Tag Archives: merchant services

stop online piracy act 1

SOPA: Pot Meet Kettle [2023 Update]

The Official Merchant Services Blog has late breaking news to report today. Once again we take on the topic of the Stop Online Piracy Act (SOPA). In perhaps the strangest twist to date for the ongoing saga that is the battle between the entertainment industry to curb piracy and the internet industry to keep their business free of government interference on a micromanaged level — Alex Fitzpatrick from mashable.com reports that SOPA has some SOPA issues.

Lamar Smith Copyright Violation

In Fitzpatrick’s article, found here, it is noted that the sponsor of the Stop Online Piracy Act (H.R. 3261) Lamar Smith has a copyright violation on his own website texansforlamarsmith.com.

The article follows a report from Jamie Lee Curtis Taete over at www.vice.com. Taete investigated Lamar Smith’s website for any potential copyright issues. You can see Taete’s investigation here. Taete describes describes the impetus for the investigation: “US Congressman and poor-toupee-colour-chooser Lamar Smith is the guy who authored the Stop Online Piracy Act. SOPA, as I’m sure you know, is the shady bill that will introduce way harsher penalties for companies and individuals caught violating copyright online (including making the unauthorised streaming of copyrighted content a crime which you could actually go to jail for). If the bill passes, it will destroy the internet and, ultimately, turn the world into Mad Max (for more info, go here).

I decided to check that everything on Lamar’s official campaign website was copyright-cleared and above board. Lamar is using several stock images on his site, two of which I tracked back to the same photographic agency. I contacted the agency to make sure he was paying to use them, but was told that it’s very difficult for them to actually check to see if someone has permission to use their images. (Great news, copyright violators!) However, seeing as they’re both from the same agency and are unwatermarked, it seems fairly likely that he is the only person on the entire internet who is actually paying to use a stock image (and he’d be an idiot not to).

So I took a look back at an archived, pre-SOPA version of his site.”

Caught Red Handed

The violation stems from Lamar Smith using this image:

DJ Schulte's image that SOPA sponsor Lamar Smith used without giving credit to.

On his site it appeared like this:

Host Merchant Services reposts image from Lamar Smith's website with a SOPA level copyright violation.

Taete fills in the full details of this violation: “I managed to track that picture back to DJ Schulte, the photographer who took it.

And whaddya know? Looks like someone forgot to credit him.

I contacted DJ, to find out if Lamar had asked permission to use the image and he told me that he had no record of Lamar, or anyone from his organization, requesting permission to use it: ‘I switched my images from traditional copyright protection to be protected under the Creative Commons license a few years ago, which simply states that they can use my images as long as they attribute the image to me and do not use it for commercial purposes.

‘I do not see anywhere on the screen capture that you have provided that the image was attributed to the source (me). So my conclusion would be that Lamar Smith’s organisation did improperly use my image. So according to the SOPA bill, should it pass, maybe I could petition the court to take action against www.texansforlamarsmith.com.’

Oh dear. Luckily for DJ, there are people out there like Lamar making new laws to protect the little guy against online copyright theft. Keep fighting that good fight, Lamar!”

No Response Yet

No spokespeople from Lamar Smith have been available for comment on this issue. Maybe when the egg on their faces is removed there’ll be time to address the silliness that stems from the SOPA sponsor not taking enough time to make sure his own site didn’t fall under the extremely broad language that would allow the Department of Justice to shut down his own site.

Luckily for Smith, the bill hasn’t been signed into law just yet, so Google doesn’t have to remove his site from their search engine, and his payment network provider doesn’t have to suspend transactions from the donation portion of his site.

For More Information

To find out more about the Stop Online Piracy Act, you can read the in-depth Host Merchant Services Analysis here.

To read the proposed legislation itself, you can download it here.

Florida’s Proposed E-Commerce Bill

Today The Official Merchant Services Blog is taking a look at a new bill proposed in Florida that attacks the growing E-Commerce industry. The bill — HB 861 — was filed by state Rep. Mike Horner, R-Kissimmee. The bill would require online-only sellers to collect and remit Florida sales taxes, just like other Florida retailers.

Bricks vs. Clicks

This legislation is drawn on the battle that has been brewing for the past decade between brick-and-mortar retailers and online entrepreneurs. Online shopping has become commonplace for the U.S. consumer, and this year’s holiday shopping season saw record business run through E-Commerce.

The Official Merchant Services Blog did a series of posts based on the strength of the E-Commerce industry. In it we reported that in recent years, the boom in online shopping created a shift in shopping trends. Holiday shoppers no longer adhered to Black Friday as the start date for their holiday shopping needs. A 2010 survey conducted by Google and OTX found that 35% of internet users start their holiday shopping prior to the end of summer, months ahead of Black Friday.This shift continued to grow in 2011 as consumers found online shopping extremely convenient.

According to a Star Tribune article from January 16, 2011, Cyber Monday sales rose 16 percent from 2009, and topped $1 billion overall –– marking the first time Cyber Monday hit the billion dollar mark. The record setting didn’t stop on Monday, according to comScore, a company that tracked the sales figures between November and December for the e-commerce industry. Sales on Thanksgiving Day were up 28 percent from the previous year, and overall e-commerce sales topped $32 billion in the holiday shopping period, a 12 percent rise from 2009. Even Black Friday, brick and mortar stores’ biggest holiday shopping day of the year, saw a 9 percent rise in e-commerce to $648 million.

2011 saw those numbers rise even higher. Statistics released from an IBM research unit called Coremetrics found that 20% more consumers shopped online this Black Friday 2011 than did in 2010. The data collected also states that 39% more online shopping happened on Thanksgiving Day itself in 2011 than in 2010.

Trying to Level the Playing Field

The boom in online shopping is what has prompted this bill to be suggested in Florida. In Florida, online retailers are escaping the burden of sales tax for their transactions. And so the bill was created to attempt to level that playing field a bit. According to this bizjournals.com article by Susan R. Miller, “Currently, Florida retailers with a brick-and-mortar location are required to collect and remit sales taxes on purchases made online, while their online-only competitors are not. The bill would require online-only sellers to collect and remit Florida sales taxes, just like other Florida retailers.” 

Miller’s article says that the bill has support of the Florida Alliance for Main Street Fairness, a coalition of small businesses, trade associations and civic groups, including the Florida Retail Federation, Florida Chamber of Commerce and Associated Industries of Florida. The legislation could be part of a larger initiative this year by states nationwide that would require online retailers such as Amazon.com or Overstock.com to collect taxes for online transactions.

The article does note that the bill faces one large obstacle in the local legislature: “However, Senate President Mike Haridopolos has said that such a plan would violate the Florida Legislature’s “no new taxes” pledge and would not pass if it resulted in a net increase in taxes collected by the state.”

Is This the Future?

The suggestion that this is part of a large initiative to attack E-Commerce giants like Amazon and Overstock is certainly of interest. Especially since a large scale move such as that would have a deeper impact on all of the smaller Online Shopping sites that small business people run around the U.S. But there’s some key facts to keep in mind before getting too worried that this is the next big thing like the Durbin Amendment was in 2011:

  1. This is a state bill, not a federal proposal. That means that this is still a very small scale approach.
  2. Florida law isn’t exactly cutting edge. Not to be flippant, but there’s a reason why snarky internet commentary site Fark.com gives Florida its own subject tag.
  3. The bill itself does, as the story states, face some opposition in its own state legislature because of the tax issues.

You can review the exact language of the bill by downloading the PDF here.

merchant services

Finding Quality Merchant Services [2023 Update]

Today The Official Merchant Services Blog is playing a bit of catch up. The story we’re going to highlight and discuss is almost three weeks old. It was intended to run earlier, but technical difficulties with the blog’s production kept it from appearing until now. However, we feel the story is still worth some attention due to the issue it highlights about the payment processing industry.

The story comes to us from a Chicago, IL section of the Better Business Bureau (BBB). This article from the BBB says that the organization has seen a 42% rise in complaints against credit card processing services. The article, which originally was posted by the BBB on December 15 found that complaints were up for the 12 month period in 2011 compared to the previous 12 months. The breakdown was specifically 110 complaints in the recent 12 month period versus  77 complaints in the period prior.

Not Just In Chicago

The complaints aren’t just lodged in Chicago. This article from Fox40.com details similar complaints in Sacramento, CA. The article states: “The Better Business Bureau is warning businesses to beware of sales pitches by credit card processors that don’t reveal key details that could end up costing business owners more than they bargained for.”

And it quotes Caitlin Peterson of the Better Business Bureau of Northern California as saying “We’ve had over 1,700 complaints this year against the merchant processing business.”

A graphic from Host Merchant Services detailing the rise in complaints against credit card processors for the BBB

What the Problem Is ?

From reading through the two articles — as well as an older BBB article about issues in the St. Louis, MO area — the problems that merchants are encountering are really straightforward. Business owners are being approached by salespeople offering big savings on their payment processing. And then once the merchant signs a contract with that person, they are saddled with hidden fees for services they were not told about. In short, the business owner is led to believe they are getting a great deal but end up having to pay out more because of all the things not mentioned in the deal. So complaints against payment processors rise in select areas.

Pricing and Transparency

This type of behavior is the exact reason Host Merchant Services utilizes its philosophy of Interchange Plus pricing and no hidden fees. These types of issues are why CEO Lou Honick says “Host Merchant Services is about bringing trust to the payment industry.”

“Payment processing is confusing,” says Honick, noting the ease in which merchants can get saddled with the types of issues that have cropped up with the BBB complaints. “The big guys make it difficult to understand exactly what your rate is and what fees are associated with accepting credit cards. We deliver personal service and clarity. Our people care about customer service and will take the time to explain how everything works.”

Honick also cites the process that Host Merchant Services uses to directly counter the problems that business owners encounter with other processors: “We believe that when you get your statement every month, you should understand every item, and it should match what you were promised in the sales process. If you have a question, there is a live person at Host Merchant Services ready to assist you.”

The Details

One of the primary ways Host Merchant Services combats the practices that lead to these complaints is with their pricing structure. Host Merchant Services uses Interchange Plus pricing instead of the more standard tiered pricing format. Interchange Plus makes statements easier to read, customer service easier to provide to merchants, and savings much easier to guarantee. Here’s a small graphic explaining the basics of how Interchange Plus works:

Interchange Plus by Host Merchant Services

You can review a comparison between Host Merchant Services Interchange Plus pricing — which is simple and transparent — and the tiered pricing plans that other processors use in a two-part blog series that The Official Merchant Services Blog ran in October, 2023.

  • Part One
  • Part Two
  • Follow Up

What the BBB Advises ?

The BBB advises merchants take these steps to avoid getting stuck with the issues that their complainants have encountered:

Ask around.

The BBB suggests getting at least three estimates from different Payment Network Providers and to checkout he BBB Business Review of the merchant processing service. They also suggest asking fellow business leaders for referrals.

Know where to turn.

The BBB advises you check up on the support team that a potential Merchant Services Provider offers you. Can you contact them 24 hours a day? What is their response like outside of typical business hours? And the BBB advises you make sure their technical support can handle your needs as that kind of support is vital to your business’ success.

Try them out.

The BBB says that you should not settle without a trial period. You should make sure that the payment processor you choose has a 100 percent money-back guarantee before selecting them. Make sure their service works for you, and make sure they keep their promises to you.

Don’t get locked in to a long term contract.

The BBB is very clear on this. Never commit to a long term agreement that locks you in. Make the merchant services provider earn your business each and every month.

Get references.

The BBB advises that you get the payment processor to provide you with references. And then suggests you spend some time checking up on those references.

Make sure you know what you’re being charged for.

The BBB says that if you have a question regarding a fee that you were charged, ask the merchant services provider. Don’t let them hide fees on you. Make sure you understand your statement.

How Host Merchant Services Stacks Up 

Host Merchant Services falls in line with what the BBB advises merchants to do. The company places a big emphasis on transparency. Their salespeople will explain a merchant’s statement in detail. One of strengths of the offering from Host Merchant Service is their guarantee to save a merchant money. They achieve this by a statement analysis. Not only will Host Merchant Services explain the details of what your statement and fees are, completely transparent, while you process with them, they’ll also explain where the hidden fees are with your current statement.

Host Merchant Services will provide references. They do not lock you in to a contract. They do not charge you a termination fee. They provide free equipment and free paper for your terminals. And they offer 24-7-365 customer service where they guarantee you will talk to a real person that will help you out with your issues. You can even initiate a live chat with HMS Support right from any page on their web site.

As Host Merchant Services COO Dan Honick says, “You stay with us because you’re happy.”

E-Commerce: Review and Preview

The Official Merchant Services Blog begins our second year of blogging with a look at one of our favorite topics: E-Commerce.

2011 saw huge gains for online shopping. As reported in The Official Merchant Services Blog on Cyber Monday, online shopping was strong on Black Friday. IBM research unit Coremetrics stated that 20% more consumers shopped online Black Friday 2011 than did in 2010. The data collected also states that 39% more online shopping happened on Thanksgiving Day 2011. The ease of online shopping is infiltrating the traditional brick-and-mortar retail event and Host Merchant Services‘ analysis of it held true –– sales numbers across the board rose from 2010, so overall Black Friday had a boost for retail, but clicks from e-commerce continue to grow and cut into the sales from bricks.

Also, mobile payments saw a huge increase during the holiday shopping season. According to this article from Seeking Alpha, mobile payments business increased 500% from 2010 on Black Friday. According to the article, PayPal mobile reported the huge increase, coming in at 511% to be exact. PayPal Mobile also noted that there was a 350% increase in mobile shopping on Thanksgiving 2011 when compared to 2010.

The Numbers Keep Coming In

This article by Internet Retailer demonstrates that Black Friday was just the beginning. There were more than 3,000 transactions totaling $141.6 billion in 2011 in the marketing, media, technology and service industries according to data collected by investment banking firm Petsky Prunier LLC. Of those transactions the E-Commerce and digital media segment was the most active, with 1,159 deals valued at more than $44 billion.

All of this activity demonstrates strength in the E-Commerce industry, and suggests that 2012 is a year primed for continued growth and success — which combines with the already rampant predictions of success for Mobile Payments within the E-Commerce industry.

Host Merchant Services Online Shopping E-Commerce Credit Card Payment Processing Image.

Is There A Bubble?

This article from moneycontrol.com asks the question, “Will the E-Commerce Bubble Burst?”

Comparing the recent success to the success of internet companies in 2000 and 2001, the article tries to figure out if the bubble will burst like it did back then for tech companies. The author’s opinion is that the similarities are only on the surface, and that the two situations are vastly different — suggesting that in the end, it’s not a bubble that is going to burst but rather an industry that is going to grow and evolve. The article looks specifically at the E-Commerce sector in India, but does spend time detailing the big picture globally.

Online Shopping is Now Commonplace

To really underscore the potential growth that E-Commerce has in 2012, this article from Daily Deal Media talks about how popular online shopping is becoming with moms. The article cites a BabyCenter survey which suggests that: “71% of moms regularly turn to websites such as shopping engines and review sites to compare prices. Another 56% admit to searching for coupons or digital discount opportunities on a regular basis.”

This is a compelling point in regards to the overall picture of E-Commerce. It has become more and more commonplace in everyday life for shoppers around the world. Mothers are turning to it for the convenience of being able to get shopping done quickly and efficiently, according to the article. And it is just become an ingrained part of our economy, fueling the potential for further growth.

Host Merchant Services E-Commerce Mobile Payments image

Mobile Payments Big Problem

The potential growth for Mobile Payments is huge. But the one thing holding it back in the U.S. is security. Just as online shopping has become more and more commonplace, people have gotten comfortable with making payments online. That brings risk, as phishing scams and credit card fraud has increased. But security standards like the PCI DSS have helped to make the mainstream comfortable with clicking the pay button and giving out their payment information.

Mobile Payments, however, are not quite there yet in terms of acceptance. This article from the Chicago Tribune discusses the looming security issues that the mobile payments market faces. As the article states: “While the first mobile virus dates back to June 2004, risks from hackers remained limited because of the relatively small size of the market. But this has changed with the surge in the smartphone segment, which this year outgrew the PC market, and the new dominance of Google’s Android software. The emergence of mobile payments, which allows shoppers to swipe their phones at a cash register, is whetting the interest of hackers and data thieves.”

The article states that fewer than 5% of smartphone users have security software installed on their device, according to Juniper Research — the same Juniper Research that predicts Mobile Payments will increase to a $670 billion industry by 2015. And a study by Deloitte cited in the article suggests that for companies in the technology, media and telecom sector expect data stored on staff mobile devices to be their biggest security headache in 2012.

Essentially that’s the biggest obstacle holding back the Mobile Payments industry. The sheer convenience the technology brings to the payment industry is extremely powerful and so despite security concerns it continues to be developed and pushed. 2012 will see growth in the industry, despite the security issues. And as consumers get more and more familiar and comfortable with the phone swipe style of payment, the industry will boom.

A List for 2011

And just for fun, here’s a list from Mashable.com detailing who they think were the biggest winners and losers from 2011 in E-Commerce.

  • Their winners include: Amazon, Apple, Wal-Mart and Gilt Groupe.
  • Their losers include: Barnes and Noble, HP, Netflix and Sony.

Click the link to read why each company made the list.

customer service

Customer Service: A Cautionary Tale [2023 Update]

In what will likely be the last blog of 2011, The Official Merchant Services Blog is going right back to the basics. We’re going to give our readers a recap of a story that’s been the buzz of the internet for the past couple of days and which illustrates why customer service is so very very important for a business — good old fashioned and extremely basic customer service.

The Story, So Far

Penny Arcade, an extremely popular webcomic focused on video games and video game culture, written by Jerry Holkins and illustrated by Mike Krahulik, also has a regular blog. On that blog artist Krahulik posted the entire transcript of a dialog between a customer– named only as “Dave” in the coverage of the event — and the marketing/customer service person representing the Avenger Controller. This device was originally designed by David Kotkin, an art teacher, to help one of his pupils, who suffered from epidermolysis bullosa, to play games for prolonged periods without irritation.

You can read the entire transcript of the dialog at Penny Arcade here.

The recap is pretty simple. Dave went through the contact information given on the web for the product, and asked their customer service department when the product would arrive because it was late. The controller was advertised as being available in early December, and by December 16, Dave had not received the item that he had paid for in advance.

As seen in the transcript, the initial responses from Paul Christoforo of Ocean Marketing, the PR contact for iControl (the manufacturers and distributors of Kotkin’s design), were short and still vague. But then tempers flared, and Christoforo stepped over the line, attacking his own customer: “put on your big boy hat and wait it out like everyone else. The benefit is a token of our appreaciation for everyone no one is special including you or any first time buyer . Feel free to cancel we need the units were back ordered 11,000 units so your 2 will be gone fast. Maybe I’ll put them on eBay for 150.00 myself. Have a good day Dan.”

That sparked the entire fiasco. Christoforo continued to be rude and flippant in correspondence with Dave, as well as others, including Krahulik.

The Avenger Controller, object that started the customer service fiasco for Ocean Marketing.

The Internet Intervenes

Christoforo was nonplussed by Dave’s contacts in the e-mails. Even when Krahulik himself got involved, Christoforo did not believe Krahulik was who he said he was, and laughed at the idea that this negative publicity was going to impact his marketing. The conversation sort of soars from that point as Christoforo has it out with Krahulik. Christoforo threatens to initiate a smear campaign against the comic strip and Krahulik just posts the entirety of the e-mails, along with Christoforo’s information. With battle lines drawn, and sides chosen, the internet steps in — since Penny Arcade is indeed a very widely read web comic, it gets a lot of attention, especially from gamers who would all be potential customers for the product Christoforo is marketing.

First Round Knockout

The results of the smear campaign vs. Krahulik’s blog post and eventual comic strip?

  • This investigation, originally posted on Reddit, and later preserved as a .jpg
  • Christoforo shuts down his twitter account
  • Christoforo apologizes and asks for the spam to stop
  • Controller-N drops Ocean Marketing

So in essence, the internet retorted against the terrible customer service offered by Ocean Marketing and Paul Christoforo. The smear campaign he threatened against Penny Arcade never got off the ground. Ocean Marketing got slammed by a legion of video game players and Penny Arcade fans. Bad PR ruined Christoforo’s marketing business in mere days.

Captain Obvious to the Rescue

Without going too deep into the details of this internet battle between the forces of good gamers and misguided or misanthropic marketers — you can follow the fascinating set of links as this story is still picking up steam — Host Merchant Services is just going to cut to the chase.

Customer Service is a vital component of a business. Any business. That includes those doing marketing for video game controllers.

Host Merchant Services has provided some tips in the past on how to get into good customer service habits. You can read the blog post here. Customer Service is part of the core philosophy of Host Merchant Services. You can read CEO Lou Honick’s blog about customer service at the Web Host Industry Review here. It’s just The Official Merchant Services Blog didn’t think it would ever have to post a series of tips that included: “Do not curse at your customers, and do not call them stupid — especially in writing.”

Every customer is important. And as the person handling customer service, it’s definitely in your best interest to treat those customers with respect. Lashing out or trying to bully a customer is going to, at the very least, lose you that business. In this case, it lost the person more than just one customer. The whole entire exchange blew up in their face.

All of this could have been avoided with some very basic customer service strategies:

  • Do not argue with your customers.
  • Do not talk down to or insult your customers.
  • Listen to them and give their feedback or complaints your time and understanding.
  • Be honest with your customers. No one likes to hear that their product is late, but they’ll be much more willing to deal with you and your company if you’re honest with them and do not try to lie your way around the issue.

Honey, not Vinegar

After seeing the entirety of the mess Christoforo made, don’t you think the entire thing could have been avoided if Christoforo had been honest and polite? And if he had offered some form of compensation for the obvious mistake in shipping the company he represented had made? A discount? A rebate? A gift card? If Christoforo had spent just half the time performing actual customer service instead of writing insults and snark back to his customer, none of this would have happened.

That’s the lesson here. Customer Service needs to embrace the goal of long-term customer relationship building. As cathartic as the initial insults may have been for Christoforo, giving in to his frustration ultimately backfired for him and his business. Taking a hit on one customer due to having to be polite, and maybe even offer compensation for the mistake in shipping, would have saved Christoforo a lot of trouble.

This is a cautionary tale. Customer Service is important. Especially in the world of e-commerce where if things line up just right — you tick off a customer who has an open channel to one of the most widely read web comics — you could face the full force wrath of the internet.

Stop Online Piracy Act Sparks Unity?

The Official Merchant Services Blog is back from its brief holiday. Thank you for keeping up with us. We have a couple of treats to share with our readers today, though the posting is going to be brief. Host Merchant Services is gearing up its site and its services for the coming of 2012, including The Official Merchant Services Blog. Expect a return to the fast break pace and full industry coverage next week.

Stop Online Piracy Act

Up first for us is coverage of the Stop Online Piracy Act. You’ll hopefully recall that Host Merchant Services gave an in-depth analysis of the Stop Online Piracy Act a few weeks ago, getting out in front of the coverage of this controversial piece of legislation. What prompted this coverage was that the bill included payment processors in its extremely broad scope of oversight, letting the Department of Justice take action against merchant service providers — or Payment Network Providers as they are described in the bill’s wording — for the reported piracy of that processor’s merchants. This struck a chord with Host Merchant Services and other providers and brought the whole topic of online piracy into the arena of merchant services news.

GoDaddy Reverses Position

Outside of the entertainment industry support for the bill has been minimal. The bill has been soundly thrashed by most tech industry companies, ranging from Adobe to Google — you can read Google Executive Chairman Eric Schmidt’s comments on the bill here. Apple and Microsoft initially were part of a group that supported the bill, then changed their position quickly when the details of the bill were hashed out in a congressional hearing.

The latest company to do a full 180 on SOPA support is GoDaddy. Unfortunately, it may have been a bit too late. GoDaddy initially came out in favor of the bill, stating that the company opposed Online Piracy and supported the effort to stop this crime through the legislation. That prompted a harsh critical reaction from its customers, many gathering online to organize a boycott of GoDaddy.

GoDaddy relented and changed its position. As this politico.com article reports: “Go Daddy CEO Warren Adelman said in a statement that lawmakers can ‘clearly do better,’ even though the company stands by its original position that ‘fighting online piracy is of the utmost importance. It’s very important that all Internet stakeholders work together on this. Getting it right is worth the wait. Go Daddy will support it when and if the Internet community supports it,’ he continued.”

But the damage has already been done. Much like Bank of America taking a huge PR hit for its reaction to the Durbin Amendment, GoDaddy is now in the spotlight over the Stop Online Piracy Act. The article explains that GoDaddy was in a precarious position on this issue, as they had a vested interest in fighting piracy being a domain registrar: “The fight over Internet piracy has recently put Go Daddy in a precarious position: As a domain registrar with a vested interest in fighting illegal content, it sat opposite of other Internet companies that felt SOPA and the Protect IP Act threatened the Internet’s backbone.”

‘Unlikely Allies’

In one of the stranger developments linked to SOPA, it appears that the bill is acting as a unifying force for liberals and conservatives. According to this ology.com article Republicans and Democrats are banding together in their criticism of SOPA and becoming “unlikely allies.”

The bill, which was authored by Republican Lamar Smith does have some strong proponents besides just the Hollywood and the Recording Industry. The Better Business Bureau and various Chambers of Commerce back the bill on the very simple premise that online piracy is a serious issue and the crime is hurting businesses in the U.S. But as the article points out, the issue is deeper than that and has created allies among Republicans and Democrats: “The ‘netroots’ conservatives opposed to SOPA have some unlikely allies in liberal and libertarian bloggers. In the end, the battle over SOPA is as clear a case of big industry versus the little guy as there has been in recent years. As politics makes a turn toward the populist ahead of the “great recession” it is highly unlikely that the big studios will achieve a legislative victory here.”

Stay Up To Date on SOPA

The bill itself is currently tabled by Congress and likely won’t be dealt with until 2012. But you can keep up with the latest developments by continuing to follow the coverage Host Merchant Services. Also this google+ feed can be quite informative too: #SOPA

technology 785742 1920 1

Beyond PCI: Digital Downloads and Security

‘Tis the season to be wary. There’s a lot of reports going around about how to be more secure and safe in your holiday shopping. Credit card scams and debit card scams are being looked out for. And shoppers are being careful. But the criminals are adapting and the danger goes beyond just phishing e-mails and retail shopping. So today, The Official Merchant Services Blog is here to talk about a particularly interesting development in security issues: video games.

We are in the midst of a very brisk holiday shopping season. Credit cards and debit cards are being swiped at record rates. Black Friday turned into Cyber Monday which then turned into Cyber Week. E-commerce, particularly mobile payments, were breaking sales records. Among this purchasing frenzy, blockbuster new video games are getting snapped up quickly. Games like Skyrim and Star Wars: The Old Republic are being rabidly purchased as gifts for gamers.

technology 785742 1920 1

But these new video games come with some big picture concerns that consumers need to pay attention to –– namely, security breaches that compromise their credit card information.

And that danger is related less to the video game itself and far more to the way the game is purchased, activated and enhanced. Digital downloads, virtual in-game items purchased with real money, micro-payments, are all rapidly rising trends in the video game landscape. Hackers are taking advantage of this trend by trying to find weaknesses in the security around where that information is stored.

A Brief History of Crime

Security Breaches for video game companies have been happening frequently this year. The biggest breach happened to Sony, affecting their Playstation customers as well as their PC gaming customers not once, but many times this year.

In April of 2011, the Playstation Network was hacked, compromising the vital information of 77 million accounts, and 24.5 million Sony Online Entertainment accounts. This has been touted as the largest personal data heist recorded in history, and prompted Sony to shut down its services for a month.

After that initial bomb, hackers continued to attack Sony throughout the year. Once again Sony was being breached as recent as October, according to this Forbes article.

Not Just Sony Gets Breached

This problem is spreading, however, beyond just Sony. Other companies are getting breached. Notably Turbine, maker of Dungeons and Dragons Online and Lord of the Rings Online. Allegedly the company’s community forums were hacked in early October –– around the same time Sony was being breached –– and vital customer data was breached through the hack. Turbine took their forums and community down for a week in an attempt to fix the problem.

Then in November, digital game distribution leader Valve announced there has been a security breach within its Steam database. This breach was similar to the Turbine breach in that the hack targeted the Steam community forums, which in turn opened up access to the customer database. The timing of this breach was right around the time that Steam was offering the newly launched, extremely popular Skyrim for digital download.

The Trend Targets Forums

With the recent flurry in security breaches, a trend appears to be taking shape. Hackers break into ancillary areas of a video game’s structure, notably the community forums. Because of how those areas store customer information but are still very vulnerable to security breach, which customers have critiqued and notified the company about in Turbine’s case, hackers keep targeting this weak spot. By getting in through a forum, they can find a backdoor into the database that stores the credit card information.

The big picture concern here is that more and more games are being distributed digitally, and more and more games are requiring some form of storage of credit card information for either ongoing subscriptions or micro-payments for downloadable content. Which means these hackers will be able to vigorously pursue customer information like credit card and billing information. Here’s an infographic detailing the change in video gamer behavior regarding micro-payments and digital downloads between 2008 and 2010.

Host Merchant Services infographic on video gamer trends like gold farming and micro-transactions, between 2008 and 2010.

What it’s basically showing is that subscriptions are going down, but gamers are buying more virtual items and are willing to make more and more micro-payments for content. This shows there’s a rise in the freemium model that Turbine games employ or the Downloadable Content that XBox Live games employ –– as previously noted in our blog here. And that makes the stored payment information that these gaming companies have a tasty target for hackers.

On the Horizon

It appears these attacks, and subsequent breaches, are just getting started. The Sony breach this past spring was huge and really set the stage for the ongoing assault. But the continued efforts have been relentless. Putting that activity into the context of recent reports from Verizon on lax PCI Compliance among businesses and merchants –– 79% of organizations surveyed were not fully compliant –– as well as the continued rise in micro-payments, virtual item shopping, and digital download content  in gaming systems  –– be it a pair of sneakers in sports game NBA 2K12 or an entire starship in Star Trek Online  –– these security breaches are cause for alarm.

This holiday season sees the competition between major MMORPG giant Blizzard, with their World of Warcraft game shifting to a Kung-Fu Panda inspired expansion, and Bioware’s George Lucas-fueled Star Wars: The Old Republic. Blizzard’s own security has been compromised consistently through their battlenet, so gamers need to be cautious in handing companies their information. Security needs to be stepped up. Both sides, consumer and merchant need to be proactive.

PCI Compliance And More

The PCI DSS is already stepping things up, as they’ve instituted a revamped set of PCI Compliance Standards with their version 2.0. But as the Verizon study shows, a lot of companies are struggling to maintain compliance. And PCI Compliance is really just the first step, as it tends to be a more basic set of guidelines on security, still striving to adapt to the swiftly changing schemes that hackers launch in their quest for your credit card information.

Host Merchant Services provides a Free PCI Analysis to its merchants and prospective merchants. The company also provides an informative FAQ on PCI and what it all means. And finally gives anyone interested, a step-by-step guide on how to become PCI Compliant at the most common tier for businesses.

More needs to be done, however, with e-commerce businesses. These security breaches keep happening, and they put millions of accounts  –– and credit cards  ––  at stake. The Official Merchant Services Blog will continue to monitor this developing story, especially as we get past the release dates of some major video games that have been fueling holiday shopping. But we’d love to hear from some of you. What are some tips you would offer to be more secure in your video gaming habits? Do you think there’s more risk now than there was in the past when using online gaming services such as XBox Live or subscribing to World of Warcraft? Let us know.

A Look at VeriFone’s Vx Evolution

The Official Merchant Services Blog has been covering the basics of payment processing, offering insight and tips on the general topics of the credit card and debit card transaction industry for merchants. Today we’re going to go a little deeper, and delve into a nuts and bolts topic: payment terminals. This kicks off the first two-part series where we shine a spotlight on specific terminals that are available to merchants. After the first two-parter, we’ll occasionally revisit the topic of terminals and look at offerings from other terminal manufacturers.

Keep in mind that Host Merchant Services offers free terminals to its merchants, so reviewing what’s available and finding the terminal that fits you best can create a lot of savings on your processing bottom line in the long run. Our first spotlight shines on terminal manufacturer VeriFone, specifically the Vx series.

The Vx Evolution

VeriFone offers a series of terminals on its Vx Platform that have been slightly rebranded as the Vx Evolution. The terminals are being marketed under this evolution tag as being proven, advanced and evolved. What that boils down to is a new look with some upgrades to a line of terminals that have a history of working and working well.

VeriFone lauds the Nine Advantages of the Proven Vx Platform:

  • The Verix system that the terminals use has a decade of proven use.
  • The terminals maximize communication, speed and flexibility, support value-added transactions and deliver multi-app capability that essentially enables applications to securely co-exist on the same device.
  • A seamless transition for the next generation of the line, letting you continue to run the hundreds of existing applications that work on Verix.
  • The worldwide use and support for the popular Vx platform.
  • The lack of obstacles for platform switching, making it quick and easy to get started on a Vx platform terminal if you switch from another brand.
  • The Vx series of devices is idea for virtually any vertical market or end-use scenario.
  • The enhanced toolkit, clear guidelines and helpful documentation let users quickly build solutions based on Vx Evolution’s core technologies and capabilities.
  • The intuitive user interface helps the Vx platform get deployed quickly.
  • The ARM RealView Developer Suite (RVDS) 4.0 Complier helps you compile your applications with the Verix eVo Toolkit.

 

Host Merchant Services Image of VeriFone Terminals in use.

You can review those advantages in a downloadable PDF found here.

The Other Two Benefits of Vx

VeriFone also is lauding two other advantages for its Vx Evolution of terminals: speed and security.

The Need for Speed

According to VeriFone, the Vx Evolution delivers secure payment processing eight times faster than its competition. It claims it can do this with a superior single processor that outperforms dual processors that competitors use. Using the metric of MIPS –– Million Instructions Per Second –– this graphic shows how VeriFone’s 500 MIPS ARM 11 processor works:

Host Merchant Services chart on processor speed for VeriFone terminals.

Essentially what VeriFone is saying is that competitors use a 450 MIPS processor to run applications and a second 50 MIPS processor to handle critical security tasks. They claim this slows down secure transactions to 50 MIPS. But VeriFone, with its Vx Evolution brand, utilizes a built-in, integrated security processor. It’s running at 500 MIPS for everything –– applications and security.

You can fully review VeriFone’s documentation on speed by downloading a PDF about it here.

Staying up to Date on Security

The next advantage VeriFone is lauding its Vx Evolution brand with is security. This is of particular interest to The Official Merchant Services Blog because we’ve written in the past about PCI Security Standards. In fact, we took a close look at a study by Verizon that showed 79% of merchants surveyed were not fully compliant with PCI DSS standards.

Host Merchant Services Image of a VeriFone Terminal

Host Merchant Services offers a free PCI analysis for merchants and makes PCI Compliance a priority for its merchants. Which is why the Vx Evolution brand is noteworthy.

According to VeriFone their Full Spectrum Security package –– which is standard with all of its Vx terminals in the platform –– gets their terminals up to PCI PED 2.0 standards. So Host Merchant Services, in its push to keep all of its merchants compliant year in and year out, embraces the Vx platform of terminals that are stamped with the PCI PED 2.0 Approved seal.

At a time when many merchants are having issues maintaining the old PCI security standards, the VeriFone terminals are stepping up their game and making it easier for merchants to maintain the new PCI compliance standards. This lets Host Merchant Services merchants stay compliant moving forward and gives HMS a leg up in its initiative for quick, easy, and worry-free PCI Compliance.

You can read more about the security benefits of Vx Evolution by downloading a PDF here.

To Be Continued …

In the next part of this series, we’re going to look at the terminals themselves and see how they apply those Nine Advantages VeriFone has lauded.

In the meantime, what do you think of this branding? Have you used any Vx terminals? In the past? In the present? Let us know.

Customer Service: Help Desk Stress Test

Today The Official Merchant Services Blog continues its special two-part series on Customer Service. We can’t stress enough how essential it is to focus on Customer Service –– especially now during the holiday shopping season when your business may be barraged with a lot more customers who have a lot more questions.

Yesterday, we shared with you a blog from Lauren Carlson at Software Advice. The blog gave detailed tips on how to prepare business and its customer support team for the holiday shopping season. Today we bring you the second half of Carlson’s customer service saga which focuses on utilizing the holiday season as a way to stress test your help desk.

Carlson suggests that “the holiday season represents a perfect laboratory for examining your business, as well as your performance at each point of customer contact.”

This is a compelling concept. As Carlson says, the holiday season gives you a chance to analyze your business –– especially the customer support side of it –– at super speed. Doing so lets merchants identify high performance areas that are effective under the added stress of the holiday season, as well as get some insight into areas that may need some improvement. To get merchants in the mindset of how the microcosm of the holiday season can fuel some quick on the spot analytics Carlson asks: “So you had 72 percent first-call resolution rates in August. Great. What about the day after Christmas?”

Carlson keys in on five areas of support that companies should examine during their holiday season to gauge their help desk.

Host Merchant Services blog image on customer service and help desk analysis.

How Effective is That Training?

Many merchants add seasonal help for the holiday shopping rush. It’s a tried and true method for the retail industry, for example, to take on some extra help at the end of the year to push through all that added hours and increase in customers. Carlson suggests this can be a catalyst for analyzing employee onboarding –– and get a good look at how effective your company’s system is for training and preparing new support staff.

She says “Companies should use this opportunity to examine the success of their training techniques, as well as the usability of their system.”

It’s really sound advice to keep track of your support staff’s effectiveness, and the holiday season definitely gives a merchant a focused period of time to quickly measure the staff’s performance.

How Well Do You Deal With Surprises?

The next area in help desk performance that Carlson says a company should measure during the holiday shopping season is something called The Collaboration Period. Carlson describes the first nine months of the year as a build-up or preparation period for a business. Mitch Lieberman, of Sword Ciboodle, calls that period the Coordination Period in Carlson’s blog. But, according to Lieberman, the holiday rush shifts into the Collaboration Period. Carlson quotes Lieberman as saying “Collaboration is when something is outside what could or should have been easily coordinated. Are you ready to collaborate on these emergency issues that you didn’t predict?”

Essentially, merchants can use this time to study how well support staff deals with surprises. How well can they go off script? How effectively can they cope with issues that crop up that weren’t prepared for and which aren’t on an FAQ or a PDF or a Guidelines e-mail.

Host Merchant Services blog image on customer service and help desk analysis.

Where Do the Problems Get Handled?

The next area of help desk effectiveness that Carlson suggests merchants should look at is peak load management. Businesses that bulk up with some seasonal help during the holiday rush tend to train those new employees on the basic level of support. They get training to help them stick to a script, deal with the first tier of issues in a protocol, or use the FAQ that was designed for the holiday season –– all really basic stuff. The intent being to keep the easy stuff out of the way of the veteran support team members, who are then expected to effectively handle the harder issues.

Carlson says some interesting statistics can be gathered through this dynamic: “Measuring the percentage of first-call resolutions compared to the percent of calls escalated will help to inform your peak load strategy. “

What’s Your Worst Case Scenario?

The next area Carlson says companies should analyze harkens back to the boy scouts mantra of “Be Prepared.” Carslon says “assume something bad is going to happen. It’s not pessimism. It’s good business. If you assume disaster will strike, you will have an emergency response system in place that’s ready to manage the disaster on all channels.”

It’s never good when disaster strikes. But it’s a much heavier burden on a merchant when disaster strikes during the high pressure holiday shopping period. So this is a good time period to gauge what a company’s emergency response process is. And, if things do go bad, get an up front look at how effective that protocol is. Being proactive, Carlson suggests, is the best approach. Use this time period to analyze your emergency procedures and tweak them to be the most effective they can be.  As Carlson puts it, “having proactive procedures mapped out for unforeseen emergencies will not prevent call spikes, but it can lower the spikes to a manageable amount.”

Host Merchant Services blog image on customer service and help desk analysis.

Are the Customers Satisfied?

The core element of your customer support team, and your help desk, is customer satisfaction. Is the customer happy? That’s what it all comes down to. Companies should be measuring customer satisfaction year-round. And Carlson’s blog concedes that point. But Carlson points out that the holiday shopping season heightens the importance of customer satisfaction. This is something The Official Merchant Services Blog has discussed during our series on holiday shopping as well. The stakes are higher during the focused frenzy that happens after Black Friday, so you need to make sure you’re keeping even the most basic tenets of customer service in mind at all times.

Carlson asks the question, “you might have great satisfaction rates during low-volume times of year, but is your support team still on par when things get hectic?”

She suggests something as simple as a survey of your customers asking how you did during the holidays –– basic feedback.

Host Merchant Services likes the idea of reaching out to the customers for feedback. It’s an effective way to continue to maintain the long-term relationship building goal of customer support. Or, simply put, it’s a nice way to let your customers know you value them and their input. HMS suggests utilizing your social media tools for a survey like this, as you can quickly interact with your customers through those tools and they can help you track and analyze the responses.

Conclusion

This is an effective checklist of ideas for merchants to monitor their customer support capabilities. There are some concrete suggestions here on ways to collect data that will help shape a company’s goals for delivering quality customer service. Carlson gives a lot of good tips in both parts of her series. The Official Merchant Services Blog is glad she shared these with us and hopes you find them useful too.

If anyone else has some tips or suggestions on how to improve customer service now in the holiday shopping season or any other time of the year, feel free to share in the comments section.