EMV Technology – Small Chip, Big Security

BLOG_EMV

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. http://alphacardservices.com/Solutions.html

Advertisements

Tech For The Taking

Last time we introduced the topic of NFC Technology and mobile payment in our, ‘The Revolution of The Mobile Wallet’ post.  If you missed it, you can check it out here. As mobile wallets become more and more popular and major tech companies begin to battle for their place within the mobile wallet spectrum we’ll introduce you to the key players in this mobile wallet war.

There’s a silent war happening on the home front of the technology world. With 19 billion devices connected to the internet around the world, and an expected 50 billion devices by 2020, the smartphone has revolutionized the retail industry. Now large tech companies all over the world are gearing up for battle over how people are paying for their goods.

These tech companies have one shared goal; to dispose of the ever so inconvenient leather wallet, with paper and plastic payments, and replace them with technology. They want smartphones to act like electronic payment methods using NFC, near-field communication technology.

There’s just one problem. With so many companies wanting a piece of this new digital payment market, there might be a few knock out rounds before a single contender can come out with a title.

In one corner, we have Softcard (formally known as Isis). They’re made up of the wireless carriers; Verizon Wireless, AT&T and T-Mobile. Softcard allows users to make a payment by tapping their mobile devices at a terminal. They’ve also snagged partnership with major credit cards such as Discover Network, Visa, MasterCard, Barclaycard, and American Express.

Notice that Sprint t has opted out of this partnership and instead teamed up with mogul giant Google on their competing service called Google Wallet. Google Wallet is another mobile system allowing users to store debit cards, credit cards, gift cards, and loyalty cards all in one place. Google Wallet also uses NFC technology allowing users to make payments via a kiosk on their phone. Their service is currently working with over 300,000 merchant locations and is available on Apple, HTC, LG, Motorola, and Samsung devices, as well as a few select tablets. Impressive, right?

While Google Wallet has been in the works for quite some time (2011), its next heavy weight contender arrived true to its nature and fashionably late to NFC technology. Apple, with their service Apple Pay, and its loyal band of followers and technology enthusiasts has caused quite a stir in the mobile wallet wars. They’re not rolling out with something entirely new, but instead doing what Apple does best—innovating on existing technology and striking while the competition is boiling.

When Apple launched its mobile payments system in 2014, it boasted more than 1 million activations just in just its first week. Apple Pay is becoming popular for two major reasons: convenience and security.

Unlike competitor mobile wallets, Apple Pay has made the payment process even easier, by not requiring users to even open an app for use. The user just holds the iPhone 6 near the kiosk while holding their finger on the Touch ID to make a purchase. No pins—no hassle and an entirely different level of protection. However, here in lies the limitation of Apple Pay. It can only be used by iPhone 6 and can also be made compatible for iPhone 5. If that doesn’t thrill you, maybe the security will.

The tokenization system built into Apple Pay is a main reason consumers seem less hesitant about Apple Pay than any other mobile payment system. Apple wasted no time explaining exactly how customers would be safe from breaches. They use tokenization, which removes the consumer’s credit card number at purchase and replaces it with a generated number. That number then expires after one purchase.

It also never shares with merchants a buyer’s actual credit or debit card information, and given consumers’ growing privacy concerns, this also gives Apple an advantage. Google Wallet offers a similar system, which both can insure the consumer’s total privacy. With Apple Pay, the payment details are stored on the iPhone itself. Google Wallet stores them on Google’s servers.

Both Google Wallet and Apple Pay generally strive to do the same thing. It just depends on the user’s preference and cell phone provider. Both providers use NFC hardware. Both of these systems are completely relied on credit card issuers such as Visa, MasterCard, American Express and Discover to function. Unfortunately, both Apple Pay and Google Wallet are available only in the US at the time. However, Apple has announced plans to expand internationally.

Despite Apple’s innovation and Google Wallet’s experience, there are other contenders which seem to be emerging; and it’s the retailers themselves! Merchant Customer Exchange (MCX), which consists of Rite Aid, CVS and Wal-Mart have declared that they will no longer accept Apple Pay or Google Wallet. Instead, they are working on their own alternative, CurrentC. CurrentC differs from Apple Pay and Google Wallet in that the system will charge users directly to their bank accounts instead of paying transaction fees to MasterCard and Visa.

So, who will win these mobile wallet wars? With shifting alliances and growing companies trying to outdo the other constantly, there’s no telling. Alpha Card Services we are excited about the innovation of NFC technology and we’re compatible with whichever option our customers choose—whether it is Google Wallet or Apple Pay we’ve got you covered. To learn more about our Mobile Payment Processing solutions, please click here.

Stay tuned for our next in-depth article about EMV Technology on or about February 19th!

The Revolution of The Mobile Wallet

More than half of all Americans own Smartphones. And this holiday season as busy shoppers got out their lists; whether they were headed to crowded malls or navigating the web for the perfect deal—one thing was certain. Their gadgets were with them. It is increasingly clear that mobile devices are beginning to impact retail in a huge way. With more consumers browsing, comparing, and purchasing by mobile phone this year than any other means, retail companies are beginning to react to their customer’s demands by reaching out to them where they spend the most time—their mobile devices.

While customers are enticed and swarmed by retailers via text promotions and email blasts daily—this new technology is one for the taking and it will revolutionize the way you look at your wallet.

Literally.

You might think of your wallet as a traditional accessory used to house and safe keep all your precious goods. Cash, credit cards, driver’s license, gift cards, reward cards, and the occasional embarrassing family photo. It’s bulky, it’s unorganized, and it keeps growing every year making it harder for you to find what you really need when you’re next in line at the register. And let’s face it nothing is more precious than your time.

Lastly, let’s not forget that your lovely leather wallet is also completely insecure. Just about anyone can get a hold of it and easily burn through your cash, drain your bank account, credit, and worse your identity. Despite all this insecurity, transactions are still predominately based off cash or check.

This is where the cutting edge technology of the mobile wallet comes in.

To break it down, mobile or digital wallets are apps that enable users to make 1 click payments via mobile phone, because the user’s information is already stored in a secure cloud. This can include purchasing items online or using a smartphone to purchase something at a store without ever needing your physical card or making direct contact. Instantly the hassles of locating your credit card or reentering digit after digit for online purchases are diminished. It’s convenient. It’s simple. But it can seem a bit intangible.

Here’s a more in depth look at how they work.

Digital wallets will run differently from app to app depending on the provider and developer. Some wallet services will require a simple click for payment while others will require a pin number. Bottom line, digital wallets will pay for your stuff, much faster than traditional methods. Not only can they be used to purchase items but also to store things such as bus passes, concert tickets, coupons, and gift cards. Consumers benefit from the protection and convenience they offer and merchants are protected against fraud while also allowing them to sell goods faster.

There are two different types of digital wallets. Client-sided and server-sided. Client-sided wallets are maintained by the user. Information is downloaded and a program is installed in which the user can input their personal information, which is all stored on the user’s personal computer. When the consumer purchases something on the web, on a compatible web site, the wallet is able to input the personal information so the user won’t have to. Using this type of digital wallet has its benefits. However, client-sided wallets differ depending on the software and developer. It is also monitored by the user which leaves room for some minor aggravation.

Server-side wallets differ in the fact that the user’s data is not stored by their own personal computers but is stored and maintained by large companies. Visa’s V.me digital wallet is a great example. In this case all user data is store by Visa on the company’s secure computers.

If you’re wondering if digital wallets will only support certain types of cards, you’re in for a surprise. Visa’s V.me for example, can store data for you from many other credit card companies, such as Discover and Master Card. They also maintain your e-wallet account, dismissing the need of a physical card which can be stolen. This is beneficial for both the consumer and the retailer, who deal with a significant less amount of credit fraud.

While it is evident that this ground breaking technology can definitely spare you minutes of fumbling with your credit cards at your online cart, digital wallets take it a step further and turn completely mobile at store fronts too.

With more Smartphones being equipped with NFC (near-field communication) chips, which are an important component to the digital wallet movement, it is estimated that more than half of Smartphones will have NFC technology by 2015.

So what is NFC? It’s wireless communication with short range. And that means mobility to pay for almost anything at a store with just a tap of your phone to a compatible POS terminal. A great example of this is Google Wallet. Google is one of the leading technology apps using the power of NFC. All user’s credit card data (reward cards and gift cards too) are stored on Google’s servers (not your phone).

The dilemma that arises when using digital wallets is the merchant acceptance to this new technology. So while, you are able to join for example, MasterCard’s digital wallet MasterPass, in order to take full advantage of the technology, retailers and online merchants need to add the Master Pass API to their site or make POS systems compatible to the technology; giving the shopper the option to pay with MasterPass. The problem is not the interest in the technology but that many merchants are not equipped with the technology.

However, as this technology evolves, more and more companies want in on the action and are competing for a monopoly. Apple Pay for instance, is one of the most buzzed about digital wallet payment systems out today and its making waves—which is good news for users because other companies will feel compelled to compete and perfect the infrastructure. Apple Pay lets people pay merchants using their iPhones. All major credit cards are accepted and over 220,000 merchants are on board.

Alpha Card Services is excited to venture out into this new technology. We are NFC ready and compatible with Apple Pay and Google Wallet. Our Mobile Payment Processing and Point of Sale Systems are designed with merchants and customers in mind providing the best technology, mobile solutions, reliable performance, and affordability. To learn more visit us at http://www.alphacardservices.com/

So despite all this innovative and exciting technology what’s still causing people digital wallet woes?

The fact is that regardless, the payment method the technology still has a ways to go and has not convinced many consumers to trade in their good old fashioned leather friends for such new technology.

Privacy and Security will always cause concern for the general population. People are uneasy to accept a technology that seems more concept than reality at the moment. It’s easy to imagine how many things could go wrong when personal accounts, life savings, and credit cards are thrown into the mix. The complexity of the digital age is also keeping a few hesitant of this wireless transition.

Despite these problems, experts say that it’s estimated that digital wallets could become a $90 billion industry by 2017. However, before reaching that assessment, merchants must overcome some hurdles as with any new technology. Until then, our traditional wallets will continue to weigh down our pockets and purses. However, the growth of the mobile wallet cannot be ignored as it could determine the form of currency, which will be used in the future.

http://www.nytimes.com/2014/09/11/opinion/the-digital-wallet-revolution.html

http://www.theguardian.com/technology/2014/jan/15/10-things-u-need-to-know-digital-payments

http://www.cnet.com/news/how-e-wallets-could-be-a-gold-mine-for-credit-card-companies/

 

 

How to Market your Restaurant – both Online and Offline!

Running a restaurant can be a life-long-dream come true. You know that you have the best food, hired fantastic employees, found the greatest location with an outdoor patio, but for some reason, you still don’t have enough customers’ walking into your establishment to obtain your monthly goals. So, why isn’t your picture-perfect business doing as well as you thought it would?

Perhaps it’s time to look at your marketing strategy. Maybe you don’t have a marketing strategy because you think it’s too expensive? In that case, it’s important to take advantage of all of the free ways you can promote your business. Marketing your business doesn’t need to cost anything when you use free marketing tools such as Facebook, Instagram and Foursquare.

Host an event such as a Kid’s-Eat-for-Free Santa Claus lunch, Quizzo with branded prizes, or a “Beat-the-Clock” contest. A “Beat-the-Clock” contest allows you to offer specific drinks at the bar for twenty-five cents and increase the price every hour until midnight. This will allow you to bring in more customers and possibly their friends or coworkers.

• Facebook allows you to post up-and-coming events, contests and specials. It gives you the opportunity to promote when that hot new band is going to be playing at your restaurant. You can upload menus, a calendar with future events, photos of your food, and coupons for customers to print and bring in for redemption. It’s a virtual billboard that allows your business to directly target all possible customers for multiple reasons.

• Instagram enables you to share photographs of your food. Nothing gives a person more incentive to patronize your restaurant than the offer of free food! Just post a photo of a delicious food item with a tagline which says: “The first 20 people to walk in before 6 p.m. will receive a free appetizer!” It’s that simple! You have to entice and give potential customers a reason to visit your restaurant.

• Foursquare allows you to promote your restaurant to more than 100 million possible customers. When someone downloads the free mobile app to their smartphone, it allows them to find any restaurant in the area. Once a customer has tried your restaurant, they can say what they liked about their experience and conversely, what they didn’t like. Don’t get discouraged by negative reviews. A review is a good thing whether it’s negative or positive. A positive review gives you the chance to promote the encouraging things customers are saying online about your business. A negative review gives you the chance to evaluate feedback and change perceptions about your restaurant. You have to let your customers know you are listening and that you appreciate their candid feedback!

Give your employees kudos! When you acknowledge how great your employees are and you promote that online, your customers will know that you appreciate your employees. Happy and motivated employees will generate great service for your restaurant. Your customers will recognize and appreciate that you are putting your heart and soul into the food, drinks and ambiance you are selling.

If you aren’t very tech-savvy and you happen to have some money to spend, there are multitudes of ways to promote your business.

Along with menus, you can have an entire selection of printed marketing collateral available to market your restaurant. Effective printed marketing tools include the following:

• Table tents for displaying monthly specials
• Coupon sheets to advertise discounts
• Postcards to canvass your geographic area for new customers
• Flyers to hand-out to office buildings, apartments and even dormitories
• Rack cards for communicating how long you’ve been in business and what your restaurant is known best for.

Once your restaurant starts to thrive with more customers, you can begin to expand your marketing with t-shirts, branded glasses and gift & reward cards. Before you know it, your restaurant will need to expand to accommodate all of your customers.

Alpha Card Services can help you market your restaurant with our gift and reward card program. Stay tuned for more exciting news in the near term from Alpha Card Services on how we can help market your restaurant, both online and offline, with our team of graphic designers and Marketing specialists.

http://www.buzztimebusiness.com/15-tips-market-barrestaurant-30-minutes/
http://www.buzztimebusiness.com/smarts/facebook-marketing-tips-bars-restaurants/

How to Protect Yourself from a Data Breach

A data breach is the intentional and criminal release of private credit card information to an insecure location. Do you know how to protect yourself and your company from a data breach? You may think that you don’t have to worry about data breaches, because you own a small or medium sized business, but that’s not the case. Small and medium sized data breaches are more common than you might think.

All together more than 1 billion records have been compromised since 2004. In 2012 alone, there were 621 data breaches reported. Some costs included a 7% increase in detection costs, 11% increase of costs towards notifications and a 26% increase towards costs, like credit or debit card replacement, compliance fines and mandatory audit costs.

In that same year, 44 million records from small and mid-sized businesses were compromised. The average small-to-mid-sized business cost of a data breach was $54,000 dollars with an average cost of $277 per stolen record. 41% of these data breaches were the result of a criminal attack and 61% of these attacks were not discovered for over a month. Everyone from small business owners, to large business owners can be affected by a data breach.

If a criminal wants your money, then they will find a way to get it. Target’s data breach occurred on November 27, 2013, and lasted until December 15. Over 70 million cards were compromised during this financial catastrophe. It greatly affected their brand, decreased productivity, and may have cost them more than 3.5 billion dollars in damages. More than 170 million customers have been affected by data breaches. Victims of these breaches include, T.J. Maxx in 2007, and Neiman Marcus in 2014, for which they are still tallying up the amount of damages.

So, how do you protect your company and your merchants? One way that you can do this, is by signing up for Data Breach Insurance. The Data Breach Insurance plan with Alpha Card Services, through their partnership with Royal Group Services automatically enrolls you into this program. More information about Alpha Card Services’ Data Breach Insurance can be found here: http://www.royalgroupservices.com/controlscanbreachprotectionportal/

When there is even the slightest possibility of a data breach within your business, are you willing to take any chances? A data breach can ruin a business and shut it down permanently. A data breach can also be extremely expensive, with a multitude of fines and mandatory costs such as:

-Mandatory forensics audit costs
-Card replacement costs
-Compliance fines
-Fines that are based on the actual fraudulent use of the cards, which may vary depending on the number of cards exposed.
-Productivity loss
-Significant paperwork and overhead to manage the post-breach documentation process similar to an IRS audit.
-Brand damage

The damage that can be done to a company’s brand could be completely devastating. It could destroy any possible growth that a company is trying to achieve. This is why it’s imperative that any and every possible action that can be taken is taken, to ensure that each cardholder’s information stays secure. This is why credit card companies have PCI Compliance standards in place.

PCI Compliance guidelines were created by credit card companies, as a standard in protecting the users of their cards. Whether a Visa, MasterCard, Discover, or any other card is used, each one has a PCI Compliance standard that goes along with it. Every company that handles credit card processing has to follow these guidelines. They have to ensure that the credit cards are being protected, while in use.

PCI Compliance is setup to create the maximum possible security, following these strict policies:

-Offering a standard shield to ensure the security of credit card numbers
-Keeping up-to-date with anti-virus software
-Implementing strong access control measures
-The constant checking of network stability
-Strict control of the security policy information

Even though credit card companies have PCI Compliance guidelines in place to ensure the protection of credit card numbers during processing, there is still the possibility of a data breach. You, as the business owner need to make sure that you’re following all of the standard guidelines of PCI Compliance. If you’re a business owner who feels uncertain about PCI compliance guidelines, companies like Alpha Card Services can help determine what is needed to become PCI compliant. This is why Data Breach Insurance is a necessary component of every business.

Alpha Card Services always makes sure to inform its customers of any outside or internal data breaches that may affect their merchants. Even though the T.J. Maxx, Target, and Neiman Marcus data breach did not affect any merchants associated with Alpha Card Services, they still felt it was necessary to inform all of their merchants, because of the overall popularity of these stores.

Although the business world is filled with possible data breaches and misused PCI Compliance guidelines, it is still important to do everything possible to protect yourself and your merchants from becoming victims of fraud. The addition of extra securities such as Data Breach Insurance can help in protecting your company. With these extra precautions set in place, all companies can feel safe knowing that they have done all that they can do to protect themselves and their merchants from potential financial disaster.

References:
http://www.techopedia.com/definition/13601/data-breach
http://mobile.philly.com/business/?wss=/philly/business&id=239747611
http://alphacardservices.com/Why-Alpha-Card/PCI-Compliance.html
http://www.practicalecommerce.com/articles/629-What-Is-PCI-Compliance-And-Should-Merchants-Be-Concerned-About-It-
http://techcrunch.com/2013/12/23/target-may-be-liable-for-up-to-3-6-billion-from-credit-card-data-breach/

Successful Sales Training Programs

Effective training programs for salespeople allow for the acquisition of knowledge and skills to promote a healthy business. However, these programs are not as black and white as learn the trade and boom! become an awesome salesperson. To become a successful salesperson, unique sales training programs have been developed. Three companies which offer unique, but successful sales training programs are General Electric, Google, and Alpha Card Services.

The GE Appliances Commercial Training Program (CTP) is considered the talent pipeline for GE’s future sales leadership. The CTP combines real work experience with specialized training. This program is ideal for committed individuals who aspire to be future sales leaders within GE and are willing to relocate to jump-start their career.

The CTP is an intensive sales training program that provides real work experience in GE Appliances retail and/or contract sales business channels, including management of a sales territory. The program will include a mentoring program to develop skills essential to career development, provide Six Sigma Greenbelt training and certification, and offer the opportunity to establish a strong network of colleagues as a foundation to career success. To graduate from the program, individuals must exceed performance standards and be willing to relocate after 18-24 months.

What is Six Sigma Greenbelt training one may ask?  Six Sigma is a set of tools and strategies for process improvement originally developed by Motorola in 1985. Six Sigma became well known after Jack Welch made it a central focus of his business strategy at General Electric in 1995, and today it is used in different sectors of industry.

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization (“Champions”, “Black Belts”, “Green Belts”, “Orange Belts”, etc.) who are experts in these very complex methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction and/or profit increase).

The program gives participants the opportunity to make an impact on GE. It also provides participants with visibility to senior level business leaders, while fostering personal development through mentoring and coaching. The CTP provides valuable contacts and experience that accelerate the development of business and professional skills. With years of proven results, they have developed a comprehensive program to develop and promote future sales leaders.

Candidates must have a university or college degree.  A Marketing or Business degree is preferred. They must demonstrate strong leadership, analytical, problem-solving, interpersonal and communication skills. They must have passion for and commitment to a career in sales as well as be willing to relocate.

Google’s unique sales training program is GoogleEDU, the company’s three-year-old learning and leadership-development program. GoogleEDU is formalizing learning at the company in an entirely new way, relying on data analytics and other measures to ensure it is teaching employees what they need to know to keep profits going. Google thinks it has found a way to make its learning stick. It has become more exacting about when it offers classes and to whom. It uses employee reviews of managers—similar to the professor reviews that college students fill out at the end of a semester—to suggest courses to managers. Ever data-obsessed, Google uses statistics gathered from current and former employees to recommend certain courses to managers at different points in their career; say after a move to a new city or joining a new team. In this way, the trainees have an opinion on how they should be trained. Experienced managers who join Google from other companies can find it difficult to operate in a culture where power over subordinates is derived from one’s ideas and powers of persuasion, not job titles. Decisions on promotions and raises are often made by consensus among peers and superiors. An employee isn’t necessarily going to obey a manager just because he or she is a manager. This is radically different from most traditional corporations, which have a top-down, hierarchical style of management. Google has also begun offering specific classes based on an employee’s work area (engineering versus sales) and career stage (junior developer versus senior manager). The more targeted it is, the better, because it is specific to a salesperson’s strengths. More individualized, customized recommendations are part of how Google is trying to individualize and personalize the learning experience here.

Although a more up-and-coming business when compared to General Electric and Google, Alpha Card Services is paving its own roads with its world-class training program for their sales reps. Referred to as “The Alpha Edge,” this program conducts regularly scheduled training for all their Business Solutions Professional (sales reps), including a rigorous two-week comprehensive training program for new Business Solutions Professionals. An example of this is their Alpha University and online video portal.  These interactive videos take teaching about the credit card processing and business services industry to a new level as each video details products, industry terminology, and walks the rep step-by-step using and selling their products.

Their program has become so successful, that Alpha University is now expanding its training as more and more sales reps come onboard.  Alpha University is becoming a central educational and e-training portal that will contain even more relevant information about comprehensive business solutions.   FAQs, training documents, additional video e-learning and a user’s forum are all future components of the Alpha University.

Similar to GE and Google, Alpha Card Services individualizes its training through interactive videos and continuously works towards developing innovative new training methods. What sets Alpha Card apart is their unique 24/7 online e-learning, which allow sales reps to always have access to critical training materials.

Citations:

Why should you customize your loyalty program?

Customer loyalty programs come in two varieties: punchcard and points-based. The punchcard model works well for businesses that offer specialized products or services such as coffee shops, pizza parlors, bars and ice cream stores, where the average transaction value is relatively low and the goal is increase purchase frequency.

However, for hair salons, day spas and high-end retailers, their goal is less about increasing purchase frequency, as a customer will only use their services every so often, and more about encouraging customers to spend more. A points-based loyalty program rewards customers equitably to the dollars they spend.

There are many ways to customize your approach, which gives a merchant a competitive advantage and additional brand awareness.

For example, using a simple points system is the most common loyalty program method. Frequent customers earn points, which convert into some type of reward. Whether it’s a discount, a free item, or special customer treatment, customers work toward a certain amount of points to redeem their reward. If you opt for a points-based loyalty program, keep the conversions simple and intuitive.

One example of a company using a points-based loyalty program well is Boloco. They relate to their audience by measuring points in dollars, and rewards in food items. Consumers swipe their customized Boloco card at every purchase and the card tracks the amount of money spent. Every $50 spent earns the customer a free item. Whether they choose a super large burrito or an extra small smoothie – it’s free after $50. This is an example of a company simplifying points with an accessible customer reward system.

Although a points system is perhaps the most common form of loyalty programs, it isn’t applicable to all business types — this type of loyalty program is most appropriate for businesses that encourage frequent, short-term purchases.

Finding a balance between realistic and desirable rewards is a challenge for most companies designing loyalty programs. One way to overcome this is to implement a tiered system. Offer small rewards as a base offering for being a part of the program, and encourage repeat customers by increasing the value of the rewards as the customer moves up the loyalty hierarchy. This helps solve the problem of members forgetting about their points and never redeeming them because the time between purchase and gratification is too long.

Virgin Airlines’ Flying Club inducts members at the Club Red tier, then moves them up through Club Silver and Club Gold. Club Red members earn miles on flights and get discounts on rental cars and hotels. Club Silver members earn 50% more points on flights, accelerated check-in, and priority stand-by seating. Club Gold members get double miles, priority boarding, and access to exclusive clubhouses where they can grab a drink or get a massage before their flight. The key is to offer benefits in the early stages to hook the customer into coming back. Once they do, they’ll realize that “gold” status isn’t unachievable, and offers awesome benefits.

The difference between points and tiered systems is that customers extract short-term versus long-term gratification from the rewards program. You may find tiered programs work better for high commitment, more expensive point businesses like airlines, hospitality businesses, or insurance companies.

Loyalty programs are meant to bring your customers closer to your business. In some circumstances, a one-time (or annual) fee that lets customers bypass common purchase blockers is very beneficial for business and customer alike. By identifying the factors that may cause customers to leave, you can customize a fee-based loyalty program to address those specific factors.

In 2011, eCommerce shopping cart abandonment hit a whopping 72%, and is still rising. This abandonment is often caused by customer shock after tax and shipping prices have been applied. However, E-Commerce giant Amazon, found a way to overcome this issue in their loyalty program called Prime. For $79 annually, Prime users get free 2-day shipping on millions of products with no minimum purchase, among other benefits.

This program is groundbreaking because it charges loyal customers while providing enough in return for frequent shoppers to realize the benefits. Amazon actually loses about $11 annually for each Prime subscriber, but makes up for it in increased transaction frequency that would not have happened without their elite benefits.

This type of loyalty program is most applicable to businesses that prosper on regular, repeat purchases. For an upfront fee, your customers are relieved of inconveniences that could impede future purchases.

Depending on your business type, your customers may find more value in non-monetary or discounted rewards. Any company can offer promotional coupons and discounts, but businesses that can offer value to the customer in ways other than dollars have an opportunity to connect with their audience by connecting with the needs of their audience.

Patagonia, an eco-friendly outdoor attire enterprise, profited from a loyalty program that discarded the points and discounts. The company employed its Common Threads Initiative, where they partnered with eBay to help customers resell their durable Patagonia clothing online through the company website.

This program builds on their brand of sustainability and creating a high-quality product, and it blends seamlessly with the company’s customer persona by providing a value that they really care about. Before implementing a loyalty program of this kind, be sure you’ve researched and understood your customer identity.

Strategic partnerships for customer loyalty, also known as coalition programs, can also be highly effective for customer retention and company growth. Again, fully understanding your customers and their purchase process will help determine which company is a good fit as a partner.

American Express has a huge partner base with multiple companies across the country. Their recent Twitter Sync campaign rewards customers for tweeting about them by syncing discounts and deals with Twitter #hashtags. Their cardholders have redeemed over $2,000,000 in rewards. Participating companies that are benefiting from their coalition with Amex include Whole Foods, Staples, and Zappos.

Fortunately, one doesn’t have to be a multi-million dollar credit card company to apply a partnership plan. This method is applicable on a much smaller scale, as long as you understand how individual customers experience your product or service, and what is a best fit for them.

For example, if you’re a dog food company, partner with a veterinary office or pet grooming business to offer co-branded deals for mutual benefits for your company and your customer. The objective audience owns a dog, thus any services that dog requires offers added value from your company. Providing customers with value beyond even what your company can offer will show that you understand them, and will enhance your network to reach your partners’ customers, as well.

Turning your loyalty program into a game is also an entertaining way to encourage repeat customers and, depending on the type of game you choose, help solidify your brand’s image.

GrubHub, an online food ordering and delivery website, uses Yummy Rummy in this way. Once customers place three unique orders through GrubHub, regardless of price, they get to play a game for a chance of winning free items. Players choose one of four cards and have a 25% chance of winning a free dessert, drink, gift card or other unique prizes.

This type of loyalty program has potential to backfire, however, if customers feel like your company’s pulling a fast one on them to win business. Executed appropriately, this type of program/game could work for almost any type of company.

Customer loyalty programs offer unique ways to obtain and retain customers. The business can create and encourage repeat visits from customers as well as capture and maintain an important customer database. In the end, this program shows your appreciation for your customers’ continued business. Alpha Card’s Gift and Reward Card Program, which we design and produce completely in-house, offers a customized approach and gives each merchant a competitive advantage and additional brand awareness. To find unique, customized ways to attain and preserve the business of customers, get more information about our gift and reward card program at giftcards@alphacardservices.com today! You won’t regret it!

Citations:

http://www.servistree.com/loyalty-program.html

https://exploreb2b.com/articles/5-reasons-your-loyalty-program-may-not-be-working-for-you

http://blog.hubspot.com/blog/tabid/6307/bid/31990/7-Customer-Loyalty-Programs-That-Actually-Add-Value.aspx

http://blog.getperka.com/perkapost/customize/?MS=LN4S1_CUSTOMIZE&LS=Email

New Surcharges by Merchants?

Due to the January 22, 2013 Visa and MasterCard Antitrust Settlement, beginning January 27, 2013 merchants in the U.S. region and U.S. territories will have the option of adding a surcharge to Visa and MasterCard Credit Cards at the brand level or at the product level.

Settlement:

Settlement Fund: $7,250,000,000. Covered Period: January 1, 2004 to November 28, 2012. If your business accepted payment by Visa or MasterCard debit and/or credit cards on or after January 1st 2004 to November 28th 2012, a class action settlement may affect you. Several lawsuits were filed by retailers in 2005 accusing Visa, MasterCard and American Express of fixing fees for processing credit and debit card payments and barring stores from directing their customers to use lower-cost payment options, such as credit cards with lower reward structures, which results in merchants paying higher interchange fees. An “interchange fee” is a fee paid by merchants to the credit card companies for each retail transaction that uses a credit or debit card. This fee ranges from between 1% and 5% of the transaction. On Friday, July 13th, the Plaintiffs reached a settlement with Visa, MasterCard and the major card-issuing banks (the “Settling Defendants”) in the amount of $6.05 billion. In addition, the Settling Defendants will reduce interchange fees that would otherwise be paid by merchants on Visa and MasterCard credit card transactions over an eight-month period. The Settling Defendants also agreed to significant rule changes which are aimed at reducing future fees and transactional costs. This portion of the settlement is valued at an additional $1.2 billion. The settlement still requires approval from the court. There may be additional settlements forthcoming between the class and American Express / Discover.

 Thus, the monetary portion of the Settlement consists of two funds. The first is a cash fund in the amount of $6.05 billion. Any person, business or other entity that accepted Visa or MasterCard credit or debit cards in the U.S. at any time between January 1st, 2004 and November 28th, 2012 may be eligible to receive a payment from the $6.05 billion fund. The second is a fund equal to a portion of interchange fees attributable to certain merchants that accept Visa or MasterCard credit cards for an eight-month period to start by July 29th, 2013. That fund is estimated to be approximately $1.2 billion. This settlement brought on processing rule changes that now gives merchants the right to apply surcharges or checkout fees.

Merchants can add Surcharges now?

Merchants must first notify Visa, MasterCard and their Acquirer of their intent to surcharge at least 30 days prior to implementing surcharging. Merchants should submit notifications to Visa at www.visa.com/merchantsurcharging and to MasterCard at www.mastercardmerchant.com.

For merchants that accept credit or charge cards of other payment network brands (i.e. American Express and Discover), surcharging practices are subject to a competitive “level playing field” limitation that depends on whether those payment network brands impose surcharge restrictions on credit cards and the merchants’ costs of accepting those cards. If the merchant chooses to surcharge, they must clearly disclose to their customers at the point of store entry or at the point of sale and the dollar amount of the surcharge on the transaction receipt.  The surcharge amount must be electronically printed on the cardholders receipt in order to allow the entire transaction (surcharge and amount of goods or services) amount to be submitted in the authorization and clearing records. Merchants must continue to comply with all applicable state laws that prohibit surcharging and state/federal laws regarding deceptive or misleading disclosures. Alpha Card’s Customer Service team is well aware of this new policy and is available 24/7 to assist merchants with understanding these new protocols.

Restrictions:

Surcharges can only be applied to credit card transactions. Currently, 10 U.S. States have surcharging restrictions including California, Colorado, Connecticut, Florida, Kansas Maine, Massachusetts, New York, Oklahoma and Texas. Merchants should consult legal counsel to determine whether their practices comply with relevant state law.

Will any stores add a surcharge? Should consumers worry about paying a credit card surcharge?

The National Retail Federation (NRF) has discussed the settlement with many merchants, and no merchant they contacted plans to surcharge. The NRF was not involved in the class action lawsuit. Most experts initially believed the mega retailers would skip the fee altogether or test it in markets as a way to gauge customer reaction before bringing it out on a larger scale basis.

However, NBC News contacted some of the country’s largest retailers. Wal-Mart, Target, Sears and Home Depot said they have no plans to add a credit card surcharge. Visa and MasterCard have rules that require retailers to handle credit cards the same way in all of their stores across the country. That means a chain with stores in any of the 10 states where a surcharge is banned would not be able to have a surcharge at any of its stores. Also, under terms of the settlement, a merchant who adds a surcharge to purchases on a Visa or MasterCard would have to do the same with American Express cards. But AMEX prohibits surcharge fees. Thus a merchant who accepts American Express as well as Visa/MasterCard would not be able to surcharge any of those cards. Very few retailers would be able to surcharge under the settlement, and the vast majority don’t want to surcharge even if they could. The merchant isn’t profiting from the fee. They are only allowed to cover their costs, not add a mark-up to the fee amount. Most experts believe that no merchant who does any sort of volume business is going to want to surcharge because it will drive away their customers and slow down transactions. In fact, most consumer advocates believe that except for some small retailers, a credit card surcharge is a non-issue in the short-term. However, some consumer advocates believe the surcharge will start to take into effect in a few years. For example, in Australia, where surcharging credit cards began in 2003, at first few merchants charged the fee. Now approximately one-third of the sellers there – including some hotels, supermarkets, department stores and utilities – charge extra to use a credit card.

What about disclosures? 

The below signage is provided as an example of surcharge disclosure. Merchants are free to develop their own signage that meets surcharging requirements and are permitted to combine brand messages if more than one credit card brand is surcharged. Merchants should verify relevant state laws before imposing a surcharge.

Point-of-Sale Disclosure Example

“We impose a surcharge of ____________ % on the total transaction amount on Visa, MasterCard and Discover credit card products, which is not greater than our cost of acceptance. We do not surcharge debit cards.”

The advocacy group Consumer Action has published a booklet on credit card checkout fees. It warns consumers to be on the lookout for these fees and advises them to express their discontent. The new rules from Visa and MasterCard require merchants who apply a credit card surcharge to post a notice at the store’s entrance. The exact percentage of the surcharge does not need to be disclosed until the point of sale. The customer receipt must list the amount of the surcharge. Online stores with a surcharge will not be required to have a notice on the home page. They only need to alert shoppers about the surcharge when they reach the page where credit cards are first mentioned. In most cases, that means the final step of checkout when the purchase is being completed.

What This Means for Consumers

Consumers will pay an additional fee when they use their credit card at merchants that decide to surcharge. Consumers should be aware there are limits to the amount merchants can surcharge. Merchants are permitted to apply a surcharge to only credit card purchases and cannot impose a surcharge for purchases made using a debit or prepaid card. If merchants intend to impose a surcharge on credit card purchases, they are required to notify customers before customers make an actual purchase. Merchants must disclose surcharge fees on every receipt – both in store and online. Consumers should carefully review receipts where checkout fees should appear.

If you do see signage warning of new credit card fees, there are some things you can do as a result, although none of them are convenient. You can undoubtedly protest with your wallet and take your money to a merchant that isn’t charging the fee. You can pay with cash or a debit card, but keep in mind you’re still paying a fee to cover the interchange, although not a new and separate fee. Finally, you can use a rewards card that gives you cash back, which would help to offset the added cost of the merchandise.

Not the end of the story

This settlement that allows merchants to impose a surcharge is only preliminary. The court has yet to issue its final ruling in this case. That’s expected later this year. Once that happens, various retailers and business groups plan to challenge the settlement. That could drag into late 2014. For now, the possibility that the settlement could be modified will most likely keep many businesses from instituting credit card surcharges. But in any case, as an Alpha Card employee, I can confidently state that Alpha Card Services knows the ins and outs of this issue and our Customer Service team is available to assist merchants with understanding this new policy.

Citations:

http://www.csbresources.com/visa-mastercard-settlement

http://usa.visa.com/personal/using_visa/checkout_fees/index.html

http://www.mint.com/blog/credit/is-your-merchant-charging-the-new-credit-card-surcharge-fee-0213/

http://www.pandce.proboards.com/thread/128063/visa-mastercard-surcharge 

Complications with the Expired Payroll Tax Cut

A payroll tax increase of 2%, due to the expiration of the middle class payroll tax cut, has hit employees who have received their first paychecks of the year, and has many employers determining how they will cut back in 2013. The tax increase came when Congress decided not to renew a temporary payroll tax reduction as part of the fiscal cliff negotiations at the end of December. The rate returned to 6.2% as a result. While the increase won’t likely have a significant impact overall on the economy, it could change buying habits and where people choose to shop, especially for lower-income households.

While it is unlikely that the income tax increase on those making $450,000 will have any negative impact on the economy, the lower paychecks for the working class are likely to not only reduce consumer spending in the short term but shift the mindset of consumers towards more saving – a dangerous concept in a period of low growth. Nearly a third of store managers say shoppers are cutting back on spending due to the payroll tax increase, according to a survey by retail industry research firm Merchant Forecast of 52 store managers in malls across the country. The survey was conducted the second weekend of January; store managers based responses on foot traffic and sales figures, among other things. That could be a good thing for discount retailers as more consumers look to them for savings. Off-price stores such as J. C. Penny’s and T.J. Maxx will gain customers as they decide to shop for less expensive stores and brands. Major retailers such as Walmart and Target that also offer grocery items could see an increase in those purchases as consumers seek discounts or switch to generic over brand-name products. The tax increase shouldn’t affect the spending choices for most middle- to upper-income families. However, payroll processors anticipate that there will be some slow growth in the economy due to the increase.

How Payroll Processors are Impacted, and Adapting

Payroll processors are warning that a two-month payroll tax-cut extension passed by the U.S. Senate would be difficult to implement. Payroll companies can react quickly to a yearlong extension for the first paycheck of 2012 or adjust the second paycheck to correct problems. But payroll providers emphasize that they don’t like a second consecutive year of December tax law changes or the Senate-backed two-month extension of the tax cut that could create unprecedented complications. Some payroll processors believe in the end, it is going to cost companies more money to pay for reprogramming systems.

Payroll companies believe the yearlong change would happen seamlessly even if Congress waited to pass a 2012 extension until the last days of 2011. The two-month proposal, however, could cause logistical problems. Some processors believe there is insufficient time to implement the separate limit for January and February, which would require significant programming changes. The changes could create substantial problems, confusion and costs affecting a large amount of employers and employees.

Enacting the 4.2% rate retroactively during 2012 would be easier to implement, because many payroll systems self-correct when tax rates change. Also, the $18,350 cap would create a new wrinkle that would cause difficulty and extra work during the payroll industry’s busy season. Still, many payroll processors state that regardless of the outcome, any changes should have minimal effect on merchants and their ability to process payroll with the latest tax rate.

Smaller businesses that use off-the-shelf software or prepare pay stubs by hand would also face difficulty complying with late changes. Merchants who work for themselves and pay both the employer and employee sides of the tax may have trouble ensuring they make the correct quarterly estimated tax payment. Large payroll providers would face complications as well, though will largely be able to manage the changes.

NBCNews.com video: ADP CEO on Processing the Payroll Tax
http://www.nbcnews.com/id/21134540/vp/50468134#50468134

Are Customer Service Complaints Justified?

Merchant Services and Financial Services companies market its services with three main strategies: telemarketing, outside sales agents, and partnerships with independent sales organizations. However, many merchants consider the face of these companies to be their customer service departments. With questions ranging from rate adjustments to terminal issues, merchants rely on customer service representatives to have in-depth knowledge of the issue. However, what many merchants do not realize is that customer service representatives are trained on certain aspects of the company, and must rely on other departments to answer questions they have not be trained to answer. When a merchant needs to be transferred because customer service does not know the answer, or if customer service answers a question incorrectly, many merchants consider this an indication of deceptive sales tactics.

Background of the issue:

The overwhelming theme among merchant complaints of customer service departments is reports of unexpected and “hidden fees”, non-disclosure of the service auto-renewal clause, and surprise over the cancellation fee, especially from merchants reporting several years of service beyond the three year agreement. However, with credit card rules and regulations changing often monthly, such as increase in transaction fees, it is difficult for many customer service employees to stay on top of these changes and report them to merchants who call in. Further, many merchants do not understand industry talk, often getting “lost in translation” when a customer service representative tries to explain new fees or terms of the contract. This merchant confusion often leads to misunderstandings in their services and contract, and discontent in the customer service representative.

Solutions to the issue:

When agents sign on their merchants, to avoid confusion they can help direct the merchant on whom they should call with certain issues. When it comes to understanding their monthly statements or changing bank information, merchants should call customer service. When the merchant is interested in ordering another terminal or is having terminal problems, contact Technical Support, or when they are interested in cancelling their contract contact the Cancellation Department, etc. The merchant needs to understand that customer service makes up a part of the company, and does not represent the whole company. Further, customer service represents a processor’s ability to communicate effectively with their customers. Positive attitude, ability to console disgruntled merchants, and ability to listen to and understand the merchant’s issues before responding to the question are important traits of a customer service representative.

Moving Forward:

Merchant Services and Financial Services can improve its ratings in customer service by improving policies in the common areas of merchant complaints and eliminating future grievances. For example, numerous merchants report that agents fail to disclose important fees and service agreement provisions when signing them up. By having the merchant review the contract, understand the terms and conditions, and negotiate with the agent, it prevents confusion and dissatisfaction on the part of the merchant. The company can further improve its ratings by eliminating unfavorable conditions in its service agreement and solving merchant issues before they become public criticisms. Merchants are strongly encouraged to fully read and understand the terms of their merchant account agreement before signing as the terms may vary widely based on the agent and/or ISO partner setting up the account.

Alpha Card Service is completely equipped to perform the proper due diligence with merchants. Our Underwriting team analyzes each new application carefully, confirming every rate and fee with the merchant.  Alpha Card’s customer service department continually exceeds expectations in ensuring a positive merchant experience.  For more information on how our customer service department can help you, please click here.

Citations:

http://www.cardpaymentoptions.com