Surcharging Credit Card Transactions

creditcard swipe

In 2012, Visa and MasterCard settled a multi-billion dollar legal dispute between banks and retailers over credit card processing fees. As part of the settlement deal, the credit card companies had to reduce surcharging credit card transactions for 8 months at a fixed rate. They also concluded that surcharging credit card transactions, which are charges used to cover processing credit and debit payments (which are set by credit card companies and deducted from the transactions by banks who issue the cards), gave merchants the freedom to pass along surcharges to customers if they choose to do so.

The key phrase being ‘choose to do so’. The ‘check out fee’ for the customer could be anywhere in between 1.5% to 3% of the customer’s total purchase. However, ten states have laws restricting any type of surcharging of credit card transactions. These states are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. For example, it is prohibited to charge a customer the surcharge inside a Target store in New York, but it’s allowed inside a Target store in New Jersey. This makes for holes in the system.

While merchants pay $50 billion annually in surcharges for credit card transactions, and clearly would be benefiting from these surcharges to help lessen the load; many retailers chose not to. In fact, several large retailers opted out of the surcharges immediately. These companies include McDonald’s, Target, and Walmart. In the end, small businesses were left with the choice to decide whether they wanted to surcharge their customers  or not. Most small businesses followed suit with the larger retailers, fearing being the first in their area to start charging customers. Not only that, but business owners are aware they need repeat business to survive. If retailers started surcharging the credit card transactions to their customers—it makes the decision much easier for the customer to choose a competitor who has not elected to do so.

The bottom line is that no consumer wants to pay any hidden extra surcharges or taxes. This is evident when we look at competitive gas pricing. It’s no secret that fuel prices are cut throat competitive—and in most major cities, paying at the pump with a credit card over cash has resulted in higher prices. People are willing to travel and switch it up in the search for only a few cents off their gallon of gas. This too could be applied to surcharging credit card transactions; and the disadvantages to stores opting to surcharge could end poorly for the business.

So how is a consumer made aware that the retail location they are currently shopping in  surcharges the credit card transactions?  According to the settlement agreement, retailers must post signs making customers aware—and also inform Visa and MasterCard 30 days prior to charging the fee. American Express carriers would also be surcharged, including debit. Consumers using PayPal on the other hand, cannot be surcharged.

Consumers may not see extra fees on their receipts any time soon. Merchants continue to struggle in a battle against the courts and inflated surcharges put in place by two major card companies (Visa and MasterCard), which control over 80 percent of the market.  Due to this dominance, merchants don’t have other card issuing companies to choose from, and may be stuck accepting the surcharged credit card transactions.

In the meantime, these three questions remain.

  • Is it practical or is it good business to pass along surcharges to consumers or employees?
  • Should passing these surcharges become industry practice or is it taking a risk?
  • Will passing the surcharges result in angering employees as well as consumers?

To learn more about how we can help merchants and partners alike, please visit


EMV Technology – Small Chip, Big Security


Chances are that if you’ve gotten a credit card recently, it’s equipped with EMV technology, which stands for “Europay, MasterCard, and Visa”. Translation: your credit card now has a teeny tiny computer chip inside of it that makes it extremely hard to counterfeit.

So, what’s motivating banks to switch over? Well, EMV technology sounds extremely beneficial, especially after recent data breaches that have occurred at retailers such as Target and Neiman Marcus. With half of the world’s credit card fraud happening right here in the United States, banks are keen on doing away with the faulty magnetic-stripe cards which are pretty easy to counterfeit. In fact, this technology isn’t exactly new. The United States is one of the last countries to join in on chip technology, while Europe has been utilizing it as early as 1992.

What makes EMV different from the traditional magnetic strip card payment process?

The major change between magnetic strip credit cards and cards using the chip technology is the way confidential data is stored and processed. When a consumer makes a purchase using a card featuring EMV technology, the payment terminal reads the microchip, authenticates it and instructs the POS to proceed with the transaction. The cardholder is then required to enter a pin instead of a signature. This is beneficial because signatures can be forged. It is also extremely unlikely that a thief would have access to the cardholder’s personal identification number.

Because transaction information is encoded uniquely each time the credit card is used, it’s nearly impossible for criminals to gain data and duplicate your credit card. However, data from a traditional magnetic strip card can be copied with a card reading device – enabling criminals and thieves to reproduce counterfeit cards, in result costing consumers and merchant’s money. EMV technology turns the tables with its authentication capabilities and its ability to verify the point-of-sale device, its authentication.

So how will this affect businesses? Although EMV technology seems to be counterfeit’s kryptonite, it will be quite expensive equipping businesses with compatible technology such as processing devices that are able to read the information on your credit card’s chip. However, not complying with the new technology could cause problems. Especially since businesses that don’t have an EMV processing device by October 2015 could be facing some pretty hefty setbacks.

So, what kind of liabilities is your business at risk for if it’s not equipped with EMV card readers? We’ll simplify it. Right now, if your business runs a fraudulent card, the bank assumes the cost. However, starting in October 2015, if your business accepts a fraudulent chip card, and your business is not using an EMV card reader, the bank is no longer liable to absorb the cost. That’s a nasty pill to swallow for any business owners, who were reluctant to fork up the cash in order to migrate to EMV technology.

All in all here are some really great reasons why businesses will benefit from EMV technology.

Hands down security is a huge reason why merchants should make the switch to EMV technology. It seems like a no brainer! Both merchants and consumers win. Merchants supply consumers with security, while gathering steady revenue. And consumers keep their information private.

The speed and productivity of the way consumers are shopping while using EMV technology could be a huge factor as well. Migrating to EMV technology will speed up mobile and contactless payment! That means more and quicker sales for merchants and added security for the consumer. Devices that accept EMV credit cards are dual both contact/contactless devices. By installing these devices to accept EMV, merchants are also readying themselves to accept mobile and contactless payments.

The switch will also improve how consumers purchase abroad. Since most of Europe has already migrated to using the EMV technology, it’s no surprise that many Americans using magnetic strip credit cards have been left stranded at the kiosk unable to make their purchases. Converting to EMV technology will force America to join the rest of the world and make payment a more unified transaction.

It comes down to the final question: What will migrating my business to EMV cost me? And how can Alpha Card Services help?

Like we mentioned, the benefits of switching to EMV technology will outweigh the possibility of fraudulent purchases for any merchant. The safety of your consumers will be greatly implemented and in the end the liability of costing your business money will be practically eliminated.

At Alpha Card Services we are serious about our merchant’s security. We have several EMV-ready credit card terminals, and as the October 2015 date approaches, we will work with all our merchants and partners to ensure EMV readiness.

To learn more about our solutions, click here.

Where is EMV headed in the United States?

Ring up a customer’s purchase, and odds are they’ll respond to the total by handing you a credit card. To American consumers paper money is antiquated and cumbersome, and the flexibility and ease of plastic much more appealing. Little do most of them know that to the rest of the industrialized world, their classic magnetic swipe card is becoming a relic, too.

In Europe, Canada, and many other areas, electronic purchases are performed not with the swipe of a card and the flourish of a signature, but with an EMV card. EMVs, also called chip and pin cards since many countries also require a unique user pin be entered at purchase, are credit cards that have a microprocessor chip embedded within that transmits an ever-changing series of numbers to perform the transaction at either a retailer or ATM. The result is a more secure process that can drastically reduce fraud and counterfeit credit card rings.

EMV, which stands for EuroPay-MasterCard-Visa, is also the basic rules for how these chip cards should operate. An initiative that also includes names like JCB and American Express, it began in the late 1980s but is now only making headway here in the U.S. The program has many goals, including ensuring Americans will be able to continue using their cards when abroad, helping visitors from EMV-standard counties be able to use their chip cards when in the U.S., and improving the security of electronic transactions in general.

The latter is an area the U.S. could use the help with; according to a November 2011 study by The Nilson Report, the U.S. generated about 27 percent of card purchases globally yet accounted for 47 percent of card fraud.

Big benefits, but there are some issues with adoption; namely the cost. Merchants are required to purchase new hardware and software, and issuing banks will pay more to issue the physical EMV cards – about $3 a piece.

However, on top of reduced fraud losses, there could be savings in the long term. A white paper by Bell ID says chip and pin adoption is likely to eventually result in lower interchange transaction fees. And the big names are already incentivizing retailers to get on board; Visa last year launched their Technology Innovation Program, which waives annual compliance testing if at least 75% of their Visa transactions come from dual-interface EMV chip-enabled terminals.

The change is coming, and possibly sooner than later. The names behind the EMV standards have set a deadline of April 2013 for processors and merchant acquirers to support chip card transactions. While many industry experts believe a hefty percentage of processors won’t make that date, the deadline is sure to at least get the industry moving in the right direction.

The bigger date to some is October 15, 2015, is when fraud liability shifts to acquirers and merchants. Banks will take the fall if the card used does not have an EMV chip but the retailer was using an EMV-ready terminal. The merchant will be liable if a chip card is used, but the terminal isn’t compliant. Gas stations have a bit more time to update their pumps — their deadline is October 2017.

As our clients learn more about this technology, the safety it affords them, and the convenience and protection it will offer their customers, Alpha Card Services will be working to adopt it and have affordable, easy-to-use programs in place. Keep following us here for updates, or contact us for more information on implementation plans.

Mobile Merchants and PCI DSS

Mobile Processing involves two features:

  1. Mobile software application that is downloaded on the smartphone
  2. The card reader that sends the credit card information to the software application on the smartphone

Every smartphone processing provider has a software application that is PCI DSS which is mandatory by the PCI Security Council; however, the biggest problem and one that has not been addressed by the PCI Security Council, is what happens to the credit card data when the credit card is swiped through the card reader and sent to the software application on the smartphone.

If a smartphone processing device is using the “audio jack” to connect the card reader, the card reader is sending audio signal from the card reader to the software application on the smartphone. These audio signals are the same signals that a touch tone phone makes when your press a number on the key pad-each number sends a different signal, thus the credit card numbers being sent to the application is a long stream of signals which are not encrypted making it very easy for this data to be compromised. It has been proven that this process can be “hacked” in less than an hour by an intermediate programmer which is why we do not support this type of device.

Audio Jack Card Reader

Audio Jack Card Reader

Our smartphone processing device utilizes the data jack on the Apple Products (iPhone, I touch, iPod touch) and Bluetooth for the Android to connect the card reader to the smartphone. This process utilizes “end-to-end encryption” which means that once the card is swiped, through the card reader, the card data is encrypted when it sends the card information to the smartphone application thus making it very difficult for the credit card data to be compromised. Most payment industry experts have hinted that the PCI Security Council will only allow end-to-end encryption for smartphone processing, making it the “standard”; thus making the “Audio Jack Card Reader” obsolete.

Data Jack Card Reader

 Data Jack

The italicized section below was written by Suzie Maxwell, Director of Marketing at JDS Compliance.

What’s a Mobile Merchant to Do?

The mobile merchant market is one of the fastest growing market segments in the merchant processing space today.  Inevitably, tremendous growth is not without growing pains.   One area that has yet to catch up is the development of PCI compliance standards for these merchants.

How does a merchant validate compliance with a standard that does not exist?   Which SAQ “fits”, when none really does?  Talk to any PA-DSS approved provider and they will reassure you that they are PCI compliant.  Unfortunately, that does not speak to the merchant’s PCI compliance requirements.

There may be light at the end of the tunnel for these merchants and their merchant service providers.  The Payment Card Industry’s Security Standards Council has announced that they will focus on developing best practices for the mobile market in 2012. reports that Mike Mitchell, the council’s newly elected chair, says mobility is among his top priorities for action in 2012.  “We have special interest groups that will be looking at how to take a risk-based approach to the next level,” Mitchell said.

Because of its anticipated growth and adoption, mobile presents increasing concerns, and the council will need to address security risks for mobile payments, said PCI SCC General Manager Bob Russo.  “The adoption of mobile is running rampant, and when it comes to using personal mobile devices, people have not thought about all of the security,” Russo said. “We have a task force looking at this, and in 2011 we issued some guidance. This year we will be issuing some best practices.”

Mitchell noted mobile has the potential for mobile to transform the payments industry. “But with that potential are increased risks and increased vulnerabilities,” he said. “We want security to remain at the center of the payments evolution.”

Hopefully the development of best practices will provide guidance for mobile merchants, and those of us trying to help these merchants comply with the requirements of the PCI DSS.  Until a standard is established specifically for this market we are all left to grapple with this on a merchant by merchant basis.

Tokenization: Beyond the Arcade Games

Tokens are a relatively recent development that can help merchants to process cards safely and at a reasonable cost. Tokenization is a buzz word that’s been flying around since the Payment Card Industry Security Standards Council (PCI SSC) acknowledged it and introduced guidelines to help merchants take advantage of tokenization without violating any PCI standards.

What is Tokenization?

In the simplest words, tokenization is the process of replacing sensitive data with some unique identification symbol. Tokenization in the merchant payment system seeks to minimize the amount of data a business needs to keep on hand- and therefore the amount of data that is at risk in the merchant’s system. Tokenization makes it difficult for hackers to gain access to data because whatever is stored in the database is not sensitive information after authorization of that transaction.

Tokens have been used in everything from storing medical data, social security information, and drivers’ licenses, all the way to card payment processing. Of course, the card processing use is the most significant to us, and probably to you too.

Tokenization converts credit card numbers into randomly generated values, called tokens. The token can only be used for that specific transaction and that particular merchant. For example, in a credit card transaction the token usually contains the last four digits of the card and the rest of the token contains other alphanumeric characters which represent cardholder information and other transaction specific data.

What Does Tokenization Have To Do With PCI Compliance?

PCI SSC standards do not allow merchants to store any credit card numbers on their point of sale terminals or in a merchant database after a transaction. Therefore, to run a card while in compliance with PCI SSC, a merchant must never retain the actual credit card number after authorization. Large merchants have the option of installing an end-to-end encryption system, but this system is expensive to install and maintain. For a medium to small merchants, a better option is to allow someone else to encrypt the information- or to tokenize it.

The other benefit of tokenization is that it doesn’t actually rely on encryption to keep it secure. Tokenization converts what is sensitive and valuable data, into letters and numbers which are insignificant to anyone after that transaction’s authorization is complete. Encryption attempts to hide the data, but it is much easier to simply make sure the data is not in the system in the first place. As was mentioned, this foils hackers, and makes access to sensitive information stored by the merchant impossible.

New Developments in Compliance

We talked about PCI compliance in general, but PCI guidelines have been supplemented by tokenization guidelines. PCI council worked on the new guidelines for about eight months, and the release of them represents a step forward for merchants. The council has finally agreed that tokenization is acceptable and can limit PCI compliance, and that alone is significant.

The supplemental guidelines outline what needs to be considered when implementing tokenization and recommends scope for the tokens. The supplement looks to the token process itself and makes suggestions for best practices when selecting tokenization as your PCI solution. Finally, the supplement defines domains and areas where specific controls need to be applied and validated, where the use of tokens effectively minimizes card data.

How Can Tokenization Lower My Costs?

As a merchant, keeping costs low is the bottom line, if you’ll excuse the pun. You have to comply with PCI SSC guidelines, but you also want to keep costs down. Encryption might help you comply, but it is so expensive. Not running cards can cause a loss of business. Tokenization solves both these problems, and more. Your payment processor should offer you the option to tokenize your card transactions and should provide you with peace of mind knowing you are complaint.

When the service provider is the medium through which you tokenize information, the provider issues you a point of sale device, and this device has the capability of converting credit card numbers into tokens. Your payment processor should be able to provide this service, which will help you comply with PCI SSC and lower your costs. You already trust Alpha Card Services with your processing, and know that you can count on us to help you remain one hundred percent compliant with PCI SSC. Our tokenization won’t change anything about that. You can go on with running your business, knowing that we are keeping up with compliance issues and helping you keep your customer’s data safe. Contact us for more information.

The Mobile Wallet and the Tap to Pay System

We all have our mobile phones today, and, like our wallets used to do, the phone holds virtually everything we need: pictures, contacts, email, even bank account information. And now smartphones are trying to take one more thing out of that bulky wallet: payment cards. The mobile phone is on the cusp of becoming a mobile wallet, among all its other functions. The only thing you need to be concerned about is that you’ll never be able to use the I-forgot-my-wallet excuse again!

What is a Mobile Wallet?

A mobile wallet is also referred to as a mobile payment. Mobile payments allow you to use your phone to transmit the payment data from you credit card or debit card to the store with just a tap on the processing terminal where you would normally swipe your card.

The technology emerged in 2005, piloted by Nokia, and was different from payment via SMS text or through direct billing. This type of mobile wallet or mobile payment allows you to use Near Field Communication (NFC) technology to allow a special device in the smartphone to send waves to a receiver in the merchant’s payment terminal. This receiver gathers the information and transmits it to the computer to read and process it.

The technology for mobile payments is already in place and being used by some European countries, although their uses include paying for public parking and public transportation. You may also already use this technology if you have an EZPass for your vehicle on toll roads.

The proposed mobile wallets would feed off your bank account or a credit card account, and not off of a cash fund you place on the device. The mobile wallet gained a lot of ground after the initial testing done by Nokia, and now many other phone companies are rolling out smartphones with the capabilities of mobile payments.

Research in Motion, Google Android and LG are some of the first to announce that their upcoming phones would be capable of mobile payments using NFC of merchant to consumer transactions and by using debit or credit card information. Additionally, the manufacturers of the payment processing terminals have begun to catch on to the trend, and are now rolling out terminals that have both NFC capabilities, as well as ordinary swipe card technology. 2012 is expected to be an exciting year for mobile wallets and NFC technology system.

How does this help me?

2012 is the year when merchants should begin to get the system in place for the mobile wallet system. Ensure that your payment processor is capable of handling any changes in payment systems, and that your own terminals are up to date so that if a customer comes in and wants to just tap to pay, you are able to serve that person.

Everyone will benefit from this technology, especially after the initial challenges of changing systems. The mobile wallet is infinitely more secure than the credit card for both the consumer and the merchant. The card information stored on the phone can be removed within seconds of the phone being reported lost or stolen. This means less fraudulent purchases for the merchant and less hassle for the consumer. Additionally, the technology ensures security by sometimes requiring a PIN or a password to access the system and also uses waves that are encrypted and generally not readable except from a very short distance.

Another example of how this will help both merchants and consumers is that the smartphone has the capability to not only use the credit card information but also any coupons and loyalty card information to efficiently process the transaction giving the consumer the maximum benefit and the merchant the easiest transaction. Then all information can be stored in the computer and merchants can use loyalty card usage and coupon usage information to help them improve sales and customer satisfaction.

Finally the advent of NFC technology and its use as a mobile wallet will change the credit card industry and the payment systems industry, with most of the changes being something your providers will need to adjust to quickly. Currently the mobile wallet is “operator-centric,” meaning that the phone company and the consumer operating the phone are in control of the use. The credit card system will not face so many changes; it will merely have to be more prepared for use of wireless and internet transactions. Essentially the mobile wallet removes the need for swipe cards, but not the processing fees associated with it. Credit card companies will need to adjust to this change.

How can we help?

While you and your customers ponder the use of the mobile wallet, we offer a mobile payment system which may help you adjust to the idea of phones being a method to convey currency. This handy system allows you to turn your smartphone into a payment processing terminal safely and securely. Contact us today to discuss how you can prepare for the new technology and how it may affect your business.

When all other players in the system are changing, you can bet that your payment processor will need to change too. Alpha Card Services is watching this emerging technology and is excited about the changes that are occurring. As a processor we understand that the merchant, and the consumer, and the credit card company are all shifting positions, and the payment system processors will need to be prepared to shift too. As the specific use of this technology emerges and the players begin to take their places, Alpha Card Services will be adding mobile products and solutions for merchants to help them move forward without interrupting business.

Why is Chip and PIN and “Pay at the table” popular in Europe, but not the United States?

Many of us have traveled to Europe on regular occasion – both for business and pleasure.  If you’re like me, you notice all the nuances of how Europeans and others throughout the world embrace and utilize technology more voraciously that those in the U.S.  For example smartphone technology was being used in Europe in the early 2000s, well before the mass marketing introductions of Android and iPhone phones in the U.S.  I remember back in 2000 marveling at my German counterpart’s smartphone device that contained a decent megapixel camera, email and web capability, and application integration that accessed the company enterprise system.  At the time, most of us in the United States were burdened with clunky cell phones with limited text messaging plans and dropped calls.  Another example of “delayed technology” is that of QR codes, which were widely used in Asia and Europe well before their recent adoption in the U.S.  See my blog posting on for more on QR codes.

Another technological “delay” that I am aware of; this one in the payments processing industry, is chip- and-PIN cards.  The chip- and-PIN cards, which are referred to as chip-and-PIN cards, because the credit cards have computer chips embedded in them, and the cardholders instead of signing for purchases, must punch four-digit PIN numbers into terminals.  Chip-and-PIN has become standard in Europe because of their superior fraud-prevention abilities.  In fact, our CEO just returned from Europe and provided first hand details of this payment technology along with pay-at-the-table.

There are essentially two main types of technology in use for credit cards today.

  • The antiquated technology still used in the United States, in which information is encoded into a magnetic stripe on the back of the card.
  • Smart cards, which contain a computer chip that holds information.   The chip-and-PIN smart cards used in Europe were first introduced to help reduce fraud, and have several key advantages for the cardholder.
  1. Immediate authorization – no waiting! The actual terminal verifies that the card is real vs. the conventional method of transmitting to the card issuer and confirming that card is not either lost or stolen.
  2. The smart (chip-and-pin) card never leaves your presence.  When a conventional magnetic swipe card leaves your presence it can be compromised by a fraudulent technology device called a skimmer.  Potentially someone such as a restaurant employee could take your card for payment, “skim” your card in a skimmer device, download the information and use it for card-not-present transactions or for cloning another card.  With Chip-and-PIN technology, it is virtually impossible to clone the card.
  3. Pay-at-the-Table – this equates to a mobile processing solution where a server comes to your table with a smartphone or wireless processing device, the cardholder inserts the card and enters a PIN number, and voila! – the transaction is complete, along with a printed receipt.  See my previous blog on the possibilities of digital ordering and pay at the table technology.
  4. Chip-and-PIN cards add another layer of security

When will the United States go to Chip-and-PIN?
So I’ve pointed out all the advantages of chip-and-PIN card vs. magnetic swipe.  What is the hold up in the U.S. to adopt, for all intents and purposes, superior technology?

  1. Adoption of chip-and-PIN cards would require changing all of the terminals in the United States to the type that can accept smart cards or magnetic stripe cards.  Many banks and merchants have resisted this overhaul for obvious reasons.
  2. The cost of fraud in the United States is considered at manageable levels right now, reducing any incentives to change.
  3. Pay-at-the-table is emerging somewhat in the U.S.; however with magnetic swipe technology.

As of this posting Visa has announced a significant plan to encourage U.S. merchants to support EMV (EuroPay, Mastercard, Visa global standards) chip technology.  This includes incentives for accepting contact-less cards and NFC-phone payments.  The plan is likely to finally get the huge U.S. payment industry moving toward adoption of the EMV standard to secure point-of-sale transactions.  Interestingly, even with the Visa initiative, U.S. banks and merchants have yet to adopt a plan for migrating to EMV, unlike every other developed country.

It appears that the reluctance to change is cost focused… This is understandable in light of current economic conditions.  Dozens of countries in Europe and Asia are adopting the new technology or have plans to do so. That could put some pressure on the United States to change with the times.  However since economies and transactions are interwoven on a global scale, won’t we forced to adopt this superior payment technology at some point?  Personally I tend to think so.

Alpha Card Services plans to assist new and existing merchants in the future (once this technology has become more widely accepted in the U.S.) by offering a no-charge EMV enabled terminal upgrade.  This no-charge upgrade is meant to help defray the cost of the new EMV technology with merchants.

In the meantime, whenever one of us goes to Europe, we can enjoy a quick, secure pay-at-the-table payment experience.

Are digital receipts and mobile card processing the next evolution of commerce?

How often have you waited in line at the local home improvement store for the one clerk to checkout 20 patrons; often with tired, screaming children running through the aisles?  Perhaps you’ve enjoyed a long meal at a Zagat-rated restaurant, and you’ve been waiting for over a ½ hour for your server to process your check.  You know the story; its wait, wait, and wait some more!  Waiting is what we seem to do best these days.  If you’re like me, when you purchase a product or service, you want to get in and out of the retail environment as soon as possible, with no complications at the register.

Recently, an increasing number of retailers and restaurants are offering mobile credit card processing as a solution to alleviate these long checkout queues, as well as enjoy other benefits to the merchant and consumers.  In a nutshell, the merchant utilizes a placement reader or card swiper that attaches directly to a smartphone, such as the iPhone, Android or Blackberry.  A smartphone app downloaded by the merchant provides the technology for credit card processing, digital signatures and electronic receipt transmission to the customer.  The merchant swipes the customer’s card through the placement reader, the card transaction processes in the background, the customer signs the smartphone screen and a receipt is emailed to the customer’s email inbox.

Beyond the obvious convenience factor of reducing retail checkout queues and the efficiency of emailing a receipt directly to a customer email inbox, merchants are starting to tout the other benefits that accompany mobile credit card processing.  Merchants that are migrating towards paperless, digital receipts are finding that expensive to maintain receipt printers are no longer necessary.  This in turn reduces the merchant’s receipt paper and printer ink costs.  With a reduction of paper usage, merchants can now champion the environmentally friendly aspect of paperless receipts in their green marketing campaigns.  Customers also appreciate the green alternative to a crumbled receipt that often gets misplaced.

Cardholder security is a major concern for both merchants and customers alike.  Most mobile processing systems are equipped with rigorous encryption standards that meet or exceed conventional processing terminals.  For example, Alpha Card Service’s QwickPAY mobile processing device surpasses current PCI DSS standards by combining multi-layered MagneSafe™ security, in addition to encrypting card data from the point-of-swipe.  The QwickPAY service enables merchants to use their existing mobile devices to make secure, card present transactions anytime and anywhere, without the concerns of storing sensitive card data.

For merchants, there are clear opportunities for direct marketing with obtaining the customer’s email address.  Special offers, coupons, newsletters and social media outreach are all possible with this direct relationship with the customer.  However, some privacy advocates have expressed concern that obtaining customer email accounts constitute an intrusion into personal information.  As electronic receipts have been optional for consumers thus far, most of these concerns are unfounded.

As a person who is frequently impatient with long lines and slow checkout staff, I fully embrace this transformation to digital receipts and mobile credit card processing.