Certifications and the Payments Industry

Discussion continues to rain down about the need for certifications and dare I say… licences within the payments industry as there is a mad dash to get in front of government regulations.

While concern remains about the need for certification from many industry veterans as can be expected from those who have worked within the industry for so many years and have possibly forgotten more than most now know.  They are not necessarily the issue.

The issue that needs addressing is the constant turn around and influx of individuals who are looking to make a living doing honest work, but lack the critical fundamental knowledge to do so.  This lack of information, resources and know how does not only impact their ability to work, but also the merchants who they are trying to work for.  This costs our industry countless dollars in support, ill will and the constant turnover of agents and industry professionals.  The trickle up effect of this is what we see now, an industry under scrutiny who has many concerns about the ability to control, train and monitor itself effectively.

The common theme from the majority (not all by a long shot) of industry veterans is that change is needed and that change is in the area of education in one form or another.  There was a great post about this on The Green Sheet which can be found here.

As always, we’re interested in hearing your feedback.  So let us know by following us on Twitter or making a post here.

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Introduction to Global Payments…New Webinar

I understand how valuable time is.  Whether this is for you, your employees or clients time is at a premium.

With that in mind we here at Merchant University have fully embraced the concept of delivering actionable knowledge within 15 minutes.  Hey, that better than Dominoes!  The first webinar series we’ll be putting on is going to be focused on Global Operations for Merchants.

–          Introduction to Global Payments – March 12th @ 11AM PST – Click Here to Register

–          Introduction to Global Fraud Prevention – Date to be determined

–          Introduction to Global Chargeback Management – Date to be determined

These are merchant focused webinars which will help any merchants who are currently operating in the global marketplace, or for merchants who are considering expanding their business into new regions.

We’re very excited about this new series we’re going to be putting on as each of the points we’ll be outlining have been taken from direct experience working with and working for merchants who operate in a wide variety of international marketplaces.

Maybe you’re thinking that 15 minutes is not enough, that there is no way you’ll be able to find/hear/learn something that will improve your business in such a short time.  If that’s the case, then I challenge you here and now to take a scant 15 minutes from your day and see.  If you happen to know the information we cover, that’s great as you’re on the right track and it’s only cost you 15 minutes…but if not, think of the opportunity.

So… how about it?

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The Need for Education…Are we too Prideful?

Let me start off by saying this post will be biased.  I want to educate people, I want to help people become better tomorrow than they were today.  So in my mind the need for constant and continual education is a no-brainer.  I’m not necessarily talking about class study and tests.  I’m speaking to the need to improve one’s knowledgebase …no matter how that’s done.


Now, with the disclaimer out of the way, why don’t we as an industry feel as though we need to be educated on what we’re doing?  Or better yet, on how to do what we’re doing better?  From my personal experience as a merchant and a service provider (to a lesser extent) there is a huge gap in processes people practice and the actual best practices.  Worse yet, there is this sense that people don’t feel as though they need to continue to educate themselves.  That what they know now and today will be “good enough” for the business of tomorrow.


Why is this?  Is it because people really don’t think they need to improve themselves?  I personally find this hard to believe.  Could it be because there is no intuitive, simple and straight forward source for education?  Possibly that the educational content active today is too time consuming and not valuable enough, or people just don’t see the value in education?  Finally could it be as simple as; People don’t want to admit that they don’t know, or that they could use education?


Whatever it is I’d love to know.  If the problem lays with the way that education is handled that’s a problem that we as an industry can tackle.  If the issue lies with the people not believing that education is for them…well we have a larger problem on our hands.


Let me know what you think by emailing me directly at ian.wynne@merchantuniversity.org or you can contact us on Twitter at Merchant_U.


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Using Customer Service to Minimize Chargebacks

I recently made a comment about how merchants can use customer services rules and practices to help manage their chargebacks.  Since I received a couple inquiries on how to go about doing this, here are a few best practices…

Adopt a policy with your customer service of actually servicing your customers (what a shocker!).  Simple enough right?  Be nice to the customer (this by no way means the customer is always right) but by simply being nice and offering alternative options to a customer who has called/emailed your service department you can negate potential chargebacks.

If a customer has taken the time to call or write you, it’s just as likely and possibly even easier for them to call and file a chargeback.  Even more so with the new changes coming down the pipeline from Visa…keep this in mind when dealing with unruly customers.

Have a refund policy… this is actually an often overlooked piece of the chargeback management process. If a customer is unhappy with your product or service and they are unwilling to take a replacement or credit, it’s likely that if they don’t get their money back they will file a chargeback.  So by offering a refund you can prevent this.  I’d much rather offer a refund (even if I don’t feel it’s deserved) than receive a chargeback.  You’ll be out the money anyways and more-so if a chargeback is filed.

At check out clearly state your policies around product returns, refunds and cancellations.  Also include here your stance on fraud, and how you’ll prosecute it to the full extent of the law.  By stating your policies (and allowing for the logical wiggle room) you’ll dissuade some less determined would-be fraudsters from transacting on your site and going somewhere else.

An often overlooked benefit of good to great customer service?  Even if someone did not like the product or service provided if they walk away feeling as though they were treated well there is still a chance they will come back and try to purchase from you in the future.  This however is not the case with a poor product and terrible service.

What are your thoughts?

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The PCI Plague – Combating Inadequate Action

One would think that with all the information, news and concern related to PCI and security that we would have have an adequate way to inform and educate merchants about the need to be compliant.  However it seems, according to a recent First Data Corp and National Retail Federation survey of small businesses (less than $100k annually) that PCI DSS compliance is important and known about, but there remains a lack of action on the part of the merchant.

Here are some of the statitics pulled directly from the survey:

  • 64% of the merchants who KNOW about PCI DSS don’t believe their business is vulnerable
  • 60% of surveyed merchants are unaware of the costs they inure due to a breech of card holder data
  • 66% of surveyed merchants aware of PCI DSS requirements, yet only 49% completed the self assessment questionnaire
  • Of those merchants claiming to be aware of PCI DSS requirements 42% were unaware of the ongoing self assessment obligation.

In my mind these numbers beg the questions: How do we reduce the gap between knowledge and action?  What should we as an industry be doing to help these smaller merchants take action on their desire to protect their customers information?

There is a ton of great information out there about PCI DSS what it is and what it means to merchants even how to become and stay PCI compliant.  But with the number of small merchants 1) thinking they are not vulnerable and 2) not being made aware of the very real dangers and costs associated with a breech of card holder information, some action on our part needs to be taken.

Now while the actual responsibility of being PCI compliant remains on the merchant I believe that it is our job and responsibility as  providers of a service to assist those who we work with and for.  By helping them succeed and avoid potential pitfalls we are actually helping our business by making sure they stick around for the long haul and we provide them with an exceptional level of service.

I don’t know how we solve this problem… but i’m sure you each have ideas on how we can, so I’m all ears.

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New Chargeback Rules & Regulations

There has been much talk about the changes being handed down from Visa related to chargebacks.  Whether you’re a merchant, ISO, processor or even an agent you should be aware of what the changes are and how they will impact your business.

Below we’ve outlined in a very general form the changes being enacted as well as some best practices on how to manage the updates.

The Changes

1) Fraud coded chargebacks (see this link for chargeback reason codes) will no longer require the card holder to sign an affidavit confirming they were not responsible for the transaction.  Issuers may now submit the information in electronic form.

– The statement, “card holder neither authorized or participated  in the transaction” will still be required to be submitted in electronic form.

– It’s important to note that this is not a mandate only a requirement change and issuers may still request a card holder letter to support a fraud related dispute

2) Documentation is no longer required for non fraud related chargeback reason codes


Adapting your Business to the New Changes

In my experience it’s best to anticipate the potential fall out and make any necessary adjustments, or at least have the ability to be mobile to react once new changes are implemented.  So whether you’re using a manual or automated chargeback disputation process be sure your system is prepared to handle the changes related to document requests.  Training agents who fight your chargebacks for you is also important if you use in house staff.  Make sure agents are not attempting to dispute chargebacks on technical reasons as this will not work.

Update or add wording on your site at the check out process ensuring everyone who makes a purchase from you that your company takes all disputes seriously and will do everything within the law to persecute those committing fraud.

What else do you think can be done, or are you doing to prepare for the changes?  We’d like to know!


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True Fraud vs. Friendly Fraud…

The term “friendly fraud”…pretty funny when you think about it.  Why on earth would we call a situation where someone is stealing from you friendly?  I’ve never really understood that and most professionals within the industry say the same thing.  So if you happen to know where it came from, I’m interested in learning, so let me know.

But what is friendly fraud and how does it differ from true fraud?  And more importantly, how do we:

1) Identify the difference between friendly and true fraud?

2) Combat friendly and true fraud, without impacting our valid customers?

Identification is the challenging part, combating it can be a bit more manageable.  This varies even when we look at the difference between frauds related to physical goods vs. digital content.  But let’s speak in general terms and later we can go into details on each of the sections.

First off…

Primarily, if there is any hope at all at identifying what’s taking place within your transactional environment it’s critical that you have access to the transaction data.  When I refer to transactional data it’s anything, any piece of information that can be used and linked to a specific transaction, there are some details here.  If data is unavailable then identification and subsequent management of the frauds becomes much more difficult and less likely.  Let’s assume for conversation sake that data is available.

Well then how is data used to differentiate between fraud types prevention of unwanted transactions?


Yes, congruency is the term that we’ll be using to help differentiate between true and friendly fraud.  Why, because for starters true fraud tends to be much less congruent with your standard transactions, generally containing more pieces of data that fall outside of the standard transaction taking place.  Example: A merchant has an average order of $150 which comes from within the US.  Congruency takes a hit when an order is processed that is for $350 and takes place from the UK.  Not saying that this is an invalid order but it lacks congruency, it’s outside of your expectation and probably warrants further inspection.  That kind of characteristic is much more closely identified with true fraud vs. friendly fraud.  For true fraud, the data behind a transaction is one of the best tools to identify and then combat malicious activity.

Friendly fraud will often fall within the lines that have been deemed congruent for the operation being run.  This makes it extremely challenging to combat.  What I’ve found successful to start off with is transparency.  Transparency about what is expected of your customer and what can be expected of you.  Within the Terms of Use/Service as well as in other areas (but in less detail) state both the precautions and reactions that can be expected for those who attempt to defraud your company.  Clearly outlining, and more importantly effectively executing on your stated plan will help minimize the possible friendly fraud taking place on a merchants site.  By no means is it failsafe and the end-all-be-all of prevention but it’s a great first step.

What do you think, and what have you found to be successful in the identification and subsequent cessation of activity related to specifically friendly fraud?

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Merchant University’s New Blog!

And we’re back!  After a couple of weeks without our blog we’re back and will be building this without any further or future downtime.  Thanks for sticking with us as we’ve worked through the technical issues we experienced in getting a new site set up and new blog created finally.

We’re also looking to take a more conversational approach to the blog as we want to engage in discussion with anyone interested in education within the payments industry.  From industry pro’s to new merchants we’ll be bridging the gap by using the fundamental language of education.  In this blog we’ll be talking about everything payments related.  However unlike most sites, we’ll look to boil the information down into real world terms and educate or provide real world solutions to the potential complications for your business.

We hope you like what you see, if you have any questions, want to be apart of Merchant University or would like to chat, let us know via any of these channels:

Twitter: http://twitter.com/#!/Merchant_U

LinkedIn: http://www.linkedin.com/groups?mostPopular=&gid=3482252

or email me: contact@merchantuniversity.org


Ian Wynne

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