Uncategorized Archives - B2B Payment Gateway | Level 3 Data

3 Keys dramatically lower payment processing fees on B2B payments.

March 22, 2018February 25, 2014 by fortpoint_b2bproc_admin

cash_key Whether you’re starting a brand new business or have been processing for years these three keys will help you lower your credit card processing fees on B2B payments, which can have an immediate and significant impact on your bottom line.

1. Do Your Research

Picking the right merchant service provider can be a time consuming and stressful experience. Because of this, many new businesses will just go with the first merchant service provider they come across. It’s important to research multiple merchant service providers so you can compare the few that accommodate your B2B transactions. Think about who your customers are and how you will process credit cards. What percentage of your transactions will be swiped vs. keyed in?

If your business needs to process level 2 or level 3 data, pick a merchant service provider that will be able to accommodate those needs. Most sales reps are only trained on the industry basics with an emphasis on retail swiped businesses so chances are they will not understand how to properly set up a business that accepts credit cards from other businesses. Also, most providers will require a two or three year contract, so do your research beforehand and make sure you get this right so you’re not stuck with a provider that can’t facilitate level 3 credit card processing.

2.Shop Around

Once you’ve established which providers can accommodate your B2B processing needs, shop around get a quote from each of them. This will give you leverage so they’ll be fighting for your business. Shopping around works for business that are already processing as well. Simply call other merchant account providers and let them know what other companies are quoting you and ask if they can beat it. Be sure to get the application in writing with all the rates and fees so you can be sure there are no other hidden fees.

Show them your existing statements and they’ll show you where and how much they can save on your processing fees. Many companies think they’re stuck with their merchant service provider once they start processing, this is false. In fact, a lot of providers will cover any cancellation fees you might have if you’re processing a fair amount of volume. If you’re brand new to processing, ask if you can get a copy of their contact before signing it and then show that to other providers.

After you repeat the process a few times, you’ll be amazed at how much money you’ll save in processing fees as opposed to signing the first contract you see. Shopping around is the best thing you can do to negotiate the best B2B processing fees.

3. Know Your Clients & Keep Records

After you’ve shopped around and chosen the right provider, keeping great records of your clients and their purchases will help you save money in several ways. Once you have a few months worth of processing statements, you can use that as leverage to shop around for a better rate or even renegotiate your rates with your current provider. Keeping track of your customers and learning their spending habits will also help you avoid unnecessary chargebacks.

Furthermore, keeping records will help you better understand your processing statements so you can see where and how you’re being charged each time you process a card. For example, you may notice that a lot of the payments you are taking are government purchase cards or business and corporate credit cards. If you seldom process debit cards, you are rarely getting that low “qualified,” rate that was quoted to you. This scenario would explain all of the mid and non-qualified surcharges you see on your statement.

If this is the case, you should research for better interchange fees for those specific cards instead of being enticed by low rates that typically only apply to cards that you rarely receive from customers. Also, if you haven’t already, look into the benefits of processing level 3 data.

Target’s Data Breach Indicates Level 2 and Level 3 Credit Card Processing Can be Critical to Your Business.

March 22, 2018January 6, 2014 by fortpoint_b2bproc_admin

The US is slacking in credit card data security.

Because of a malware attack on Target’s computer systems, over 40 million customers now have their credit card numbers, expiration dates, and security codes floating around on the internet’s black market. This has not been the first case of a mass security breach of a large retailer.

In July of 2005, T.J. MAX had a breach that resulted in data stolen from at least 47 million of their customers. These instances of mass theft should serve as a wakeup call for the US to increase the security of credit and debit cards. target_data_security

Instead of the widely adopted ‘smart card’ that carries data in an embedded chip, Credit Card Data Security the US still uses the less secure, magnetic strip. Smart card technology isn’t new. In fact, the majority Europe uses smart card technology, and has been doing so for the past decade. The embedded chip allows for more data encryption and could’ve easily stopped Target’s breach. With more and more countries adopting smart card technology, the US has become a top target.

Credit card information can be very lucrative on the black market. The credit card number alone might sell for a dollar or less. However, like in the recent Target case, having the name, number, expiration dates, and security codes can sell for $10 or more. Multiply that by 40 million, and it’s easy to see why this type of theft isn’t going away.

This is exactly why understanding the concept of level 2 or level 3 credit card processing is so important. The requirement for additional data is much deeper and makes it nearly impossible for a thief to commit fraud. This is mostly true for business to business and business to government companies who tend to key in customer purchasing or procurement credit card numbers.

Including these data points with a transaction significantly increases the security of a payment and in turn that due diligence is rewarded with much lower interchange rates and credit card processing fees.

Over 80 counties now use smart card technology and it’s easy to see why it’s been embraced so well. It’s much easier to steal information of a magnetic strip than it is an encrypted chip. As a result, the US has been a huge target for hackers.

So why hasn’t the US done something?

The answer is a bit complicated. To start, these type of cards do exist in the US, there’s just not a lot of them. Credit Card issuers might give them to traveling clients because very little places abroad still use magnetic strips. Still, only about 1% of cards in the US have this type of technology.

Lack of political push for greater security measures is a big reason why smart cards have not been embraced. Businesses need more regulation and if there’s no push for it things are likely to remain stagnant.

Another reason is the sheer scale of the transition. Credit card issuers, banks, merchants, and consumers would all have to make the switch to smart cards from the existing 1 billion magnetic strip cards in circulation. Making such a huge scale transition would be extremely expensive and is unlikely to happen without some sort of government reform.

The good news is that it does look like the US is slowly moving towards smart cards. Many credit card issuers have publicly stated that they plan on making the transition by late 2015. By October 2015, if a merchant or acquirer’s equipment does not support smart cards, otherwise known as EMV cards, they will be liable for any instances of counterfeit fraud instead of the issuers.

What can I do to increase security?

Merchants looking to swipe cards should ask if their machine is EMV compatible. For those Merchants doing business to business and business to government transactions you need to make sure you are setup properly with level 2 and level 3 credit card processing capabilities. It’s going to protect your business and significantly decrease the fees you pay to accept cards.

Learn about Level 3 Processing to Stop Burning Money.

March 22, 2018December 3, 2013 by fortpoint_b2bproc_admin

Depending on the business, credit card transactions will fall under three different categories: Level 1, Level 2, and Level 3 processing. A business processing cards will either fit into one or all of the levels of processing depending on the type of business and what type of customers the business primarily deals with. Knowing these levels will result in a greater understanding of how rates apply and ultimately save a business money.

While each level has different processing rates, a good rule of thumb is the more data you receive from your client, the less the processing fee will be. In other words, the more data you have, the less of a risk of fraud there is, which results in a less expensive processing rate.

Level 1 Processing

Level 1 processing usually refers to business-to-consumer (B2C) processing. This might be a Burn_Interchange convenience store, a restaurant, or any other enterprise where the business is selling their product or service directly to the consumer. Level 1 processing requires the least amount of data from the consumer, usually just their name, the amount of the transaction, and the date the transaction was made.

If a business is conducting business-to-business transactions (B2B) they will almost always fall under Level 2 or 3 processing.

Level 2 Processing

Level 2 processing is the starting point for most business-to-business transactions. Depending on how much information a company requires from their clients, they might stay in Level 2 or move up to Level 3. Level 2 processing has to meet all the criteria of Level 1 processing but also has to include criteria like tax information, a customer code if applicable, and the merchant postal code.

Not only does Level 2 processing decrease the risk of fraud, it also may enhance the customer experience and customer service by providing your client detailed transaction information. Since building a strong relationship with your clientele is essential for any business, Level 2 & 3 is a great catalyst for maintaining that relationship.

Level 3 Processing

When doing B2B or B2G transactions you’ll notice Level 3 processing has to include all the data requirements from Level 2 processing in addition to several other criteria such as product codes, freight information like duty, postal codes from both the products destination as well as origin, any discounts that may apply, the country code, tax information, and more.

The more information entered, the risk of fraud is significantly less and therefore processing rates may be lower than the other two levels. Level 3 processing also requires advanced processing software to keep track of all the data that is required. If your business has a government contract that requires Level 3 processing, make sure you sign with a Merchant Service Provider that is able to give you the tools necessary to process Level 3 transactions.

There are Merchant Service Providers that specialize in Level 3 processing and it would be a good idea to seek that out instead of going with one that just has lower rates. When it comes to Level 3 data, it’s always a better idea to be safe than sorry, as being non-compliant may result in losing your client or getting your business into serious jeopardy.