MasterCard recently announced a new authentication method for online transactions. Visa / MC have had online authentication programs out for several years now. Visa’s is called Verified by Visa, MasterCard is called MasterCard SecureCode. These two programs work great when the two pieces of the puzzle fit together. One, the cardholder must be using a bank that participates in the program and many do not. The second piece is the merchant must be using a platform and/or shopping cart that is compatible and capable of collecting this information. Many do not as well. The new authentication process is to use cell phones and text messages. When they try to make a purchase online, it will send them a text message to their phone to enter into the computer when prompted for it to verify the transaction. The service is first being offered in Brazil and maybe eventually make its way to the US. I however believe the use will be limited like the current verification programs the two brands already have in place now. I think everyone should use and support them that way cardholders do not have to deal with stolen credit cards as often. It doesn’t cost them anything, but having to deal with a stolen credit card can be a big pain.
I watched this movie over the weekend. It is about two guys that grew up in poverty. The older brother initiated the original startup of A&R Cellular. A company that sold wireless services. One thing I noticed, which I’m sure was accurate, is they were calling on businesses asking if they needed the service. The catch was I kept hearing them say no obligation. A few years later, they went into thebusiness. They changed the company to A&R Bankcard and starting calling on businesses about their credit card processing rates. I then hear the same line, no obligation. Everything was going great, they were growing the business. At one point, they sold a piece of their portfolio for one million dollars. Around 2002, they had a buyout offer from any unknown company to me, BGL for 30 million. They became greedy and asked for 50 million.
During the renegotiation of that deal, the FTC finally started investigating the company. The older brother did receive about two dozen notices or calls from the guy from the FTC, but simply ignored them. It finally came crashing down on them. The FTC took the company down. I’m not sure if this part is true, but the brother thought the FTC was hurting an innocent company. If their business practices was how the movie portrayed, then they deserved what they received. Lying and telling merchant’s false information to get merchants signed up is unethical and will eventually come back to bite you, as the A&R brothers soon learned.
Wal-Mart & Amazon seemed to be fighting it out recently when it comes to black Friday & having the best deals. Amazon has always been the leader when it comes to lowest prices on the Internet. But recently, Wal-Mart has kicked it up a notch and are heavily competing in this arena. They are slashing prices on certain products like the easy bake oven and movies. Wal-Mart may cut a price and then Amazon will following, as if they were in a ring fighting for their life. For most ecommerce merchants, this can be a costly and not so profitable tactic. Because of their size, they actually quality for different interchange levels when it comes to them using theirservice. Because they do so many millions per month, they quality for special interchange rates that are only available to large merchants. You can come out a head by simply avoiding the products that the two gorillas have decided to heavily discount. In the mean time, consumers will greatly benefit with never seen before low prices.
A website called eMompreneurs.com has been recently launched to help moms launch their own at home business. Many moms struggle with the decision of going back to work or staying at home and taking care of the kids. And for that reason, this site was created. It is a site that will provide training, marketing tools a community and network opportunities for moms looking to start an online business while they raise the children at home. They cover topics such as SEO, CPC, blogging, shopping carts, and much more. They have committed to donate 10% of all proceeds to the charities that empower local women. The creates of the site said they formed the site after having their own successful business and felt they should spread their knowledge to others so they can do the same thing. They are expected to open the site around the first of December.
Some of the Salvation Army donation locations have gone electronic and added capabilities to their offerings. Consumers can now donate with their credit card. I’m not sure if I agree with this logic. I think many consumers would give more than they can really afford as they can simply charge it. I understand many consumers do not carry around a lot of cash these days, but I know many consumers do not have self control when it comes to plastic as it can feel like a magic card at times. Also, your money will simply not go as far as the Salvation Army has to pay to process the credit cards. So instead of giving around 97% of your money to the organization, why not give cash and be able to give 100%? You are giving a percentage or two of your money to the banks when you use a credit card. My other concern would be theft. What would stop a volunteer from setting up a merchant account and replacing the current machine with their own that would deposit the funds into their own checking account? I know this wouldn’t be very likely, but it does raise the question. Where there is a will, scamsters find a way.
There has been a recent report released that says the US government has been investigating a few ecommerce merchants and their affiliate with a few marketing companies. Companies such as Priceline, FT & Orbitz have been mentioned in the report. These companies and many others have partnered with some marketing firms that are misleading the customers according to the report. There are supposedly thousands of complaints over the years about consumers finding mysterious charges appearing on their credit card. What is happening is this. After a consumer makes a purchase and enters their information, they are taken to a page thanking them for the order. On this page, there is a button that says save $10 on this very purchase. When the customer clicks that button and fills out the appropriate forms, they are unknowingly signing up for a membership service from the marketing company. There is some information, but it is generally in fine print at the bottom.
I have personally made purchases from some online merchants that have used this very tactic. I quickly found out what it was all about by looking at the entire offer and seeing what the fine print says and that you are signing up for someone else’s services. But I can see how a lot of consumers do not read it, sign up thinking they will simply save $10 and that’s it. But then find out there are other charges on their credit card until they cancel the service. My advice: read before you sign!
If you have an ecommerce business, then the Monday following thanksgiving is your black Friday, also known as Cyber Monday. Black Friday is mostly for retail stores as consumers flock to buy exceptionally low priced deals. As the weekend dies down, many shoppers go onto the web to make purchases on company time that following Monday, which is generally the biggest day for ecommerce businesses. So what should you do? For one, make sure your web site and everything is safe! Getting hacked can place a lot of damage onto your company. Make sure your passwords to your server that hosts your website is a long, very complex password that is very difficult to breach. Next, make sure your shopping cart and system is up to date with the latest patches. Lastly, check to make sure your own personal computer is update to date. That means any software updates for your operating system, anti-virus and firewall. If you do not have either one of those, go get one now! Lastly, keep an eye on your web site during the day on Monday so you can catch any glitches relatively quickly and resolve them asap.
I see that the GAO released a report saying if congress regulated or placed a cap on Interchange fees, it would benefit consumers and urges them to act. I have a feeling we are getting very close to some type of regulation in the industry. Is anyone else worried? As long as our position in this business isn’t affected, I wouldn’t care that much really, but that is the concern. Whenever the government gets involved with anything, it never turns out for the better. Politics & business do not mix! I hope V/MC are not too cocky on this topic and consider stop raising rates for a year or two and maybe lower some to ease the whole tension among the industry and merchants.
This is the one time I hope all the lobbyist the banks have in congress come through & block any regulation…
The popular eBay site was recently found broken and not operational. Thousands of shoppers found the site down on Saturday saying the search they entered wasn’t about to run. Thankfully, weekend sales are generally relatively small compared to during the week. But there are thousands of businesses and merchants that rely on eBay to generate them their business. There are some that sale exclusively on eBay and this down time may reflect in their sales for the month. This would also mean that Paypal’s service through the site wasn’t operational either. The last update from eBay was at 6:28 PM EST saying that due to errors in some of their backend systems, members may be receiving error messages. eBay recommends using their advanced search option as a work around until the issue is resolved. This is no doubt something that will be talked about among the many merchants that sell on eBay and how much it has affected them. Hopefully, most merchants will not see much of an impact.
Heartland’s CEO Steven doesn’t believe there is such a thing as secure software and probably will never be. Steven learned the hard way when he was brought on board at the company to find out that their network had been compromised for months and millions of credit card numbers had been stolen. The actual numbers are unknown, but the fact that they process more than 100 million transactions a month for more than 250K merchants, that should almost guarantee it has been among the largest breach in history. They lost more than 500 million due to the breach. The credit card processing giant has announced that they have plans to develop and release software and hardware to implement end-to-end encryption to ensure the data’s security from point a to point b. According to Steven, end-to-end encryption has been avoided for many years mainly because of the cost. Due to all the breaches in the past few years, the industry may have no other choice but to embrace it and absorb the expense. The TJ max breach a few years back is another large breach that has also helped bring attention to implement this type of encryption. I personally think encryption is important, but it is vulnerable like anything else. If hackers want something, you can’t stop them. You simply try to stay ahead of them and beat them at their own game.