Manage Your Customer's Payment With Speed, Accuracy, Reliability and Savings

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Manage Your Customer’s Manage Your Customer’s Payments With Speed, Accuracy, Payments With Speed, Accuracy,

Reliability and SavingsReliability and Savings


Where are we going with all of this?Where are we going with all of this?


Is this the NEW reality?


Payment Changes


The EFT TrendThe EFT Trend


What is EFT?What is EFT?EDI (Electronic Data Interchange)

- usually used by large companies for large payments

Reduce deduction codes and standardize file formats

WIRE Transfers

- usually used for same day payment

- international payment

Broader standardization of process and remittance

- final payment

ACH (Automated Clearing House)

- universal usage

Broader standardization of process and remittance

Credit Card

- primarily used for smaller payments

- customer convenience

- ‘perks’


Scheduled Payment Entry

Transaction # 646055Transaction # 646055

16354

084000084

156564163

(OPTIONAL)

$5525.50

ABC Plumbing

Apply transaction to invoice # 1165339


Scheduled Payment Entry


Transaction ReportTransaction Report

123450000

Halpern Industries

Goodstein’s Crown Molding Inc.

Fountain’s Fence, LLC

Lonardo Food Services

94156


Sample Website


ACH Payment Entry

Transaction # 646053Transaction # 646053

16

084000084

156564163

(OPTIONAL)

ABC Plumbing


Deduct late fees on all invoices

995

997

999

$1001.50

$100.00

$500.50

No. of Invoices: 3

Amount: $1602.00


Credit Card EntryTransaction # 646053Transaction # 646053

16

1525 SW

33193

41111111111111

ABC Plumbing


995

997

999

$1001.50

$100.00

$500.50

No. of Invoices: 3

Amount: $1602.00

Miami

4141


An exact copy of your invoice or statement is presented.

Link your invoice or statement to scanned documents like Purchase Orders, Bills of Lading, POD with signature capture and more…

ePay Online™ Point. Click. Pay.


$

$

123450000 $

$

Fleet Pride, Inc.


Sample XML 20022 NEW

All payment options, credit card and ACH


Sample ePay Credit Card

All payment options, credit card and ACH


Canadian PADCanadian PAD


Credit Card Merchant ServicesCredit Card Merchant Services

Reduce your processing fees and the cost Reduce your processing fees and the cost of accepting payments by credit card.of accepting payments by credit card.


Three key entities manage the payment system.

Issuers <Others>

Issue cards Assume buyer’s

credit risk Generate

reports Provide

customer service

Acquirers Sign up

merchants Underwrite

merchant risk Provide

processing– Authorization– Capture/

Settlement Generate reports Provider customer

service

Networks <Others> Provides

systems/operations Develops products Provides risk

management Provides advertising

and promotions Sets standards and

rules

Ecosystem of a credit card transactionEcosystem of a credit card transaction


Ecosystem of a credit card transactionEcosystem of a credit card transaction


Level I, II and III Data Level I, II and III Data RequirementsRequirements

Data Type Level 1 Level 2 Level 3Merchant Name x x xTransaction Amount (Total) x x xDate x x xTax Amount x xCustomer Code (16 Char) x xMerchant Postal Code x xTax Identification x xMerchant Minority Code x xMerchant State Code x xItem Product Code xItem Description xItem Quantity xItem Unit of Measure xItem Extended Amount xItem Net / Gross Indicator xItem Tax Amount xItem Tax Rate xItem Tax Identifier xItem Discount Indicator xShip from Postal Code xFreight Amount xDuty Amount xDestination Postal Code xDestination Country Code xAlternate Tax Amount x

Level-I and Level-II data elements can be

transmitted via a standard credit card point of sale

terminal.

Level-III line item detail requires greater system

capability, which is provided via UTA/Vantiv

partnered payment processing applications.


Sample Transaction Costs:Sample Transaction Costs:Interchange ExpenseInterchange Expense

Visa Purchasing Card: $500 transaction

Purchasing B2B Rate (Level I): 2.10 + .10 $10.60

Purchasing Level II Rate: 2.05 + .10 $10.35

Purchasing Level III Rate: 1.95 + .10 $ 9.85

MasterCard Purchasing Card: $500 transaction

Purchasing Data Rate I (Level I): 2.65 + .10 $13.35Purchasing Data Rate II (Level II): 2.40 + .10 $12.10Purchasing Data Rate III (Level III):1.80 + .10 $ 9.10

14% reduction in cost by processing Level III versus Level I data

32% reduction in cost by processing Level III versus Level I dataInterchange only -- Not showing all interchange categories


Sample Transaction Costs:Sample Transaction Costs:Interchange Large Ticket ExpenseInterchange Large Ticket Expense

Visa Purchasing Card: $7500 transaction

• Standard Rate 2.95 + .10 $221.35 • Business Electronic 2.75 + .10 $206.35• Business Card Not Present 2.65 + .10 $198.85 most commom

• Purchasing Level II Rate: 2.05 + .10 $153.85• Purchasing Level III Rate: 1.95 + .10 $146.35• Large Ticket 1.45 + .10 $108.85


Effective Rate 1.45%

Interchange only -- Not showing all interchange categories


Sample Transaction Costs:Sample Transaction Costs:Interchange Large Ticket ExpenseInterchange Large Ticket Expense

Visa Purchasing Card: $25,000 transaction

• Standard Rate 2.95 + .10 $737.60• Business Electronic 2.85 + .10 $687.60• Business Card Not Present 2.65 + .10 $662.60 most common

• Purchasing Level II Rate: 2.05 + .10 $512.60• Purchasing Level III Rate: 1.95 + .10 $487.60• Large Ticket 1.45 + .10 $362.60• VLPA .60 + 52.50 ($25k pricing) $202.50


64% reduction in cost by processing VLPA versus Level I data

Large Ticket Effective Rate 1.45%VLPA Effective Rate .81%

Interchange only -- Not showing all interchange categories


VLPA - Credit Card VLPA - Credit Card Interchange RatesInterchange Rates

– Ticket Size Rate – $10,000 or less 1.95% + $0.10 – $10,000 - $25,000 0.70% + $49.50 – $25,000 - $100,000 0.60% + $52.50 – $100,000 - $500,000 0.50% + $55.50 – Greater than $500,000 0.40% + $58.50

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Breakdown of Cost

Interchange represents 85% of the cost of this transaction.*Based on Average Ticket currently qualifying for the Visa Commercial B2B (Purchasing, Business, Corp) rate

Total Cost = $12.46


Can I pass the cost of the credit card processing along to my customer in the form of a fee?

No, Visa and MasterCard regulations do not allow you to charge a fee or pass back the interchange to the cardholder for accepting their card for payment.

UNTIL NOW………UNTIL NOW………

THE Question


Changes to No Surcharging Operating Rules…Changes to No Surcharging Operating Rules…continuedcontinued

Effective January 27, 2013 (this is not a comprehensive guide)• Will permit surcharging of Credit Card transactions only• Does NOT permit surcharging for Debit Card transactions• Surcharge based on brand level (i.e. MC or VISA) o OR surcharge based on product level (i.e. World Card, Signature Card)o Cannot surcharge at brand and product levelso Cannot surcharge at card issuer level (i.e. Wells Fargo, Citibank )• Surcharging practices are subject to a competitive ‘level playing field’ (complex)• Surcharged amount will be capped at “cost of acceptance” of applicable card• Disclosure of surcharge policy at ‘point of entry’ and ‘point of sale’• 30 day advance notification of intent to surcharge must be given to Acquirer• Several states have laws currently prohibiting or restrict surcharging.

CA, CO, CT, FL, KS, ME, MA, NY, OK, TX, (many others considering)• Strongly encourage that you visit the VISA/MC websites to obtain surcharging

guidelines PRIOR TO implementation.


FEDERAL COURT RULINGFEDERAL COURT RULING

Effective December 13, 2013 (this is not a comprehensive guide)• Federal Court Ruling becomes law• $6.05 Billion reduced by 25% for merchants who opted out of the settlemento Merchants who accepted V/MC in the US between Jan 1, 2004 and Nov 28, 2012• Part 2 - .10bp for 8 months is expected to equal $1.25 Billiono Merchants who accepted V/MC as of Nov 28, 2012• Claims Forms are not yet available (see www.paymentcardsettlement.com)

• Preregistration is optional but recommended (see www.paymentcardsettlement.com)

• Jan 2, 2014 appeals have been filed by retail companies • State laws prohibiting surcharging - CA, CO, CT, FL, KS, ME, MA, NY, OK, TX, UT

(many others considering). o Virtually no case law existso Virtually no guidance expected from the card networks regarding legal issues

• Strongly encourage that you visit the VISA/MC and www.paymentcardsettlement.com websites to obtain surcharging guidelines PRIOR TO implementation.


Why EMV Chip?

• Chip is an underlying foundation/infrastructure for future innovations

• Chip is key in controlling/reducing counterfeit fraud• EMV is the global standard for payments

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*Visa – EMV chip Overview


Chip vs. Magnetic Stripe

• Chip– Highly secure– Cannot be cloned– Prevents skimming– Pin to prevent fraud– Data encoded in chip– Unique key– Sensitive data never

leaves the chip

• Magnetic Stripe– Less secure– Easily Cloned– No protection against

skimming– Pin to prevent fraud– Data encoded in

magnetic stripe– Sensitive data can be

compromised

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Chip Card Environments

• Retail, ATM, Mobile, and Online Applications• Online Applications

– Must use OTP device – One Time PIN or USB reader connected to PC

– For use both in the merchant environment and the online banking environment (deters phishing)

• Mobile Applications– EMV standards will be the basis for mobile

application development in the future

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12 Potential Signs of CNP 12 Potential Signs of CNP FraudFraud

Keep your eyes open for the following indicators. When more than one is true during a card-not-present transaction, fraud might be involved. Follow up, just in case.

1. First-time shopper: Criminals are always looking for new victims.

2. Larger-than-normal orders: Because stolen cards or account numbers have a limited life span, crooks need to maximize the size of their purchase.

3. Orders that include several of the same item: Having multiples of the same item increases a criminal’s profit

4. Orders made up a “big-ticket” items: These items have maximum resale value and therefore maximum profit potential.

5. “Rush” or “overnight” shipping: Crooks want these fraudulently obtained items as soon as possible for the quickest possible resale, and aren’t concerned about extra delivery charges.

6. Shipping to an international address: A significant number of fraudulent transactions are shipped to fraudulent cardholders outside of the U.S. Visa AVS can’t validate non-U.S., except in Canada and the United Kingdom.


12 Potential Signs of CNP 12 Potential Signs of CNP Fraud (cont’d)Fraud (cont’d)

7. Shipping to a single address, but transactions placed on multiple cards: Could involve an account number generated using special software, or even a batch of stolen cards.

8. Multiple transactions on one card over a very short period of time: Could be an attempt to “run a card” until the account is closed.

9. Multiple transactions on one card or a similar card with a single billing address, but multiple shipping addresses: Could represent organized activity, rather than one individual at work.

10. In online transactions, multiple cards used from a single IP (Internet Protocol) address: More than one or two cards could definitely indicate a fraud scheme.

11. Transactions with similar account numbers: Particularly useful in the account numbers used have been generated using software available on the internet (e.g., CreditMaster)

12. Orders from Internet addresses that make use of free e-mail services: These e-mail services involve no billing relationships, and often neither an audit trail nor verification that a legitimate cardholder has opened the account.


Manage Your Customer’s Manage Your Customer’s Payments With Speed, Accuracy, Payments With Speed, Accuracy,

Reliability and SavingsReliability and Savings

Rafael CervantesRafael Cervantes(786) 512-2962(786) 512-2962

[email protected]@unitedtranzactions.com

Rudet FountainRudet Fountain(404) 386-9586(404) 386-9586

[email protected]@unitedtranzactions.com

Manage Your Customer's Payment With Speed, Accuracy, Reliability and Savings

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