

Visa CISP Website

Rules for Visa Merchants

Business owners today understand the value of credit card processing. The more common means of acceptance generally include the traditional physical terminal for card-present transactions, and of course the widely used virtual terminal for internet sales. Now, the cellular technology that became so popular throughout the last decade is available for credit card processing. Wireless Processing is revolutionizing the credit card industry the same way cell phones revolutionized the age-old telephone industry.

Wireless terminals are becoming utilized more and more because of their flexibility. Simply put, you can use the same terminal to accept credit cards over the phone, in your office, at a client site, and even in the comfort of your own home. The convenience of taking credit card processing with you is invaluable and provides one of the greatest ROIs in the market. Wireless terminals are especially useful for the following:

• Trade Shows
• On-Site Workers (plumbers, electricians, etc.)
• Door-to-Door Salesmen
• Taxi and Limousine Drivers
• Events/Fairs
• Stadium Sales
• Food Delivery
• In-Home Massage Therapists

Other immediate advantages include a decrease in fraudulent transactions/chargebacks, an improved cash-flow versus accepting checks or money orders and increased security (less cash handling). Today's wireless terminals are very compact and take portability to a new level. One of our most popular models is the Verifone Vx610. It has a built in thermal printer, pinpad and offers a true all-in-one solution. An alternative is the WaySystems MTT-1556 which is one of the smallest units available. It can comfortably be worn around the neck and also includes a wireless thermal printer with holster.

One important note about mobile terminals is that they actually transmit data on the same popular networks as mobile phones- specifically GPRS and CDMA networks. Terminals are actually available for each network type, but serve a similar function. To delve a bit deeper into the difference between the two you can check out our writeup, here.

A few suggestions about wireless processing:

1. If you have a cell phone, it might be a good idea to take it to the location you wish to accept payments to see how good the coverage is. As with cellphones, an area with poor network coverage is going to impair your ability to accept credit cards. You can check your local coverage by using the following links:
   
   GPRS Coverage (T-Mobile)
   CDMA Coverage (Verizon)
   
   
2. Always arm yourself with an imprinter. They are cheap and provide a great backup solution incase you are in a low-coverage area.
3. As with any other method of processing, before purchasing a wireless terminal you will need to setup a merchant account. It's always a good idea to find out all the rates and fees before signing up. Luckily, our parent company MerchantPlus makes it easy. Click here for full details.
4. Consider leasing before purchasing a wireless terminal. Leasing reduces up-front costs and offers a number of other advantages. We offer leasing on virtually ever terminal available on our website. Find more details here.

That covers all the basics. We hope you use this powerful technology to achieve your business' true potential. Of course, should you have any questions please feel free to give us a call anytime at 800-546-1997.

Frustrated by the dearth of flattering leotards on the market, dancer Yumiko Takeshima started her own line of customized dancewear in 2003 and has since developed a loyal following of fans around the world. The company, Yumiko, has experienced double digit growth solely on Internet and phone orders. Yumiko also owes much of its success to its network of almost two hundred YumiGirls, a community of Yumiko fans who sell the product to other dancers in their community. Continuing on its momentum of growth, the company ventured into the world of retail for the first time with a store in an up-and-coming Manhattan neighborhood.

In planning its initial foray into retail, Stephen Dean, head of Yumiko USA, explored various Mac-compatible point-of-sale (POS) software options to make the transition as smooth as possible. He found XSilva Lightspeed 2 to be the clear winner in the bunch. With a simple, sleek interface, the solution was easy to use, flexible, and comprehensive in functionality. After a few weeks of using XSilva, Stephen had nothing but rave reviews for the solution. The following are excerpts from an interview conducted in his NYC store:

Q: What are some of the most important features you were looking for in a POS solution?

A: First of all, it had to be Mac-compatible, which automatically narrows the list down to a few options. Second, it had to be flexible and easy to use. Our business is largely customized product and I needed something that would allow me to easily add new SKUs into the system. We offer a whole range of leotards that people can customize by sleeve length, material, color, etc.

 Because Yumiko has so many SKUs, it's important that the user interface is simple and straightforward. On the front end, all I have to do is scan the barcode and all the relevant information pops up on the screen – price, sales tax, description, size, color. On the back end, setting up each style was a breeze. And once the styles are in the system, it was easy to find a specific leotard by typing the name, any part of the description, or color. I can also update the information or print a label in a matter of seconds.

What I've also found extremely helpful is the inventory management feature. I will never have to close the store to do an inventory check – XSilva keeps an up-to-date count of exactly how many of each style, color, and size I have on hand. And if I'm running low on certain styles, the system automatically reminds me to reorder.

Q: How was the learning curve for XSilva?

A: I'm no techie, so the Mac-like interface made it easy to figure out. The support team at MerchantPlus and XSilva were great – they were available to help with any other questions I had.

 Once I got comfortable with the system, the rest was easy. I've already seen huge time savings already...I can't imagine doing any of this manually.

Q: How compatible is the solution with your existing accounting software?

A: That's another added bonus – XSilva is compatible with the accounting system I currently use. There are also some great financial features, such as the margin calculation feature. Yumiko products are made in Spain so I need to be able to set up a supplier in the system in euros and calculate the US price I need to make my required margin.

Q: As you expand the retail business, how do you see your software needs changing?

A: I am looking to hire three or four part-time employees for the store so I can focus on other parts of the business. Because the software is easy to use, training new employees should not take very long. And once they learn the system, all they have to do is scan the barcode to process the transaction. There's no need to memorize style codes or prices and hence, little room for error. I also like the security features that come with the program – I can make sure that I'm the only one with access to certain functions, like changing the price of a style.

And in the future, if we expand to multiple retail stores, I can add users so everyone can access the same system. XSilva is fantastic for small businesses that are looking to grow and stay organized.

From the time eBay acquired PayPal in 2002, and its subsequent gain in popularity since then, questions arose as to how it compares to a traditional merchant account. We feel that despite some of PayPal’s initial convenience it still doesn’t challenge a true card-processing solution. Here are the leading reasons why:

• For those of us needing to process credit cards in a brick and mortar location a Merchant Account is not only the best alternative, it’s the only alternative. It offers highly customizable processing options; including Mail/Phone Order, Retail, Internet, and Mobile card acceptance.
• Immediate access to funds is important to many businesses, especially those needing to keep a continuous cash flow moving. A Merchant Accounts deposits funds directly into your bank account, typically within a 48-hour time period. PayPal requires funds to be placed into their interim account first, before being manually submitted to your bank account. This wait can be costly, and even jeopardous to an organization.
• An even more important concern to businesses is having their processing abilities frozen or even revoked. With a Merchant Account your business goes through an underwriting process by a highly specialized team who understand your businesses. Unlike PayPal, there is virtually no risk of your credit card processing being hindered once you are up and running.
• Universal acceptance is another key advantage to having a Merchant Account. With PayPal, your customers also need a PayPal account to be able to pay you. In contrast, a Merchant Account accepts Visa, MasterCard, Discover, American Express, JCB, Diner’s International and all the major credit cards that are used daily. Forcing someone to register for PayPal is a major inconvenience and can be the deciding factor of whether or not you make the sale.
• Recurring billing is an extremely useful feature which allows you to bill customers on a weekly, monthly, or quarterly basis. This is advantageous to merchants who provide a subscription-based service; to them billing automatically can save time and headaches. Traditional merchant accounts offer tools that allow for this (such as Ubersmith and Authorize.net’s ARB Module).
• PayPal transactions move across large accounts which are pooled and are usually too large to be FDIC insured. This is not the case with a merchant account. Your money is always secure and protected.
• With PayPal, customer service is something that is practically non-existant. Allowing for a company to handle all of your processing and not being able to speak to someone over the phone is possibly PayPal’s biggest shortcoming. Situations when you need immediate answers can be frustrating without the ability to reach someone who you have a real relationship with.

The bottom-line is that if you want to run your business in a professional manner and need to firmly establish your own identity, then a transparent merchant account solution is your best option.