HMS Partners with ServInt

Today The Official Merchant Services Blog has learned of a new partnership agreement between Host Merchant Services and cloud hosting services provider. With HostingCon 2012 right around the corner, this partnership announcement is well-timed. Credit card processing firm Host Merchant Services has announced that it has entered into a strategic marketing partnership with ServInt.

Servint is the latest provider to join a partner program that has taken the web hosting and cloud services industry by storm. This alliance will give ServInt the ability to provide flexible and customizable merchant services and credit card processing to its customers quickly and efficiently.

ServInt, based in McLean, VA, has been providing managed hosting services to businesses and enterprises around the world since 1995. Today, they offer a full portfolio of VPS, dedicated, IaaS cloud and PaaS Java hosting to clients in more than 130 countries.

Partnering with Host Merchant Services, the premier provider of payment processing and e-commerce services for small businesses and medium businesses, lets ServInt maintain its high level of quality customer service while offering a guaranteed best-rate plan for merchant services. ServInt customers will be able to accept credit card payments easily from a merchant services provider that is intimately familiar with the needs of cloud hosting customers and e-commerce merchants.

Host Merchant Services is a registered Independent Sales Organization (ISO) with Visa U.S.A. and MasterCard International with bank sponsorship provided by Wells Fargo Bank, Walnut Creek, CA. The company specializes in providing world class customer service and support to its credit card processing customers.

“ServInt is an outstanding, reseller-centric, cloud services company that we are excited to partner with,” said Host Merchant Services CEO Lou Honick. “Host Merchant Services shares ServInt’s dedication to quality customer service. Their customers will benefit greatly from a seamlessly integrated payment processing solution, from a provider that really understands their needs. ServInt customers will enjoy transparent pricing, 24x7x365 customer support, and a skilled technical support team to assist them in quickly integrating the service to their website.”

ServInt COO Christian Dawson added, “ServInt prides itself on being one of the most reseller-friendly service providers in the hosting marketplace. Our partnership with Host Merchant Services further enhances our ability to meet the needs of this critical segment of our customer base, as it adds a critical business product to the best-of-breed support services we offer – at very favorable terms – to the hosting reseller community.”

The partnership is part of a Host Merchant Services initiative to provide web hosts and cloud operators like ServInt a fast and transparent third party solution for processing credit cards. The Host Merchant Services partner programhas been gaining traction at a rapid rate to become the “go to” choice for web hosts that want the best mix of revenue sharing and quality service without onerous contracts or commitments.

Host Merchant Services COO Dan Honick sums it up by saying, “Our customers and partners stay with us because they are happy with our service.”

About ServInt
ServInt is a pioneering provider of high-reliability, managed cloud hosting services for enterprises worldwide. Founded in Northern Virginia in 1995, ServInt provides a range of IaaS, PaaS, VPS and dedicated server packages to hosting service resellers, web designers, developers and online businesses in more than 130 countries. To learn more about ServInt’s cloud, VPS and dedicated hosting solutions you can visit their website http://www.servint.net/.

About Host Merchant Services
Host Merchant Services is a different type of merchant services company which focuses on delivering the industry’s lowest processing rates while providing industry-leading service and support. The company’s products include merchant services and credit card processing. Host Merchant Services is the only merchant services company with a partner program that guarantees unsurpassed pricing, support, and customer service. The company is headquartered in Newark, Delaware and executes all operations with the manifesto of “bringing trust to merchant serivces”.
To learn more about Host Merchant Services visit https://hostmerchantservices.com

Industry Terms: Loyalty Program [2023 Update]

This is the latest installment in The Official Merchant Services Blog’s Knowledge Base effort. Well we want to make the payment processing industry’s terms and buzzwords clear. We want to remove any and all confusion merchants might have about how the industry works. Host Merchant Services promises: the company delivers personal service and clarity. So we’re going to take some time to explain how everything works. This ongoing series is where we define industry related terms and slowly build up a knowledge base and as we get more and more of these completed, we’ll collect them in our resource archive for quick and easy access. Today’s term is Loyalty Program.

Loyalty Program

A Loyalty Program is an e-commerce and channel partner term that is used to describe a program that rewards customers for making purchases from the same vendor or company. Loyalty programs may offer prizes, reward points, future discounts and other incentives designed to keep customers coming back and doing repeat business with you. Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior.

Loyalty Programs utilize the same common item to make the program work — a card. The type of card varies in name — called any number of things such as a loyalty card, rewards card, points card, advantage card, or club card — but the characteristics are all the same. It is a plastic or paper card, visually similar to a credit card or debit card, that identifies the card holder as a member in a loyalty program. These cards typically have a barcode or magstripe that can be easily scanned, and some are even chip cards. Small keyringcards (also known as keytags) which serve as key fobs are often used for convenience in carrying and ease of access.

The way the system works is by presenting the card, the purchaser is typically entitled to either a discount on the current purchase, or an allotment of points that can be used for future purchases. Hence, the card is the visible means of prompting return business.

Where a customer has provided extensive identifying information in the application process, the loyalty card may also be used by the company running the program to access customer data and trends in order to expedite verification during the receipt of membership privileges — such as the receipt of cheques or dispensing of medical prescriptions, access to a club lounge in airports, using a frequent flyer card, etc.

Recently there has been a move away from traditional magnetic card, stamp or punchcard based schemes to online loyalty programs. While these schemes vary, the common element is a push toward eradication of a traditional card, in favour of an electronic equivalent. The popular choice of medium is often a QR code.

Industry Terms: Gift Cards

Gift Cards

A Gift Card is a restricted monetary equivalent or scrip that is issued by retailers to be used as an alternative to a non-monetary gift. Highly popular, they ranked as the second-most given gift by consumers in the United States in 2006 — when about $80 billion were spent on them. Gift cards are so popular because relieve the donor of selecting a specific gift and their convenience combined with the proliferation of e-commerce has only made their use skyrocket in the 6 years since those figures were released.

The recipient of the gift card can use it at his or her discretion within the restrictions set by the issuing agency. This makes for a lot of variety in the gift cards themselves, even if their basic function remains exactly the same. Gift cards usually resemble a credit card in appearance, including the presence of a barcode or magnetic strip which is read by an electronic terminal — most often the same terminal merchants use for swiping credit and debit card transactions. The gift card itself is identified by a specific number or code, not usually with an individual name, and thus can be used by anybody. They are backed by an on-line electronic system for authorization. Some gift cards can be reloaded by payment and can be used multiple times.

Some cards have no value initially associated with them. When they are sold the cashier enters the amount which the customer wishes to put on the card. This amount is rarely stored on the card but is instead noted in the store’s database, which is crosslinked to the card ID. Gift cards thus are generally not stored-value cards as used in many public transport systems or library photocopiers, where a simplified system (with no network) stores the value only on the card itself. To thwart counterfeiting, the data is encrypted. The magnetic strip is also often placed differently than on credit cards, so they cannot be read or written with standard equipment. Other gift cards may have a set value and need to be activated by calling a specific number.

Gift cards are divided into “open loop” or “network” cards and “closed loop” cards. The former are issued by banks or credit card companies and can be redeemed by different establishments, the latter by a specific store or restaurant and can be only redeemed by the issuing provider. The latter, however, tend to have fewer problems with card value decay and fees. In either case the giver would buy the gift card (and may have to pay an additional purchase fee), and the recipient of the card would use the value of the card at a later transaction.

Mobile Gift Cards and Virtual Gifting

As we reported last year, Virtual Gifting and Mobile Gift Cards are a recent and hot trend. Mobile gift cards are delivered to mobiles phones via SMS messages and phone applications including iPhone applications allowing users to carry only their cell phones. Benefits include tying them to a particular phone number and ease of distribution through email.

Virtual gift cards are delivered via e-mail to their recipient, the benefits being that they cannot be lost and that the consumer does not have to drive to the bricks and mortar location to purchase a gift card.

In these types of transactions the merchant is not involved in the loop, therefore it’s not a traditional gift card. It’s more of a cash transfer.

E-Commerce: Latest News

Today The Official Merchant Services Blog revisits one of its favorite topics: E-Commerce. Specifically we’re going to focus on the staggering growth in E-Commerce and the sky high expectations revolving around its continued success.

Trillions Upon Trillions

Once again turning to Internet Retailer and its Industry Statistics coverage, we’ve found a report by Interactive Media in Retail Group (IMRG), a U.K. online retail trade organization, that states worldwide business-to-consumer e-commerce sales will pass the $1.25 trillion mark by 2013, and the total number of Internet users will increase to approximately 3.5 billion from around 2.2 billion at the end of 2011. The study also found that e-commerce sales in 2011 increased almost 20% from 2010, clocking in at $961 billion.

Also the data revealed China turbo-boosted its e-commerce growth quicker than Paul Walker’s character in The Fast and the Furious, as the up and coming economic titan of Asia grew its e-commerce market by a whopping 130% in 2011. The rapid growth spurt however still didn’t put China ahead of the old standbys. The United States remained the world’s single biggest e-commerce market, followed by the United Kingdom and Japan. IMRG estimates that growth rates in those countries will be approximately 10-15% a year going forward.

Host Merchant Services e-commerce image for feature article

In fact, the Euro states are forming quite the tight knit club of competition in e-commerce market share and are starting to outclass the North American Region. According to a separate report released recently by the European Multi-channel and Online Trade Association, European online business-to-consumer sales posted 19% growth in 2011 to reach an estimated $307 billion, surpassing North America at $297 billion.

Much of this data just demonstrates exactly how pervasive online shopping is becoming worldwide. So while some jockeying for position between regions is nice, the real impact of this data is that the rest of the globe is quickly catching up with the leaders in e-commerce market share. Point blank, people everywhere are shopping online, thus buying things with credit cards through the internet.

Billions Upon Billions

Back in May the U.S. Commerce Department estimated that United States e-commerce sales totaled $50.27 billion in the first quarter. This figure is up 15.4% from the $43.58 billion in the first quarter of 2011 — and marks the first time e-commerce sales have topped $50 billion outside the fourth quarter, which generally has much larger sales due to the holiday shopping season. In fact, the holiday shopping season spike helped account for a quarter to quarter dip in e-commerce sales. On a quarter-over-quarter basis, e-commerce sales declined 18.6% from Q4 2011, according to the Commerce Department.

Host Merchant Services e-commerce image for blog post.

The Commerce Department found that on a seasonally adjusted basis e-commerce accounted for $53.16 billion of the $1.08 trillion of total retail spending during the first quarter — roughly equal to 4.9% of total retail spending. This means that Quarter 1 2012 e-commerce sales increased 15.4% year over year on the seasonally adjusted basis, whereas total retail sales grew 6.5%.

What it all Means

The data being compiled here serves as a spotlight for two primary points that The Official Merchant Services Blog keeps coming back to:

Shopping online has become an accepted and now commonplace activity. Consumers go online with none of the fears they used to have about compromising the security of their credit card information. For better or for worse the convenience has far outweighed the security concerns consumers used to have.
Computers are much more commonplace in homes across the world — as are mobile devices. The technology has become a staple, thus allowing consumers the ease of access and highlighting the convenience of button pushing versus driving around searching for goods and services.
Credit Card Processing is a huge beneficiary in this paradigm shift in consumer behavior. Unlike Brick and Mortar store shopping, online shopping is all credit card based transactions.
This means all online merchants need to be able to take credit card payments. And payment processors are right there in the thick of this e-commerce surge.

News for Mobile Payments

Yesterday, The Official Merchant Services Blog defined the term Mobile Payment Processing for its readers. We bring this topic up frequently because it’s one of the hottest trends in credit card processing. Today we’re going to update our coverage of the topic. We have been framing almost every discussion of the topic around a set of studies done last year.

We’ve dug deeper on the topic to find new numbers — mostly from Internet Retailer and their very helpful industry statistics category.

The Mark of SORO

According to The State of Online Retailing Volume 1: Mobile Marketing, 91% of retailers have a mobile strategy in place. Produced annually in partnership between Shop.org and Forrester Research, The State of Retailing Online (SORO) study is the highly anticipated research that brings details of all aspects of eCommerce — from marketing, social media and mobile to KPIs, mobile and profitability — to the online retail community. For the first of two 2012 studies, Shop.org, RAMA and Forrester Research have embarked on a “deep dive” study of all things mobile marketing. Its findings are based on survey responses from 59 retailers, including merchants that operate stores, sell only on the web and manufacturers selling directly to consumers and details how retailers are implementing smartphone and tablet marketing into their sales mix.

According to the study, mobile generated 4.7% of total web sales for the retailers surveyed in 2011, with tablet users accounting for 3.2% and smartphone users accounting for 1.5%.

Host Merchant Services chart on mobile payments

Essentially the data in the study indicates that e-commerce is slowly but steadily integrating more and more aspects of mobile commerce. The driving force spurring much of the conversion along appears to be coming from social media and e-mail campaigns. Mid-sized retailers — those with annual sales between $10 million and $100 million — say mobile e-mail optimization is their top tool for mobile marketing.

Also the study revealed the popularity of Quick Response Codes. The study says small and large retailers — those with annual sales of less than $10 million or more than $100 million, respectively — cite their use of quick-response codes or other barcode scanning tools as the top tool they use for mobile marketing, even though only 15% of smartphone users say they’ve ever scanned a code, the report says.

Burger King, Smart Phones and QR Codes

The information about QR Codes is significant when you factor in two of the latest breaking news stories in the mobile payments processing category.

First, Burger King just announced it has partnered with Qualcomm’s mobile commerce arm, Firethorn Mobile, for the BK Mobile Crown Card (BK MCC) initiative, which will start in 50 restaurants across Utah and surrounding areas. The platform will allow Android and iOS smartphone users to scan QR codes found on in-store counters and drive-thrus to make a payment via the BK MCC app, which is available on Google Play and the App Store. The transaction will then be processed through the user’s registered debit or credit card account.

Host Merchant Services image on Burger King and QR Codes

Second, the NCR Corporation has developed a way to withdraw money from an ATM that uses your smart phone and a QR Code. According to this article by Digital Trends: “Developed by the NCR Corporation, the payments group within the company has created a way to withdraw cash from an ATM without having to pull an ATM card out of a purse or wallet.”

Here’s how the process works:

A bank customer with an Android or iOS smartphone with a built-in camera approaches an ATM and launches the NCR application.
After the app loads, the customer enters the four digit PIN number tied to their bank account on the smartphone touchscreen.
When the pin is accepted, the app brings up all bank accounts related to the customer’s account.
At this point, the customer can choose if they want to withdraw money from their checking or savings account.
After picking an account, the customer chooses a dollar figure on the smartphone touchscreen. (In the NCR example, there are preset dollar figures in addition to a custom option to withdraw a specific amount of cash).
Once the dollar figure is picked, the customer taps the scan button to launch the camera on the smartphone.
Then the customer scans the QR code on the ATM screen with the camera application.
The transaction is confirmed and cash is dispensed.
The customer gets an electronic receipt on the smartphone screen as well.

According NCR management, the entire process takes about ten seconds to complete. In addition, someone waiting in line at an ATM could hypothetically run through all the first steps on the smartphone and would be ready to scan the QR code immediately when they reached the front of the line.

Industry Terms: Mobile Payments [2023 Update]

Mobile Payment Processing

Mobile Payment Processing — also referred to as mobile money, mobile banking, mobile money transfer, and mobile wallet — generally refers to payment services operated under financial regulation and performed from or via a mobile device such as an iPhone, iPad or Android smartphone. Mobile payment processing is an alternative payment method; instead of paying with cash, check, or credit cards, a consumer can use a mobile device to pay for a goods or services.

There are four primary models for mobile payments:

Premium SMS based transactional payments
Direct Mobile Billing
Mobile web payments (WAP)
Contactless NFC (Near Field Communication)

Mobile Payment Processing is being adopted all over the world in different ways. It is predicted to exceed $600 billion in revenue worldwide by 2015 according to a study by Juniper Research. This revenue, if realized, would be double the figure as of February, 2011. The Mobile Payment market for goods and services — excluding contactless NFC transactions and money transfers — is expected to exceed $300 billion globally by 2013. Some mobile payment solutions are also used in developing countries for micropayments.

Evaluating Payment Processors

Payment processing can be confusing even for the experts in the industry. The system seems to be purposely designed to be difficult to understand even the most basic things, like what exactly your rate is and what fees are associated with accepting credit cards.

But accepting credit cards has become a necessity for businesses today. People are shifting toward a paperless society quickly, and online shopping has become a staple to even the most resistant consumer. As a business owner you need to become an expert on payment processing and do so quickly if you wish to keep ahead of the curve and not get burned by hidden fees and surcharges that cut directly into your profits.

Which credit card processing company should you get your merchant account from? Credit card processing fees, transaction fees, statements fees, PCI DSS fees, annual fees, all pile up. And these fees vary a lot from processor to processor.

Today, The Official Merchant Services Blog is going to give our faithful readers a quick and effective guide on how to compare and evaluate credit card processing companies.

Not All Processors Are Alike

There are many processors that offer merchant accounts and let small, medium and large businesses accept credit cards in brick and mortar locations as well as online through their website. There’s even a huge push today for mobile payments — letting merchants accept payments directly through their mobile phone from just about anywhere. With the wide variety of options, business owners may feel overwhelmed when trying to find the processor that suits them best.

Finding a processor and getting a merchant account isn’t easy.

For starters, the card associations — Visa, MasterCard, Discover and American Express — all have their own rate sheets know as Interchange Reimbursement Fees. These fees make up the majority of what a merchant pays to their processor and they vary greatly depending on the card type accepted. The rates and categories are complex, and confusing to follow for just one of the card companies. All of them together combine to make a maze of fees and categories that most merchants get lost in.

Second, many banks don’t offer merchant accounts directly to small businesses, so those businesses need to go through third party providers for a merchant account. These third party processors have different fee structures among themselves and different rules. So business owners face a lot of confusing variety from both the card association as well as the processor.

To add even more layers to this, businesses that process credit card orders online need to pass their transactions through an online gateway system. Whatever shopping card software is used has to interface with that gateway, so integration from shopping cart to gateway to processor is extremely important.

So let’s dig right in and see what’s what from the processor side of things.

First: Their Rates and Fees

For payment processors, a variety of things about you and your business can influence the discount rate and various fees they charge you for accepting charge cards as payment. Some of those factors include:

The number of years you’ve been in business
The percentage of your sales that are made over the phone or the internet
The type of business you are in
Your personal credit rating
The average dollar amount of each sales transaction
Your monthly sales volume

Keeping all of that in mind, discount rates tend to range from 2.24 to 3 percent for home run and small businesses that accept Mail Order/Telephone Order transactions. These transactions are higher risk and carry higher fees. To find out more, read our knowledge base article on MO/TO.

You’ll find in your search for a processor, however, that many processors advertise discount fees less than 2 percent. These lower fees are for swiped transactions — sales made by running the customer’s credit card through a machine. These card present transactions are more secure and much less risky so fees and penalties tend to be much lower. And online transactions through secure payment gateways also carry less fees and penalties than card-not-present transactions. Keep all that in mind when comparing pricing and rates between offers from payment processors.

Another key to rates and pricing was touched on before by The Official Merchant Services Blog when we compared Tiered Pricing to Cost Plus Pricing. To recap, Cost Plus Pricing tends to end up costing the merchant less because the merchants don’t get dinged for higher surcharges from other rate buckets. So a tiered pricing rate offer will seem lower than it actually ends up being.

Second: Other Fees

The discount rate isn’t the only fee to consider when comparison shopping. Business owners should also consider the application fees, the initial cost of equipment, per-transaction fees (a fee you pay on top of the discount rate for each transaction you process), monthly minimums that affect your fees, voice verification charges, address verification fees (if extra), monthly statement fees and any other added costs a processor will charge you. Something to always keep in mind, processors are very flexible in how they present your proposal and they could offer you a much lower discount rate with a higher per-transaction fee if your average ticket price is low but your transaction volume is high.

Also pay close attention to the cost of equipment and/or software for processing the transactions. Equipment can vary in cost between different processors by hundreds of dollars, even for the exact same piece of equipment. Merchants should try their best to not lease equipment or software. Buy the items outright. By leasing a credit card terminal you lock yourself into a term-contract that may not be something you can cancel without a heavy penalty. And you pay more for the item than its actual cost in the long run.

Third: Read the Fine Print

Be sure to read all application forms and contracts presented to you very carefully. Read all of the small print. Some processors will attempt to charge you if you want to stop processing charges through them in less than two or three years — termination fees. That termination fee can also be completely separate from any penalties you incur when canceling a lease of a terminal. If you plan to do a lot of MO/TO, pay careful attention to what the contract says about the percent of transactions you can process as phone orders (non-swiped). What the salesman says to you during the pitch process may not be what the application actually says because the offer is being given to you at a best case scenario and isn’t taking into account details like added surcharges for card-not-present transactions. At the end of the day, the contract carries the weight over the salesman’s pitch.

Also take into consideration what conditions the company can terminate your account and whether or not there are monthly minimums and maximums. Much of the juggling between different rate buckets in a tiered pricing proposal hinges on being able to surcharge you for details like exceeding a monthly maximum or failing to reach a minimum.

Fourth: The Application Process

Some companies will eagerly attempt to send a representative directly to your place of business — including your home if that’s where you do your business from. Part of this is to pitch the services to you in person. But another part is to be present on site, and to take a photograph of your location. This is part of the application process and is done to verify that you are at the location you say you are. Some other companies can do online site surveys or accept photos and information you yourself provide.

During the process of applying for a merchant account you should be prepared to furnish these items to the company:

A copy of your business license or certificate of doing business
Your driver’s license
Profit and Loss Statements
Copes of previous years’ tax returns
A photo of your office

All processors require two-way access to your bank account once you are accepted. This allows the processor to deposit funds into your account and also allows them to withdraw funds if there are chargebacks.

Comparison: Host Merchant Services

Just for comparison’s sake, here’s quick rundown of Host Merchant Services in the context of the tips we just provided you.

Host Merchant Services offers cost plus pricing. This is transparent pricing where we show and explain all of the fees you are charged. The company also guarantees to offer you the best rate, claiming that if the company can’t save a merchant money they will give them a $100 gift card for their time. And the company guarantees that it will not raise its merchant’s rates. Ever.

The company has no hidden fees. Host Merchant Services also cuts off a lot of the fees that other processors charge — there’s no annual fee, no application fee, no monthly minimums, and the lowest PCI Fee int he industry.

The company provides free equipment — both a credit card terminal and receipt paper.

Host Merchant Services provides customer support for integration of payment gateway services. The company has a variety of gateway options that will integrate with almost all of the shopping carts out there — and will help its merchants get integrated. HMS also offers its own in-house gateway with no transaction fees and full AP for custom integration with any software package.

We leave you to draw your own conclusions regarding the Host Merchant Services offer.

Industry Terms: EBT

Electronic Benefit Transfer (EBT)

Electronic Benefit Transfer (EBT) is an electronic system in the United States that allows government’s states benefits departments to issue money,accessible via a plastic debit card.

Common benefits (in the U.S of America) provided via EBT are typically of two general categories, food benefits and cash benefits.

Supplemental Nutrition Assistance Program (SNAP), formerly know as food stamps, provides funds via a payment card for recipients to purchase groceries.
Cash programs such as Temporary Aid for Needy Families (TANF) and general state-offered benefits provide funds via a payment card for recipients to make purchases and receive cash back at businesses that accept the cards.

To use these benefits: Through EBT, a recipient uses his/her EBT card to make purchases at participating retailers. Food-stamp benefits can only be used to purchase food items authorized by the USDA’s SNAP program. Cash benefits may be used to purchase any item at a participating retailer, as well as to obtain cash-back or make a cash withdrawal from a participating ATM.

As food stamps are being phased out in the United States, all SNAP benefits are now being issued via EBT. So the way it works is in the SNAP program, recipients apply for their benefits in the usual way, by filling out a form at their local food stamp office. Once eligibility and level of benefits have been determined, information is transferred to the state’s EBT contractor and an account is established in the participant’s name, and SNAP benefits are deposited electronically in the account each month. A plastic debit card, similar to a bank card, is issued and a personal identification number (PIN) is assigned or chosen by the recipient to give access to the account. Recipients are offered the opportunity to change the PIN at any time, and are offered ongoing training if they have any problems accessing the system.

All states have systems that use magnetic stripe cards and “on-line” authorization of transactions. When paying for groceries, the SNAP customer’s card is run through an electronic reader or a point of sale terminal (POS), and the recipient enters the secret PIN to access the food stamp account. Then, electronically, the processor verifies the PIN and the account balance, and sends an authorization or denial back to the retailer. The recipient’s account is then debited for the amount of the purchase, and the retailer’s account is credited. No cash money changes hands. Payment is made to the retailer through a ACH settlement process at the end of the business day. Most states’ online EBT systems are interoperable through the Quest network, which is sponsored by the Electronic Benefits and Services Council (formerly the EBT Council) of NACHA-The Electronic Payments Association.

For More Information

Host Merchant Services makes it easy to accept EBT.
You can read an FAQ on EBT Here.

Global Reveals More About Data Breach [2023 Update]

Today The Official Merchant Services Blog is updating its coverage of the Global Payments Data Breach. The big bomb Global just dropped is that apparently there was a second data breach.

The story, initially broken by Ellen Messmer at Network World stated that Global Payments itself revealed this latest news.

Data Breach II: Credit Card Boogaloo

From the Global Payments Website: “The Company’s ongoing investigation recently revealed potential unauthorized access to servers containing personal information collected from a subset of merchant applicants. It is unclear whether the intruders looked at or took any personal information from the Company’s systems; however, the Company will notify potentially-affected individuals in the coming days with helpful information and make available credit monitoring and identity protection insurance at no cost. The notifications are unrelated to cardholder data and pertain to individuals associated with a subset of the Company’s U.S. merchant applicants.”

So What Was Compromised?

This second breach compromised the personal information of a subset small merchants that applied to be clients of Global Payments — and the company stressed that this set of merchants was different than the ones exposed in the first breach. The exposed information includes the sort of personal information the Atlanta processor uses as part of its underwriting process. The company stressed that it does not have evidence that any fraudsters obtained or misused the merchant applicants’ information — but the servers that contained that information were possibly accessed by an unauthorized party. Last time we updated this story, we provided information from Brian Krebs about how information from the first data breach could have been used by fraudsters.

Something to keep in mind regarding Global’s claims that the second breach did not lead to fraud is that Global still maintains that the information that was compromised in its first breach was not involved in fraud — even after Krebs dug up examples of fraud happening to Global customers in his blog entry here.

Wait, What?

The author of the official updated statement released by Global — Jane Elliot from Investor Relations — added this caveat to the statement: “This announcement may contain certain forward-looking statements within the meaning of the ‘safe-harbor’ provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including management’s expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties. Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following: further results of the continuing investigation of the unauthorized access of our processing system, including the discovery of additional card data or information implicated in the incident; the effect of our remediation efforts on operations; the impact of fines or penalties from the card networks and state authorities on our results of operations; and other risks detailed in the company’s SEC filings, including the most recently filed Form 10-Q or Form 10-K, as applicable. The company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.”

That reads like a very wordy hedge against the way this story has evolved to date. To put it another way, much of what Global has already stated, including clinging to the claim that the breach is contained and the number of compromised cards was just 1.5 million, has already been contradicted by information revealed by Visa and MasterCard.

Visa and MasterCard issued new alerts on May 15 suggesting the breach dated back to January 2011 — an exposure window significantly longer than what was originally reported by Global when news of the breach surfaced in late March. Visa’s alerts in March, which Brian Krebs used to break the story, indicated the breach occurred sometime between Jan. 21, 2012, and Feb. 25, 2012. Global used those alerts to help underscore their assertion that the breach was small and contained. But on April 26, an updated advisory from Visa put the suspected intrusion date closer to June 7, 2011. Setting the length of exposure for compromised cards back six months. And then Visa and MasterCard released information that pushed the date back an entire year from the initial alert, to January 30, 2011. This vaults the figure of compromised cards to 7 million — much higher than the 1.5 million “or less” suggested by Global in their official statement.

All this contradiction over the length and severity of the breach had been met with silence from Global Payments. They had offered no further comment other than to link to their website. But with this latest batch of statements, they’re now adding that very long caveat. And they apparently intend to clear matters up even further in June. The Company plans to provide additional information regarding the potential financial impact, the PCI compliance process and the status of the investigation not later than its July 26, 2012 year-end earnings call according to Paul R. Garcia, chairman and CEO of Global Payments.

The Official Merchant Services Blog will be following this story as close as ever now. It’s getting more complicated and convoluted. Hopefully that earnings call will clear the air a bit. But it still seems like the reporters digging into this, as well as Visa and MasterCard have a very different set of facts than the ones Global is sharing with people.

HMS Webinar Reminder [2023 Update]

Today we just want to remind all of our readers and subscribers of the upcoming Host Merchant Services webinar. On Tuesday June 12, 2012, at 10 a.m., CEO Lou Honick will be giving a 30-minute presentation on the Host Merchant Services Partnership Program as well as a quick introduction on how credit card processing works. After the presentation there will be a 10-minute Q&A period. The webinar is absolutely free to any and all interested in attending.

You can find the
registration form here
AT THIS LINK.

As stated before this webinar focuses on the partnership program — a bold offering from Host Merchant Services where we help businesses make money by sharing revenues with them from referrals they bring to us. The system goes beyond the normal lead-referral system, giving the partners potential for a much larger share of the revenue. HMS does all the work on its own to set up the partner’s customers for credit card processing. Host Merchant Services provides the partner’s customers with a complete payment processing and financial transaction service quickly and easily. Once the customer has their merchant account set up and has begun processing, the partner then begins to earn a steady and consistent stream of shared revenue with each and every monthly processing statement.

For More Information

You can visit our Partnership FAQ Page HERE AT THIS LINK to get more information. Or contact the company at 1-877-571-4678.

Or you can Register for the Free Webinar and get walked through the entire process, see how the partnership works, and learn about how Host Merchant Services will make you money and keep your customers happy.