If your business depends primarily on online orders,then perhaps you’ve come across the acronym AVS. AVS stands for “AddressVerification System” and it is a fraud prevention tool used to verify thebilling address provided by the customer with the address on file with thecredit card issuing bank. AVS checks the numeric portions of the address—likestreet number and zip code—in order to return a verification. Sometimes thisresults in false positives or negatives which may result in having to do amanual override, but overall it is a good means of preventing fraud.

Additionally, making sure to use AVS can also affectyour interchange rate! Credit card companies like to see merchants taking theinitiative to protect against fraud, and merchants who capture AVS data canreceive lower interchange rates. Overall, it is a good idea to institute apolicy of AVS, especially if you’re a merchant that relies on card-not-presenttransactions.

The codes for AVS are alphabetical, and some are cardbrand-specific. The codes are:

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An interchange rate is the rate a card network charges to cover the risk of doing business. All credit transactions involve risk because no physical currency is being exchanged, and an interchange rate is calculated to mitigate that risk incurred from fraud and the threat of the card network not being paid back by the cardholder as much as possible. Interchange rates are paid whenever a merchant processes a transaction and is usually presented in the form of a percent plus a few cents per transaction. Interchange rates are not regulated by any government entity, so they are set by the card networks themselves.

These interchange rates do change, twice a year in fact, and are generally released in April and October. This is because the payment processing industry is always evolving, and card networks have to keep up with spending trends. The rates don’t always increase, sometimes they decrease or remain the same, depending on several factors the card network considers and their judgement of the market.

The factors that go into the decision to adapt interchange rates include the risk of fraud, the rewards card networks offer cardholders, the cost of the transaction, and the industry in which the purchase is being made (example: a concert ticket is high risk, so it would have a higher rate than, say, a low-risk purchase of a meal at a restaurant). Payment processors add their own markup to cover their own risk of doing business.

Visa and MasterCard’s interchange rates are available to the public, without processor markup, so you can always stay up to date and informed when choosing your payment processor. Visa’s rates can be found here and MasterCard’s are here. To help merchants keep more of the money they earn so their business can grow, PayArc offers one of the best deals in the industry for low-risk businesses, so contact us today to find out if your business qualifies!

ncryption & PCI Compliance

Surely you’ve heard about skimmers being placed on gas station pumps or similar, of criminals trying to capture credit card information. PCI-compliance helps merchants avoid potentially dangerous situations like these. Staying PCI-compliant should be a primary concern for any merchant. Security breaches can spell disaster for businesses large and small, as recent headlines have made clear. For that reason, card networks expect merchants to comply with the PCI-DSS to keep everyone from cardholders to the card networks themselves safe from fraud.

Encryption is one such way to keep cardholder data safe. The practice of encryption is a great security measure because…

• The practice helps keep merchants PCI-compliant
• Encryption makes it much harder for cybercriminals to steal data, protecting cardholder, merchants, processors, and card networks from fraud
• Encrypted data requires a decryption key to access, so until the encryption is unlocked the data is safe

How Encryption Works

Like tokenization, encryption converts the card data into an indecipherable code. However, unlike tokenization, the encrypted data but be decrypted (using a randomized decryption key) in order to be used. While a token can be used as is, encrypted data must be “unlocked” to be usable. Only authorized users have the decryption keys necessary to read the data, and these keys change often to guard user data.

While the magnetic stripe on the back of a credit card is encrypted, it is fallible to skimmers. An EMV chip also contains encrypted information, and each transaction is encoded differently, making it safer. EMV (Europay/MasterCard/Visa) chips were introduced in the U.S. around 2014, after several hacks of big-name retailers made consumers wary of credit card transactions.

PayArc and Encryption

PayArc offers an encryption service as part of our PCI-compliance program for merchants. This program is made possible through our partnership with ControlScan, a leading IT security service. PayArc and ControlScan are dedicated to the protection of your customers’ card data, and we will help you every step of the way to make sure that goal is met.

Usually, when a merchant account is terminated, the merchant’s name and business is listed on MATCH—Member Alert to Control High Risk. Ending up on MATCH is the nightmare of legitimate merchants. This is because finding an individual’s name on MATCH means that most processors will not approve a different merchant account with the same owner due to the higher risk of potential for fraud.

What is MATCH/TMF?

MATCH (previously known as TMF, or Terminated Merchant File), is a database of merchants used by payment processing companies that contains information on merchants and individuals whose accounts have been terminated. Payment processors check MATCH for each new potential account to mitigate their own risk and keep their business safe. Once a merchant or individual is on MATCH, it is very difficult to be removed and very unlikely that another merchant account will be approved for processing.

Why Would A Merchant Account Be Terminated?

There are several reasons as to why a merchant account would be terminated:

Placing a merchant or an individual on MATCH is not a decision that an acquiring bank or payment processor makes lightly, so if you’re not committing fraud you are probably safe. MasterCard and Visa both have penalties in place for acquiring banks and payment processors who not comply with their regulations—both for placing merchants on MATCH and for failing to do so. However, mistakes do happen, and if you believe that you have been placed on MATCH in error be sure to speak with an attorney who has experience in the credit card industry.