posted on September 11, 2000 07:13:42 AM new
I received this via e-mail this morning. IF you have a true Merchant Account, I was wondering if you had heard anything about these new regulations?
Also, what is your understanding of this?
**********
New regulations for "electronic commerce transactions,"
including Internet sales have been announced by
MasterCard / Visa, making processing with a swipe terminal
or popular software prohibited, and subject to fines up to
$25,000 in some cases.
Visa plans to notify all merchants before October 2000
that a Virtual Terminal will be required to process sales
deemed as "electronic commerce transactions."
Visa will allow merchants three months to come into
compliance, or be subject to fines. MasterCard has
announced similar plans citing the high level of disputes
associated with the Internet transactions.
Non-compliance will result in fines of $5,000 for the third
month and, $25,000 per subsequent month from Visa.
MasterCard plans to fine merchants $1,000 for each month
of non-compliance.
Visa has published their definition of an electronic
commerce transaction to include "...a transaction conducted
over the Internet or other network using a cardholder access
device, such as a personal computer or terminal," according
to a recent Visa memo.
Being in compliance will include processing all transactions
considered "electronic" by using an approved "real-time"
gateway, rather than software such as PC Authorize, IC Verify,
PC Charge or other modem based credit card processing
solutions.
Approved gateways for Internet and other electronic
transactions include CardService's LinkPoint HTML,
Authorize.Net, CyberCash, Payment Net, iBill, PayPal and
Yahoo! Store.
If you are unsure if your business will be affected by this
change in regulations, here are some examples of what is
considered an electronic transaction.
When a cardholder enters credit card information into a form or
shopping cart at a merchant's website, this is an electronic
transaction. The cardholder initiated the transaction by entering
card data and transmitting it to the merchant over the Internet.
If the cardholder sends an order request and the credit card
information to the merchant in an eMail, this too, is considered
an electronic commerce transaction, as the cardholder initiated
the transaction by entering card data and transmitting it to the
merchant over an electronic network.
If a cardholder visits a merchant's website for product
information, and does not transmit an order over the Internet,
but instead sends the order to the merchant by fax
[or telephone or mail] this is considered a mail/telephone
transaction because the cardholder did not use a PC or
transmit the information over the Internet.
Standard software or terminal systems may still
be used for this type of transaction, as well as for monthly
billing, recurring transactions where "on file" credit card
information is used.
Oddly enough transactions using a transponder or radio
operated device such as Speed Pass from Mobil or
transponder systems for paying road tolls like EZ Pass and
Fast Lane, are not considered "electronic transactions," as
they also refer to "on-file" credit card information.
The question now is who will pay for merchants to switch
to the virtual terminal system? Who will pay the increased
monthly fees, and higher discount rates associated with
real-time systems?
The answer is, the Internet merchants will be picking up the
tab. Your best bet is to contact your sales representative who
set up your original merchant account. Most virtual terminals
sell for about $700 to $1000. As an existing merchant, you
should be able to negotiate a substantial discount.
Some merchants may have only just purchased software,
or are currently in a lease on their equipment, and now will
need a new solution, or face stiff fines.
A good provider will soften the blow substantially. If you
fall into this new set of regulations, researching your options
would better be done sooner, than later.
Be sure to get a list of all the fees in writing, and shop around,
you can use competing offers to drive your price down.
****************
I have read and re-read this, but am not sure exactly what it is saying, and I couldn't find any news release regarding this. If you find one, please post it.
posted on September 11, 2000 02:35:20 PM new
jwpc - posting to bring this up, and I agree the writing is pretty convoluted.
It seems it says that merchants are taking orders over the internet and punching in the numbers on a swipe machine as if they had the card in hand, and in the future they will be required to purchase / lease / use a different type machine "virtual terminal" at apparently an increased cost.
posted on September 11, 2000 03:21:08 PM new
One more reason to get away from the major corporations controlling America and it's buyers....and commerce. BTW I believe that Discover (TM) also updated their standings as well.
[ edited by Empires on Sep 11, 2000 03:22 PM ]
posted on September 11, 2000 04:46:05 PM new
I don't get most of it either. The part I really don't get is how PayPal could be an approved gateway, (whatever that is).
The reason it doesn't make sense to me is that you have to require people to sign up for Paypal service to use it. Am I mistaken but isn't a Merchant account an agreement between a business and a bank, or financial institution?
I think I understand the reason for a change if it is that Merchants are entering numbers on a swipe machine. It could be to reduce liability. The purpose of a swipe machine is for the customer to do the swiping, not the merchant. CCNow has a rule that only the customer can fill in the online form.
I dunno. Parts of seem to make sense and parts of it are not very well explained.
posted on September 11, 2000 05:08:54 PM new
VeryModern you are correct!
The fees are a little different for each type of transaction, with a swiped transaction being the lowest. So if a merchant that runs a retail store is using that account for internet sales, they are paying a lower rate than an internet only merchant. They should not be running internet transactions thru a retail swipe account.
If you already are set up with an internet type account, you should be all set. I use one of the approved gateways that was mentioned and it costs $20 per month.
