Tag Archives: merchant services

Steve Jobs passes away 2011

Steve Jobs 1955-2011

Steve Jobs, Apple co-founder and former CEO of the company, passed away Wednesday October 5, 2011. Apple’s website posted this as a remembrance:

“Apple has lost a visionary and creative genius, and the world has lost an amazing human being. Those of us who have been fortunate enough to know and work with Steve have lost a dear friend and an inspiring mentor. Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple.”

The impact Jobs had on the payment processing industry is still being defined even now after his passing. Mobile Payments are a booming sector in payment processing, and technology is still being developed and tweaked and polished to harness the revenue potential that some predict will blossom by billions of dollars in the next four to five years.

And the iPhone that Jobs helped Apple launch is a key element in mobile payments. Host Merchant Services‘ own mobile payment solution, HMSPay uses an iPhone application to function. The iPhone, the iPad, the iPod are three of Jobs’ greatest legacies and innovations. These items that Jobs brought forth into the world are still only at the beginning of their use in terms of payment processing and its evolution.

You can find out more about Steve Jobs and his life from these links:

Google plus

What Does Google+ Mean For Small Businesses? [2023 Update]

With the launch of Google+ this year, most of the media buzz about the topic has been the confrontational aspects of Google+ vs. Facebook. But now that Google+ has started to settle in, there’s deeper issues at play for it and the impact it can have on e-commerce. The Official Merchant Services Blog takes a look at where things stand with Google+ and what impact it can have with small businesses.

Since its start in 1998, Google has been building an entire array of web tools. E-mail, calendars, the vaunted Google Docs, advertising, site analytics, mobile applications and third party apps for everything else, the “Google Universe” now offers a complete lifestyle hub for its users. The only thing it had been missing was social media … until now. Google+ is that last addition, and has the capacity to bring all of the rest of the tools Google offers together seamlessly into a rapidly growing social network.

What does Google+ mean for the small businesses?

Google Apps Marketplace and Google’s Chrome Web Store are extensive marketplaces for web apps that host everything from accounting to project management to Customer Relationship Management (CRM) applications to Enterprise Resource Planning applications. A full suite of management tools come together through Google and then Google+ Circles provide the interactive connection for co-workers using these apps.

Google+ is poised to become the conversation manager, overseeing all of the apps that are generating activity inside of a business. Google+ offers an expansive, easy to manage unifying force for business communications within Google’s universe. As a result, small businesses are migrating (over 3 million so far) away from expansive on premise software solutions to Google Apps for their IT infrastructure in a cloud computing environment. And this gives Google+ the opening it needs to target small businesses.

Single Platform or Best-of-Breed?

This Google-branded “universe” held together by Google+ also brings up a key issue for businesses regarding their tools: Do they go for a series of best-of-breed tools, the top of the line features available from a mix of companies and options, or do they go for a single source for all their business interactions?

With the former choice the business has the top-of-the-line tools and functionality available. But the usage can be fragmented between different pieces of software and programming. Purchasing managers, IT, and end-users are left juggling a medley of vendors and individual tools that on their own can be the best of what they do, but overall may not play well together. It could be something like Microsoft for IT, Oracle for backend infrastructure, Facebook for marketing and social media, LinkedIn for business to business connections. A series of integrations across a landscape of tools that ends up being complicated and expensive.

With choosing Google, and using Google+ to hold it all together, the business now has a single set of tools from the same source. This unifying force is very appealing to small business owners. As they look to replace desktop software and move toward a web-only environment, Google+ gives them that much more convenience on this path. Online tools offer an ease of use, accessibility and low cost that a series of different software packages can’t match. And even mixing together various web-based apps can be more cumbersome than the single Google toolbox can potentially offer. This extends beyond the document sharing of Google Docs and gives a viable web-based alternative for all that’s needed to keep a small business running day-to-day.

Unlike Facebook, which still focuses on the social aspect and presents itself as a place to hang out, Google+ is placing itself in a unique position to be the catalyst for a small business toolbox that manages all the different things a small business needs to thrive.

Now that the benefits of Google+ are thoroughly defined and out of the way, it’s time to focus on the one glaring negative. Businesses still can’t properly utilize the system yet. The only problem with Google+, and it’s a big one, is that businesses can’t register for the time being. Google says that won’t change until winter 2011.

What that means is you have to take advantage of Google+ currently in other ways. So the potential boon Google+ can bring as a unifying force for small businesses is still waiting for Goggle to finish integrating the features and let businesses in on it all. For now, Google+ remains an incomplete tool that still only works as a social tool like Facebook. That will change. And when it does, businesses will have an entire universe of functionality stitched together and ready made for them to take to the clouds and run things through just the web. Host Merchant Services will continue to monitor the development of Google+ and keep our readers up to date.

In the meantime, here’s a blog that gives some advice on how to use Google+ right now.

And here’s a blog from Forbes that cites 5 Things Small Businesses Should Know About Google+.h

the durbin amendment

Why the Durbin Amendment Got it Right [2023 Update]

The people in Washington aren’t exactly popular these days, and mostly for good reason.  Unemployment is high, the so-called economic recovery is weak, and small businesses are hurting.  However, another round of stimulus is on its way, and this time it might just work.  Even better, this stimulus comes at the expense of banks that got us into this mess to begin with. To be fair, there is plenty of blame to spread around but that is a topic for another day.  The Durbin Amendment went into effect October 1st, and many businesses will see a significant reduction in their monthly debit card processing fees.  This isn’t just for pin-based transactions, but applies to all Visa and Mastercard logo signature debit cards, as well as card-not-present debit card transactions via Internet and phone order.  On average, fees will be reduced by over 1% per transaction, resulting in a windfall for small business.

There are a lot of arguments against the Durbin Amendement.  I’ll outline and debunk the major ones here:

The savings will not get passed along to the merchants.

True, your merchant services company is not required to pass the savings along to you.  If you are on tiered pricing instead of Interchange plus, you aren’t going to receive the benefits.  But this is also creating a huge opportunity for merchant services companies like us to introduce customers to the benefits of our pricing model and to save them a very significant amount of money.  In short, if you’re merchant services company isn’t passing the savings along to you, it’s time to find a new merchant services company.

Merchants will not pass the savings along to their consumers.  

Again, true, but not necessarily the point.  In a free market, any time you create margin, you create opportunity.  Businesses all over the country are getting a little relief in their margins.  Some will choose to use that margin to compete on price.  Some will pocket the profits.  Many will use that extra profit to reinvest and grow their businesses through hiring and infrastructure enhancements.  No matter how you slice it, this is money directly to small business and that is great for the economy.

Banks will charge fees to offset the lost revenue.  

Sure, this is happening at some high profile institutions like Bank of America.  But other banks are also using it as an opportunity to lure you away.  Banks are limited by competition in terms of how much of the fee they can pass along to you before you bolt to a competitor.  That is the free market working the way it should.  When you take monopolistic fees like Interchange that are unavoidable to merchants and move them to the front of the transaction, consumers and small businesses ultimately win.  You now have the ability to shop for the best deal, where transaction costs were previously hidden and passed along in other ways.

Overall, the Durbin Amendment should provide a multi-billion dollar boost to small businesses everywhere, and the government didn’t have to shell out taxpayer dollars to make it happen.  Sure, it may be somewhat arbitrary, and too much regulation is never a good thing, but the card associations that impose Interchange fees operate as a cartel with monopolistic powers, so the government has a valuable role to play in the process.  We should all celebrate the Durbin Amendment and the tremendous benefits to small business.  If you’re not setup to take advantage of the savings, what are you waiting for?  Apply now!

Durbin Amendment About To Be In Effect

On the last day of September, Durbin Amendment Eve if you will, The Official Merchant Services Blog is about ready to end its Countdown to Durbin Series. Today we take a look at the big news that has the media buzzing.

Bank of America Reacts to Durbin

Bank of America, the largest bank in the country going by deposits, announced it is going to begin charging its customers a $5 monthly fee to use debit cards. The bank will begin charging the fee next year for the bank’s basic checking accounts. It will apply only to debit card purchases and not to ATM withdrawals, online bill payments or mobile phone transfers, the company said.

Consumer Backlash and Cut Up Cards

Bank of America announced this change, which will take effect for its customers in 2012, and were soundly slammed with negative feedback. Our first link comes from Fox Business Network, where Gerri Willis cut up her debit card on the air in reaction to the news from Bank of America. “Right here, right now, I’m going to show Bank of America what I think of their fees,” she said before using a pair of scissors on her card.

Durbin Slams Bank of America

Our next link comes from The Washington Post. It picks up the topic, mentioning what Willis did on the air. It then offers Bank of America’s defense of this new fee, stating that the bank is doing this to recoup losses that will come from the cap on debit card swipe fees that the Durbin Amendment will put into place tomorrow on October 1. Then the article quotes Senator Dick Durbin: “Bank of America is trying to find new ways to pad their profits by sticking it to its customers,” Durbin said in a statement Thursday. “It’s overt, unfair, and I hope their customers have the final say.”

Bank of America Already in Crisis

While this move was quite predictable, and falls into line with Host Merchant Services’ previously published analysis of how banks will react to the Durbin Amendment, the news is quite incendiary because of Bank of America’s current situation. Which is mentioned in the third article we highlight on Bank of America, by Fox News: “the Bank of America decision drew outrage for several reasons. The company is the largest U.S. bank by deposits. And it reaped $45 billion in federal bailout money — receiving the first chunk in 2008 and the rest in 2009 to cope with losses at Merrill Lynch. “

The article also mentions that Bank of America did pay back the government all of the bailout money.

Bank of America a Microcosm of Durbin’s Impact

A fourth article, from the Christian Science Monitor, sums up quite succinctly how this news is quite standard Durbin Amendment fallout: “So in other words, Bank of America is shifting a part of the fee obligation from merchants to customers.”

As we’ve seen in the ongoing Countdown to Durbin series, this is one of the most expected moves that banks are making. Shifting the burden of the fees away from merchants and putting it squarely on the shoulders of the consumers. This avoids the scope of the Durbin Amendment’s regulations and lets the banks continue to reap profits from the billion dollar payment processing industry.

Rounding out the coverage of Bank of America and its announced monthly debit fees we find:

The Chicago Tribune offers a quick glance at Bank of America’s plan here.

The Baltimore Sun blogs to its readers to avoid these types of fees by switching to ATM only.

And the final little tidbit we offer you today on the eve of Durbin enactment comes from The Street, reporting that Morgan Stanley cut 2012 earnings estimates for Bank of America and 11 other banks.

Host Merchant Services highlights Bank of America's downgrade by Morgan Stanley

This chart, while the story states is not entirely tied to Bank of America’s recent announcement or to the Durbin Amendment, does show that banks will be affected by the Durbin Amendment. They will have to make changes to deal with the losses they expect to take from a hard cap on fees that they were profiting from, and if Bank of America is any indicator, the burden of those changes will go from the merchants who used to get hit with the swipe fees to the consumer who will now have to pay more to support the use of debit cards.

networking with host merchant services

Networking with Host Merchant Services [2023 Update]

Host Merchant Services attended the 10th Annual Tabletop Networking Mixer last night hosted by the Delaware State Chamber of Commerce. The event was a blast. We were able to reach out to many local businesses and showcase the savings and improvements our company can bring to area merchants. HMS’ entire executive staff attended, as well as a host of our sales representatives. Many people stopped by our table to see the iPhone mobile payment solution we offer.

Chamber2

We’d like to give some quick shout outs to the many great businesses we met and talked with. Including:

  • LTCI Strategic Partners
  • Master, Sidlow & Associates
  • ADP Small Business Services
  • Planet Ten Multimedia
  • W.B. Mason Co., Inc.
  • Corexcel
  • Nagy & Associates
  • Bath Fitter
  • AgoraNet
  • Comcast Spotlight, the Ad Sales division of Comcast
  • Smart Home Inc
  • AD Transporation & Courier Service
  • All Aboard Cruises & Travel
  • Intellitec Solutions
  • crew360
  • DP Studios
  • Wertz and Co. Inc.
  • Royal Jewelry Design
  • Qnectus
E-Commerce uses Mobile Payments and Near Field Communications as new Merchant Services Solutions

Payment Processing Changes and How They Effect Small Businesses

It used to be one of the big decisions a small business had to make was whether or not to accept credit cards. But with E-commerce booming and consumers continually reaching for plastic instead of paper for their transactions, that decision has pretty much been made for small businesses. They have to accept some form of card payment as fewer people carry cash. However, the technology for payment processing is advancing at a high rate right now. And many studies predict mobile payments are on the verge of transforming the way people pay for things even more than before. The future of payment processing is ripe for change.

The Current Payment Processing Landscape At A Glance

Merchant Services, by its very nature, is an industry that for the most part seeks to work unnoticed by the consumer. The companies performing this service, which can be explained here in this Host Merchant Services infographic, tend to make their money off of percentages of a penny. Transaction by transaction those percentages grow into pennies, and as volume increases even further those pennies increase into dollars.

A lot of small business owners have horror stories about their payment processors because a really common practice that companies in the industry started to do to each other to compete better, was to boost the expenses from those transactions, and those percentages of pennies, with hidden fees and contractual obligations.

It got so bad that federal legislation, in the form of the Durbin Amendment, was passed as a way to combat debit card swipe fees. Host Merchant Services is already tracking the effects of those changes in a series right here on the Official Merchant Services Blog.

Changing the Game

But that’s not the only way the game is changing. Some companies, like Host Merchant Services, see the opportunity being created by the old standard. So HMS shines light on hidden fees, cuts away the fat from these agreements and HMS even goes so far as to not hold its merchants to contracts or termination fees.  Many of the features you find at Host Merchant Services are designed specifically to appeal to small business owners. A service oriented Merchant Services solution that lets the merchant know exactly what they are paying on their statement.

Technology Adds its Own Wrinkle

Beyond just what Host Merchant Services is doing to change the model for Merchant Services Providers, the industry is being shaped by advances in technology, specifically the potential for profits from mobile payments. Small Business Owners are starting to find the convenience of being able to process a payment anywhere can give them more flexibility to reach their customers. And so the companies developing the technology for these mobile payments are racing to reach the market with their ideas and advances.

Square Up  –  In 2009 the Co-Founder of Twitter, Jack Dorsey, introduced a breakthrough device that allows both individuals and businesses to swipe and process credit cards directly on their iPhone or Android phone. While Square was not the first company to do this, what set them apart was their fee structure and their lack of a contract. Square has no contract, does not have any monthly fees and only charges when a card is swiped or keyed in. They currently charge 2.75% of the transaction for each swiped card. This is their big selling point because Square lets small businesses that did not have the resources prior to begin accepting credit cards. This is appealing to small businesses with low or inconsistent volume that would normally be burdened by the heavy costs associated with setting up a merchant account.

Google Wallet  – On the other side of the payment world there is Google, who partnered with Citibank to create a new product called Google Wallet. This new mobile payment technology allows consumers to attach a credit card number to an embedded near-field communications (NFC) chip in their Android phone. This in turn gives that person the ability to make payments by swiping their mobile phone next to a chip reader.

NFC technology has been around for about a decade, and is still being tested in target market areas. Google Wallet will be tested first in New York City and Google hopes to roll it out for the rest of the country in 2012. Host Merchant Services noted this previously in an article.

HMSPay  – Host Merchant Services offers its own mobile payment solution, HMSPay. This is similar to Square in that it’s a device that attaches to an iPhone. And its big selling point is that it adheres to HMS’ standards of service and savings. Merchants who use it are able to get ultra-competitive rates that let small businesses take credit cards without being overwhelmed by hidden fees and other excesses found in the Merchant Services industry.

 

 

What Durbin Will Change

Roundup of What Durbin Will Change

The changes to interchange fees and debit card transactions brought on by the Durbin Amendment are just days away. The Official Merchant Services Blog is going to give its readers a quick hit of some of the chatter that is heating up the internet as we close in on the day the changes take effect. As with the previous articles, we’ll be using Host Merchant Services’ own Durbin Analysis as the foundation for comparison. We’ll be touching on 3 separate articles today so the comparison will be brief and focus on the highlights.

Citigroup Focuses on Credit Cards

The first article we find comes from The Wall Street Journal. This article points out how Citigroup is reacting to the changes that its competitors Wells Fargo and SunTrust are making because of the Durbin Amendment. Both of which were reported in our last Countdown To Durbin Blog, but can be summed up as both of those banks are going to implement a fee for debit card use that its customers have to pay each month.

Citigroup, according to the Wall Street Journal, is pushing an aggressive credit card campaign to its customers. Citi mailed an estimated 346 million credit card offers to North American customers in the third quarter of this year, the Wall Street Journal reported in the article.  The article suggests this move is at least partially motivated by a void that will be created by the Durbin Amendment:

“One potential void was created last year by an addition to the Dodd-Frank Act, which overhauled financial regulation. Known as the Durbin Amendment, the new rules, which go into effect in October, will limit the fees that banks collect from merchants each time a debit card is swiped, making cards far less profitable for the issuers.

As a result, some issuers are making debit cards less attractive by charging monthly fees and eliminating rewards. Citi is hoping to capitalize on this change by convincing dissatisfied debit customers to use its credit cards instead.”

This builds off of what our previous article found, that Durbin focuses on debit card transactions so one viable reaction to the Durbin changes is to switch focus to Credit Card Processing.

Consumer Reaction To “Too Many Fees”

too many fees 1

The next article we cite comes from an NBC news affiliate in Indianapolis, IN, wthr.com. This article contains some evocative reaction from consumers regarding debit card fees. It cites what Regions Bank is doing in reaction to the changes from the Durbin Amendment:

“Regions issued a statement saying regulations have changed and, as a result, banks are adjusting how they cover the costs of providing debit cards. For some customers, that will mean a monthly fee for a debit card beginning in October. While Regions and other banks say the change is necessary, it isn’t popular.”

Which we have cited before as being a very popular reaction from banks regarding the federal regulations. This article quotes debit card using consumer reaction:

“I think it’s my money and I shouldn’t have to pay to use it,” said Andrea Moxley.

“Enough is enough. Too many fees,” said another woman.

This underscores the reaction that many of these articles are finding. Consumers, the group the legislation was supposed to help with its reforms, are not pleased with the shifted burdens that end up not helping them in the end.

Merchants Can Save

The final article we cite comes from Jennifer D’Angelo. It’s a blog of hers that goes into detail about how Merchants can take advantage of the Durbin Amendment changes to save money. D’Angelo suggests Merchants can save up to $1,200 per year because of the Durbin Amendment. She states:

“Under a new law called the Durbin Amendment that takes effect Oct. 1, any merchant that takes debit cards — from retail stores, restaurants, gas stations, and small businesses like chiropractor’s offices — could be eligible for up to $1,200 a year in savings on debit card processing.

In order to be eligible for savings, you need to ask your payment processor if they are passing along the benefits under the Durbin Amendment.”

It’s a very short piece that essentially suggests contacting your payment processor for more information about savings. But it does include the statistics about the cap the Durbin Amendment brings to debit card swipe fees (the previously reported 24 cents on the average purchase) as well as the cost of swipe fees in the past year (the also previously reported 44 cents on the average purchase). Which underscores how much of a difference the Durbin Amendment is forcing on the individual transactions.

These articles give three different perspectives on the Durbin Amendment: Bank, Consumer and Merchant. And gets right to the heart of the issue: Where will the savings that the legislation was designed to create actually end up going? Banks are making moves to protect the huge profit margins the fees provided them prior to the regulation. Merchants are capable of getting some savings, but it hinges on what their payment processors can do. And consumers may end up having to pay the same amount as fees get shifted to other, unregulated areas in the infrastructure of bank services.

Host Merchant Services offers tips on how to protect against Identity Theft

Tips to Prevent Identity Theft

College students are commonly targeted for identity theft. Because they are such common victims of identity theft, Host Merchant Services recommends taking a few simple steps to protect your identity:

– Secure your mail.

Campus mailboxes are often easily accessed in a dorm or apartment. Have sensitive mail sent to a permanent address such as your parents’ home or invest in a secure post office box.

– Don’t share too much on social networks.

Studies have found that identity fraud can be twice as common for people who have been on social networking sites for five years or more. Javelin research found that those people not using privacy settings on their networks were at a higher risk of exposing crucial information to fraudsters. So to protect yourself, take the time to update and adjust your privacy settings for the various social networking media you utilize.

– Important documents should be securely stored.

All important documents you have should be stored somewhere safe. This includes your Social Security card, passport and bank and credit card statements. Shred all paper documents that contain sensitive financial information and any credit card offers that come in the mail.

– Never loan your credit or debit card to anyone.

If you feel the need to pay for a friend’s meal or a tank of gas, go with them instead. Avoid co-signing for a loan or other financing.

– Make sure your computer software is up-to-date.

Many public Wi-Fi systems can be susceptible to hackers, especially those that are not password-protected. Download updates to your antivirus and spyware software on a regular basis to keep your personal documents and information safe. Never use a shared computer workstation to pay bills or shop online.

– Check your credit and debit card statements frequently.

Look for any suspicious activity or purchases. The sooner you identify potential fraud, the sooner any fraudulent charges can be refunded to you.

– Start with trust.

When shopping on unfamiliar websites, always check for the BBB Accredited Business seal and click to confirm it is legitimate. If there’s no seal, check the company’s BBB Business Review at bbb.org.

– Check your credit report at least once a year.

Experian, Equifax and TransUnion each offer a free credit report once a year. Visit www.annualcreditreport.com to request a report and look for any suspicious activity or inaccuracies.

To check the reliability of a company and find trustworthy businesses, visit bbb.org.

durbin preparations continue

Durbin Preparations Continue [2023 Update]

The Official Merchant Services Blog is staying on top of the Durbin Amendment. Today’s article that we analyze comes from the New York Daily News.
The first thing that stands out about this article compared to many of the others on the impending Durbin date of October 1, is the casual, but easy to relate to lead of the story. The New York daily news appeals to its readers with some examples of other common cost increases that everyone who might pick up this story can relate to: An increase in toll costs and an increase in Netflix subscription costs. With those two things firmly entrenched in the reader’s mind, the article then shifts into discussion about the Durbin Amendment. And like Host Merchant Services said back when it analyzed the legislation, the New York Daily news makes the point that consumers are going to feel the heat from the cap on swipe fees.

Key Summation of the Durbin Amendment

key summation of the Durbin Amendment

The key summation of the Durbin Amendment from this article is short and to the point:

“The new legislation, called the Durbin Amendment, roughly cut the amount banks can charge retailers who swipe your debit card – known as an interchange fee – in half.

That’s great for retailers, who were paying an average of 44 cents per transaction, but bad for banks. In some ways, at least, it’s bad for customers, too.”

The Daily News article points out two banks are shifting the burden directly to its customers: Wells Fargo, which is testing a $3 monthly fee for debit card users in 5 states, and SunTrust which has already announced it is launching a new account type, Everyday Checking, that charges $5 a month for debit card use. These examples show that the banks are simply making a lateral move with the fees, so that they are no longer found under the scope of Durbin, but are still being extracted from consumers.

These examples follow suit with the current media landscape that is finding more and more banks ready to unveil new programs and changes to their services all related to the Durbin Amendment. But the article does go on to explain that some of these changes are still in the testing phase, and a detail oriented customer may be able to find ways to avoid these debit fees by taking advantage of other services and perks their bank provides.

The next big thing the article mentions is banks scaling back on debit card rewards programs. Host Merchant Services found this to be a likely reaction to Durbin Amendment changes as well when it analyzed the legislation.

The article concludes, however, with some information that recent articles about the legislation have been less inclined to delve into: Credit cards. The legislation primarily attacks debit card swipe fees, and this opens up a lot of potential for the big credit card companies to vie for consumers to switch from debit to credit. And the article makes a final point about how smaller banks can end up exempt from the changes. So it leaves the reader with a lot of different options on how to deal with any challenges they may face with their purchasing choices on October 1.