My Merchant Account Blog

Comparing Electronic Payment Gateways

Monday, August 09, 2010

Years ago, we wrote an article Electronic Payment Gateways Compared.  We still stand by our professional opinion that no one can write an article comparing the electronic payment gateways unless those gateways are being used.  And when that article was written, I hate to admit it, but we were still using the LinkPoint (aka First Data Global Gateway) as an electronic payment gateway.  We stood by them when First Data decided to re-build the gateway from the bottom to the top.  We were promised more options to help reduce chargebacks - that did not happen.  We stood by them when they renamed LinkPoint to the First Data Global Gateway, once again being promised options to help reduce chargebacks.  And of course, that promise was broken as well.

Fortunately, we came to our senses and found a better electronic payment gateway named the Quantum Gateway.  This gateway was built with the Internet merchant in mind.  Preventing chargebacks was on the top of the list.  Chargebacks cost everyone money, thus increasing fees to the merchant account providers, the merchants, and finally the consumers.

Quantum Gateway

Unlike most other electronic payment gateways that charge a monthly fee or maybe even a transaction fee, the Quantum Gateway does not.  That's right, you read it correctly, they do not charge a monthly fee or a transaction fee.  They off a virtual terminal, batch uploading, virtual checks, and a virtual terminal accessible via a WAP enabled phone.

More Security Features

Unlike most other electronic payment gateways, the Quantum Gateway does not charge the merchant for storing credit card numbers.  Storing credit card numbers is risky on the Internet, but if you use the Quantum Gateway to help store the credit card numbers, this helps to take away a lot of that risk.  You can also use the Quantum Vault for recurring billing. 

Besides Address Verification Service (AVS), the Quantum Gateway has also added:

• Dial Verify - a system that automatically will call the customer during the checkout process, thus verifying the phone number.  You can use default recordings or upload your own recordings.  If you need a professional voice talent, we recommend Lynn Brooks.
• MaxMind - a scoring system to help you decide if the transaction needs to be vetted more, approved, or declined.
• Verified by Visa / MasterCard Secure Code - this system will help prevent some chargebacks based on the merchant's location, consumer location, and card association

We made the change to the Quantum Gateway and we suggest you do the same.  They offer a test account so you can implement it before signing up as an Internet merchant.  We say this because we noticed about eighteen months ago, the LinkPoint gateway seemed to stop offering free test accounts, even though they still say it on their website.  We have made numerous attempts at getting a free test account from the LinkPoint gateway, Authorize.net / Cybersource, and the Quantum Gateway.  The Quantum Gateway was the quickest when we applied for a test account, with Authorize.net coming in a close second.  However, we never did receive a test store from the LinkPoint gateway.

First Data is laying off employees while the Quantum Gateway is growing.  So, what are you waiting for?  Check out the Quantum Gateway and get a merchant account today.

Your Merchant Account Blog

Thursday, July 08, 2010

My Merchant Account Blog is also now Your Merchant Account Blog.  We wanted to let you know that this blog is not just mine, but yours as well.  All merchants need to understand merchant accounts and how they work.  So many providers add on extra fees that it might be worth looking into another processor, especially if you are with First Data (First Data Might Be Over Charging Merchants).  You can still reach the site with www.mymerchantaccountblog.com or www.yourmerchantaccountblog.com.

We hope that you find these posts useful when deciding to choose a merchant account provider, possibly an electronic payment gateway (Quantum Gateway is recommended), PCI DSS, how to prevent chargebacks, and much more!

E-Commerce Chargebacks and Its History

Thursday, July 01, 2010

Chargebacks can be divided into a few simple categories:

• Non Receipt of Goods or Services Chargeback Codes
• Authorization Error Codes for Chargebacks
• Fraud Codes for Chargebacks
• Non Receipt of Information Chargebacks
• Cancelled or Returned Chargeback Codes

Merchants are winning more chargebacks now than in the past.  This is due in part of the merchants adding more verification tools during the checkout process.  Chargebacks occur when the consumer contacts the issuing bank to ask for a refund.  When this happens, different issuing banks will do different things.  For example, American Express will usually always side with the consumer.  Barclay's will sometimes call the merchant to see what can be done before issuing a refund. 

On the rise though is friendly fraud - the customer orders the product and then says the product was not received.  Or maybe the child gets one of his parents credit card to order a product - especially downloadable products.  A downloadable product generally has a chargeback ratio of 0.6% while apparel is slightly higher.

Merchants though walk a tight line when trying to reduce their chargeback ratio.  Too many extras added to the checkout process could lessen sales.

So where is the line to protect merchants from losing their products and more money?   Try to contact the customer and see what the problem might be.  If the child used the parent's credit card, the parent might be willing to work with you to settle the debt.

You always want to dispute the chargeback - no matter what: Chargebacks Are Not Worth Fighting For.  If the merchant account provider sees that you are not fighting any chargebacks, you might run the risk of losing your merchant account.  In 2009, only about 53% of merchants fought against chargebacks.  And from that, only one third of the merchants accounted for 90% of the disputes.

Quantum Gateway

The Quantum Gateway is one of the few gateways on the market that offers a number of fraud prevention tools at no extra charge, from Verified by Visa (VBV) / MasterCard Secure Code (MSC), MaxMind - GeoIP, and DialVerify.  Implementing these procedures can greatly reduce a lot of the chargebacks.

Reducing Fraudulent Transactions in ECommerce with the Quantum Gateway

Friday, January 08, 2010

As I was looking back at a few of the posts on here, I noticed that in January 2006 and January 2007, posts were made regarding fraudulent transactions (Some Ways to Help Internet Merchants Reduce Fraud and Chargebacks and Fighting Fraud in your E-Commerce Store respectively were wrote). 

Since the holidays are over, now might be the time to consider taking another look at how your transactions are vetted / scrubbed when a consumer orders your product(s).  The Quantum Gateway is one of the very few electronic payment gateways that offers merchants many options to help prevent fraudulent transactions and chargebacks  (including the Quantum Vault - allowing the merchants to safely secure credit card numbers on the Quantum Gateway's secure servers) at no extra charge.  During the holidays, volume is usually higher on the Internet and fraud also increases.  Merchants are less reluctant to vet / scrub the transactions as they should because this might delay the order process.  People rely on this, especially this time of the year, to take advantage of the merchants.  Now is the perfect time to consider Changing Merchant Account Providers that might have a better electronic payment gateway, like the Quantum Gateway - which has more vetting procedures built into the electronic payment gateway at no extra charge.  This allows the merchant to have the transaction scrubbed before it is even processed, usually saving the merchant a transaction fee (First Data Might Be Overcharging Merchants (on Transaction Fees)).

However, chances are pretty good that you are already vetting the transaction some with Address Verification Service (AVS) and Card Verification Value / Card Verification Code / Card Identification Code (CVV/CVV2 / CVC/CVC2 / CID).  These are some very basic vetting procedures, but the merchant can do a lot more to help protect against chargebacks and fraudulent transactions.  Some of the other ways to vet a transaction:

• Calling Your Customer
• GeoIP
• Verified by Visa and MasterCard Secure Code
• More Options

These security features can be used during the checkout process with no extra time involved from the merchant.  The system will do everything for you - protecting you and saving you time.