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A Payment Gateway enables online merchants to accept card payments and alternative payments securely by encrypting sensitive information and passing the transaction details to the acquiring bank. Acquiring bank then notifies the issuer bank that an account/card holder has requested a payment. A payment gateway facilitates the transfer of information between the online merchant and the payment service provider or the bank.
A number of payment gateways provide various screening tools to monitor transactions for fraudulent activity and tools to prevent fraud. Payment gateways also provide reporting facilities to merchants to keep track of their orders.
Following is a simple process that defines the payment process (credit card processing) behing a payment gateway whether with Areto Systems or not:
An Automated Clearing House (ACH) is an electronic network for financial transactions. It is generally used in the U.S. This clearing house usually processes large batched volumes of credit and debit orders. The first task done by the ACH is when a receiver grants the authorization for the originator to issue a debit or credit to an account. The receiver can be also known as the account holder,
The originator can be a specific individual person, a company or a merchant. Every account is identified by the bank account number and the bank’s routing number. The vital step of this payment process is the authorization of the receiver/account holder – a transaction may not be initiated without prior consent.
High risk merchants are defined as merchants whose business is more susceptible to fraudulent activity or their average sales volumes are higher than average. It is the norm that high risk merchants are more prone to thorough due diligence by the acquiring banks. This is due to the risk associated with such merchant accounts. So, what is a high risk merchant account?
Some of the reasons to consider a merchant as being high risk include:
Here at Areto Systems – online payment services, we have partnered up with several payment service providers who accept high risk merchants. Contact us or Join us now.
Finally, in October 2015 the much-debated Payment Networks’ Liability Shifty propagated with EuroPay, MasterCard and Visa (EMV) is coming into motion in the United States, and the US is moving towards upgrading its mobile payments security standards. It is a progressive development for financial organisations, banks, credit unions, retailers and credit card issuers and more.
Security is so much important. Retailers need to obtain new terminals that read credit cards designed with EMV computer chips. If they fail to do so, they will end up burdened with the liability for any fraudulent transactions at their stores. In this article, we will discuss and evaluate the new system, how it works and its effect on the business world. EMV basically stands for the three pioneers in the card issuing business, Europay, Mastercard and Visa. It is a standard that upgrades the security of a business transaction. Credit card companies will now issue credit cards equipped with computer chips. These chips appear as a small metallic square on the front the card.
Retailers have begun upgrading their checkouts by introducing new technology that reads the chips. Gone are the old days off swiping the magnetic strip of your credit card through the terminal. Now you will have to insert your card into the machine that will read your card, and approve your transaction.
This new system of mobile payments security prevents fraud, such that, it creates a new, unique code for each transaction, and this code cannot be used again. It does not share your card information with the retailor, instead, the EMV chip generates, a random, unique code. This system will prevent hackers to access your information. That will avoid the duplication and theft of credit card information.
Now let’s take a look at how this system will work. You will have to enter a PIN and provide additional information. However, most cards require a signature rather than a PIN. Users who do use any of the above mentioned “fancy” credit cards, which approximately makes up more than half of the US population, do not worry, you will still be able to make your regular transactions provided your card is equipped with new magnetic chips. In the instance, that a retailer has not upgraded his technology with a magnetic chip reader, you will still be able to make your payment using your EMV card.
However, through the old-fashioned magnetic strip. In case, a hacker gets access to your information regarding that particular transaction, you will not be liable for the cast. The retailer will incur it. That is because he did not upgrade his technology according to the updated card-reading system. Indeed, this new upgraded system will prevent credit card fraud and theft. Maybe not entirely, but it will most certainly increase the security standards. These standarts will serve to prevent fraud and credit card hacking. However, chip technology only serves to prevent credit card fraud at terminals largely in stores and retail markets. The reason is that the EMV chip users usually frequent stores, and online markets. In the instance that you misplace your card, lose it in a public place or it is physically snatched from, the person who holds it will be able to use it.
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Find out you need to have an e-wallet for playing online poker. If you want more information about electronic wallets, you can read our article about them.
3D Secure or 3DS is a protocol designed as another layer of security for online credit and debit card transactions (also known as CNP – cardholder not present). Visa developed it with the intention of improving the security of Internet payments. Visa company offered it to customers as the Verified by Visa (vbv) service. MasterCard also adopted services based on this protocol, under the name MasterCard SecureCode. JCB International did the same with J/Secure.
The 3D secure standard creates a ‘trust-chain’ between the merchant and the issuing bank. Thanks to this standard, under specific conditions, the issuing bank takes the charge-back liability from the merchant. This standard is very simple to use for the end-user (customer/consumer).
Prior to accepting the payment, 3D secure redirects the cardholder to a third-party website, where he/she needs to input a code or passphrase, which knows only he/she. If the authentication is successful (code is correct), the association gives the payment processor or gateway (such as Areto Systems) permission to go ahead to accept the payment. Certain information is also attached to the transaction which supports a shift in charge-back liability if conditions are met. It is important to note that 3D Secure or 3DS is not a standard service and merchants would require specific registration. End-users are also not “enabled” by default – the issuing bank must be able to support this protocol.
It is also important to note that 3Secure service is mandatory for any merchants accepting Maestro debit card (issued by Mastercard) since 2007. Failure to abide by this regulation might result in hefty fines on merchants. And in worse case scenarios might also result in the inability to accept online MasterCard payments. 3D Secure adds an authentication step for online payments. People should differentiate between 3D Secure 3DS and the Card Security Code. It can be a bit confusing. The Card Security Code is a short numeric code on the back of the card.
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Facts to consider before selecting a payment provider
An acquiring bank – also known as an acquirer. It is a bank or a financial institution that processes credit and/or debit card payments. These payments are for products or services on behalf of an online merchant. Acquiring Banks accept transactions from the card-issuing banks within an association being Visa, MasterCard, Discover, American Express, Diners Club, JCB and others.
The acquirer underwrites the merchant requesting to accept online payments. It means that this is a vital part in the payments acceptance process. As part of the process, prior to signing an agreement between the merchant and the acquiring bank, the bank usually conducts due diligence in order to ensure that the merchant is genuine and is able to support their business in order to avoid fraudulent activity and also cover the consumer’s interest.
See also:17
Payment gateway – what do you need to know about it?
What is a high risk merchant account
What is an automated clearing house
4 Tips how to prevent chargebacks
A reserve is an amount of cash retained by the payment provider or acquiring bank. This is due to the risk associated with a merchant account. Therefore a fixed monetary amount retains indefinitely and we call it a fixed version of reserve. As opposed to a rolling reserve, funds in a fixed reserve are never released, thus it brings further disadvantages to a merchant.
In conclusion, the usual reasons why online merchant must have it :
What is the use of an ewallet? Well, merchants or buyers use ewallets to keep electronic money, just in the same way that one would keep his or her physical money in a physical wallet. Once funds are stored in your ewallet, you can then use your ewallet to purchase from thousands of web sites selling anything from tangible products, services and also entertainment, such as betting, poker and so forth.
Some of the most widely used ewallets are MoneyBookers, Neteller and EcoCard. Several online shops and also online casinos accept them. All merchants who sign up for such ewallet accounts via Areto Systems benefit from very significant reductions in processing fees and setup costs. Also, Areto regularly seek to increase their partners by partnering with other valuable e-wallets.
So, why use an electronic wallet? It gives one various ways to pay when it comes to paying online. Ewallets provide an easy and safe way of purchasing or receiving payments. To start, you need to place funds into your account. Normally this is done via debit card, credit card, or wire transfer. Some e-wallets provide other services and different benefits.
So, thanks to the ability to purchase and accept payments with your e-wallet through AretoPAY– making payments and receiving payments has never been easier, safer and cost-efficient.
DISCLAIMER
Areto Payment Processing Services AG is a licensed Financial Intermediary and member of the VQF, a self-regulatory body approved by the Swiss Financial Market Supervisory Authority (FINMA) for the supervision of the financial intermediaries.
