#highriskpaymentprocessors

Utilization of credit card for making online purchases is extremely basic these days. Due to incidences, like data breaching; customers stress over how delicate information (personal information of customer as well as credit card details) use by merchants. As a merchant, you have to open a merchant account to carry out transactions and if your payment processor accepts credit card payment, you as an entrepreneur is authoritatively committed to give security to your customer’s sensitive information shared while finishing transaction process, which is engraved in the agreement you signed. If you are using third-party software to manage customer’s information, it ought to have the capacity to ensure all the data of your customer.

Five tips for proper handling the credit card information of your customer.

Protect your customer’s data with these helpful tips.

Use Approved Software

When a merchant uses POS (Point of Sale) terminal, mobile running payment processor software or swipe machine to conduct transactions, as a merchant it is your duty to make sure that your hardware, as well as software, is PCI Compliant. There are many applications and card readers available that come with security loopholes. So, it is advisable to choose reputable hardware and software vendors who take full responsibility for the integrity of their product. For the long run and good reputation of your business make sure to use tested and approved solution.

Genuine Service Provider

You can avail services of a reputed service provider to install credit card processing software, manage credit card processing as well as credit card storage for your business. Service provider includes:

SaaS (Web-based software)

IVR phone services

It might also include companies to which the merchant outsources payment-processing functions. Through extensive testing of these service providers, you can make sure that they are trustworthy. Qualified Security Assessor (QSA) who performs a comprehensive audit of policies, procedures and the system of the service providers does this type of testing. You can only use PCI DSS Validated service provider as a part of a contract signed.

Storage of Sensitive Information

Payment processing regulations specifically prohibit the storage of credit card security code or any data contained in the magnetic strip of a credit card. Although you may have business reasons for storing credit card information. The card security number is in place to know whether a user of the card over the phone or internet has the possession. But if the security code is stolen, this approach will not work. In the magnetic stick, which is on the backside of the credit card, track data is stored. This contains the information of the account that is otherwise don’t show on the card. This data assists with authentication and the card cannot be fake.

Encrypted Electronic Storage

For recurring payment authorization or mail order authorization, the merchant might have to store credit card number. If such sensitive data is there as paper documents, you should keep it in a secure place. If you process recurring transactions, you can also store credit card number via electronic storage. But make sure that these files are well encrypted using a robust encrypted algorithm before storing. This provides protection against unauthorized access or if you lose your computer.

Phone Recording

To monitor the service quality and verification of payment approval, a merchant should need to record the phone orders. It is advisable to encrypt recorded calls immediately and store it digitally in a limited access, password protected directory. Also, ensure that there is no other software aligning to this storage system as it might uncover these credit card numbers.

FINAL WORDS

Credit card transaction is not a new concept. Everybody cases to know the procedure: swipe the card, hit the button and the transaction is complete in a blink. Be that as it may, do you truly know the procedure? Do you imagine that it is as simple as it appears? It really is a substantially more intricate procedure than what you witness. The fact is swiping the card and signing the recipe is the first and the last step of the procedure. In between lays multiple steps that include more than one person working invisibly for the customer to complete that particular transaction.

Most of the customers do not care about the complete process. It may seem unnecessary, it provides important information about the inner workings of the modern commerce. Not only for customers but knowledge about credit card transaction process is tremendously important for small business owners as well, as it is a merchant who has to confront the cost of the payment processor. Let us discuss the working of credit card processing in detail.

Key Players

CARDHOLDER

There are two types of cardholders 1. Who repays full credit card balance? 2. Who pays only a portion of balance and rest accrues interest?

MERCHANT

This is the store or seller who pitches goods or services to the cardholder. The merchant acknowledges credit card payments. The activity of a merchant is to accept payment through a card, send the card information to the issuing bank and request payment approval.

MERCHANT’S BANK

It is also known as acquiring the bank and is responsible for sending an authorization request to the issuing bank through a proper channel followed by communicating the response of the issuing bank to the merchant.

SERVICE PROVIDER

Also known as acquiring processor is a third party entity that works as an arm of the merchant’s bank. It provides service or device that allows the merchant to accept credit card for payment and also sends the credit card details to the credit card network and further sends back payment authorization to the acquiring bank.

CREDIT CARD NETWORK

Also referred to as Association member, works the system to facilitate the credit card payment process, worldwide and administrate interchange fees. Credit card network receives details of credit card payment from the service provider and forwards the request for authorization to the issuing bank. Consequently, it sends a response of the issuing bank to the service provider. Some of the examples of the credit card network are Visa, MasterCard, and American Express

ISSUING BANK

Also called the credit card issuer is a financial institution that provides the customer with a credit card, which is involved in the transaction. After receiving the authentication request from credit card network, the issuing bank either approves it or declines it.

Credit Card Transaction Process

Give us a chance to comprehend transaction process in only three stages:

STEP 1: AUTHENTICITY

At the point of sale, a cardholder gives the card to the merchant to swipe the card on POS terminal to make a payment.

Credit card details are sent to the acquiring bank, which forwards the same to the credit card network

Credit card network clears the payment and a request is sent to the issuing bank for an authorization.

Authorization request includes credit card number used for the payment, expiration date, billing address, card security code and the payment amount.

STEP 2: AUTHENTICATION

When the issuing bank receives the authorization request, it validates the credit card number, checks the availability of the funds in the cardholder’s account, verifies the billing address and validates Card security code (CVV number).

It is up to the issuing bank whether to approve or deny the request. When they make a decision, it sends back the suitable response through a proper channel (credit card network and acquiring bank).

Once the merchant receives the authorization, the customer is provided with the receipt at the completion of the sale.

STEP 3: CLEARING AND SETTLEMENT

In clearing stage, the transactions get the post to the cardholder’s monthly billing statement and in the merchant’s statement.

The merchant sends all the approved authorizations in a batch to the acquiring bank by EOD.

For settlement, service provider routes the batched information to the association member, which in turn forwards all the approved transactions to the corresponding issuing bank.

Then the issuing bank transfers the funds (minus interchange fee, which is shared with the credit card network) within 1-2 days. Then the credit card network pays from the remaining funds to acquiring bank as well as the acquiring processor.