Here is a nice explanation of the infamous EMV integration & requirements
EMV eBook Now Available as a Flipbook
The EMV eBook is available in flipbook form! The book is accessible through VeriFone.com on the EMV product page.You can also link directly to the flipbook here
The Green Sheet Online Edition
January 13, 2014 • Issue 14:01:01
A t last, the controversial and long disputed $7.25 billion settlement of the class-action lawsuit brought by retailers against Visa Inc. and MasterCard Worldwide over interchange fees was approved.
The Dec. 13, 2013, order of Judge John Gleeson of the United States District Court Eastern District of New York paves the way for merchants large and small to receive compensation for allegedly excessive electronic transaction processing fees imposed by the card brands over an eight-year period.
In his memorandum and order, Gleeson found that the settlement plan was both fair and reasonable. The claim administrator will now begin distributing funds to some 8 million U.S. merchants from two accounts – the $6.05 billion Cash Settlement Fund and the estimated $1.2 billion Interchange Fund.
For more details on the settlement, see “The $7.25 billion settlement proposal: What you need to know,” The Green Sheet, April 22, 2013, issue 13:04:02.
Gleeson said only minor modifications would be made to the settlement and that a status conference regarding next steps would be held in his courtroom on Jan. 10, 2014.
The settlement, which was initially reached in July 2013, resolves, for now, a legal battle over interchange and card brand rules that began in 2005. As outlined by Gleeson, in that time both Visa and MasterCard have gone public and the Durbin Amendment to the Dodd-Frank Act (which regulated debit card interchange) was implemented. Along the way, proponents and opponents of the settlement routinely slung accusations at one another.
In April 2013, Gleeson even threatened to hold six national trade associations in contempt of court for disseminating what the judge characterized as misleading information about the settlement via websites. Gleeson said the misinformation campaigns arose from “their zeal to drum up objections and opt-outs by merchants around the country.” He noted that in the arena of class action settlements, “this one has been anything but typical.”
For and against
Reactions to the settlement’s approval were predictable. The law firm of Robins, Kaplan, Miller & Ciresi LLP, which filed the initial class action lawsuit in 2005, endorsed the settlement. K. Craig Wildfang, partner at the firm and co-lead counsel for the retailers, said he looks forward to “getting the funds into the hands of the members of the class.”
The Electronic Payments Coalition, which represents the card brands’ interests, also expressed satisfaction with the settlement. “The long political conflict over interchange fees is finally over, settled by a well-established legal process, which brought together retailers and the card industry for a negotiated resolution,” the EPC said. “After years of mediation, dozens of meetings, and millions of pages of evidence, the parties involved have willingly agreed to settle their dispute.”
However, such was not the verdict of the National Retail Federation, the largest U.S. retailers’ association. “We are very disappointed that this deeply flawed settlement has been approved,” said NRF Senior Vice President and General Counsel Mallory Duncan.
He added that the settlement “permanently ties the hands of thousands of businesses who wanted nothing to do with this misguided case.”
In addition, Duncan pointed out that “swipe fees cost merchants and their customers an estimated $30 billion a year and have tripled over the past decade.” He noted that the NRF is reviewing the ruling and “will take whatever steps are necessary to protect the rights of merchants and safeguard the pocketbooks of their customers.”
Back to business
Final arguments for and against the settlement were heard by the judge in a contentious Sept. 12, 2013, hearing. Gleeson portrayed settlement objectors at the hearing as “afflicted by needless hyperbole.” He said one merchant association principal posed the argument that merchants would be worse off if the settlement was approved than if the lawsuit went to trial and the plaintiffs then lost the case.
Gleeson added that another settlement critic equated settlement approval to “the deprivation of civil liberties in the aftermath of a terrorist attack.” A third opponent of the settlement “cast Visa and MasterCard as modern-day Nazis, and warned me not to assume the role of [England’s World War II era prime minister] Neville Chamberlain,” Gleeson said.
The judge stated that “the vitriol and poor behavior and feigned hysteria [of the settlement opponents at the hearing] mask complex and difficult issues on which reasonable merchants can and do disagree.” Apparently, merchants overall did not disagree with the settlement, as Gleeson said his decision to approve the settlement was strengthened by “the relatively small number of opt-outs and absence of objections from class members” to it.
Maybe Jason Oxman, Chief Executive Officer of the Electronic Transactions Association, struck the right note. “Although ETA was not a party to this litigation, I think it’s good for all concerned to have this settlement behind us,” he said. Oxman feels that legal wrangling distracts financial service providers and merchants alike from providing consumers with safe and reliable services .
Amazing ingenuity has resulted in over $1 million dollars of sales in their first month! http://tacfirecon.com/
The Green Sheet Online Edition
September 10, 2012 • Issue 12:09:01
How to help merchants counter fraudulent orders
By Bill Hoidas
Matrix Payment Systems
W ith the ever-growing problem of identity theft, fraud is of increasing concern to merchants, especially those in the MO/TO and e-commerce categories. Some merchants take an unreasonable approach and say they want a 100 percent guarantee that if they do next-day or same-day delivery with customers they don’t know, they’ll never have a chargeback. To that, I reply the dream factory is located in their nearest casino.
Nowadays, it’s relatively easy for thieves to make credit cards and enter data they steal via skimming. Machines to make physical credit cards can be obtained for as little as $865. MO/TO and e-commerce merchants are prime targets for these identity thieves.
So how are merchants supposed to know if a new client’s credit card is legitimate? I suggest they take the following steps:
Determine whether the cardholder’s street address, ZIP code and cardholder verification value match the information given by the purchaser.
If the information matches – and only if it is a physical delivery – require the cardholder’s signature with delivery.
Have cardholders sign credit card authorization forms, provide copies of their driver’s licenses, as well as the front and back of credit cards.
If a cardholder doesn’t have ready access to a fax machine, one company has devised a way to get signature and ID images. RightSignature LLC (https://rightsignature.com) provides the technology to enable customers to create digital signatures online.
Use every available means to ferret out fraud
The merchant should always ask the purchaser for a phone number and call the number provided to confirm the order. In 90 percent of cases, the fraudster will provide a phony or disconnected number.
The merchant should also call the issuing bank’s phone number on the back of the card image. In fraud cases, the phone number usually doesn’t correspond to the name of the issuing bank on the front of the card.
It’s a good idea to request an email address. It can tell a lot about the purchaser. Ideally, the email address will be similar to the cardholder’s name. For example:
John Smith’s email is jsmith@gmail.com. This is good.
John Smith’s email is enerygyman@comcast.net. This could be bad.
John Smith’s email is istealstuff@yahoo.com. Red flag!
In addition, the merchant should do an Internet search on the email address. Often, fraud related to that address will show up in the results. And the merchant should do a search on the purchaser’s name, address and ZIP code for indications of fraud. Information will usually be available and provide the customer’s professional associations and other clues.
For looking up a person by name to see if the information he or she provided is accurate, use Spokeo.com. This service is free, but for $3.95 per month you can get more detailed reports. Or use PeopleSmart.com. For looking up the location of sender’s IP Address, use www.ip-address.org.
Take it even further
If the customer comes to pick up merchandise, the merchant should give it only to the cardholder and require a driver’s license or other valid form of identification. If the merchant has already run the card as a MO/TO, he or she should require the customer to swipe the card used on a manual imprinter and sign the slip. A signed card receipt is as good as or better than a terminal-swiped receipt.
To get issuing-bank information for U.S. and foreign cards, use these contact numbers:
Visa Inc.’s Merchant Verification Service: 800-847-2750, an automated line. Option 1, address verification: enter the numeric portion of the street address, ZIP code and card number. It will tell you if they match. Option 2, issuing bank phone numbers: Enter the card number, and it will provide you the 800 number for the issuing bank. Call and verify the name on the account.
Visa’s International Address Verification: 800-228-1122.
MasterCard Worldwide Assistance: 800-622-7747 (to obtain issuing bank phone number). It provides a phone number for the bank identification number range. For English, press 1. Then, for merchants press 2.
Discover Financial Services’ Address Verification: 800-347-7988, an automated line. You will need your merchant number. It verifies only a card member’s address.
American Express Co. Address Verification: 800-528-2121. Choose option 3 to verify name and address.
International Credit Card Verification, International Telex Verification. To use this, call Visa’s normal card authorization phone number and hold for an agent. Don’t press any selection for a destination. Just wait. I waited nearly three minutes. Once on the line, agents will request cardholder information and the address you have. They will also ask for your merchant number. If the issuing bank is not immediately available, a telex operator will make contact or will take down all appropriate information and contact the merchant after the issuing bank has responded.
Many merchants call an authorization phone number if they get a decline or nonmatch from the address verification system. No authorization “genie” will answer the phone. Calling will not change a decline or AVS nonmatch.
The U.S. Department of Justice recently reported seizing 36 websites or domain names that allegedly dealt in stolen credit card numbers. The federal action was part of an international effort.
Stolen card information can be purchased on these types of sites for as little as $3.50 per number.
Merchants sometimes take the view that issuing banks should know which cards have been stolen and warn merchants. But how could banks possibly know until cardholders report unauthorized charges on their accounts?
Merchants also claim that banks should reimburse merchants when stolen credit cards are used. This is a double-edged sword. Banks aren’t always the good guys. But if they reimbursed for losses, many merchants wouldn’t bother to screen out fraudulent orders.
Fight the kickback trend
In the last six months, some of my merchants have answered chargebacks with full documentation, only to have the issuing bank frivolously kick back the chargeback as a “pre-arbitration” for a decision.
Often, it’s a clear example of allowing a chargeback to continue, although even a child could see that the cardholder is just trying to rip off the merchant.
I feel that legal pressure should be put on card issuers to rectify this. I suggest my merchants contact an attorney when this occurs, and I can recommend to readers an attorney with expertise in this matter.
Merchants should be aware of the facts regarding chargeback replies that come from card issuers.
Chargebacks sent back for pre-arbitration go back to the issuing bank for a decision.
Only chargebacks sent for “arbitration” are decided by MasterCard or Visa for final rulings.
Merchants can go to the card brands’ websites and file complaints if they disagree with final arbitration rulings, but they are not allowed to ask for reviews unless the amount is over $5,000. And they usually have to put up 25 percent of the amount pending review. Fees are incurred at all stages.
Meanwhile, merchants should reply to all chargebacks in as much detail as possible. Recently, one of my merchants told me he had answered a chargeback in detail. The copy he sent me of his reply showed otherwise. Following is my guidance to him and to all merchants on the best way to reply to chargebacks.
In an era of frivolous bounce-backs on chargeback replies from issuing banks, ISOs need to document things well and in a professional manner. Don’t just circle items and write remarks. Print out supporting documentation and include each item on a separate document.
Put your remarks in a cover letter, not just written here and there on the supporting printouts. While documenting everything, highlight pertinent points in the chargeback documents. Make your replies look as professional as possible.
Build a strong fortress against chargebacks
The merchant’s website should list the exact products and the price the customer pays, including all charges and fees such as shipping and tax. There should be a click-to-agree icon before customers can enter orders. If the merchant receives a chargeback, he needs to include in his reply a screenshot of any click-to-agree pages.
Finally, merchants should be reminded that they are business people. They have to make the final decision as to:
How much risk to take.
How worthwhile it is to spend their time fighting chargebacks, especially the small ones, just to prove a point.
Whether they will view smaller chargebacks as a cost of doing business, similar to shrinkage in retail.
Bill Hoidas is a Director for Matrix Payment Systems, a leading ISO specializing in larger MO/TO, e-commerce and retail accounts. Bill has been in the industry for seven years and can be reached at bhoidas@gmail.com.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
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Ok if you claim you like working out unplug your cute little exercycle, stairmaster, elliptical and if you have a “trainer” give him/her training wheels, put your little weights away and man up and subscribe to my friend Hugo’s one year course. I signed up this morning! You can do this in your home gym or at a gym that actually like people who train hard! Hugo Rivera
Make every repetition count!
Hypertrophy MAX registration is now open ONLY till Friday night: <= Same system I used to gain my last 10lbs of muscle in a year.
See my review here: http://bit.ly/1978JZ4
Make every repetition count! Hypertrophy MAX registration is now open ONLY till Friday night: <= Same system I used to gain my last 10lbs of muscle in a year. See my review here:
If you can find it in your heart please donate whatever you can afford to my friend’s Dad’s fund Thanks!
http://www.youcaring.com/medical-fundraiser/john-lovelace-medical-fund/112867
May you have
the spirit of Hanukkah
which is Peace,
the gladness of Hanukkah
which is Hope,
and the Heart of Hanukkah
which is Love
EMV – the Silent Migration
Posted November 7, 2013
“The EMV migration is happening, but very silently. The issuers seem all to be prepared for it and are planning to issue chip cards next year, and some have already started.”
I’ve come to realise that the EMV migration in the US is a silent one, happening slowly but surely in the background without much apparent interest from local players. All the talk, “hype” and interest is not the EMV migration but in mobile payments, i.e. in ways to circumvent card payments and instead of making them more secure.
I have been following the EMV migration process in the US closely for the past three years, because as an EMV platform provider my company, Handpoint, can stand to benefit greatly from opportunities associated with it. I have therefore attended and presented at various US payment conferences for the past three years and I could summarise my year-by-year findings as are:
2011 it was early days for EMV, there was very limited interest and I was basically explaining the technology to other attendees. And there was another three letter acronym that held centre stage – NFC.
2012 the FIs and payment players were very much aware of EMV but showed very little interest and there was much talk about the US leapfrogging EMV completely, to something supposedly much better like Google Wallet or ISIS. Yet, at the same time the teams at Google Wallet and ISIS were quietly saying that they were relying on the EMV migration in order for their wallets to kick-off – as they said EMV migration would push NFC readers in the stores – a catch 22, anyone!
This year, 2013, I attended/spoke at Money2020 in Las Vegas and it was in many ways more of the same. ISIS and Google were pushing their wallets rather then trying to explain why NFC hadn‘t taken off or why it would or should. PayPal announced some new payment methods at the conference, i.e. the Payment Code, which is basically either a QR code checkout method or a Pay-with-PIN at an existing payment terminal – putting emphasis on payment methods that would fit in the current merchant environment as opposed to needing a HW modification/replacement. All very interesting although PayPal seems to have missed the fact that barcode scanners used by most merchants can‘t really scan QR codes of mobile phones and terminals tend not to be updated (needed for their payment code) unless they are replaced – EMV, anyone?
Basically, there doesn’t appear to be any interest at all in the EMV migration and I continue to be the only speaker on the subject while the excitement is all around ways to pay after it is been implemented – so to speak. But lurking in the background and whispered in back rooms at this year’s conference, was a more exciting news (to me at least).
All the new terminals are EMV capable
The EMV migration is happening, but very silently. The issuers seem all to be prepared for it and are planning to issue chip cards next year, and some have already started. And the terminals are being deployed as all the new Ingenico’s and Verifone’s have that are deployed are EMV capable – although the EMV functionality is turned off and Ingenico/Verifone will undoubtedly charge a shilling or two to turn it on.
Some analysts reckon that up to 10% of terminals in the field US are EMV capable. So why is there so little talk or interest in the EMV migration, the biggest overhaul in US payment history?
I don’t really have a good answer to that question and one would think there was more talk on the subject as there is much business associated with it. Perhaps it is because most of the local market players stand to benefit very little from the migration, as they’ve got nothing to add to the more than a decade old technology. Perhaps it is because of the very little interest from the merchant side, which have only been offered a stick in the form of a liability shift in October 2015, but no carrot in the form of a lower interchange, as the card schemes have offered globally (some baby carrots have been offered in the form of PCI audit reliefs).
The Durbin amendment and its appeal by the Fed is undoubtedly having a delaying effect on the whole EMV migration and an outcome before the end of the year is likely kick-start EMV card issuing. Also, I wouldn’t be surprised to see the card schemes offering some carrots in the form of a lower interchange at the same time (or perhaps, a higher interchange of magnetic stripe payments).
Fraud is mounting in the US
EMV might not offer US merchants or cardholders any excitement or groundbreaking technology other than security. But fraud is mounting and has increased by 70% since 2004 in the US, which now stands for almost quarter of the global card volume and almost half the global fraud. While at the same time fraud associated with counterfeit and stolen cards (the fraud that EMV tackles) have reduced by 80% in the UK for the same period (EMV was introduced 1st of January 2005). Fraud in the US is likely to increase even further this year and next year as the US market remains as one of the few havens for mag-stripe fraudsters. So I look forward to next year’s payment conference in the US – perhaps then I won’t be the only speaker on the subject of EMV.
Blog post by David Gudjonsson Handpoint CEO & Co-founder
