The Easiest Way to Make Your POS System More Secure Right Now

TP Blog pos security emv

5 minutes The last several years have been brutal on business owners where cybersecurity is concerned. You can’t glance at the headlines without coming across news of some catastrophic data breach. And hackers aren’t the only possible security issue. Credit card fraud is still very much a real thing. Let’s start with the good news. There are things you can do right now that will absolutely make your POS system more secure. In fact, the single most effective tip in this article won’t even cost you a dime. It’s a simple policy shift that will immediately boost fraud protection. Then there’s the bad news. Since we’re talking about a policy change, that means retraining yourself and your people—maybe even some of your customers. And if you want to maximize your POS system’s security, you may have to make some room in your budget. But before we get to all of that, let’s talk about risk. Here’s what you need to know about credit card fraud. When the Chip or Strip Doesn’t Work You’ve almost certainly seen this scenario play out. A customer has their card in hand. They’re ready to pay. But—wouldn’t you know it—the strip or chip just won’t read. What do you do? The easiest solution is also the one most likely to expose you to risk—just key in the credit card number. The second you do that, you expose your business to multiple forms of potential liability. The risk of both credit card fraud and undefendable chargebacks go up. Keying in a credit card number sidesteps the security precautions put in place by both payment processors and financial institutions. And, unfortunately, there are plenty of criminals out there who are well aware of this fact. Which is why credit card fraud is trending upward. RELATED: Data Security for The Small Business Owner Fraud on the Rise Of course, there are times when you simply can’t use a credit card’s magnetic strip or the EMV chip. Any order taken online, by phone or, if you’re feeling really old-school, by mail is known as a Card-Not-Present (or CNP) transaction. And that’s the space where fraud is currently growing. In fact, The Aite Group estimates that global CNP fraud will exceed $7 billion by 2020. As Robert Harrow, a financial writer for Forbes, explains, “Credit card fraud is migrating online. That’s because the small EMV chips, which are now ubiquitous, have made it extremely difficult to counterfeit credit cards. . . . The days when a fraudster could just waltz into a local convenience store and use a counterfeit card are (mostly) gone.” And the last line of that quote is the kicker because there is one scenario would-be criminals can still exploit to commit credit card fraud in person. All they have to do is present a well-meaning merchant with a card that doesn’t seem to work. If the chip won’t read and the magnetic strip won’t scan and you decide to just key in the card number, guess what? You inadvertently circumnavigate multiple layers of payment processing security. Let’s Talk Cost As mentioned above, there are times when CNP transactions are inevitable. Any business you do online will force a CNP transaction. Not to worry. There are things you can do to make those more secure. But before we get to that, let’s cover one more unpleasant aspect of manually keying in credit card numbers—increased transactional cost. Different payment processors handle manually entered credit card numbers differently. Here at Talus, we don’t tack on any extra fee for manually entered credit card information. However, the financial institutions who provide credit cards do increase their fees, and that means your cost per transaction will go up, even if you’re one of our customers. Not only that, but any disputed charge will almost certainly be charged back if you manually enter the information for a credit card that’s physically present. Again, this has to do with the issuing bank, not your payment processor. Financial institutions don’t like it when you sidestep security. RELATED: Business Owner’s Guide to Payment Processing 2 Easy Ways to Boost POS Security Emiliano Moreno, a Corporate Manager with Talus Pay, is candid when it comes to the option of manually entering credit card information. “Swiping is always going to be better than manually keying in the transactions,” he said. As Moreno explained, the possibility of increased risk combined with the guarantee of increased cost makes manual entry a less-than-ideal option all the time. So what do you do instead? Two things. 1. Avoid manual entry if at all possible This is the single most effective way you can lower your risk, dodge unnecessary costs, and protect yourself from excessive chargebacks, all at the same time. And, as promised, this policy-based upgrade won’t cost you a dime. 2. Use AVS When you have no choice but to accept payment with a manually entered card (either because you’re taking payment remotely or the customer’s card simply isn’t working), we highly recommend AVS. AVS stands for “address verification system.” Typically, there’s some form of AVS in place by default, meaning you would have to intentionally bypass it to not use it. Don’t do that. AVS often just requires an address and a zip code. As Moreno explained, “The system is going to interface with the issuing bank and verify the address.” This additional security measure can help minimize the risk of chargebacks. Moreno also recommends using the CSV code in addition to AVS. One Recommended Upgrade If you’re particularly security minded (which is, by the way, a good thing), there’s one additional upgrade we’d like to recommend. This may incur additional cost, but it will also boost your POS security just a bit more. Embrace EMV When it comes to EMV (short for Europay, MasterCard and Visa) chips, Moreno pulls no punches. “If you don’t have the capability, you need to switch over immediately.” To be clear, Moreno isn’t overstating the importance of EMV chips. Eric Pesale, an attorney specializing in […]

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The Advantages Of EMV Processing Terminals

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3 minutes It wasn’t too long ago that merely swiping your credit or debit card was the standard at checkout. The process was quick and straightforward — but it wasn’t the most secure method, and fraud was common. However, in 2015, a new form of cards embedded with EMV-chips entered the U.S. marketplace with the promise of cutting down on what was then $21.86 billion in credit card fraud globally, according to the Nilson Report. EMV cards have proved their value over the last three years and are an essential part of keeping your business and your customers secure. Why EMV Cards Reduce Fraud EMV stands for Europay, Mastercard, Visa. It is the global standard for chip-based transactions. The chip in the card creates a unique transaction code that cannot be used again. This helps obscure the purchaser’s actual credit card number during the purchasing process. After the smart chip communicates to the card processor to verify and authenticate purchase and availability of funds, the transaction is processed. By contrast, magnetic strip cards don’t encrypt essential information, such as account number, name and expiration date. That makes the likelihood of fraud much higher. Fraud Decreasing With EMV Chip Cards The transition to EMV chip cards in the U.S. has been good news for banks and merchants, with credit card fraud dollars dropping by 75% from December 2015 to March 2018 for merchants who have made the change, according to a study released by Visa. Adoption of such cards was swift. Some 855 million chip cards had been issued to U.S. consumers as of August 2017, according to estimates by U.S. Payments Forum. While chip cards aren’t foolproof, retailers that wait to switch to chip reader terminals are opening themselves up to increased fraud risk and responsibility. Prior to the shift to EMV cards, credit card issuers were primarily responsible for covering fraud affecting consumer accounts by reimbursing cardholders for the lost funds as a result of fraud. But once the EMV mandate when into effect on Oct. 1, 2015, fraud liability shifted to the party with less secure systems. So, the only insurance your business has against liability is to offer your customers EMV technology. Chip cards can be used anywhere cards are used, but the chip functionality only works at a business that has an activated chip-enabled terminal. Merchants that haven’t adopted the new anti-fraud technology blame the delays on the cost of upgrading charge card systems and delays in obtaining certification for the machines. However, many small business owners say they’re happy to make the switch. “Credit is a risky thing for any business out there,” says Roddey Player, owner of Queen City Audio Video Appliances in Charlotte, North Carolina, told local television station WBTV. “Machines are typically 500 to $1,000. It’s not a prohibitive type of expense especially when you’re going to protect your company.” While retailers are not legally obligated to transition to chip card readers, there are several reasons why it’s good for business: Consumers expect secure terminals: As of last June, more than 3.1 million merchant locations were accepting chip cards — a 680% increase since the beginning of EMV migrations in the U.S., Visa says. Consumers now expect businesses to help keep their financial information safe and protect them from fraud. If your company doesn’t offer chip card readers, you could be risking your reputation and relationship with customers. Not transitioning increases your exposure to noncompliance fees and liability: The 2015 EMV mandate in the U.S. made businesses responsible for in-store counterfeit card fraud cases involving readers that are not EMV-compliant. Also, businesses are subject to fees from processing companies on each transaction that occurs without the proper EMV terminal or chip readers. These two factors could cost your business more money in the long run than the initial cost of switching to the new standard reader. The new readers can boost your marketing efforts: Today’s credit card readers — and the processing technology connected to them — capture a lot of data about your customers, and you should use that data to your business’ advantage. Building a customer database can help you determine the products customers are seeking. This information can also help you decide whether to start a loyalty program, offer gift cards or simply communicate better with your target consumer. Cutting-edge technology is reshaping the payment landscape, and EMV is only the tip of the iceberg. Is your business prepared to evolve with the technology reshaping the payments industry? Contact a Talus representative today. […]

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Small Business Credit Cards Vs. Small Business Loans: How To Decide

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4 minutes If you’re a small business weighing the pros and cons of financing expenses with a credit card or a loan, you’re not alone. Paying operating expenses and accessing credit are the top financial challenges non-employer firms face, according to the 2018 Small Business Credit Survey from the Federal Reserve. Non-employer firms are businesses that have no paid employees, have business receipts of $1,000 or more and are subject to federal income taxes, according to the U.S. Census Bureau. Credit cards are the most popular type of financing product, with 45% of all non-employer firms using credit to finance costs. Loans or lines of credit account for 27% of financing among non-employers. If you’re looking for a line of credit but struggling to get started due to the size of your business, look into different vendor accounts and see how they could help with gaining your first line of business credit. You could even check out reviews of loan providers such as loan lender reviewed to make sure you get the best type of loan for you from the best provider if that is the method you choose. Applying for loans and going through the whole process can take a while as you have to visit your local bank or loan company, but luckily with times advancing online loans are now a great way to get money there and then. This is definitely ideal if you’re working from home too. Whether you should choose a business loan or a small business credit card comes down to a range of factors, including: What you need the capital for The amount The payment arrangement you’re most comfortable with Your credit The desired APR range Here’s an overview of what to think about when considering these two options: Type Of Loan Best For Loan Amount Limits Loan Type APR Small-business loan Major purchases Up to $5.5 million through the SBA Term loans, invoice-based Fixed-rate Small business credit cards Ongoing expenses Varies by issuer, but typically less than loans Line of credit Variable Small Business Loans Getting a loan through a traditional bank could be a good option for small businesses. According to Fundera, such banks often offer lower interest rates than alternative lenders. But the fees they charge can add up quickly, qualifying for the loan can be difficult and the process can be fairly lengthy. Traditional banks are not the only option for small businesses seeking a loan. The U.S. Small Business Administration offers a range of options with loan amounts from $500 up to $5.5 million. And online lenders have made their way into the small business loan game as well. You can now get term loans, lines of credit and even invoice-based financing, all through online lenders. Pros Small business loans generally have higher borrowing amounts than credit cards, especially those guaranteed by the U.S. Small Business Administration. Those loans are guaranteed up to $5.5 million. In addition, interest rates on loans are often lower than those of business credit cards, making them a good option if you’re financing a major purchase. SBA loan rates, for example, are tied to the current prime , the LIBOR rate and sometimes an optional peg rate, a weighted average of rates the federal government pays for loans with maturities similar to the average SBA loan. In 2019, rates from the SBA for a loan start at the base rate plus 2.2 percent. Finally, loans offer a range of repayment terms, lasting as long as 25 years. Breakdown of the pros: Higher borrowing amounts Lower interest rates More repayment options Cons The process to qualify for a small business loan is often more involved than picking up a small business credit card. For example, the SBA bases eligibility for a loan on what a business does to receive its income, character of ownership, where the business operates, the ability to repay and the business purpose. And while some loans don’t require collateral, many of them do, which is a requirement you won’t find with credit cards. Offering collateral for a loan could help you qualify for higher amounts, better repayment terms and lower interest rates. Breakdown of the cons: Tougher qualification process Collateral is often needed When To Consider It Because these loans offer higher borrowing amounts, lower interest rates and a range of repayment options, they’re often best for those looking to finance a major purchase, like equipment or inventory. They can also be helpful to refinance debt or build business credit. Small Business Credit Cards There are a number of options when it comes to credit cards specifically tailored to small businesses. For entrepreneurs who don’t qualify for a small business loan, or don’t want to put up collateral for a loan, a small business credit card can be a great option. When used well, these tools can finance costs, help track business expenses and build business credit. With these lines of credit, you pay interest only on the credit that you and only if you carry a balance. Pros Unlike small business loans, small business credit cards require no collateral. Better yet, they often offer rewards or cash back for spending on business-related expenses. The Capital One Spark Cash card, example, offers unlimited 2 percent cash back on spending. And some of these cards, like the Blue Business Plus Credit Card from American Express, offer a 0 percent APR introductory period, which can be great for financing a major expense without paying interest. Breakdown of the pros: No collateral required Rewards for spending 0% APR intro periods Cons Business credit cards are essentially unsecured loans, which tend to come with higher APRs than you’d find with a secured loan. The Spark Cash from Capital One, for example, carries a variable APR around 19% If you don’t pay your balance in full each month, the interest payments can eat up all of your rewards and cost you some principal as well. These cards may also come with high fees, including annual fees, late […]

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Business Budgeting, Cash Flow And Taxes

TP Blog 04.08.2019 Taxes

3 minutes Every small business is unique, but they all share one challenge: managing their finances well enough to stay in business. Whether you open a flower shop, sell your wares online or start a new restaurant, you cannot ignore how much money comes into – and goes out of – your business, says Patricia T. Anderson, an accountant and Enrolled Agent based in Boca Raton, Florida. There are usually many outgoings, even online businesses need to invest in services like Eatel Managed Business Services to ensure things run smoothly. “The new business owner’s biggest financial concern is cash flow,” she says. Anderson says most businesses fail because they do not have enough cash to get them through the lean period when starting the business. “They need to have enough cash to take care of them personally and professionally while they run and build their business,” she says. The key to staying afloat is setting a realistic budget, and then turning that into a cash-flow analysis that ensures there are enough funds to keep the business going until it can turn a profit, she adds. Choosing The Right Business Entity The financial concerns don’t end there, though. For example, choosing the right business entity – such as a limited liability company or S. corporation — can make a big difference to your bottom line, Anderson says. “Small-business owners should consult with an accountant to confirm that they are making the best selection for tax and liability purposes,” she says. Fail to seek such guidance, and you could end up paying more in taxes than you should. Anderson also notes that many small-business owners are not aware that their tax is calculated on the amount of profit the business has earned, not the amount of cash they have personally taken out of the business. “This can also cause cash-flow issues,” she says. “Many new business owners roll the profits back into the business to help it grow and forget to set aside funds for tax.” The Impact Of Tax Reform Recent changes tied to federal tax reform – formally known as the Tax Cuts and Jobs Act — also can have an impact on your new small business. Anderson says the biggest change is the qualified business income deduction, which can provide up to a 20% deduction of qualified business income from a domestic business. “If qualified, it could significantly reduce their tax liability,” she says. However, she adds that there are “a tremendous amount of rules and exceptions” surrounding this change. “This new change makes it even more necessary to engage an experienced business tax preparer,” Anderson says. Another change tied to tax reform is likely less welcome – the elimination of the deduction for entertainment expenses. “In addition, if you treat your clients to cocktails and dinner at the sporting arena while attending a sporting event, your tickets and food and beverage is no longer deductible,” she says. However, she notes that if you strictly take your clients to dinner for a business purpose, your food and beverage would still be 50% deductible under tax reform. “Many clients used to track meals and entertainment in one account on their financials, but now it is important to separate the two to assist in tax preparation,” Anderson says. Hiring Outside Help Strong finances are the fuel that allows a business to move forward. For that reason, it’s crucial for small-business owners to view their accountant as someone who can provide help that stretches beyond mere compliance and tax work. “In reality, they should be using their accountant’s expertise for more than just that,” Anderson says. For example, she urges new business owners to work with their accountant to conduct a profitability and growth analysis, especially in regard to long-term plans such as opening an additional location, moving offices, adding team members, and integrating new software. “They should consider the cost and benefits of these decisions,” she says. “Sometimes, clients are making decisions based on their wants, but need to analyze information so they can make more informed decisions to attain their long-term goals.“ She also notes that too many small-business owners who handle their own finances do their accounting “after the fact.” By working with an accountant, they can get better access to real-time data that can help them make more effective decisions about product and service pricing, and employee salaries, she says.   Are you looking for payment services for your new business? Speak to a Talus Pay representative today to customize your POS system. […]

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