Keeping Card Costs to a Minimum

As a business owner, you want to manage expenses as best as you can to drive more revenue to your bottom line. In card processing, there are a few things you can do to help you control card processing cost.

1. Insert/Dip/Tap the card if you have a device and the opportunity. Not only are they the lowest cost, they are among the most secure forms of payment. Mobile wallets are low cost, low risk, and a fast, secure transaction. A card swipe is secure and low cost, but does have greater chargeback risk than an insert/dip or tap payment.

2. Batch or settle your funds within 24 hours of authorization. Banks require settlement within 24-hours to secure a low rate. Going over 24 hours will increase the interchange cost of accepting the card.

3. Avoid hand-keying the transaction if you can, but if you cannot, please key in the billing address (numeric), zip code, and CVV2 on the back of the card. If you are working with a commercial card or purchase card, you may be required to enter additional data fields on a virtual terminal.

When it comes to accepting cards, the debit card is the least expensive card to transact for payments over $15.00. The signature card, rewards cards, world t&e and other point, perks or cash back cards will carry higher costs.

We hope you enjoyed these tips and look forward to sharing more information with you again soon. Should you have any questions about payments for your franchise business, we invite you to contact us.

Controlling Your Cost for Accepting Credit Cards

The FPN client support team routinely receives calls about the fees associated with accepting credit cards and asks what can be done to keep the cost to a minimum. Here is a simple explanation about the fees you pay and how to minimize your cost.

There are three components that make up your cost: Interchange, Assessments and Processor Cost.

Interchange is the fee you will pay for an authorization and settlement of a transaction (moving money from the cardholder to your bank account). Interchange is the most costly fee associated with credit card acceptance. This portion of the fee goes directly back to the bank that issued the card and will vary based on card type (debit, credit, rewards, signature, commercial, business, world t&e, etc.).

Assessments is the fee paid to the card brands, Visa, MasterCard, Discover, American Express. The money collected from the fee goes directly to the card brand. Did you ever wonder how they sponsor so many sporting events?

The Processor Cost is the final component. This fee is approximately 15-18% of your card cost. The fee covers the cost of support, risk, and underwriting the merchant account.

Your franchise has negotiated the one component they could in the process to help provide you with the most effective program available.

In the next article you will have a chance to learn about how to keep your card costs to a minimum.

Trends in Franchising and Online Processing

Trends in Franchising and Online Processing

By Landon Pierce, Sales Engineer, Franchise Payments Network

From my vantage point as Sales Engineer for FPN, I have an exciting opportunity to help tie technologies together such as POS systems, CRMs and more. It’s very gratifying to determine how all the different parts and pieces, from software to hardware, can blend together to work in a cohesive environment. The ultimate goal, of course, is to solve any issues and achieve any goals that our customers set for themselves.

My immersion in franchising began as a sales representative, which gave me an invaluable opportunity to talk and work directly with franchisees to discuss what products and services were required for effective wholesales processes. I then moved into a program manager role, overseeing everything from the business development handoff to the rollout and technical aspects of projects, collaborating with our customer service and sales teams. It’s a complex position with many different perspectives rolled into one.

Subsequently, I concentrated my focus on the sales engineering side. These experiences have provided an excellent foundation for helping customers address their needs in a holistic and cohesive manner as the industry continues to evolve.

The COVID pandemic has definitely jump-started several issues that had been, more or less, slow moving. Among the major trends we are seeing right now is the ability to do contactless payments, such as near-field communication, online transactions and e-commerce, text-to-pay – basically anything to avoid the transfer of a card or cash between two parties.

Contactless payments are becoming the new norm in our world. Whether it’s through a terminal that accepts tap or Samsung pay, Google wallet, Apple Pay or TAP, contactless is quickly coming to the forefront.

In this industry, technology is always front and center. Everything we do must evolve at a rapid pace to keep up with emerging innovations in terms of integrating new software and hardware. Now some of that effort even involves artificial intelligence and machine learning processes to expand our technology platforms.

Many of these developments and technologies must also be carefully adapted according to the needs of each company’s industry niche and vertical served market, in terms of how they interact with their customers. Some may interact face-to-face with those customers 90% of the time, while others may be providing their services online via e-commerce.

As online systems continue to evolve, the challenges of secure online processing will become increasingly pivotal. Unfortunately, there will always be potential risk with e-commerce transactions. But that does not mean those risks cannot be managed and minimized with the proper resources in place.

Sophisticated fraud modules offer the ability to recognize, flag and hold potentially risk-prone transactions, then decline them or request additional information. These modules also enable verification that the person or the machine on the other side is not committing fraud, for example by requiring different types of CAPTCHA from a human being making the transaction.

There are many elements in an effective fraud module, which should be customizable. Features can include not accepting any transactions outside a particular card BIN range or a denial of transactions from outside your native country. An AI-based fraud module can perform a real-time assessment of a card’s assumed risk, like whether it’s been associated with any other fraud or chargebacks in the past and approve or deny the transaction based on the data received.

Integrating online payments into a website or a shopping cart scenario can help, since it requires customers to select certain products and services, then pushing them into a cart similar to that in an Amazon set-up. Franchisors should look into integrating their website with FPN’s systems to alleviate potential fraud if they’re not already doing so.

A good source of best practices is referencing the Payment Card Industry Data Security Standards (PCI DSS). For example, we’ve heard horror stories in the past about employees writing down customers’ credit card information, then taking that information home. In another situation, hackers were able to access the central backend of a major retailer through its CCTV network.

If the merchant loses that sheet of paper or a spreadsheet on a computer, or their computer gets hacked and that information ends up on the internet, they are liable for all of that information being lost. The potential penalty can be up to $50,000 per piece of lost information!

Other, more basic considerations include protecting all devices, from the POS system to laptops and smartphones. Utilizing protection such as 2FA (Two Factor Authentication) is just one way to help protect your data on many devices.

It is absolutely critical to protect sensitive data as thoroughly as possible. Another way to do that is by not processing directly on a website or device. Instead, use a separate secure PCI certified server with a gateway that handles the handoffs of information from card issuer to settlement and back.

The bottom line, literally? Keep your business data safe and secure. And, at the same time, don’t get left in the dust by your competitors who may be doing a better job. That means staying on top of a constantly and rapidly changing technology landscape.

Questions? Contact us today.