Twitter CEO Backs Cryptocurrency Startup

The Wall Street Journal has been reporting this week that CEO of both Twitter and payment processing company Square, and longtime advocate of Bitcoin, Jack Dorsey has been a prominent investor in the two-year-old company CoinList during their Polychain Capital-led $10 million funding round.

What is CoinList?

CoinList was founded in San Francisco two years ago in 2017 with the aim of helping startup companies raise capital through the sale of cryptocurrency. They made waves almost out the gate during the cryptocurrency boom in ICOs (initial coin offerings) when tokens were exchanged for the money the companies were raising. With the roller coaster-like sudden rise and fall in Bitcoin, the market for ICOs blew up with it before it then bombed.

As the CEO of payments company Square, Dorsey has had Bitcoin of his own for some time, and has often advocated the positives of the cryptocurrency. Square recently announced that they will be introducing a new cryptocurrency service of their own called Square Crypto, as they also revealed that in the second quarter of 2019 alone they generated as much as $125 million in Bitcoin revenue.

The Future of Bitcoin

Despite being a fond advocate of Bitcoin, Dorsey said recently to the Australian Financial Review “[Bitcoin is] not functional as a currency. The peaks and troughs are like an investment asset and are equivalent to gold. What we need to do is make it more usable and accessible as a currency, but it’s not there yet.”

He did add, however, that he thinks Bitcoin can and will eventually grow and become more widely adopted by the online community by saying, “I think [Bitcoin is] the best because it’s been the most resilient, it’s around for 10 years, it has a great brand and it’s been tested a bunch. As I look at all cryptocurrencies that could fill that role of being the native currency for the internet, [bitcoin is] a pretty high probability.”

CoinList will aid new startups in raising money through token sales, and will then use that cash to build a new exchange platform they’re calling CoinList Trade. Along with CoinList Trade, they’ll also set up a cryptocurrency wallet, according to the Wall Street Journal.

Kroger Will Begin Taking Visa Payments Again

In a not at all surprising turn of events, Kroger has decided to cease their ban on Visa payments across all of their 130 Smith’s Food & Drug stores.

Why the Ban?

Earlier this year, after slamming Visa’s transaction fees, Kroger decided to take action against Visa. Saying that they’ll “drive up food prices for all customers” and calling them “excessive,” they subsequently banned all Visa payments at all of their California stores, before bringing in a total ban across all 130 of their Smith’s Food & Drug stores located around the country.

Kroger CFO Mike Schlotman said when asked to comment earlier this year, “Visa has been misusing its position and charging retailers excessive fees for a long time. They conceal from customers what Visa and its banks charge retailers to accept Visa credit cards. At Smith’s, Visa’s credit card fees are higher than any other credit card brand that we accept,” and then went on to instigate the ban.

According to Visa, when asked to comment on the situation, “It is unfair and disappointing that Kroger is putting shoppers in the middle of a business dispute.”

Kroger Remains Quiet About the Reversal

Now, in spite of their reasoning for the ban on accepting Visa payments, Kroger has decided to reverse the ban, and will be accepting Visa credit cards at all of their locations across the country according to a Kroger spokeswoman. This includes chains such as Kroger, Fry’s, Dillon’s, Ralphs, Harris Teeter, and all other Kroger owned chains.

There has been no comment by Kroger or their spokespeople as to the reasons behind the ban’s reversal, nor has there been any response from Visa.

Earlier this year, shortly following the introduction of the Visa ban, Kroger went on to launch its mobile payment app Kroger Pay. Kroger Pay is a smartphone-based payment system that combines both a customer’s payment information with the company’s loyalty card with an aim to speeding up checkout times.

The company also launched a Kroger Rewards debit card, with Kroger Personal Finance CEO and corporate strategy integration lead Gary Millerchip saying “Kroger is redefining the customer experience by creating innovative ways to pay at our stores and online.”

Canadians Prefer Contactless Payments

Near field communication (NFC) transactions have been rising steadily all over the world for several years now, and in Canada, the dominance of mobile payment technology is no exception.

Near Field Communication Mobile Payment According to Visa Inc’s Canadian unit, Canadians are now more comfortable than ever with the use of mobile payment technology, with as many as 52% of 1,000 people polled in a recent survey saying that they contactless transactions regularly. In addition to this, 80% said that they consider contactless payments as “a very convenient way to pay,” and 45% praised their security.

In the first quarter of 2019 alone, near field communication made via platforms such as contactless credit cards, wearables, and mobile devices saw an increase of almost 25% since the previous year, accounting overall for 51.5% of total transactions made.

There are eight stand-out provinces of Canada that are really leading the way when it comes to contactless payments. The province of New Brunswick has seen 51% of its transactions become contactless followed by Saskatchewan (51.6%), Alberta (52.1%), British Columbia (53.5%), Ontario (54%), Nova Scotia (55.2%), Manitoba (58.2%), and Prince Edward Island leading the charge at 59.2% of all transactions.

One huge factor that has contributed to the increase in contactless payments is the recent rise of the digital wallet. Technologies such as Apple Pay and Google Pay, while they may have started somewhat slowly, soon started to pick up speed as Canadians started to realize the benefits and ease of simply paying with their phones, which most of us, especially the millennial and Gen Z generations, will more than likely have in our hands already anyway, as opposed to searching for their credit cards.

It should be worth noting too that, while contactless transactions in Canada make up 51.5% of all transactions, in the neighboring U.S., that figure drops to a pretty staggeringly low 3%. In spite of being one of the highest adopters of smartphones in the whole world (at a rate of 77% in 2018), statistics show that as much as 89% of all U.S. consumers are still shunning mobile payments, making the U.S. one of the lowest adopters of contactless technologies in the world, and Canada one of the highest.

UniCredit Unveils Data Breach That Involves 3 Million Users

On Monday, UniCredit revealed to the public that a 2015 file comprised of names, addresses, phone numbers, and email addresses pertaining to more than 3 million of their customer base was compromised and leaked.

This occurred in spite of spending an additional €2.4 billion over the past 3 years on cyber security enhancements to their IT systems. Despite UniCredit catering to a wide range of customers worldwide, the records leaked in Monday’s attack were related to only their Italian client base.

The data breach was reported to authorities last Thursday, October 24th, while a company representative relayed the information to Reuters. While there were no details with regards to how the breach was able to happen, the spokesman did confirm that there is an internal investigation ongoing. Italian police are also examining the possibility that other crimes may have been committed in conjunction with the security breach.

This is the third such incident of its kind to affect UniCredit after two previous data breaches in September to October of 2016 and June to July of 2017 in which the private information of over 400,000 Italian customers was compromised. It is not thought that this latest attack is linked to those two in any way, however, as they were the result of a third party accessing customer data without any form of authorization or consent.

The Italian bank was quick to assure customers in their statement issued on Monday, however, that there was no serious financial information leaked in the data breach, nor were there any compromising information leaked that could lead to unauthorized access of customer accounts. The data lost by those affected is Personally Identifiable Information (PII) which won’t be able to lead to any unauthorized transactions. It is, however, usually used for social engineering campaigns, and it can potentially aid those who wish to commit identity theft.

UniCredit customers who may have been affected by the breach will have been contacted by them either by online banking notifications or via the post. A new business plan is expected to be presented by the bank in early December.

And one last thing to consider if you are a merchant and you are worried about data breaches affecting your bottom line: Host Merchant Services Data Breach Security Program. Click that link to download a PDF explaining the value-added service HMS provides its merchants that goes above and beyond just simple PCI Compliance and helps ensure a merchant’s peace of mind.

Uber Announces Uber Money [2023 Update]

Uber is making an exciting new push into financial services and technologies for its drivers and couriers.

Essentially a digital wallet platform with upgraded debit and credit cards, the drive behind Uber Money is to provide its more than 4 million drivers and couriers worldwide access to an Uber bank account through which they can get paid immediately, in real time, after each and every ride.

What Is Uber Money?

With the formation of the Uber Money division, Uber will offer its drivers a debit card featuring advanced services such as “instant pay.” According to Uber, drivers will get instant access to their earnings in real time, without any cost to them, and will be free to spend it as and where they wish to.

Another feature that seems to be exciting for drivers is their no-cost $100 overdrafts. These can greatly assist any cash-strapped drivers to get their working day started with a full tank of gas and it’s a more affordable alternative to high-interest payday loans.

Uber Wallet

With Apple recently launching a credit card with Goldman Sachs and Facebook developing its own cryptocurrency, Uber has jumped on the financial services bandwagon by introducing its digital wallet, known as Uber Wallet that allows its drivers to store dollars, make mobile payments, and track their transaction history. The service will be fully integrated with Apple Pay and Google Pay so drivers won’t need a physical debit card in order to immediately start spending their earnings.

Uber Debit Account and Card

Drivers located in the U.S., and soon drivers worldwide, currently have access to the Uber Debit Account. This account, powered by Green Dot, comes with no monthly fees and features seamless integration with the Uber Driver app. This integration allows drivers to make electronic payments straight from the app.

The Uber Debit Card is another factor of the Uber Debit Account, and it will soon launch with features such as cash back on any gas purchases, ranging from 3% to 6% for Uber Pro drivers of the highest tier.

Uber Credit Card

Uber is also relaunching the Uber Credit Card in partnership with Barclays. Holders of the Uber credit card will receive 5% cash back on money spent across the Uber platform, from Uber rides to Uber Eats and JUMP bikes and scooters. Even the Uber Copter which flies between Lower Manhattan and JFK is included.

Ingenico Offers New Mobile Payment Option For China [2023 Update]

On Thursday, October 10, 2019, international payment services provider Ingenico announced its plan to open up the mobile payment processing market in China to the world through several unprecedented business partnerships. Ingenico has decided to focus in-country on China’s local e-commerce and mobile payment systems: It has partnered with bank card services provider UnionPay and Alipay and WeChat Pay, which are two of China’s top app platforms that utilize mobile payment systems.

Why Pick China?

China’s internet user population represents a quarter of all internet users worldwide. China also has a huge e-commerce market, the largest in the world, that grows by leaps and bounds every year because of online retail sales. A large part of China’s population uses convenient mobile and online options to fulfill their shopping needs. Mobile tech users alone make up 82 percent of the population and primarily use apps for offline and online payments. Whether shopping in a brick-and-mortar store or online, consumers typically use Alipay for all of their purchases. Additionally, the WeChat app is used for a wide mix of reasons by approximately 1.1 billion users daily. China is also one of the leading countries for creating new and successful offline and online consumer engagement strategies. As a result, mobile shoppers in the country connect quickly to brands through a variety of apps.

How Do Merchants Benefit?

Merchants from outside of China have traditionally found it difficult to operate in-country through China’s e-commerce systems because of the differences in platforms and the dominance of local payment solutions. Ingenico’s announcement means that international merchants will increasingly gain access to China’s mobile consumer population. Merchants will have the ability to accept real-time payments from mobile and desktop devices through UnionPay support and Alipay upgrades. Ingenico also plans to offer a full range of currency conversion options that make it possible for merchants to accept Chinese Yuan as payment. Through the WeChat text and voice messaging service, Ingenico will provide full support so that local WeChat users can make purchases from businesses without leaving the app. WeChat Pay support will extend to both official accounts and advanced sub-applications known as mini-programs. No other payment services provider currently offers this option on a global scale.

At Host Merchant Services, we stay on top of changes in the payment processing industry to provide the newest and best business opportunities to our clients. We will continue to keep an eye on this and other Ingenico developments and publish updates as they become available. For answers to any questions that you might have about this specific announcement or our payment processing services, contact us today.

Is Apple Pay Really More Popular Than the Starbucks Mobile App? [2023 Update]

According to an October report published by eMarketer, a respected online publication dedicated to the digital marketing industry, the mobile payments service known as Apple Pay is now more popular than its counterpart developed by the Starbucks Coffee Company. Since about 2014, the Starbucks app, which started off as a digital version of its successful gift and rewards card, had been the most widely used mobile payments platform in the United States, but statistics crunched by eMarketer indicate that this is no longer the case.

Top Mobile Payment Apps

More than 27 million purchase transactions and payments were settled with Apple Pay in 2018, a figure that eMarketer expects will increase to 30.3 million by the end of 2019, thus representing a 47.3% share of the “contactless” or Near Field Communications (NFC) payments market. It should be noted that Apple Pay is accepted at Starbucks, whereas the Starbucks mobile app only works at the company’s retail locations equipped with NFC point-of-sale terminals.

The holiday shopping season happens to be very busy for Starbucks, particularly with its pumpkin spice flavors and often controversial choice of coffee cup designs, but this will not allow the company to retake its place atop the mobile payments totem pole. The number of active Google Pay users, who are those making at least one NFC payment within a six-month period, will climb to 12.1 million, less than half of Starbucks mobile app users, who can easily be assumed to be even more active because such is the nature of delicious caffeinated beverages and tasty gourmet treats. Samsung Pay comes in at third place with 10.8%, just a sliver of the market share it holds in places such as South Korea.

Both Companies Benefit

For payment processing analysts, comparing Apple Pay to the Starbucks app is an apples to oranges situation. While it is true that Apple now commands nearly 50% of the American NFC payments market, Starbucks is the true leader because this is a mobile app that can be installed in iOS and Android devices; in fact, it worked on Windows Mobile devices until about 2017. As for Apple Pay, the popularity of the iPhone is what is really boosting this digital wallet, and it could be argued that the Apple Card, which is a very recent product still being rolled out, will likely enhance Apple Pay.

It could be argued that the new Apple Card could very well be the factor that can realistically propel Apple Pay past Starbucks. There is one thing that coffee lovers enjoy as much as coffee itself, and that is being rewarded for their good taste; this is where the Starbucks mobile app excels, and it is what the Apple Card is going for. The current cash-back rewards program offered to Apple Card holders is pretty standard; should Apple spice it up with greater rewards for using the card in conjunction with Apple Pay, it would entice greater use of this iOS digital wallet. In the end, providers of payment processing services stand to benefit from this competition.

How to Be a Top Merchant Services Independent Sales Agent

Because of the potential to earn residual income, a merchant services agent program is a path to profitability – but only if you make sales. In order to be a successful credit card processing agent, you not only need to know your business, but you also need to know how to sell. An Independent Sales Organization, or ISO, can provide opportunities to a good salesperson to earn unlimited profits in the merchant services world. Follow these steps to be a top merchant services independent sales agent:

Choose Your Merchant Services Partner Wisely

Due to a lack of federal regulation, the merchant services industry is notorious for deceiving sales agents and vice versa. Ask to see your potential merchant services partner’s “buy rate” or “Schedule A,” which indicates their split with you. Inquire of their internal support staff and the levels of agent.

Know Your Business

Credit card price structures are complicated. Understanding the cost-savings of a merchant deal is invaluable to your customers. After all, that’s their priority outside of the actual processing of payments. Keep up with the ever-shifting trends of your industry, from eCommerce to security to mobile payments. Become a payments expert.

Know THEIR Business

Before walking into a business, research the basics. Of course, learn the business’ name, as well as the name of the person you will meet with, and the needs of businesses in their industry. Research the industry if you’re not already familiar with it. And prepare questions for the merchant, revealing your well-researched knowledge.

Focus on Good Prospects

If a merchant is willing to speak with you during your visit to their business, they are a good prospect. Don’t spend time or energy trying to talk to someone who doesn’t want to talk to you. You may not find a willing merchant until you’ve visited 10, 20, or more unwilling businesses. Keep going until a prospect is willing to speak with you. And when a merchant does finally speak with you, let them do the talking. Only talk half as much as your prospect does.

Follow Up

Whether you’re following up with a prospect or with an existing client, keep a schedule for following up with all of your merchants even if they haven’t signed up with you yet. Send a couple of emails to your prospects after meeting with them, asking follow up questions. For existing clients, stop by for a visit – or call or send an email.

Processing Statement In Hand

After you find your good prospect, request a processing statement. No matter how long it takes the merchant to deliver the processing statement to you, stay persistent – even if it takes months.

Educate Your Merchants

Review your merchants’ statements with them. Explain the fee codes. Make yourself available to answer their questions – even if they ask the same questions over and over again. They will grow to trust you, and they will put their faith in you. If you help them save money, they will refer business to you.

Referrals Build Your Business

Beyond referrals from your existing customers, find referral partners in bookkeepers, accountants, PTA parents, and anyone you know who has a relative with a business. Let them know you pay referral partners a percentage of your monthly residuals from the referred merchant.

Host Merchant Services

Partnering with global processing platforms such as TSYS and First Data, Host Merchant Services features a merchant services agent program with numerous boarding partners. Boasting terrific customer service, HMS offers cash discount programs and multiple high-risk bank partnerships, providing merchant services agents benefits and features they can pitch to their clients.

To learn more about our independent sales agent program, click here. If you have any questions about our program, please feel free to reach out.

PayPal to Roll out Branded Venmo Credit Card

PayPal has announced plans to introduce Venmo Credit Cards in the year 2020. This is going to be a strategic move aimed at improving peer-to-peer payment services with additional options that give users more benefits.

PayPal has partnered with Synchrony to achieve this goal. PayPal, a foremost player in the peer-to-peer payment industry, will become the first service in that sector to offer its users an opportunity to own a credit card affiliated with its brand.

The market projections look encouraging, with a PayPal alternative, more users, mostly younger people, can access the Venmo Branded credit cards and enjoy the benefits of using a Venmo service at businesses that use a traditional credit card processing service.

PayPal aqcuired Venmo back in 2013, after buying Braintree, the parent company of Venmo. PayPal will be taking a step further by expanding the Venmo payment processing platform to include credit card processing and payments.

The Task Ahead for Synchrony

Synchrony will leverage its digital technology assets to forge a path to success for this new deal. Synchrony is entering the credit card processing industry that already has established brands such as MasterCard, Visa, American Express, Chase, among many others.

The agreement between PayPal and Synchrony is structured as a profit sharing deal, which may begin with minimal gains, and eventually more profits as people subscribe, to gain access to the Venmo credit card.

The new credit card offer will give consumers more purchasing power and access to credit. Since it is the first of its kind, using the PayPal alternative will give consumers an opportunity to have a new experience, much different from Peer-to-Peer payments.

Possible Benefits for Users

Owning a credit card gives the user a flexible spending limit that is convenient. Considering the reputation of all the brands involved, it is expected that the new Venmo credit cards will have standard and possibly better security features.

Strategic partnerships between Venmo and brands such as Uber, Chipotle, among others, will go a long way to attract more customers who want to enjoy discounts and participate in promotions offered by brand partners.

PayPal has earned the trust of many users. In such a significant strategic business move, the brand’s reputation is important. From our perspective, the Venmo credit card is positioned for success because of the vast customer base and stakeholders in this deal.

Before its acquisition, Venmo already had a large subscriber base, with over 40 million active users.

Using the Venmo Credit Card

People who already have active Venmo accounts will be granted access to manage their new credit card with the Venmo mobile app. All the main features of the credit card will be accessible through the Venmo mobile app. However, PayPal is yet to disclose the exact features of the credit card.

We expect a full disclosure a few months before the launch of the Venmo credit card next year.

MasterCard’s Dispute Resolution Initiative

Mastercard is rolling out its new Dispute Resolution Initiative for payment processors and merchants that will bring many changes to how Mastercard chargebacks and transactions are handled.

The initiative, which has a goal of improving chargeback outcomes and efficiency, will likely mean a more consistent process for merchants. The Dispute Resolution Initiative is being rolled out in four phases and began in October 2018 with a final phase rollout scheduled for April 2020. The latest changes went into effect in October 2019.

What Merchants Should Understand

The Mastercard Dispute Resolution Initiative (MDRI) brings modern solutions to payment processing and chargeback resolutions. MDRI puts more responsibility on issuing banks which must collect information from cardholders like a receipt before initiating a dispute which rules that aim to prevent double refunds completely and reduce invalid disputes that are expensive for merchants.

Merchants won’t use Mastercard’s new dispute system, MasterCom, directly. Instead, the payment processor uses it on the merchant’s behalf. Acquirers and issuers will use MasterCom to initiate and respond to every Mastercard chargeback. As a merchant, your processor can submit supporting documentation through the system if you want to fight a chargeback.

The new dispute system is similar to Visa Claims Resolution (VCR) which Visa rolled out in 2018. VCR, a method of simplifying the chargeback process, automated 80% of dispute volume and reduced the average chargeback resolution time from 54 to 23 days.

New Payment Processing and Chargeback Rules

The Dispute Resolution Initiative adds new processes, technology, and rules to automatically validate dispute requests, open new communication channels between merchants and cardholders, and create a central dispute management platform for acquirers and card issuers.

During the first phase of the rollout, Mastercard instituted a new rule that requires issuers to request more information from cardholders to file a Mastercard chargeback for these reasons:

Cardholder Does Not Recognize (4863)
Cardholder Dispute, Recurring Billing and Digital Goods (4853)
Point of Interaction Error (4834)
Incorrect Transaction Amount (4831)

For these reason codes, issuers must get supporting documentation. For disputes over digital goods or recurring transactions, there must be a cardholder email, letter, or expedited transaction dispute form.

By obtaining more information at the beginning of the chargeback process, the goal is to reduce the number of invalid chargebacks.

Mastercard also added a new pre-compliance requirement. Before an issue can be escalated to a compliance case, a pre-compliance case needs to be filed.

During the second phase, Mastercard instituted a new rule that refunds cannot be initiated after a chargeback is reversed or filed. An acquirer cannot use a pre-compliance case to reverse a second refund if credit is issued for a disputed transaction. Acquirers can still recover the money with a new presentment if the time limit allows, through a pre-arbitration case filing if credit is issued after a second presentment, or through collections.

Issuers are now instructed to check for a reversal or refund before a chargeback and accept a second presentment if the transaction is submitted as “Credit Processed.” Always verify if the customer’s bank is involved before filing a refund to avoid a double refund.

Issuers can no longer use the following reason code for a Mastercard chargeback:
Fraudulent Processing of Transactions (4840)

The timeframe to file a chargeback for a Point of Interaction Error (4834) has also been reduced to 90 days from 120 days.

Changes Still Planned

Phase four of MDRI in 2020 will streamline the chargeback process by removing the arbitration or second chargeback cycle. Instead, card issuers can continue disputes with pre-arbitration before escalating to arbitration in case of fraud. This will be similar to the Visa Claims Resolution process.

During the final phase, Mastercard will eliminate the following reason code for a chargeback:

Cardholder Does Not Recognize (4863)