US Bankcard Services Industry Blog

Monday, June 28, 2010

Bankcard Services: Chargeback FAQs

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A chargeback occurs when funds are returned to a consumer due to disputes, errors, or fraud. When the credit card company withdraws the money from the merchant’s account and returns it to the consumer, merchants are charged a chargeback fee. Below are answers to a merchant’s questions regarding a credit card chargeback. What are the common practices that I should avoid? • Never let any customer operates your U.S. Bankcard Services, Inc. (USBSI) credit card terminal. • If you receive a “decline” card response, do not process any more sales on that particular card. • Only use an authorization code that has been provided directly from your merchant processor. • Never use the customer’s phone to call for a transaction authorization. Why did I get a chargeback when I received an approval code for the transaction? An authorization code simply verifies if the card is in good standing, has not been reported lost or stolen, and has sufficient funds available for the amount of the transaction. It does not guarantee that you will not receive a chargeback. How can I guarantee my transaction does not turn into a chargeback? Fraud is virtually unavoidable and disputes will always happen. However, minimizing risk exposure may help prevent a chargeback. Follow the transaction requirements and utilize all the available resources (AVS or Calling Code 10 Service.) Refuse to process any suspicious credit card transactions and request the customer provide a different form of payment. How critical is the “respond by date” from the chargeback or retrieval advice? VERY. Special attention must be paid to the response deadline or it will result to a non-reversible chargeback. It is highly recommended to respond to the chargeback or retrieval as quickly as possible to avoid unexpected situations. Why did the processing bank debit my account without notifying me first? In accordance to Visa and MasterCard regulations, an automatic debit occurs against the credit card processing bank and passed to the merchant each time a chargeback is initiated. If merchants respond with sufficient information within the allotted timeframe to counteract the issue, the debit may be reversed. How long does a card issuing bank have in bringing up a chargeback? The Card Issuing Bank can request a retrieval or chargeback for up to 18 months after the transaction date. It is crucial that transaction records are kept and made accessible and legible during this timeframe.

Monday, June 21, 2010

U.S. Bankcard Services, Inc. (USBSI) Answers Questions on Avoiding Fraudulent Transactions:

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Even with utmost vigilance, fraud exists - especially in transactions involving money. A single swipe through a credit card terminal using a suspicious card could cause businesses a great deal of financial loss. Below are answers to some questions raised by merchants on avoiding fraudulent transactions in different scenarios: In a Mail Order / Telephone Order scenario What are the minimum requirements that I should follow? • Transaction records must show a 100% match on AVS (Address Verification System) • Transaction records must show a “match” on CVV2 (Card Verification Value 2) • Merchant must ship the merchandise only to the AVS address. • Merchant should have the proof of delivery signed by the cardholder. How should a non-verifiable AVS response be handled? If the AVS is not verifiable by the Card Issuing Bank through the U.S. Bankcard Services, Inc.terminal, merchants should ask the customer for a different card or another form of payment. What is a “Code 10 Service?” It is a call made to a Merchant Support Call Center whenever a card, cardholder, or a transaction is deemed suspicious. Your bankcard services representative will ask you the transaction details and transfer your call to the Card Issuing Bank’s operator who will then assist you on further verification procedures. In an e-Commerce scenario What precautionary measures should I take? It is necessary to have a check box or a button for customers to agree on all polices to avoid unnecessary disputes in the future. Ask your U.S. Bankcard Services, Inc. representative for more preventative measures. In a Restaurant / Retail scenario What are the minimum requirements I should follow? • Swiping the card through a terminal. A legible terminal sales-draft (printed receipt or imprinted sales slip) must be present. • For manually keyed transactions, creating an imprint of the credit card on a sales slip that also has the cardholder’s signature, the transaction date, and the authorization code is necessary.

Monday, June 14, 2010

Top Forecasts for the Credit Card Industry in 2010

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Starting today, the Credit CARD Act is in effect. Congress passed the Credit Card Accountability, Responsibility, and Disclosure Act to protect consumers from rapid interest rate increases and penalties. Unfortunately, credit card processing companies and issuers have already begun to lose billions in revenue due of the economic downturn. This could worsen because of the new rules imposed on credit card processing companies and efforts to boost income will most likely be at the expense of consumers. Below is a list of the top predictions for the credit card industry for 2010. 1. More credit card processing companies are expected to have annual fees. Approximately 20% of credit card processing companies and issuers have annual fees and with the latest bill passed by Congress, this number is most likely to rise in efforts to increase revenue. Additionally, merchants and banks have introduced new cards that have annual fees while some credit card companies are already testing annual fees on their existing cards. 2. Increased interest rates and fees will still occur despite the Credit CARD Act. Credit card issuers will continuously find loopholes and reasons to increase rates regardless of the reform bill. Existing fees such as balance transfer and cash advance fees will also increase because the CARD Act doesn’t limit fees. Certain MSP’s such as U.S. Bankcard Services, Inc. offers great deals on cash advance fees that are fast, convenient, and require no personal guarantees or collateral. 3. Credit card processing companies and issuers will create opportunities to raise rates through means such as inactivity fees or processing fees for certain requests. Some banks require that cardholders spend a certain amount; otherwise they are required to pay a fee. While other merchants may charge cardholders if their cards are unused for a certain period. 4. Fixed-rate credit cards will start to rise and fall with the prime rate, which is currently at its lowest at the rate of 3.25%. The shift to variable rates by credit card processing companies and merchants will be felt by consumers when the economy starts to pick up as these rates will definitely increase. 5. Rewards will likely be reduced for some cardholders, especially for those not subject to pay annual fees and pay off monthly balances. Rewards may be smaller pay-outs for cash-back cards, higher point thresholds, or for cardholders to accept credit cards with annual fees. 6. Expect more government regulation because some legislators think that the CARD Act is not enough. This regulation may come in the form of regulating the interchange rates between credit card processing companies and merchants, which consumers will most likely to make up for due to the reduction of an important source of revenues for merchants and bankcard processing companies.

Monday, June 7, 2010

USBSI takes care of retail entrepreneurs’ credit card processing concerns

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As an entrepreneur, you will notice that your customers are increasingly relying upon credit cards to pay for their purchases. After all, credit cards are convenient for bulk and on-the-spot purchases. However, credit card processing also has it's downside. Unlike cash transactions, credit cards require after-purchase follow-up and for this you need a reliable credit card processing partner. U.S. Bankcard Services, Inc. (USBSI) is your best bet. As the leading Merchant Services Provider (MSP), USBSI provides retail entrepreneurs affordable and reliable credit card processing solutions including but not limited to credit card processing equipment and software. USBSI provides credit card processing equipment in the form of dependable desktop credit card machines from Hypercom and Verifone; two of the industry’s most trusted and well-known credit card equipment companies. USBSI offers a turnkey retail package which includes credit card terminals, printers, pin pads and other equipment based on your business’ varying needs. Credit card processing for your retail business need not be complicated. Log on to usbsi.com for credit card processing solutions that are tailor fit to your business and budget.

Tuesday, June 1, 2010

Issuer Chargeback

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Did you know that an issuing bank can also initiate a chargeback? Even if the cardholder or the merchant see’s nothing wrong with a transaction, a card issuer can charge it back if there are parameters it does not meet at their level. This can be a question regarding the amount, the card type or even electronic data collected at the time of the purchase. Talk to your processor immediately if you do not understand the reason behind any retrieval notification you may receive.