Taking card payments can make it easier to make sales and boost profits, but many small businesses are put off by complex systems and high costs. We’ve asked independent brokers Accept Cards to answer a couple of our members most frequently asked card processing questions. Q. My acquiring bank for card payments has written to me advising that I must either deposit an £80,000 cash bond or find an alternative acquirer for processing card payments. Is this common practice? Richard Bradley of Accept Cards replies: A. We have seen the practice of acquiring banks making this type of request increase significantly in the last 12 months, particularly in sectors where deposits are taken by card payment in advance of the goods or service being provided. From the acquiring banks’ point of view, they see a period of risk between the time when the deposit is taken and the delivery of the goods/service. If the company does not fulfil the delivery, then the acquiring bank would ultimately have to refund the cardholder itself. By taking a bond, based on the amount of deposit and delivery period, the acquiring bank is effectively covering this risk. In many cases the request for a bond is a blanket policy in certain market sectors, often without looking at the track record of the individual business. If your business has a sound trading history and positive accounts, there is a good chance that a specialist in the card-processing sector can work with you either to achieve a reduction in the bond requested, or to secure a new acquiring bank without the need for a bond. Q. I am very concerned that my card-processing bank will charge me for the full cost of the transaction if I inadvertently accept a fraudulent card. What can I do to minimise my risk? Mark Pearson of Accept Cards replies: A. You are quite correct that the terms of your contract with your processing bank does allow them to claim the transaction amount back from you if they are debited by the issuing bank for any reason. This does not, however, apply to transactions where the cardholder is present and you have an authorised Chip and PIN payment. Where you accept payments where the cardholder is not present i.e. over the phone, by post or on the internet, there are several good practices that are relevant. For postal and telephone orders, you need to enter all the details requested by your card terminal ie. the three-digit code on the reverse of the card, and the postcode information. Failure to do this will not only leave you open to a chargeback by the bank in the case of a fraudulent payment, but is also likely to incur an excess charge as a ‘non-secure’ transaction. Also, only forward the goods to the registered cardholder address and if you have any suspicions obtain an independent address check. In respect of e-commerce transactions you will be able to use the security safeguards of your payment service provider, who will not allow the transaction to be completed on their site without the above information, and you can also ask them (at a small cost) to implement further checks such as a registered password with the customer’s bank via the Verified by Visa and Mastercard Secure schemes. About the author The Forum of Private Business and Accept Cards are working together to provide members with preferential rates for taking payments by credit and debit card, together with comprehensive advice on all areas of card processing.
Taking card payments can make it easier to make sales and boost profits, but many small businesses are put off by complex systems and high costs. We’ve asked independent brokers Accept Cards to answer a couple of our members most frequently asked card processing questions.