Tag Archives: cnp transactions

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10 Questions To Find the Right Payment Gateway For Your Business

Have you been looking for a payment gateway that can help you collect card payments for your business? You’ll need to look at what you’re getting out of a suitable provider. Here are ten questions you can ask to help you see who you should be hiring for your needs. 

  1. What will it cost for you to set up your plans and to process payments?

Each gateway will charge different setup fees for work. These include charges to secure your account and to test your connection. You could spend at least $1,000 to set up your gateway.

A gateway will also charge a percentage of your transactions. The percentage will vary surrounding the type of card, the card network, and your risk level. You may spend more to process these payments if you are at a higher risk of chargebacks and other threats.

A gateway may charge about 2 to 3 percent for each transaction. A flat fee of 10 to 30 cents may also go alongside that charge. The totals can add up after a while, as they can cut away from your cash flow and profit margin.

  1. How will you collect your payments?

Payment gateways come with different platforms for how they will help you collect payments. Some systems can move your funds through an escrow system. A system will withhold your funds and will deliver them to you when the funds are ready to be safely transferred.

You could also use a hosted payment page you can redirect your customers to when asking for data. It doesn’t take as much time to integrate this option.

The way you collect your payments can influence how long it takes for you to see your funds. Some providers can hold your funds or a percentage of them for up to thirty days. The timeframe can increase based on your risk and the payment network’s rate of traffic.

The gateway you choose should provide prompt access to your funds. It should also be transparent when explaining how you’re collecting your funds with details on where they are coming.

  1. What are the security features?

All payment gateways should offer PCI DSS compliance. Proper compliance means a gateway will protect all card data and will prevent cardholder data from being stolen or otherwise mishandled. All cardholder content will only be made accessible on a need-to-know basis. All CVV numbers must also be discarded after use to ensure potential thieves cannot steal this value needed for CNP transactions.

Some processors also use tokenization to protect cardholder data. Tokenization replaces card info with unique strings of numbers that hackers cannot decode or utilize.

  1. What fees are there beyond the card processing charges?

Many gateways will charge various fees for their services. The charges go beyond what you would spend when first setting up your account. These include PCI compliance fees, data access fees, and other assorted charges. You’ll also have to pay fees on chargebacks, but you won’t spend anything on those if you never deal with chargebacks. All fees cover the costs to operate the network while also covering possible risks you pose on the network.

The totals you will spend on these fees should be fixed, unlike what you would spend on your payment processor you hire should be transparent and direct over what fees you would spend on services before you start.

  1. How can your processor screen fraudulent activities?

All businesses are at risk of credit card fraud, although some industries may be at a greater threat. A processor should provide suitable screening tools to help you prevent fraudulent activities from impacting your business. A gateway can include support for CVV transactions, two-form authentication, and other features that reduce the risk of fraud.

  1. Can your processor handle international payments?

Some processors can support international payments. These include ones that support multiple languages and currencies. You can use this if you plan on doing business with people in multiple countries. But some processors may also charge fees for handling different currencies or cross-border transaction efforts.

  1. How does the customer service department work?

The customer service department should be available to help you with whatever transactions you want to complete. It should offer multiple ways to reach them, including by phone or email. The customer support team should be easy to access at any time.

The help should also be free to all members. Any group that pays extra to help someone access a customer service line might not be legitimate.

  1. Can a gateway work with whatever features you have in your current system?

Not all payment gateways are compliant with whatever systems you might incorporate. You might need unique hardware or software to read some features. A quality gateway can work alongside whatever hardware or programs you are using now. The system provides quality help and reduces the need to develop new programs or setups for work.

  1. Does a gateway support recurring billing?

Recurring billing entails automatically billing customers for certain things. Subscription-based systems regularly use recurring billing features to ensure they collect funds from customers as necessary. Look at whether your gateway or processor can handle this feature if you plan on offering a recurring billing service.

  1. Can your gateway manage mobile payments?

The last point to review involves how well a gateway can handle mobile payments. A gateway can include a dedicated app or hardware program that can work on mobile phones, tablets, and other portable devices. It helps you collect payment data and content from anywhere.

These factors are good points to see when looking at how you’re going to handle your mobile payments. Be sure when finding a suitable solution that you have an idea of what you want to get from your business. It will be easy to process mobile payments if you know what is coming out of your setup.

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Federal Reserve Plans to Review Debit CNP Routing

The United States Federal Reserve is planning a Notice of Proposed Rulemaking that requires merchants to choose how they will route online transactions. The focus is on debit CNP transactions people make while online. These deals often come with interchange fees that are higher than what some entities might prefer to manage. 

The proposed rule would state that all merchants that accept debit CNP payments must be capable of reaching at least two unaffiliated ecommerce networks. The debit cards these banks issue should work on whatever network someone wishes to follow. These include networks that may charge less but still offer fewer protections and other services for work.

The move comes as debit cards have become increasingly popular throughout the United States. Visa estimates that it processed more than $2 trillion in debit card payments on its network in 2020.

As this rule comes, there exist worries about whether debit card interchange fees are too high. A lawsuit has come about in North Dakota surrounding how these fees work and what people are being charged. The work is about seeing if the charges people are spending are fair and suitable for the work they complete.

Network Efforts

The Federal Reserve says there are currently two payment card networks available for processing debit cards. First, there’s a single-message network that clears and authorizes transactions through one message. The system uses a cardholder’s PIN to confirm one’s identity.

Second, there is a dual-message network where a signature is necessary for confirming the transaction. The bank and the card network both confirm the payment.

Dual-message networks have become more common, as they are easier to facilitate than single-message ones. But many credit card networks that process debit cards may charge extra. Smaller debit networks that don’t charge as much may be available, although the materials that can work here will vary by system.

Merchants have the option to route their transactions through cheaper networks, especially as there are concerns over whether some networks are managing the proper rates. Those same merchants have been dealing with interchange fees and other charges that may be too expensive for them to manage. Some of these charges may be too high for these businesses to cover.

The single-message solution isn’t as popular as it used to be. Less than ten percent of all transactions are single-message ones. Merchants are becoming interested in handling their funds in more places than usual, making it easier for some things to function. The freedom of retailers to choose what they will utilize in their work is especially worth noting, although the limits and rules for what will work are essential for people to watch for when finding solutions of value that fit their needs.

Single-message networks have advanced to where they can now accept CNP transactions. Whether people are willing to use these networks for their CNP transactions remains unclear. While they might be convenient in theory, there are issues over how much it would cost to use these networks for different operational needs. Some of the totals these single-message networks might have can be concerning over whatever might work in any case.

Are Fees Too High?

The routing work comes as concerns about debit card interchange fees start to increase in value. Retailers have been complaining for years that they pay too much in interchange fees when accepting debit cards. Two retail groups that operate in North Dakota have both sued the Federal Reserve Board of Governors with the argument that the central bank isn’t enforcing caps on fees charged for accepting debit transactions.

The North Dakota Retail Association and the North Dakota Petroleum Marketers Association are filing a lawsuit against the Board of Governors with the argument that the board isn’t following Congress rules to keep debit card fees in check. They state that debit card processing fees are supposed to be sensible and proportional to transaction values.

The groups say that there are rules over how large the debit fees can be. These include caps on fees from banks that have at least $10 billion in assets. The problem here is that the limits and rules for debit card fees aren’t being enforced as well as people wish.

The cap was originally at 21 cents, plus one cent to cover fraud prevention costs and 0.05 percent to recover fraud losses. The worry is that debit card processors aren’t following these rules.

There is one flaw in the argument, as the average cost for each transaction remains minimal. Since the rates for processing debit cards are lower than they are for credit cards, the amounts these retailers would spend on those transactions are minor. But with more people using debit cards than ever these days, those extra charges can add up after a while. The issue makes it essential for many retailers to explore what they are doing when trying to get their transactions under control.

General Worries Over What Works

While efforts to manage debit card CNP payments are in place, there are concerns over whether people would be more interested in open banking solutions. Some open banking platforms support account-to-account transactions that streamline the banking process and include lower fees. These may not feature the same fraud and chargeback protections a bank or card network-supported deal may hold.

The changes in managing debit cards in today’s market have been substantial and have highlighted some developments that will make the field all the more unique. Debit CNP routing efforts are critical to consider for future transactions, especially as debit cards become more valuable in today’s market. But how the limits for what people will spend when processing each transaction will vary. The fact that these fees aren’t as dramatic as some retailers might say could hurt their chances to get the help they need, but there is no telling what could happen in any situation that comes around when trying to handle payments.