#credit card processing fees

[merchantservices444]

Card Processing Solutions

[mostlysignssomeportents]

The credit card fee victory is a defeat

I'm on tour with my new, nationally bestselling novel The Bezzle! Catch me next weekend (Mar 30/31) in ANAHEIM at WONDERCON, then in Boston with Randall "XKCD" Munroe (Apr 11), then Providence (Apr 12), and beyond!

The headline was pure David and Goliath: America's small businesses had finally triumphed in their 20-year litigation campaign against Visa and Mastercard over price-gouging on fees, and V/MC were going to cough up $30B as reparations:

https://edition.cnn.com/2024/03/26/economy/visa-mastercard-swipe-fee-settlement/index.html

But if you actually delve into that settlement, the victory gets very hollow indeed. Here's the figure that didn't make the headline: as a part of this settlement, the sky-high fees merchants pay to process your credit-card transaction are going up by 25%:

https://www.creditslips.org/creditslips/2024/03/the-proposed-credit-card-interchange-settlement.html

The payments system is a hellish complex, rotten cartel, dominated by a handful of firms who have raised their already-high fees by 40% since the start of covid:

https://prospect.org/power/2023-02-07-small-business-credit-card-fees/

These companies who take 2-5% out of virtually every dollar exchange in the American company are wildly profitable, but their aggregate profits are still much lower than the profits of all the merchants they prey upon. More: the combined market capitalization of every company that accepts credit-cards is orders of magnitude larger than the payment processing companies. If we're just talking about sheer economic muscle, the "Goliath" here is "all the companies" and the "David" is "the three companies that process payments for them."

So, how is it that these puny middlemen are able to run circles around this massive retail sector? To learn the answer, you need to consider the fine technical details of the lawsuit and the settlement. That's something few of us are capable of doing on our own, because – as is ever the case with finance – the whole system is wreathed in an enormous amount of performative complexity. It's what finance bros call "MEGO," for "My Eyes Glaze Over." Finance loves things that are made complicated so that they'll be hard to understand – because so many of us will assume that they are hard to understand because they are complicated and just "leave it to the experts."

Thankfully, not all of the experts are on the side of finance. When I want a cheat-sheet for the lies buried in Uber's balance sheet, I look to Hubert Horan:

https://horanaviation.com/publications-uber

And when I want to understand credit markets, I go to Adam Levitin and his co-authors at the indispensable Credit Slips blog – and the Credit Card Interchange Settlement is no exception:

https://www.creditslips.org/creditslips/2024/03/the-proposed-credit-card-interchange-settlement.html

Formally, the fight over credit-card fees is over "interchange fees" – the fees charged to a merchant's bank by Visa and Mastercard. But of course, these fees are passed on to the merchants. If you've ever shopped for a credit-card, you'll know that some cards offer massive rebates to consumers (especially wealthy consumers with great credit scores). These gifts don't come out of V/MC's bottom-line: every time you use one of those Platinum/Emerald/Unobtanium cards, V/MC levy an even higher interchange fee. So ultimately, when a wealthy customer with a "good" credit card shops at a merchant, the merchant ends up paying more to process their payment.

But merchants aren't allowed to charge that back to their customers – and that's the crux of the lawsuit. It's why American merchants pay the highest interchange fees in the developed world.

Enter the $30b settlement. Under its terms, average interchange fees will go down by 7 basis-points (0.07%) over the next five years, while all fees will go down by 0.04% over three years – a reduction of about $3b/year. Additionally: merchants will now be able to levy small, extremely limited surcharges based on either the type of card or the card brand (e.g., "We charge a fee for Visa" or "We charge a fee for gold cards"). If merchants are able to levy these fees and figure out how to max them out, they stand to make another 3b/year.

In other words, the $30b settlement comes from $15b in guaranteed savings and $15b in possible savings, for just five years – while V/MC will continue to charge more than $100b/year in interchange fees.

This litigation began in 2005, with merchants outraged over the sky-high average interchange fee of 1.75%. Today, after the settlement, those fees have climbed by 25%, to 2.19% – and they'll start climbing again after just five years. A 20-year fight over high fees resulted in a victory in which the fees are even higher.

How did this happen? Levitin gives us some tantalyzing hints. Over the two decades of litigation, the credit card cartel were able to peel off different groups of merchants and settle with them separately. Some of those settlements were vacated by courts, and other ones are still pending, but fundamentally, the merchants were not unified in the way the credit-card companies are.

This shouldn't surprise anyone. Hundreds of thousands – millions? – of merchants are unable to coordinate strategies in the way that just two credit-card companies can. Indeed, when you have hundreds of thousands of companies, that represents many, many different kinds of businesses, each of which has different kinds of customers and different labor, inventory, cash-flow and profitability specifics.

But as an industry grows more concentrated, all the firms within that industry converge on a single, homogeneous style of operations. Walmart operates very differently from the mom-and-pop shops it forced out with predatory pricing and sweetheart deals with wholesalers – but Costco, Walmart and Sam's Club are all remarkably similar to one another. As a shopper, that means that if have needs that aren't well-served by a big box store, you're out of luck – and it means that a credit-card settlement that works for Walmart will probably work equally well for Costco and Sam's Club.

Think of the mobile phone duopoly of Apple/Google. These two "competitors" have nearly identical ways of dealing with their suppliers – both charging 30% fees for processing payments (and yes, that's a racket that makes Visa/Mastercard look like pikers). These two "competitors" are also one another's most important business-partners: the single largest transaction either company makes every year is with the other – the $26B that Google pays Apple every year to be the Ios and Safari default search engine, through which Apple exposes every one of its customers to Google's incredibly invasive, continuous surveillance.

Speaking of surveillance: consider the surveillance advertising duopoly of Google/Facebook. Not only do these companies extract the nearly identical (sky-high) fees from advertisers and dribble out the nearly identical (miserly) payouts to publishers – they also illegally collude to rig the advertising market, dividing it between themselves:

https://en.wikipedia.org/wiki/Jedi_Blue

The economists' term for this is the "collective action problem." It's a problem we want corporations to have. The problem with monopolies and cartels isn't merely that they're "too big to fail" and "too big to jail" – it's that a handful of companies can form a cartel to capture their regulators:

https://pluralistic.net/2022/06/05/regulatory-capture/

The surveillance industry is unified; the surveilled are not. The rewards from surveillance are concentrated. The costs of surveillance are diffused. This is as good a working definition of corruption as you could ask for: conduct that produces concentrated gains and diffuse losses.

Our generations-long failure to enforce antitrust law created monopolies that rippled out through whole supply chains. As David Dayen described in his brilliant 2021 book Monopolized, it's the story of US health industry:

https://pluralistic.net/2021/01/29/fractal-bullshit/#dayenu

First, pharma companies merged to monopoly and started to gouge hospitals on drug prices. So hospitals formed regional monopolies that could resist these pricing demands – and then turned around and started gouging insurance companies. So insurance companies merged, too. Every corner of health-care is now a monopoly or a cartel – from pharmacy benefit managers to hospital beds:

https://pluralistic.net/2022/01/05/hillrom/#baxter-international

The only parts of the industry that aren't concentrated are the parts that can't concentrate: patients and health-care workers. The monopolized health care sector reaps the concentrated gains, and the patients and workers pay the diffused costs. Those costs are diffused, but they're still substantial – a literal matter of life or death:

https://kffhealthnews.org/news/article/investors-private-equity-nonprofit-nursing-homes-quality-of-care/

Monopolization lets businesses solve their collective action problem, so they can run circles around less concentrated, less organized sectors. But concentration also lets companies solve the collective action problem of lobbying governments and capturing their regulators. A concentrated industry can maintain message discipline in front of regulators and legislators. A diffuse sector will always have credible defectors who'll say, "No, we can absolutely function with tighter controls – my competition is bullshitting you and I have receipts to prove it."

The surveillance industry's massive concentration is why America can't seem to pass a federal consumer privacy law. The last consumer privacy law Congress passed was 1988's Video Privacy Protection Act, a law that bans video-store clerks from telling anyone which VHS cassettes you're renting. But federal law is effectively silent on every other kind of invasion – your ISP, your TV, your car, your phone, your medical implant, your dishwasher and your smart speaker can all harvest your data, charge you for the privilege and sell it to anyone, for any purpose.

That silence didn't come cheap: whenever Congress moots a privacy law, the concentrated surveillance industry is all on the same page for the ensuing lobbying blitz, which it can afford thanks to the massive profits that an industry reaps when it eliminates "wasteful competition."

This is a point that leftists sometimes miss about competition law. The point of competition isn't merely to discipline companies into finding more efficient ways to run their businesses so that their prices go down. Sure, that's sometimes a good thing for the public.

But there's plenty of commercial conduct that we don't want to improve – rather, we want to extinguish that conduct. We don't want more efficient commercial surveillance – we want no commercial surveillance.

Without competition, an industry can outmaneuver the government. Think of IBM: the DOJ sued IBM for antitrust violations from 1970 to 1982. For 12 consecutive years, IBM spent more on lawyers to fight the DOJ's Antitrust Division than the DOJ spent on all the lawyers it employed to fight every antitrust violation in the country. IBM literally outspent the US government, year after year, for 12 years! That let them delay the DOJ's breakup long enough for Ronald Reagan to be elected, and then Reagan dropped the suit.

This doesn't just effect customers for a monopoly's products – it also (and especially) effects the workers for that monopoly. When employers don't have to compete for labor, they can pay workers less and save money they might otherwise have to pay for benefits and workplace safety. Those additional profits can be plowed into lobbying against pro-union laws, and to pay the eye-watering sums charged by scumbag union-busting law firms.

Look at the companies who've gone to the Supreme Court to get the National Labor Review Board abolished: these are giant corporations from heavily concentrated sectors with little competition to erode their profits. And while Tesla, Trader Joe's and Amazon all have very different businesses, they're all similar enough that none of them sees an advantage to courting workers by offering a unionized shop:

https://newrepublic.com/article/179165/musk-supreme-court-nlrb-labor

It's not just leftists who fail to grasp the relationship between competition and the ability of regulators to do their job. Libertarians miss this, too. Even if you're a fully Fountainhead-poisoned freedom-to-contract hobgoblin, you still want a government that can enforce those contracts and defend the property rights they invoke. For a government to force a corporation to abide by its contractual obligations, that government has to be more powerful than the corporation it is charged with policing. Which means that however large you're willing to let a monopoly or cartel grow, you're going to have to tolerate a government that's even larger:

https://pluralistic.net/2023/02/05/small-government/

The "$30b win" for America's merchants is, in fact, a loss. 20 years of litigation over high fees, and the fees are now much higher. But that loss is surely unevenly distributed. Walmart and Amazon and other retail giants are going to be able to bargain for all kinds of off-the-books rebates, promotions, and other sweetheart deals, meaning that they'll have even more unfair advantages over smaller, more disorganized retailers. That means more of those mom-and-pops will vanish, leaving shoppers with less choice and higher prices – and workers with less choice and lower wages.

The lesson of 40 years of pro-monopoly policy couldn't be clearer: you can either have an economy that is regulated by lawmakers who are at least nominally transparent and democratically accountable, or you can have an economy regulated by totally unaccountable and opaque monopolists. Fail to do the former, and you will always end up with the latter.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/03/28/concentrated-benefits/#diffuse-harms

[dreamertrilogys]

HELLO????

[rohirric-hunter]

I'm like yeah sure I'll do overtime tonight which means I'm gonna be miserable and angry tomorrow and probably spend all my extra money from the overtime on some flavor of delivery

[allalrightagain]

At some point, I do feel like additional fees for appointments after insurance pays out just aren't worth the processing fees and postage.

[lucidpayments]

How Better Payment Processing Creates More Satisfied Customers

As a small business owner, you’re probably juggling countless responsibilities, from inventory and staffing to marketing and customer service.

But one crucial area that’s easy to overlook is your payment processing system.

And if your checkout is slow, complicated, or outdated, you might unknowingly be frustrating your customers and hurting your bottom line.

Long lines, limited payment options, and concerns about security can send customers straight to your competitors, costing you valuable sales and damaging your reputation.

On the other hand, getting your payment processing right can dramatically improve customer satisfaction, boost customer loyalty, and help drive repeat business.

So, if you’re looking for better payment processing and you want to provide the absolute best experience you can for your customers at checkout, then this is an article you can’t afford to miss.

The Importance of Better Payment Processing

Over the past decade, how customers pay for products and services has dramatically evolved.

Today’s consumers expect transactions to be fast, convenient, and secure, regardless of whether they’re shopping online, at a retail store, or somewhere else altogether.

As a result, having a seamless checkout experience has become an integral element of the overall customer experience.

Slow, cumbersome, or outdated payment methods can frustrate customers, often driving them away to competitors who offer better payment processing.

But if you’ve got an efficient, reliable, and modern payment system, that can translate into much more satisfied customers.

All things considered, businesses that invest in better payment processing can expect to have much happier customers, and significantly more referrals, as satisfied customers are a lot more likely to recommend your services.

Speed: Accelerating Customer Satisfaction

Speed is one of the most noticeable and appreciated aspects of any checkout experience.

Quick transactions mean reduced waiting times, and this is incredibly important to your customers, particularly during peak shopping season.

Consider the difference between a customer swiftly tapping their card or smartphone, instead of having to manually go through the checkout process and deal with slow processing.

No matter how you slice it, the faster and smoother your transactions are, the more satisfied your customers will be.

What’s more, a swift checkout experience helps to make your business more efficient, as employees will spend less time managing individual transactions, giving them more time to focus on other things.

These benefits create a satisfying shopping atmosphere, which can contribute to repeat visits and positive word-of-mouth referrals.

Convenience: Meeting Customer Expectations

Having the flexibility to accept as many payment methods as possible has become another essential expectation of today’s consumers.

Offering multiple payment methods, including contactless cards, mobile payments like Apple Pay and Google Pay, and seamless online transactions, is no longer an option if you want to keep your customers.

Because if you limit yourself to traditional payment methods, you run the risk of appearing outdated and can easily lose potential sales to more forward-thinking competitors.

Moreover, a properly integrated POS system ensures accurate transaction data, which helps to reduce human error and streamline your operations.

And in addition to enhancing the customer experience, this can also improve your efficiency.

Security: Building Customer Trust Through Safer Transactions

Customers today are becoming increasingly concerned about the security of their payments.

With that in mind, if you’re looking for better payment processing, you should consider payment processing systems that prioritize robust security measures, including PCI compliance, encryption, tokenization, and sophisticated fraud detection tools.

Protecting customer data is incredibly important for maintaining and building trust, which is a crucial component of the relationships you have with customers.

In any case, if you clearly communicate your commitment to secure transactions, this makes you more trustworthy, and that means more customers will choose to keep giving you their business.

At the same time, breaches in security can cause lasting damage to your reputation and result in lost customers.

Staying Current: The Importance of Modern Payment Terminals

Because payment technology has been advancing so rapidly, if you want to remain competitive, you’ve got to make sure your payment processing systems remain fully updated.

Like it or not, investing in modern payment terminals is no longer a luxury but a necessity.

These state-of-the-art terminals facilitate faster and more secure transactions and accommodate all forms of payment, allowing you to keep pace with customers’ expectations, and ensure they remain satisfied.

And in addition to how this can benefit your customers, modern payment terminals often come equipped with digital receipts, integrated inventory management, and customer relationship management (CRM) tools, which allow you to collect valuable customer data.

Customer Loyalty and Retention: The Bottom-Line Benefits

Better payment processing does far more than just enhance the customer experience – it strengthens your relationships with customers, making them more likely to continue giving you their hard-earned money.

Loyal customers typically spend more, purchase more frequently, and will enthusiastically recommend your business to others. And ensuring you have a smooth and efficient payment process also helps to reduce cart abandonment rates, both online and in-store.

At any rate, offering a frictionless payment experience and simplifying every step in the purchasing process will inevitably lead to increased revenue, more satisfied customers, and greater loyalty.

Lucid Payments: Enhancing Your Customer Experience

Here at Lucid Payments, we understand the critical role payment processing plays if you want to have satisfied customers.

With that in mind, we provide comprehensive payment solutions that are specifically designed to help small business owners like you enhance the payment experience by focusing on speed, convenience, security, and ensuring we offer the most modern equipment.

If you decide to partner with Lucid Payments, you’ll gain access to:

Rapid Transactions: We ensure customers enjoy swift, efficient checkouts that enhance their overall shopping experience.

Advanced Security Measures: We protect customer data with robust encryption, secure payment methods, and PCI compliance.

Flexible Payment Options: We offer the convenience of a diverse array of payment methods, including contactless and mobile payment options.

Cutting-Edge Equipment: We regularly update our payment terminals to ensure you have access to high-quality equipment with all the latest bells and whistles.

Expert Customer Support: We provide 24/7/365 support, based in Canada, which ensures you’ll receive reliable and intelligible assistance whenever you need it.

Are you looking for better payment processing? Book a Rate Reduction Review today to find out how much you can save with Lucid Payments or contact us for more information.

[fincrif]

Are All Personal Loan Offers the Same?

When you're in need of quick funds—whether it's for a medical emergency, home improvement, education, or even a wedding—a personal loan often becomes the most convenient solution. But as you begin comparing lenders, you might notice something confusing: not all personal loan offers are the same.

From interest rates and processing fees to repayment terms and hidden charges, each personal loan offer can differ significantly. So, what does that mean for borrowers? It means taking the time to understand what goes into each offer is crucial if you want to make a smart financial decision.

In this article, we’ll break down why personal loan offers vary and how you can evaluate them to find the best option for your financial needs.

Understanding Personal Loans

Before diving into the differences, let’s revisit what a personal loan is. A personal loan is an unsecured loan—meaning you don’t need to provide collateral—that allows you to borrow a lump sum and repay it in monthly installments over a set term. The tenure generally ranges from 1 to 5 years.

These loans are highly flexible and can be used for almost any purpose: travel, debt consolidation, emergency medical expenses, business needs, and more. Since they’re unsecured, lenders assess your creditworthiness based on your credit score, income, employment stability, and repayment history.

Why Personal Loan Offers Differ

So, are all personal loan offers the same? Definitely not—and here’s why:

1. Credit Score and Credit History

Lenders offer different loan terms depending on your credit score. If you have an excellent credit history, you’re more likely to receive lower interest rates and higher loan amounts. On the other hand, borrowers with low or average scores may be offered higher interest rates or shorter tenures.

2. Income and Employment Type

Your salary, employment stability, and profession impact your eligibility. A salaried individual with a steady job might receive a better personal loan offer than someone self-employed with inconsistent income.

3. Lender’s Risk Appetite

Each lender has their own risk assessment policies. Some lenders cater to prime borrowers (low-risk), while others specialize in subprime lending (higher-risk customers). This dramatically changes the loan offer—from interest rates to processing fees.

4. Pre-Approved vs. Standard Offers

Existing customers of a bank may receive pre-approved personal loan offers with instant approval and zero documentation. These differ from standard loan applications which go through thorough verification and documentation processes.

Key Components That Vary in Personal Loan Offers

To understand whether a personal loan offer is suitable for you, here are some critical factors to compare:

1. Interest Rate

This is the most obvious difference in personal loan offers. Even a 1% difference in interest rate can significantly impact your total repayment amount. Compare both flat and reducing balance interest rates to get clarity.

2. Processing Fees

Lenders may charge a processing fee—typically 1% to 3% of the loan amount. Some waive this fee as a promotional offer, while others include it in the disbursed amount.

3. Prepayment & Foreclosure Charges

Some lenders allow you to prepay or foreclose the personal loan early without extra fees. Others may charge 2-5% of the outstanding amount as a penalty.

4. Loan Tenure

Different lenders offer varying loan terms. A longer tenure means smaller EMIs but higher overall interest, while a shorter tenure has higher EMIs but less interest paid in total.

5. Loan Amount

Depending on your profile, lenders might approve different amounts. You might qualify for ₹1 lakh with one lender and ₹5 lakh with another.

6. Turnaround Time

Some lenders offer instant approval and same-day disbursal. Others may take a few business days, especially traditional banks with manual verification processes.

Why Comparing Personal Loan Offers Is Essential

Not comparing your personal loan offers could cost you more in the long run. Here's why taking the time to evaluate options is in your best interest:

Save on interest payments A lower rate can reduce your total outflow by thousands of rupees.

Better repayment flexibility Choosing a lender that allows free prepayment can help you repay your loan faster.

Avoid hidden charges Carefully reviewing offers helps you steer clear of lenders with hidden fees or penalties.

Improve loan approval chances Some lenders may have lenient eligibility criteria that better match your financial profile.

How to Compare Personal Loan Offers

Here’s a step-by-step guide to comparing different personal loan offers effectively:

1. Check the APR (Annual Percentage Rate)

APR includes the interest rate plus all associated fees. It gives a complete picture of the total cost of borrowing.

2. Use Online Comparison Tools

Websites like Fincrif.com allow you to compare personal loan offers from multiple lenders in one place—saving you time and effort.

3. Read the Fine Print

Don’t just look at the headline interest rate. Check for clauses related to late payment, bounce charges, or prepayment penalties.

4. Evaluate Customer Service

Responsive customer service is crucial, especially if you need support during repayment or face an issue.

Real-World Scenario: Not All Offers Are Equal

Let’s say two individuals—Riya and Arjun—apply for a personal loan of ₹3 lakhs for 3 years.

Riya, with a credit score of 780 and a stable job, is offered a 10% interest rate with zero processing fee and flexible prepayment.

Arjun, with a credit score of 650, gets an offer at 16% interest, a 2% processing fee, and a 3% foreclosure charge.

Even though both are applying for the same amount, their loan experiences and costs will be very different. This example proves that personal loan offers are not the same and must be evaluated individually.

Final Thoughts

To answer the question—are all personal loan offers the same?—the clear answer is no. Personal loan offers differ in interest rates, fees, loan amounts, tenures, and eligibility requirements. Choosing the wrong lender could mean paying more than necessary or dealing with inconvenient repayment terms.

That’s why it’s essential to compare different options before making a decision. Use tools like the loan comparison feature at Fincrif.com to find personalized personal loan deals from trusted lenders. Your financial situation is unique, and your personal loan should be too.

FAQs

Q1. Can I negotiate the interest rate on a personal loan? Yes. If you have a strong credit score or a good relationship with the lender, you may be able to negotiate better terms.

Q2. Why are pre-approved personal loans different? Pre-approved offers are based on your existing relationship and past credit performance, often with faster approvals and better terms.

Q3. Are online personal loan offers safe? Yes, as long as the lender is RBI-registered and transparent with terms and conditions.

[netincomesource]

Navigating Ollo Credit Card Login and Payments with Ally Bank

Easily access your Ollo credit card account with Ally Bank. Log in online to manage payments, review transactions, and check your FICO score anytime. Looking for a credit card that’s easy to understand and helps you build or rebuild your credit without the headache of hidden fees? The Ollo Credit Card, issued by Ollo Card Services (a subsidiary of Allied Irish Banks, part of Ally Financial),…

[creditcardzy]

Credit Cardzy: Discover the Best Credit Card Processing Fees

At Credit Cardzy, find the best credit card processing fees tailored to your business needs. Explore transparent, cost-effective solutions for seamless transactions. Compare and choose from a range of competitive rates, ensuring optimal savings and efficiency. Trust Credit Cardzy for expert guidance and discover the most suitable credit card processing fees that align with your business growth goals. Streamline payments without compromising on quality or affordability.

[merchantservicesarticles101]

How Much Does a Merchant Charge for Payments?

[merchantservices444]

Do You Need Good Credit for a Merchant Account?

(Human directed ai content.)

In today's digital age, having a merchant account is crucial for businesses of all sizes. Whether you're a small startup or an established corporation, accepting credit and debit card payments is often essential for maximizing sales and providing convenience to customers. However, one common concern among business owners is whether good credit is necessary to obtain a merchant account. Let's delve into this topic to understand the role of creditworthiness in acquiring a merchant account.

Firstly, it's essential to grasp the concept of a merchant account. A merchant account is a type of bank account that allows businesses to accept payments via debit or credit cards. When a customer makes a card payment, the funds are transferred from the customer's account to the merchant account. From there, the funds are typically deposited into the business's regular bank account within a few days, minus any fees charged by the payment processor.

Now, onto the question of creditworthiness. While it's true that some payment processors may conduct credit checks as part of their application process, having perfect credit isn't always a prerequisite for obtaining a merchant account. Many factors come into play when payment processors assess an applicant's eligibility, and credit history is just one of them.

Payment processors may consider various factors when evaluating a merchant account application, including:

Business Type and Industry: The nature of your business and the industry you operate in can influence the risk assessment process. Some industries are considered higher risk than others, such as travel, adult entertainment, or e-commerce.

Processing History: If your business has a history of processing payments, especially with the same payment processor, it can positively impact your application. A track record of successful transactions demonstrates reliability and reduces perceived risk.

Business Financials: Payment processors may review your business's financial statements, including revenue, cash flow, and profitability. A healthy financial position can enhance your chances of approval, even if your personal credit isn't stellar.

Chargeback History: A high volume of chargebacks can raise concerns for payment processors, as it suggests potential issues with customer satisfaction or service quality. Minimizing chargebacks is essential for maintaining a positive relationship with payment processors.

Compliance and Legal Factors: Adherence to industry regulations, such as PCI DSS (Payment Card Industry Data Security Standard), is crucial for securing a merchant account. Compliance with anti-money laundering (AML) and Know Your Customer (KYC) requirements is also essential.

While credit checks are a standard part of the application process for some merchant account providers, there are alternative options available for businesses with less-than-perfect credit. For instance, high-risk merchant account providers specialize in serving businesses with higher perceived risk due to factors like poor credit, industry type, or processing history. These providers often offer tailored solutions and may be more lenient in their credit assessment criteria.

Additionally, some payment processors offer "instant approval" or simplified application processes that may not involve extensive credit checks. However, these options may come with higher fees or more stringent terms to offset the perceived risk.

Ultimately, while good credit can certainly improve your chances of obtaining a merchant account and may lead to more favorable terms, it's not always a deal-breaker. Businesses with less-than-perfect credit can still explore options for accepting card payments and finding a payment processor that meets their needs.

In conclusion, while good credit may be beneficial when applying for a merchant account, it's not necessarily a requirement. Payment processors consider various factors beyond credit history when assessing an applicant's eligibility, including business type, processing history, financials, and compliance measures. Businesses with less-than-perfect credit can explore alternative options, such as high-risk merchant account providers, to secure the payment processing solutions they need to thrive in today's competitive market.

[mostlysignssomeportents]

How I got scammed

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/02/05/cyber-dunning-kruger/#swiss-cheese-security

I wuz robbed.

More specifically, I was tricked by a phone-phisher pretending to be from my bank, and he convinced me to hand over my credit-card number, then did $8,000+ worth of fraud with it before I figured out what happened. And then he tried to do it again, a week later!

Here's what happened. Over the Christmas holiday, I traveled to New Orleans. The day we landed, I hit a Chase ATM in the French Quarter for some cash, but the machine declined the transaction. Later in the day, we passed a little credit-union's ATM and I used that one instead (I bank with a one-branch credit union and generally there's no fee to use another CU's ATM).

A couple days later, I got a call from my credit union. It was a weekend, during the holiday, and the guy who called was obviously working for my little CU's after-hours fraud contractor. I'd dealt with these folks before – they service a ton of little credit unions, and generally the call quality isn't great and the staff will often make mistakes like mispronouncing my credit union's name.

That's what happened here – the guy was on a terrible VOIP line and I had to ask him to readjust his mic before I could even understand him. He mispronounced my bank's name and then asked if I'd attempted to spend $1,000 at an Apple Store in NYC that day. No, I said, and groaned inwardly. What a pain in the ass. Obviously, I'd had my ATM card skimmed – either at the Chase ATM (maybe that was why the transaction failed), or at the other credit union's ATM (it had been a very cheap looking system).

I told the guy to block my card and we started going through the tedious business of running through recent transactions, verifying my identity, and so on. It dragged on and on. These were my last hours in New Orleans, and I'd left my family at home and gone out to see some of the pre-Mardi Gras krewe celebrations and get a muffalata, and I could tell that I was going to run out of time before I finished talking to this guy.

"Look," I said, "you've got all my details, you've frozen the card. I gotta go home and meet my family and head to the airport. I'll call you back on the after-hours number once I'm through security, all right?"

He was frustrated, but that was his problem. I hung up, got my sandwich, went to the airport, and we checked in. It was total chaos: an Alaska Air 737 Max had just lost its door-plug in mid-air and every Max in every airline's fleet had been grounded, so the check in was crammed with people trying to rebook. We got through to the gate and I sat down to call the CU's after-hours line. The person on the other end told me that she could only handle lost and stolen cards, not fraud, and given that I'd already frozen the card, I should just drop by the branch on Monday to get a new card.

We flew home, and later the next day, I logged into my account and made a list of all the fraudulent transactions and printed them out, and on Monday morning, I drove to the bank to deal with all the paperwork. The folks at the CU were even more pissed than I was. The fraud that run up to more than $8,000, and if Visa refused to take it out of the merchants where the card had been used, my little credit union would have to eat the loss.

I agreed and commiserated. I also pointed out that their outsource, after-hours fraud center bore some blame here: I'd canceled the card on Saturday but most of the fraud had taken place on Sunday. Something had gone wrong.

One cool thing about banking at a tiny credit-union is that you end up talking to people who have actual authority, responsibility and agency. It turned out the the woman who was processing my fraud paperwork was a VP, and she decided to look into it. A few minutes later she came back and told me that the fraud center had no record of having called me on Saturday.

"That was the fraudster," she said.

Oh, shit. I frantically rewound my conversation, trying to figure out if this could possibly be true. I hadn't given him anything apart from some very anodyne info, like what city I live in (which is in my Wikipedia entry), my date of birth (ditto), and the last four digits of my card.

Wait a sec.

He hadn't asked for the last four digits. He'd asked for the last seven digits. At the time, I'd found that very frustrating, but now – "The first nine digits are the same for every card you issue, right?" I asked the VP.

I'd given him my entire card number.

Goddammit.

The thing is, I know a lot about fraud. I'm writing an entire series of novels about this kind of scam:

https://us.macmillan.com/books/9781250865878/thebezzle

And most summers, I go to Defcon, and I always go to the "social engineering" competitions where an audience listens as a hacker in a soundproof booth cold-calls merchants (with the owner's permission) and tries to con whoever answers the phone into giving up important information.

But I'd been conned.

Now look, I knew I could be conned. I'd been conned before, 13 years ago, by a Twitter worm that successfully phished out of my password via DM:

https://locusmag.com/2010/05/cory-doctorow-persistence-pays-parasites/

That scam had required a miracle of timing. It started the day before, when I'd reset my phone to factory defaults and reinstalled all my apps. That same day, I'd published two big online features that a lot of people were talking about. The next morning, we were late getting out of the house, so by the time my wife and I dropped the kid at daycare and went to the coffee shop, it had a long line. Rather than wait in line with me, my wife sat down to read a newspaper, and so I pulled out my phone and found a Twitter DM from a friend asking "is this you?" with a URL.

Assuming this was something to do with those articles I'd published the day before, I clicked the link and got prompted for my Twitter login again. This had been happening all day because I'd done that mobile reinstall the day before and all my stored passwords had been wiped. I entered it but the page timed out. By that time, the coffees were ready. We sat and chatted for a bit, then went our own ways.

I was on my way to the office when I checked my phone again. I had a whole string of DMs from other friends. Each one read "is this you?" and had a URL.

Oh, shit, I'd been phished.

If I hadn't reinstalled my mobile OS the day before. If I hadn't published a pair of big articles the day before. If we hadn't been late getting out the door. If we had been a little more late getting out the door (so that I'd have seen the multiple DMs, which would have tipped me off).

There's a name for this in security circles: "Swiss-cheese security." Imagine multiple slices of Swiss cheese all stacked up, the holes in one slice blocked by the slice below it. All the slices move around and every now and again, a hole opens up that goes all the way through the stack. Zap!

The fraudster who tricked me out of my credit card number had Swiss cheese security on his side. Yes, he spoofed my bank's caller ID, but that wouldn't have been enough to fool me if I hadn't been on vacation, having just used a pair of dodgy ATMs, in a hurry and distracted. If the 737 Max disaster hadn't happened that day and I'd had more time at the gate, I'd have called my bank back. If my bank didn't use a slightly crappy outsource/out-of-hours fraud center that I'd already had sub-par experiences with. If, if, if.

The next Friday night, at 5:30PM, the fraudster called me back, pretending to be the bank's after-hours center. He told me my card had been compromised again. But: I hadn't removed my card from my wallet since I'd had it replaced. Also, it was half an hour after the bank closed for the long weekend, a very fraud-friendly time. And when I told him I'd call him back and asked for the after-hours fraud number, he got very threatening and warned me that because I'd now been notified about the fraud that any losses the bank suffered after I hung up the phone without completing the fraud protocol would be billed to me. I hung up on him. He called me back immediately. I hung up on him again and put my phone into do-not-disturb.

The following Tuesday, I called my bank and spoke to their head of risk-management. I went through everything I'd figured out about the fraudsters, and she told me that credit unions across America were being hit by this scam, by fraudsters who somehow knew CU customers' phone numbers and names, and which CU they banked at. This was key: my phone number is a reasonably well-kept secret. You can get it by spending money with Equifax or another nonconsensual doxing giant, but you can't just google it or get it at any of the free services. The fact that the fraudsters knew where I banked, knew my name, and had my phone number had really caused me to let down my guard.

The risk management person and I talked about how the credit union could mitigate this attack: for example, by better-training the after-hours card-loss staff to be on the alert for calls from people who had been contacted about supposed card fraud. We also went through the confusing phone-menu that had funneled me to the wrong department when I called in, and worked through alternate wording for the menu system that would be clearer (this is the best part about banking with a small CU – you can talk directly to the responsible person and have a productive discussion!). I even convinced her to buy a ticket to next summer's Defcon to attend the social engineering competitions.

There's a leak somewhere in the CU systems' supply chain. Maybe it's Zelle, or the small number of corresponding banks that CUs rely on for SWIFT transaction forwarding. Maybe it's even those after-hours fraud/card-loss centers. But all across the USA, CU customers are getting calls with spoofed caller IDs from fraudsters who know their registered phone numbers and where they bank.

I've been mulling this over for most of a month now, and one thing has really been eating at me: the way that AI is going to make this kind of problem much worse.

Not because AI is going to commit fraud, though.

One of the truest things I know about AI is: "we're nowhere near a place where bots can steal your job, we're certainly at the point where your boss can be suckered into firing you and replacing you with a bot that fails at doing your job":

https://pluralistic.net/2024/01/15/passive-income-brainworms/#four-hour-work-week

I trusted this fraudster specifically because I knew that the outsource, out-of-hours contractors my bank uses have crummy headsets, don't know how to pronounce my bank's name, and have long-ass, tedious, and pointless standardized questionnaires they run through when taking fraud reports. All of this created cover for the fraudster, whose plausibility was enhanced by the rough edges in his pitch - they didn't raise red flags.

As this kind of fraud reporting and fraud contacting is increasingly outsourced to AI, bank customers will be conditioned to dealing with semi-automated systems that make stupid mistakes, force you to repeat yourself, ask you questions they should already know the answers to, and so on. In other words, AI will groom bank customers to be phishing victims.

This is a mistake the finance sector keeps making. 15 years ago, Ben Laurie excoriated the UK banks for their "Verified By Visa" system, which validated credit card transactions by taking users to a third party site and requiring them to re-enter parts of their password there:

https://web.archive.org/web/20090331094020/http://www.links.org/?p=591

This is exactly how a phishing attack works. As Laurie pointed out, this was the banks training their customers to be phished.

I came close to getting phished again today, as it happens. I got back from Berlin on Friday and my suitcase was damaged in transit. I've been dealing with the airline, which means I've really been dealing with their third-party, outsource luggage-damage service. They have a terrible website, their emails are incoherent, and they officiously demand the same information over and over again.

This morning, I got a scam email asking me for more information to complete my damaged luggage claim. It was a terrible email, from a noreply@ email address, and it was vague, officious, and dishearteningly bureaucratic. For just a moment, my finger hovered over the phishing link, and then I looked a little closer.

On any other day, it wouldn't have had a chance. Today – right after I had my luggage wrecked, while I'm still jetlagged, and after days of dealing with my airline's terrible outsource partner – it almost worked.

So much fraud is a Swiss-cheese attack, and while companies can't close all the holes, they can stop creating new ones.

Meanwhile, I'll continue to post about it whenever I get scammed. I find the inner workings of scams to be fascinating, and it's also important to remind people that everyone is vulnerable sometimes, and scammers are willing to try endless variations until an attack lands at just the right place, at just the right time, in just the right way. If you think you can't get scammed, that makes you especially vulnerable:

https://pluralistic.net/2023/02/24/passive-income/#swiss-cheese-security

Image: Cryteria (modified) https://commons.wikimedia.org/wiki/File:HAL9000.svg

CC BY 3.0 https://creativecommons.org/licenses/by/3.0/deed.en

[cryptotheism]

I had to move a few months ago. I had a gym membership with LA fitness. I've had a gym membership with them before, cancelling was a humiliating process. Call the gym, receive orders to speak to a representative in person. Receive some pre-planned speech about how they have special offers this month. Drive to the gym, ask to cancel, receive an arcane set of instructions for cancelling. I must return home, log in to my computer, I must wait for the full moon and find the lake beneath it. I must row until I cannot see the shore, where I must light a candle and whisper secrets to the flame as if it were my lover. Then, I must fall fast asleep. Only then will a representative from LA fitness call me back to ask if I really really really want to cancel my membership. I must not be swayed by offers of jewels, or women, or effeminate men, or discounts on the personal training program. I must cancel.

Not this time.

By twist of fate, It was time to replace my credit card anyway. So I cancelled nothing. Their disgusting little dog of a computer system slammed its pleas into a retired credit card number over and over, barking it's lungs raw that a single twinkish customer might not pay them 30$ a month anymore. The calls began.

Hi! --My phone shows me a transcript of an unanswered voicemail-- It's Jeremy from LA fitness! Just calling to say that theres a problem with your credit card! Call us back and we can straighten this all out.

I cannot help but smile. There is no LA fitness near me now. I will not patronize them ever again.

Hey it's Ignacio calling from LA Fitness. Just calling to say there's a problem with your credit card. If too much time passes without payment, you could invite additional fees but I can help you with that.

Claw your fingernails to bleeding stumps at my door. You will hear nothing from me.

The Esporta Fitness department called me. Yes, you worms, that's the problem. I don't speak Spanish. I hope the poor sap who called me got paid for every second spent composing this voicemail. Burn another dollar on her altar such that she might commune with me. She will receive everything, and I will give you nothing.

Call me again you mewling beasts, leave another voicemail. Writhe untouched by the grace of my credit card information. You deserve nothing but my silence.

[lucidpayments]

Tapping Into Success: How Contactless Payment Solutions Can Benefit Your Business

Regardless of the kind of company you own, or what industry you operate in, if you want to grow your business, you’ve got to give your customers what they want.

This idea that the customer’s always right certainly isn’t a new one, but it’s been given new meaning with the rise of contactless payment solutions.

Being able to simply tap your credit card, smartphone, or other device has become increasingly popular in recent years, not least as a result of the pandemic.

Like it or not, many people today would prefer to avoid touching a payment terminal, and this has caused the popularity of contactless payments to skyrocket like never before.

A survey from Mastercard of 17,000 consumers across 19 countries found that nearly eight in 10 respondents make use of contactless payment solutions.

What’s more, the survey found that 82 per cent of respondents consider contactless payments to be “the cleaner way to pay” and 74 per cent of them said they planned to continue using contactless payments post-pandemic.

In addition, as you can see from the graph below, a report from Payments Canada, published in 2022, found that between 2020 and 2021, the volume and value of contactless payments increased by 12 per cent and 18 per cent, respectively.

The report also found that due to the pandemic, 43 per cent of Canadians have changed their payment preferences to “digital and contactless for the long-term.”

Moreover, about one-third of Canadians said they’re uncomfortable touching a payment terminal, and more than a quarter said one of their biggest frustrations when making in-store payments is when stores don’t offer a contactless option.

At the same time, the majority of Canadian merchants are now giving consumers what they want, as a study from the Bank of Canada found that in 2021 and 2022, 81 per cent of merchants surveyed said they offer contactless payment solutions in their stores.

All things considered, clearly this trend toward contactless payments isn’t going anywhere. Consumers from around the world, and right here in Canada, want this option to be available, and the reality is, business owners who don’t offer it are going to get left in the dust.

So, if you want to start offering contactless payment solutions, or you’re not quite sure what they are, but you want to learn more about this technology, and how it can benefit your business, then you should definitely keep reading.

Because in this article, we’re going to explain what contactless payments are, and how they work, and explore the benefits of this ever-more popular and convenient payment option.

What Are Contactless Payments and How Do They Work?

The term contactless payments refers to a form of payment where the customer doesn’t need to physically insert their card into a card reader or enter a PIN.

Instead, they can simply wave or tap their contactless-enabled card, smartphone, or wearable device (such as a smartwatch) near a contactless-enabled payment terminal to complete the transaction.

Here’s how contactless payments work:

Card or Device: Customers use a contactless-enabled debit or credit card, a smartphone with mobile payment capabilities (like Apple Pay, Google Pay, or Samsung Pay), or a wearable device equipped with contactless technology.

Payment Terminal: Merchants or businesses need to have a contactless payment terminal or point-of-sale (POS) system. These terminals are equipped with near-field communication (NFC) technology that enables them to communicate wirelessly with the customer’s card or device.

Tap or Wave: To make a payment, the customer holds their contactless card, smartphone, or wearable device within a few inches of the payment terminal. There’s no need to swipe, insert, or type in a PIN.

Authorization: The payment terminal securely communicates with the card or device to process the transaction. Depending on the transaction amount and the specific regulations, the customer might be prompted to enter a PIN for security verification.

Confirmation: Once the payment is authorized, the terminal provides a confirmation, usually with a beep or a visual cue, indicating that the transaction is complete. The process is quick and efficient, often taking just a few seconds.

So, now that you have a better understanding of what contactless payments are, and how they work, let’s take a look at how contactless payment solutions can benefit your business.

The Benefits of Contactless Payment Solutions

Contactless payments have emerged as a game-changing innovation that is reshaping the way transactions are conducted.

With their undeniable convenience, security, and efficiency, contactless payment solutions hold tremendous potential to benefit both consumers and business owners.

With that in mind, let’s explore the myriad ways in which contactless payments can make your customers happy and benefit your business.

Enhanced Customer Experience

For both business owners and consumers, one of the most significant advantages of contactless payments lies in the enhanced customer experience they offer.

In an era where speed and convenience reign supreme, customers are drawn to establishments that provide hassle-free, convenient, and quick payment methods.

Contactless payment solutions fulfill this demand by drastically reducing transaction times. With a simple tap or wave, customers can complete their purchases swiftly, eliminating the need for them to fumble with cash or enter PINs.

The result? Satisfied customers who are more likely to return, spread positive word-of-mouth, and contribute to increased patronage and higher sales.

Streamlined Operations

For business owners, time is often a precious commodity, but contactless payment solutions can help to streamline your operations by speeding up the payment process.

The reduced time spent on each transaction translates into shorter lines, faster checkout, and improved overall operational efficiency.

This efficiency gain can also have a ripple effect on various aspects of your business, allowing you and your employees to spend more time focusing on other critical tasks, such as customer service and inventory management.

Increased Sales Opportunities

Contactless payment solutions can open up new avenues for you to capture sales that you might have been missing before.

By embracing this technology, your business can tap into a broader customer base, including tech-savvy individuals who prefer cashless transactions.

Moreover, contactless payments can facilitate impulse purchases, as customers are more likely to make quick buying decisions when the checkout process is frictionless. For businesses operating in competitive markets, this could translate into a significant boost in revenue.

Data-Driven Insights

In the digital age, data is king. That being said, contactless payment systems can provide you with valuable insights into your customers’ behaviour and preferences.

And by analyzing that transaction data, you can gain a deeper understanding of your customers, which allows you to tailor your offerings, promotions, and marketing strategies accordingly.

This data-driven approach can help you to make informed decisions that can drive growth and optimize your operations.

Cost Savings

While the initial setup costs for contactless payment systems may seem like an investment, they can lead to substantial cost savings in the long run.

Handling and processing cash transactions can incur expenses related to cash management, security, and banking fees. But by offering contactless payment solutions, you can reduce your reliance on cash, thereby cutting down on associated costs.

Additionally, the digital nature of contactless transactions helps to reduce the need for paper receipts, which also contributes to these kinds of cost-effective practices.

Security and Trust

Contactless payments are built on robust security measures, including encryption and tokenization, which safeguard sensitive customer data.

This level of security not only protects customers but also fosters a sense of trust and credibility for your business.

In an age where data breaches and fraud are prevalent concerns, offering secure payment options can set your business apart and establish a reputation for prioritizing the security of your customers.

Adapting to Changing Trends

The world of commerce is evolving rapidly, and as a business owner, you’ve got to adapt to stay relevant.

With that in mind, contactless payment solutions represent an essential step toward the modernization of your business.

And by embracing this technology, you can demonstrate your willingness to evolve with changing consumer preferences, positioning your business as a forward-thinking and innovative establishment.

Contactless payments are ushering in a new era of convenience and efficiency, and for business owners, particularly those running small and medium-sized enterprises, the benefits are both tangible and transformative.

From enhancing customer experiences and streamlining operations to increasing sales opportunities and providing data-driven insights, the impact of contactless payment solutions is profound.

And as the business landscape continues to evolve, harnessing the power of contactless payments isn’t just a financial transaction – it’s an investment in the future success of your business that can foster growth, customer loyalty, and innovation.

Do you want your business to be able to accept contactless payments? Give us a call today to find out how we can help.