B2B Vault: The Biz To Biz Podcast

Demystifying Payment Processing 101

Gateway vs. Merchant account

What is a gateway?

Popular – gateways – but there are many now - Auth.net – NMI

What is a merchant account?

Understanding the difference is crucial for businesses.

A payment gateway acts as a virtual terminal, sending transaction data between the customer, the business, and the payment processor.

Uses – virtual terminal - text – email requests, invoicing, e-commerce.

A merchant account is a “bank account” that allows businesses to accept credit cards,ach, and other electronic payments from customers, and then that money goes into the business operating account.

Choosing the right gateway and merchant account will ensure smooth – secure – payment processing.

Also, setting up your security settings, velocity settings on your VT -

In today’s digital age – understanding how you can get a customized solution for your business is of the utmost importance –

Today – everyone is looking for a bespoke – custom – payment platform to do everything they need to do.

So how do you choose your technology?

Then you need a merchant provider that works with your business type.

SEAA 2023

Southeast Acquirers Association, Incorporated, is a non-membership, 501(c)(6) trade association.  SEAA was formed in 2000 and produced the first SEAA Annual Conference in 2001.  Since then, SEAA has hosted thousands of industry professionals and presented hundreds of hours of education networking with the top vendors in electronic payments.

Sunday night: We had some nice entertainment at the hotel – got to meet up with many old friends at the event every year.

Shoutouts – Dale Laszing from the GreenSheet, John Shipley, Jamie Garfield, John McCormick, Sonny Wooten, and the rest of the board members of the SEAA!

Monday: Demo day and in meetings, we looked at some new technology and software and met with and possibly new vendors.

New and exciting technologies always appear on the scene; we take our time to evaluate each one and then do a test before we get knee-deep into something.

The exhibit hall has over 130 vendors – to speak with, network, and have food, drinks, coffee, and snacks.

A lot of talk about Self-Serve Kiosks, Robots for restaurants, and electronic signage where business owners can make a monthly income from that. – Everyone is talking about cash discount and merchants paying 0%.

On Tuesday: We had the keynote speaker, and there was a tribute to Derek Vowels, who recently passed away – he was president of the SEAA for several years, and Derek and I worked together as he was employed by a few vendors that we work with.

The main speaker was Mark Walberg – many people thought it was the other Mark Wahlberg – the famous actor and he really played it off with pictures.

Marks’ story was quite interesting – currently, he is the host of the show Temptation Island – one of my favorite reality TV shows – after a busy day nothing like watching a show that is entertaining with dating drama –

Mark's talk was about how he was able to connect with people, and that has been part of his success.

He spoke about Quitting:

Q - Quit – Get quiet and label your feelings

U – Unplug – from that feeling for 10 minutes

I – Instead - do anything that brings you joy

T - Trust – that you’ll forget to go back and worry

He also talks about service – we are in a service industry

We are the best version of ourselves when we are IN SERVICE TO OTHERS

At Nationwide Payment Systems – we are here to Serve our Clients/Merchants!

Then he spoke about making presentations:

It was cool to meet Mark, speak with him and his wife later in the day at the cocktail hour, and share a laugh about all the reality tv shows – I recorded the show's first episode already.

Later that day, we attended – lunch sponsored by American Express – shout out for having vegetarian options –

We attended several breakout sessions – they were talking about software and referral partnership, and the last one was about Banking as a Service – which we are exploring because this is a service that merchants are definitely leaning towards.

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Subscriptions, Recurring billing, and Memberships get a gut punch from the FTC.

The FTC – Federal Trade Commission has proposed a requirement for having a “click to cancel” button available on websites.

Making it as easy to cancel as it was to sign up in the first place.

Visa and MasterCard issued a rule – mandate on this back in 2020 – and went into effect in June 2022.

Here is how it affects businesses:

If you do NOT have a cancellation button on your site – cardholders can charge back up to 3 payments usually – the cardholder’s bank – card issuer will automatically do this. Now merchants can fight that if they can prove the customer did use the services and has proof and only lose 1 chargeback.

If you have a cancel button – then it's limited to one chargeback.

What can and what should merchants do?

Have a cancel button.

Enroll in RDR – rapid dispute resolution – cuts down on chargebacks.

Cancel customers who are not logging in at least once each month or send them an email.

Businesses will complain about this as they are losing revenue – but if the FTC rule kicks in – they could get hit with a ton of fines for not complying.

In 2020, a new Visa mandate went into effect that changed the rules of subscriptions. Merchants must allow customers to cancel online, notify them before each payment is processed, and link to the cancellation page in these notifications.

Full coverage of this mandate can be found here, but here are the key points:

Merchants must provide a digital receipt when a customer enrolls that includes the agreement terms, timeline, and amounts for future payments.

Customers must be able to cancel their subscriptions online, even if they didn't enroll online.

The billing descriptor for recurring charges must clearly indicate the merchant and what the charge is for.

The customer must be notified by email or text message at least 7 days before a free trial period ends, and this notification must include a link to the cancellation page.

Mastercard created changes to its rules with largely similar requirements. The last of these changes, which implements the rule about informing new customers about the timeline and amount of future payments, will go into effect on June 9th, 2022.

Visa Trial and Subscription Mandate Explained:

Visa Subscription Mandate provides rules for enhanced transaction disclosure, consumer cancellation options, dispute rights, and participation monitoring.

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What is going on at PayPal, Stripe, and Square?

So there is a buzz about the following.

All 3 companies have a new policy

Processing fees will no longer be refunded to your account when you issue a full or partial refund to your customers.

They are all doing this to match industry standards.

What is the industry standard?

If you are using a Payfac – like PayPal – stripe – square etc. – they are a payment facilitator, and they are the merchant of record – you do NOT have a merchant account.

When you process a transaction it is authorized and settled.

If you have a merchant account:

Transactions are authorized and settled – ONCE DAILY

So if you make an error – charge someone $100 instead of $10 – you can void the transaction.

Or a customer pays an invoice and overpays by mistake, uses the wrong card, or cancels an order from your website – you could VOID that transaction because it is in the same batch.

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💻 Connect with us on LinkedIn for industry insights and professional networking: https://www.linkedin.com/showcase/b2b-vault-the-payment-technology-podcast/

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Welcome back, YouTube fam! Today, we have an exciting video lined up for you, diving into the intricate world of payment processing for startups. Whether you're an aspiring entrepreneur or a seasoned business owner, understanding how payment processing works can be the difference between success and failure. So, grab your notepads and get ready to immerse yourself in this knowledge-packed episode!

Payment Processing for Startups: The Key to Seamless Transactions

Have you ever wondered how online transactions happen seamlessly? How do your favorite e-commerce stores effortlessly process payments, leaving you satisfied as a customer? It all comes down to payment processing, a vital aspect of any modern business. Today, we'll explore the ins and outs of payment processing for startups, demystifying this crucial process and helping you make informed decisions for your own venture.

Understanding the Payment Processing Landscape

Before delving into the nitty-gritty, let's take a moment to understand the payment processing landscape. In a nutshell, it involves the entire journey of a transaction, from the moment a customer initiates payment to the point where funds are transferred securely. We'll explore the various players involved, such as payment gateways, acquiring banks, and processors, and shed light on their roles in this complex ecosystem.

Choosing the Right Payment Processor

As a startup, selecting the right payment processor is paramount. But with a myriad of options available, how do you make the best choice for your business? We'll walk you through the essential factors to consider when evaluating payment processors, including transaction fees, security measures, integration options, and customer support. Armed with this knowledge, you'll be well-equipped to find the perfect payment processing solution tailored to your startup's needs.

Ensuring Security and Compliance

With cyber threats on the rise, ensuring the security and compliance of your payment processing system is crucial. We'll discuss the various security measures you should implement to safeguard your customers' sensitive data, such as encryption, tokenization, and fraud detection. Additionally, we'll explore compliance standards, such as PCI DSS (Payment Card Industry Data Security Standard), that your startup must adhere to in order to maintain a secure payment environment.

Optimizing User Experience

User experience can make or break a business in today's fast-paced digital world. We'll share valuable tips on optimizing the payment experience for your customers, reducing friction, and increasing conversion rates. From intuitive checkout flows to mobile-friendly designs, we'll uncover strategies to delight your customers and leave a lasting impression.

And there you have it, folks! A comprehensive exploration of payment processing for startups. By understanding the intricacies of this vital process, you're better equipped to make informed decisions that can drive your business forward. If you found this video helpful, be sure to give it a thumbs up and share it with your fellow entrepreneurs. Don't forget to subscribe to our channel for more insightful content. Until next time, keep innovating, keep growing, and keep making those payments seamless!

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Payment Trends & News May 2023

What stories are in the news about payments that affect business owners?

Social Media Links:

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💻 Connect with us on LinkedIn for industry insights and professional networking: https://www.linkedin.com/showcase/b2b-vault-the-payment-technology-podcast/

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FedNow is a real-time payment system developed and operated by the Federal Reserve Banks of the United States. It is designed to provide individuals and businesses with the ability to send and receive instant payments directly from their bank accounts 24 hours a day, 7 days a week, and 365 days a year. The purpose of FedNow is to enhance the speed, efficiency, and accessibility of the U.S. payment system, allowing faster and more convenient electronic funds transfers.

With FedNow, individuals and businesses can make instant payments using mobile devices, computers, or other electronic channels. The system aims to reduce the reliance on traditional payment methods, such as checks and Automated Clearing House (ACH) transactions, which can take several days to process.

FedNow is expected to benefit many users, including consumers, businesses, and financial institutions. It can enable faster bill payments, person-to-person transfers, business-to-business payments, and other types of transactions. By offering real-time payments, FedNow aims to improve the overall efficiency and competitiveness of the U.S. payment system, bringing it more in line with the capabilities offered by other countries' instant payment systems.

Allen & Justin discuss the end-of-life journey of QuickBooks POS (Point-of-Sale), an iconic software that has served countless businesses. Discover the reasons behind its retirement, the implications for users, and the alternatives available to navigate this transition seamlessly.

🚀 Watch this eye-opening video to discover how the government's actions have impacted the cryptocurrency landscape in twelve months! 📉

In today's episode, we delve into the alarming influence that the government has had on the world of Bitcoin and cryptocurrencies in 2023. Brace yourself for a rollercoaster of revelations as we uncover the shocking truth behind these destructive forces. Prepare to have your perspective forever changed!

🔹 Unveiling Government Regulations: We explore the extensive web of regulations that have been imposed on the crypto industry, uncovering the unintended consequences and stifling effects on innovation.

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