by Ty Hardison

Will Interchange Regulation Push 884 Troubled Banks Over the Edge?

Will government Interchange regulation push 884 banks on the brink of failure over the edge?

According to a post, the number of banks on the Federal Deposit Insurance Corp.'s "Problem List" totaled 884. If these institutions are already hurting, will any survive the Feds plan to cap debit Interchange fees?

The Independent Community Bankers of America speculates that the exemption for small banks (<$10 billion) to the Fed Interchange price cap will fail to protect these institutions for the following reasons:

As the largest debit issuers, mega banks will influence networks to limit support of dual pricing schemes that make their cards less attractive to merchants.

Merchants will discriminate against any high-cost cards customers present.

Debit card … more

How will Google Compete in Payments?

In a recent post Google Takes a Bite of the Apple a comparison is made between the payment system subscription pricing model of Apple iTunes at a 30% fee and Google’s announcement of its One Pass at a 10% fee on the Android platform. The difference in the fee structure is attributed to the built in user base - Apple has 160 million existing iTunes users ready to go on its platform which the start up Google platform can not offer.

Facebook also charges a 30% fee for using Facebook Credits (with 500+ million users). So in this alternative payment space it appears that 30% is the top end regardless of number of users. Of course to buy Facebook Credits people would use PayPal. Wouldn’t it be better to simply use PayPal and skip Facebook Credits? Users would skip a currency … more

California merchants beware of ZIP code ruling

In California a ZIP code is personal identification information

In the case, Pineda v. Williams-Sonoma Stores, Inc., the California Supreme Court recently ruled that a ZIP code constitutes ‘personal identification information' as that phrase is used in California Civil Code section 1747.08 and that requesting and recording a cardholder's ZIP code is prohibited if it is requested as part of a credit card transaction.

The California Civil Code Section 1747.08 does indicate exceptions which would allow the ZIP code to be requested, including:

When the credit card is being used as a deposit to secure payment in the event of default, loss, damage, or other similar occurrence;

Cash advance transactions;

When the person, firm, partnership, association or corporation accepting the … more

A Guide to PCI Data Security and Compliance Requirements

PCI Data Security and Compliance Requirements

What is PCI?Specifically, the Payment Card Industry Data Security Standard (PCI DSS) prohibits the storage of the full contents of any magnetic-stripe, CVV2 or PIN data. Storage of this type of data is in violation of (PCI DSS) and the card company operating regulations. It also provides security requirements for transmitting card data.

PCI is a data protection standard and it provides a lot of detail on how that protection should be implemented. This means that PCI is not only good for protecting payment card data, but also protecting your business and any personally identifiable information you may have about your customers and employees.

The Financial Risks of a Breach are Real. As the rules & regulations now stand, once your … more

Will debit card fee limits be delayed?

Stories like Congress May Slow ‘Swipe’ Cap Amid Regulator Concerns and Debit card fee limits hit a snag reported on yesterday's hearings where Congress and financial regulators discussed delaying or revising debit card price cap rules as suggested by The Federal Reserve to comply with the Durbin amendment before they are set to take effect in April.

As I see it, this is really a showdown between mega-banks and mega-retailers. Small community banks and credit unions, small merchants in communities serviced by these community banks and credit unions and consumers should be most concerned about the hastily added Durbin amendment to the massive financial regulatory bill. We’ve raised concerns about the impact of the unintended consequences for both our merchant clients and … more

Vantage Card Services Celebrates 15th Anniversary

Trusted since 1996, Vantage Card Services celebrates its 15th year providing payment processing and payment systems to merchants, businesses and community banks.

Today Vantage is honored to service clients in all 50 states. Our philosophy of building a business one merchant at a time, with a focus on service and education - not contracts and gimmicks – is a growth strategy that has served us well over the years.

Vantage is home to world-class payment solutions and features the best value package of price, terms, service, solutions and incentives available in the payments industry. Our passion is providing you with high quality payment processing solutions that exceed your expectations and we are continuously working on improving our programs, technology and service offerings.

In … more

Recommended Reading for anyone looking to buy or sell Merchant Services

Wow! This post on titled 5 Deceitful Tactics Credit Card Processors Use To Get More Of Your Money really captures the very points Vantage has been making now for 15 years! Everyday we work with merchants being aggressively pursued by both fly-by-night organizations and big-name-mega banks who use all 5 Deceitful Tactics.

Tactic #1: The “Rate Game”

Tactic #2: The Binding Contract

Tactic #3: Early Termination Fees

Tactic #4: New PCI Fees

Tactic #5: The Bewildering Statement

This post does an excellent job of explaining the pitfalls of these tactics and recommending solutions. Of course you MUST pay attention, ask questions and read the fine print for yourself to identify these tactics. You can NOT rely on “knowing the rep” or the “ … more

Email Phishing Scams Indicators and Best Practices

Email “phishing” scams utilize fraudulent emails that appear to originate from legitimate financial institutions, transaction processors or other business entities that routinely conduct business with merchants.

Please review the following indicators and be on guard for scams:

Look closely at the sender’s email address – the “from” line in these fraudulent emails usually very closely resembles a legitimate address. Close inspection may reveal unusual characters or structure that may help confirm that the email is fraudulent.

Check email images and graphics – often images and graphics in these fraudulent emails are out of place or incorrect. This results when a fraudulent message attempts to reference an image from a legitimate entity’s … more

New Fees a Result of Regulation

According to The Wall Street Journal, banks are planning to introduce new fees on basic products like debit cards, ATMs and checking accounts in attempt to recoup revenue lost as a result of regulatory changes.

The Fed has proposed capping debit-card merchant fees, known as interchange. I’ve been concerned about the unintended consequences for small businesses and community banks. The proposed caps on debit Interchange fees will increase the cost of debit cards for consumers and potentially curtail debit card use (resulting in either lower sales volume or use of higher cost card types). On the drawing board are annual debit card fees of $25 or $30 and limits on the number of debit-card transactions that a customer can make each month or limiting the size of a purchase that a … more

Analyst Speculate on Impact of Fed's Debit Card Proposal

On Thursday, the Fed issued a proposal to set a price cap on debit card Interchange fees under new powers from the Dodd-Frank Act. Since then there has been much speculation on its impact.

Interchange fees are paid to the banks that issue debit cards when they are accepted for payment. The fees that Visa and MasterCard charge are excluded from this regulation. Yet in question is their business model. Are the card brands value-added service providers or has their success turned them into just another type of utility company that should be regulated by the government?

Visa and MasterCard made headlines on the news with both experiencing major stock price declines. Merrill Lynch speculated that banks will seek financial concessions from Visa and MasterCard to make up for lost debit … more