Confusion in Payment Processing

Posted on February 22, 2012 by Admin

payment processing confusionConfusion abounds in electronic payment processing these days, so we‘d like to provide you with some background and clarification. We hope you find the following both helpful and useful.

At a high level, payment consultants are pointing out that CEOs, CFOs, CIOs, and CTOs should be concerned about EFT as it relates to POS, ATMs, MOTO and CNP – especially when they run in PCI and HA environments. TCO and ROI numbers can conflict, and now that S2 is gone and ISD and S1 are ACI, maintenance costs can look like an entire country’s GDP!

So – can your CPU, RAM and DB handle your TPS needs? Do you need help with IPM or Base II files for your EOD? And what about EMV and NFC?  How will payment switch changes impact ISO-8583 and XML, JSON and WS API message flows? What about HA DB’s? What about ISOs and processors like TSBA, TSYS and FDR? Will V.me be a factor as many believe it will?

Dave Bergert

Dave Bergert: OLS CTO CISSP, CISA, CPISM/A, CPP

Well FYI – OLS’ CTO, David Bergert, responsible for DEV and IT TLC, says answers lie in whether you’re B2B or B2C.

For B2C, DB recommends you prepare now for EMV and NFC for EFT at the POS. It’s proven in the UK and EMEA, and thanks to MC and VISA, it will happen in the USA.

For B2B, if you’re stuck with MICR, DB suggests moving your ABA and DDA to ACH using an ODFI. If you’re migrating, OLS can convert your CTREE or VSAM TLF’s to RDBMS. And if you’re an ISO wanting to board more MIDs and TIDs, check out OLS’ GW VT and API for CNP.

Confused?  You’re not alone. The good news is, the payment consultants at On-Line Strategies understand and even communicate like this among themselves every day! And of course, together they recommend you make the call to OLS PDQ for the G2 and 411 on EFT before it’s too late. They promise positive change in your EBITDA, perhaps as early as Q2 or Q3, and firmly believe you may even become an MVP.

Give OLS a call to schedule a no-cost consultation with one of our payment consultants today to get some straight talk about implementing or migrating to a payment processing system that best matches your business. Why not call today (972) 905-4447, or visit our site, www.OLSDallas.com? And for the latest news within the payment processing industry, we invite you to connect with us via our growing social communities.

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Payment Consultants Designated as CPPs

Posted on February 1, 2012 by Admin

Electronic Transactions Association Designates David Bergert and Ron Barker of On-Line Strategies as Certified Payments Professionals (CPPs)

Dallas (PRWEB) January 31, 2012

Payment-ConsultantsThe Electronic Transactions Association (ETA) is pleased to announce that David Bergert, CTO of On-Line Strategies, and Ron Barker, Business Development Director of On-Line Strategies, have been granted the designation of Certified Payments Professional™ (CCP). By successfully meeting the rigorous certification examination requirements, have joined an exclusive community of electronic transactions professionals and payment consultants who have earned this distinguished certification. In doing so, Mr. Bergert and Mr. Barker bring the highest level of expertise and distinction in electronic transactions to OLS.

“I’ve always been proud of our leadership team and feel their industry expertise surpasses what any other organization in the payments space can offer,” said Terry Richards, CEO of OLS. “The addition of CPP certification for two of our MVPs further attests to the value of what OLS can and does bring to our current and future customers.”

Recognizing the unique skills and special knowledge required of electronic transactions professionals, ETA launched the certification program in 2011. In addition to meeting the program’s education and experience requirements, those awarded the CPP™ designation must complete a minimum of 36 hours of industry-related continuing professional education every three years.

More and more employers, faced with critical staffing decisions, consider the CPP™ credential an added value to current and prospective employees. Further, a competent CPP-certified staff is crucial to maintaining a competitive advantage in the field.

ABOUT ON-LINE STRATEGIES
Since 1996, On-Line Strategies has provided the financial services, retail and healthcare industries with mission-critical payment and adjudication systems, strategic and technical business process consultation and production support services. Many of North America’s most demanding online and web-based processing environments depend on OLS for open architecture solutions and legacy application alternatives that offer proven performance, flexibility and the lowest cost of ownership.

ABOUT ETA
The Electronic Transactions Association is an international trade association representing more than 500 companies who offer electronic transaction processing products and services. ETA’s mission is to advance the payments industry profession by providing leadership through education, advocacy and the exchange of information.

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Is Your Customer Loyalty Program Worth the Expense?

Posted on January 23, 2012 by Admin

Customer-Loyalty-ProgramIn its Loyalty Census for 2011, the industry watchdog COLLOQUY announced that for the first time in history the number of customer loyalty program memberships in the United States topped 2 billion. However, even though American households had signed up for an average of 18 “clubs,” they were only actively participating in eight of them. In fact, despite $48 billion worth of rewards, points, and bonus miles being dispensed, roughly one-third of this figure went unused!

Since a customer loyalty program is a major company expense item, if it’s not delivering a solid ROI, then some rethinking should be performed. In an article entitled “Tips for 2012: Making Your Loyalty Program Worth the Expense”, Thad Peterson, of Market Platform Dynamics, provides some excellent questions that should be asked by C-Level executives as they reexamine their customer loyalty program initiatives.

Why do we have a customer loyalty program?

If the response is one you might hear from a teenager, “Because everyone else is doing it,” then some deep introspection is necessary. If there’s not a way to show that it is a strategic asset making a significant contribution to the value or bottom line of the company, then why is it being done?

What does the program really cost?

In addition to program administration, marketing expenses, and point liability, don’t forget to calculate consulting fees, redemption management expenses, statementing costs, direct and indirect training and IT costs, and customer call center costs. Also, there are opportunity costs for the possible overcommitment of resources toward customer loyalty instead of, for example, new customer acquisition.

Are the program expectations matching the actual performance?

Is the quantifiable financial return exceeding the total program costs? What affect is it having on brand awareness for your most valued customers?

Are we effectively using the data that the loyalty program creates?

If nothing is being learned, then why collect it? Client intelligence should be used intelligently for the purpose of improving your product/service offering and overall customer experience.

Finally…What do customers really think of the customer loyalty program?

As Peterson mentions, “Do they see it as a valuable component of the product offering, or do they see it simply as a giveaway that they are entitled to because every issuer offers a points program? Is the program meeting their needs in terms of rewarding them appropriately when they exhibit the right behavior, or are reward thresholds too high to be meaningful?”

While many opportunities are being missed by merchants and retailers, customer loyalty comprises just one component of the customer relationship. Every area of the payments industry is being challenged, changed, and enhanced. And, according to COLLOQUY, there will be “a handful of smart retailers taking advantage of technology… (who will use) loyalty as a distinguishing benefit.”

For assistance with assessing how the latest technology can be used to deepen your relationships with your best customers and bring an excited batch of new customers through your door, give On-Line Strategies a call at (972) 905-4447 for a no-cost consultation. One of our loyalty specialists will guide you through the labyrinth of customer loyalty programs and find the right strategy  for your company. For more information visit our site, www.OLSDallas.com, and connect with us via our growing social communities.

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The Case for Virtual Payments

Posted on January 18, 2012 by Admin

As banking fees and postage rates continue to rise, the factors of cost and convenience are making the case for virtual payments. From mobile payment apps, to direct deposits on virtual cards, to paperless accounts payable, consumers and businesses alike are adopting an alternative payments commerce lifestyle. Moving money without paper, cards, or ATMs means faster access to funds and better, more accurate accounting for businesses and their customers.

For more information about the benefits of virtual payments to your organization, contact OLS for a no-cost consultation. Remember, the easiest way to find our latest videos is to subscribe to our YouTube channel.

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Virtual Payments Won’t Work!

Posted on January 16, 2012 by Admin

Virtual-PaymentsAccording to a recent report, “Money: The Digital Tipping Point”, PayPal predicts that Great Britain will be a cashless society by 2016. Not only will consumers have no need for cash, it’s forecasted that they won’t even need their wallets. This claim seems far-fetched, but every month more and more retailers are making the decision to accept various forms of digital payments. However, whether the transaction at a store is “cardless” or whether it is made online without a card number, virtual payments won’t work unless the merchant has a current and viable payment switch platform.

A Cashless “App”etite

Mobile apps are creating new ways to conduct retail purchases. One such example was implemented last summer by PizzaExpress, a restaurant chain based in London. Their mobile app enables loyal diners to view past receipts, pre-book a table at their favorite location, and pay their bill directly via their mobile device. Customers, via PayPal’s secured payment services, simply enter a unique 12-digit code printed on their receipt, and then conveniently walk out of the restaurant since virtual payments are seamlessly integrated into each restaurant’s POS system.

Less Jingle Heard in Holiday Shopping

Everyone who has bravely ventured to the malls after Thanksgiving is familiar with unsympathetic crowds, long lines at the registers, and the disappointment of sold out featured items. What if retailers offered free Wi-Fi to their shoppers, allowed customers to digitally order items that they saw in their stores, and even had “cashiers” taking payments on mobile devices around the store so that consumers didn’t have to wait in line? It sounds like something out of The Jetsons, but this is precisely what is happening at European retail stores.

A New Kind of Gold, Silver, and Bronze

The 2012 Summer Olympic Games in London may become a high-tech proving ground for mobile commerce. Companies such as Apple, Nokia, and Visa are partnering with Olympic officials and merchants by installing contactless payment systems in order to alleviate crowd congestion. An estimated 70,000 retailers are already equipped with NFC (“near-field communication”) terminals so that patrons can conveniently make purchases with their smartphones. Visa, the “official NFC payments sponsor of the Games,” is making its mobile app, iCart, available to the masses, which essentially turns a mobile device into a payment device.

The Third British Invasion is Coming

Paul Revere warned the colonists in the eighteenth century. The Beatles changed rock and roll forever in the 1960s. Today, American merchants need to prepare themselves for the consumer demand and technological advances that are quickly making their way across the pond. U.S. retailers will soon see fundamental shifts in payment transaction origination and acceptance, and should carefully plan their POS infrastructure investments over the next five years.

The good news is that they don’t have to fight the Battle of Virtual Payments alone. The experienced team at On-Line Strategies can arm online and brick-and-mortal merchants with strategic information, as well as with the successful implementation of transaction engines and next generation payment switch platforms. Contact us for more information at www.OLSdallas.com or call (972) 905-4447 for a no-cost consultation. Also, we invite you to connect with us via our growing social communities.

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NFC and EMV Technology Won’t Work!

Posted on January 12, 2012 by Admin

NFC-EMV-TechnologyA more mobile, wireless America is quickly becoming a reality. Smartphones are allowing us to make contactless electronic and alternative payments, enabling us to digitally store our credit cards, retail loyalty cards and coupons, and even doubling as hotel or house keys.  This is all possible because of advances in short-range wireless connectivity called “near field communication” (or “NFC”) and EMV technology, the standard set of specifications for smart card payments and acceptance devices. However, what merchants, sellers, and retailers need to know is that NFC and EMV are “DOA” unless there’s a viable and up-to-date electronic payments transaction engine and switch platform working for them behind the scenes.

Swiping Away the Swipe

EMV and NFC are here and will be adopted in the United States. According to Mercator Advisory Group,  shipments of smartphones enabled with NFC should rise to 510 million between 2012 and 2015. NFC is often called an “application enabler,” since it opens various roads of communication and transactions in a quick, user-friendly way. Much like ID badges and key FOBs have done in the past, a “virtual handshake” is initiated between two NFC-enabled devices that are close together.  Retailers that embrace this contactless technology will not only provide an additional source of payment convenience, they will also foster greater loyalty from their customers.

For example, let’s say you own a coffee shop. Customers can stop in for a cup of their morning joe and be in and out quickly by just holding up their mobile device to the point of purchase processor. Using contactless NFC technology, retail marketers can provide online incentives, coupons, and discounts that may be unlocked by loyal customers.

Knowledge is Power

In addition to consumer convenience and simplicity of use, NFC benefits consumers and retailers alike with the opportunity to gather valuable information. For instance, a customer in a mall scans a shirt’s NFC tag with their mobile device to gather more information, such as availability in another store location or perhaps to find the lowest price.

On the retailer’s side, once a customer receives the requested product data, the customer’s interest in the product can then be made known to the company.  This intelligence leads to a deeper knowledge of the shopper and could help generate effectively targeted promotions and incentives that may assist with increased foot traffic and recurring purchases.

Safe and Secure

A 2009 study by Aite Group discovered that credit-card acceptance issues abroad cost $4 billion in missed transactions in 2008, or about half a billion in revenue for card companies. That’s a main reason why, in August 2011, Visa announced plans to accelerate smartchip migration and adoption of mobile payments in the United States through retailer incentives. In order to ensure interoperability between chips and terminals, EMV technology was developed (the name comes from the three developing companies, Europay, Mastercard, and Visa – aka “EMVCo”). EMV chip cards and phones contain embedded microprocessors that provide strong transaction and information security features that were not possible with traditional magnetic stripe cards. These security credentials help to prevent card skimming and card cloning, common ways magnetic stripe cards are compromised and used for fraudulent activity. In an EMV transaction, the card is authenticated as being genuine, the cardholder is verified, and the transaction includes dynamic data that is authorized online or offline.

Proper Planning and Timing is everything for Merchants

The United States will soon see fundamental shifts in alternative payments, including transaction origination and acceptance. According to George Peabody of Mercator Advisory Group, “The expected EMV rollout in the United States will require no little choreography on the part of merchants, acquirers and issuers because it will touch every payment device. Given the coincident timing of the EMV announcement and the arrival of NFC, merchants have to carefully plan their POS infrastructure investments over the next five years and more. Timing is everything.”

The good news about this complex alternative payments infrastructure update is that we, at On-Line Strategies, can help ensure that your electronic payments system is speaking the same language as the NFC and EMV technology.  We are the transaction engine and the next generation payments platform that makes alternative and emerging payment work. Contact us for more information at www.OLSdallas.com or call (972) 905-4447 for a no-cost consultation. Also, we invite you to connect with us via our growing social communities.

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Virtual Wallet Won’t Work!

Posted on January 10, 2012 by Admin

Virtual-WalletAccording to Fast Company, “The days of carrying around a wallet thick enough to make George Costanza blush are coming to an end.” Fortunately, relief from the extra stress and strain on our lower bodies from carrying around all of our credit cards, debit cards, loyalty cards, cash, and coupons is being granted to us as we move from physical to virtual wallets.  While it’s mind blowing to think of the numerous ways that a mobile wallet can help us personally with our budgeting and finances, it’s important to remember electronic and alternate payments cannot be successfully made from these apps and devices  unless the merchant acquirer possesses the proper payment switch and next generation transaction platform.

Many Variations Being Offered

There are many variations of mobile wallets. Some house data as an app on the mobile device’s main operating system. Others like Google Wallet place it on a separate chip that serves as a secure wallet. Still others, such as those offered by PayPal and SCVNGR’s LevelUp, will store your data in the cloud instead of on your device.

Pioneering Companies are Finding Niches

While Google Wallet certainly has the resources to be a virtual wallet market leader, other companies are battling for market share by offering creative and convenient features. Mint’s mobile solution pulls in and connects all of your accounts, such as checking, savings, credit cards, investments, loans and mortgages. In addition, it delivers personalized financial management tools, such as budgeting at your fingertips. An up-and-coming challenger to Mint, Adaptu, takes it a step further and tells you – at a glance – if you can afford to buy something with their predictive spending feature.

Proper Foundation is the Key for Merchants

More and more merchant acquirers are preparing to connect these virtual wallets to their POS systems. However, these lucrative opportunities are simply pipe dreams if they are relying upon electronic payments technology that was purchased decades ago. Being a step (or two) behind consumer technology can mean the difference between making the sale or not.

That’s where On-Line Strategies’ expertise comes into play. We help ensure that your electronic payments system is speaking the same language as the latest consumer technology. Once an electronic or alternate payment is initiated from a mobile wallet, for example, our transaction engines and payment switch platforms virtually “hold the transaction’s hand” securely from acceptance and authorization, to settlement, all the way to finalization and completion.

Our transaction engine and next generation payment system platform understand the intricacies of emerging consumer payment trends such as virtual wallets. Contact us for more information at www.OLSdallas.com or call (972) 905-4447 for a no-cost consultation. Also, we invite you to connect with us via our growing social communities.

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Mobile Payments Won’t Work!

Posted on January 5, 2012 by Admin

Mobile-PaymentsWith the combined market for all types of mobile payments expected to reach more than $600B globally by 2013, it’s clear that the payment convenience offered by mobile is here to stay. Instead of paying with cash, check, or credit cards, consumers are using mobile devices for buying a wide range of products and services, such as digital goods (music, ringtones, online gaming subscriptions), transportation fare (bus, subway, train, parking meters), and hard goods such as books, magazines, and tickets. While it’s sexy and exciting to observe all of the new technological advances in the world of electronic payments and alternative payments, one important factor to remember is that none of it is possible without a next generation transaction platform.

Credit Card Companies Got the Memo

With an increasing number of tech-savvy consumers using their smartphones and mobile tablets to make online purchases, credit card companies are entering the arena. Visa’s “V.me”, scheduled to launch in 2012, will allow customers to shop safely and conveniently online or on their mobile device without having to share their card account information with sellers when they pay. Users simply have to enter in a username and password. Plus, it’s flexible. V.me will support any major credit or debit card you accept.

Major Banks Have Caught the Bus

Not to be left behind at the station, major banking institutions are announcing their support for mobile payments. Chase Paymentech, processor of nearly 50 percent of all Internet payment transactions, offers businesses mobile processing solutions that can turn any laptop or smartphone into point-of-sale terminals which can accept debit and credit cards, EBT, EFT, and alternative payments. Bank of America’s Mobile Pay solution offers a similar service for small businesses.

Alternative Payments Jump into the Mainstream

According to a recent survey, 80% of consumers want alternative payment methods such as PayPal, Bill Me Later, Google Checkout, Amazon Payments, ISIS, and GreenDot in addition to credit card options online. The same study estimates that “an additional $109.8 billion would be spent by offering a ‘no credit card required’ way to pay online and at merchants.” New entrants like Boku are providing stiff competition by offering shoppers innovative, convenient, and cost-effective payment options. Boku allows patrons to buy digital goods and services with their mobile number, and the charge shows up on their mobile bill.

The “X’s and O’s” of Mobile

Initiating a payment, however, equates to the opening kickoff of a football game. To win the game, a team has to drive down the field and score. That’s where On-Line Strategies’ expertise comes into play. We serve as the quarterback by ensuring that each of your mobile payments:

  • Is accepted and guided to where it needs to go.
  • Is in the correct form or format for processing.
  • Is safe and secure, protected from fraud.
  • Is properly authorized, settled, and finalized.

OLS has the switch, transaction engine and a next generation payment system platform that understands emerging payment technologies.

As the market continues to find creative ways in which to apply mobile payments for consumers, On-Line Strategies will continue to ensure that these transactions are safe, secure, and completed for merchants of all types. Contact us for more information at www.OLSdallas.com or call (972) 905-4447 for a no-cost consultation. Also, we invite you to connect with us via our growing social communities.

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Electronic Couponing: More Than Just Downloading

Posted on December 29, 2011 by Admin

electronic-couponingThe days of buying the Sunday paper and sitting around the kitchen table clipping coupons for hours are slowly waning. Today, a perfect storm of consumer shopping trends has manifested, one that involves the public’s demand for deeper discounts, its desire for increased savings in time and convenience, and the advances made in electronic payments technology.  Wise consumer packaged goods manufacturers, web-based merchants, and brick-and-mortar retailers are taking advantage of these factors by implementing marketing strategies that involve electronic couponing. Shoppers, in turn, are rewarding these innovative companies with increased loyalty.

Increased use of Coupons

The evolution of a value-oriented mindset and the marked growth of coupon usage have been the apparent by-products of a fragile economy.  In its 4th Annual Purse String Study, RedPlum found that 81% of the 23,300 individuals surveyed used more coupons in 2011 than in previous years. In addition:

  • 77% said they save $11 or more each week (compared to 67% in 2010), and 23% indicated that they save more than $50 each week (a 74% increase from the previous survey).
  • 56% of 13-17–year-olds are using coupons and coupon codes.

Longing for Time Savings and Convenience

Even though electronic couponing is becoming more widely accepted and adopted, many Americans continue to spend precious time with the traditional clipping methods:

  • 60% spend 2 hours each week, and 31% spend 3 or more hours weekly clipping and/or searching for deals that apply to them (265% increase over 2010).
  • Because of rising gas and food prices, 73% responded that they are spending more time planning before going to a store and 69% are combining shopping trips.

Shift toward Mobile Commerce

As more people trade their cell phones in for web-enabled smartphones, consumers are finding timely and relevant coupons at their fingertips.

  • 22% of RedPlum respondents downloaded a coupon to a mobile device (up 107% from 2010).
  • 59% are receiving deals via email or coupon alerts.

So, as these trends continue to merge and intensify, On-Line Strategies firmly believes that the visionary companies who align their strategic marketing efforts accordingly will position themselves with a significant competitive advantage. With an eye on the horizon, OLS has been instrumental with developing next-generation, sophisticated customer loyalty programs that are integrated with powerful offer engines. Imagine how faithful your customers would be if you could:

  • Save them time by NOT having to search for and clip coupons. OLS integates with offer engines that can automatically search and retrieve all available print and electronic coupons for frequent customers based upon their buying habits.
  • Increase shopping convenience by NOT having to organize and stockpile coupons. In fact, the face values of the coupons may automatically be deducted from the shopper’s bill at checkout.
  • Reassure their confidence that they are NOT missing any special deals.  Your customers are guaranteed of getting all available savings. Thus, savvy shoppers, in order to save time and money from having to travel all over town (or all over the Internet), would award such merchants first with their purchasing dollars.

As consumers continue to find new ways to stretch their budgets, On-Line Strategies will continue to develop ways to connect loyal consumer spending to forward-thinking merchants. Contact us for more information at www.olsdallas.com or call (972) 905-4447 for a no-cost consultation.

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OLS Takes On the Top Mobile Commerce Trends of 2011

Posted on December 21, 2011 by Admin

mobile-commerce-trendsAccording to eMarketer, m-commerce sales in 2011 will nearly double sales from 2010, and then will more than quadruple again by 2015. So what were some of the trends in mobile commerce and alternative payments that emerged in 2011? Let’s take a look:

The Battle between Mobile Wallets, NFCs, and Dongles

A Mobile Wallet allows you to digitally store everything you normally would place in your physical wallet such as credit and debit cards, loyalty cards, insurance coverage cards, etc. There are many variations of them, but some house data as an app on the mobile device’s main operating system, others like Google Wallet place it on a separate chip that serves as a secure wallet, and still others from PayPal and SCVNGR’s LevelUp actually store your data in the cloud instead of on your device.

NFC (or “Near Field Communication”) is commonly seen used in some of the “tap (or bump) and go” payment systems becoming more prevalent with retailers. The technology allows two devices to exchange data when they are in close proximity with one another. In addition to Google and PayPal making inroads with NFC, another company looking to take market share is ISIS.

Dongles are external devices that would allow a connection between a device and software. For mobile commerce purposes, an example of a dongle would be a mobile credit card swiper that attaches to a mobile device. Companies like Intuit and Square are leaders in the dongle world. Square’s Card Case gives you the ability to pay for a purchase at a participating merchant by simply saying your name, plus it will allow you to start and maintain a regular “tab” with them.

Like the final gunfight scene from The Good, The Bad, and The Ugly, one of these platforms will emerge the victor with adoption by the general public, while the others will either become niche players or disappear altogether.

Land it on the Carrier

One of the top mobile commerce trends that rose to the surface in 2011 involved the ability for users to pay for smartphone and tablet apps on their carrier’s monthly phone bill instead of with a credit card, debit card, or some other third-party payment system. Popular carriers such as Sprint, T-Mobile, and AT&T brought carrier billing to the Android market. Carrier billing startup Zong was purchased by eBay in order to integrate it into PayPal. PaymentOne gives users the ability to make such payments by simply entering their phone number, plus it validates each transaction via a text message.

Piling On upon Groupon

While the Groupon phenomenon continues to grow in popularity, daily deals and local offers are on the rise for mobile device users. Big hitters such as Google Offers and Amazon Local  have entered the marketplace with a vengeance. Groupon has partnered with Loopt to launch Groupon Now. The difference? Now, real-time, location-based offers are available for impulsive mobile users without a “tipping point” needed by a group of shoppers. In addition, Groupon formed a partnership with location check-in king Foursquare in hopes of providing loyal “groupies” with personalized offers at the right time and at the right place. 

How will alternative payments and mobile commerce trends change in 2012? Leave a comment and let us know your thoughts.

For more information on how On-Line Strategies supports mobile commerce trends with its next generation transaction engine, payments switch and value-added applications , we invite you to visit www.olsdallas.com. Also, please connect with us via our growing social communities on Facebook, Twitter, LinkedIn, and YouTube.

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