All About Offshore and High Risk Merchant Accounts

Word-of-Mouth Advertising Powerful for Online Games

cmiller@highriskmerchantaccount.co.uk (Chris) — Mon, 09 Nov 2009 04:44:00 +0000

According to a study by market researcher NPD Group called “Gaming Device Profiles”, advertising games on social networks, or in magazines was much less effective than word-of-mouth referrals from friends and relatives. Of course, this is not surprising. Consumers chose products and services based on reviews those they trust rather than from ads. But, it is particularly important for the young demographic of game players. Young people are keenly tuned in to peer group opinions and are easily influenced by them. More than 75% of pre-teenagers play video games. Households with children ages 12 and under account for 45% of all video game industry revenues.According to the study, 41% of video gamers relied on word-of-mouth to find out about games. More than three in 10 learned about video games by playing them in person at a friend or relative’s home.Users of the popular game consoles are 56% male and 44% female. The largest age group of players is 2-to-12-year-olds, who make up 24% of the total. Still a large percentage of players are older with one-fifth of players in the 25 to 34 age group and 17% are 35-to-44 years old.

Virtual Good Revenues Explosive Growth

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 03 Nov 2009 05:54:00 +0000

A recently released study by Piper Jaffray confirms what everyone already knows. The sales of virtual goods are on a steep upward curve which will continue for the next several years.
For evidence of the potential of virtual good marketing and money, look no further than Britney Spears launch of her branded virtual goods on Facebook. Projections are that she will sell millions of dollars of virtual goods.

The Piper Jaffray study is called “Pay to Play.” The study predicts triple digital growth of US virtual goods sales. US revenues alone will total $621 million in 2009, a 134 percent increase over the 2008 revenue figure. Rapid growth will continue at a double-digit pace through 2013 when the virtual goods marketplace should reach nearly $2.5 billion in the US.
Of course, this pales with China’s consumption of virtual goods. Chinese social network Tencent sold nearly $1 billion in virtual goods in 2008. Worldwide, the virtual goods sales will top $6 billion by 2013.

Secret Service Nabs Gonzolez

cmiller@highriskmerchantaccount.co.uk (Chris) — Wed, 28 Oct 2009 06:26:00 +0000

In one of the largest payment processor security breaches ever, 130 million credit and debit card numbers were stolen from in the Heartland Payment Systems. The US Secret Service has indicted the ringleader of the breach, Albert Gonzalez.

The Secret Service uncovered Gozolas as he was following a trail from other data breaches. Gonzalez was linked to a payment card security data breach that occurred several years earlier at retailer TJX Companies.

It took the Secret Service years of investigation to track down Gonzalez. It used informants and pain-staking searches on sites-called carder web sites where cybercriminals post information on stolen cards. It’s difficult to infiltrate the sites because the users are of sites are leery of dealing with anyone new.

Shutting down the carder site seems easy but is actually quite difficult. A lot of sites are proxies through multiple places. For example, the site may appear to be hosted in Europe but is actually in China. And, even if the site is taken down, it’s back up within a few hours. Getting to the top of the organizations that run the sites takes the same type of exhaustive investigative work as penetrating any highly organized crime syndicate.

While the Secret Service is making some headway, as shown by the Gonzalez indictment, the problem is continuing to get worse. Technology is constantly changing and the cybercriminals have the financial wherewithal to stay far ahead of law enforcement.

Global Payments Processing Posts Quarterly Results

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 20 Oct 2009 05:57:00 +0000

Payment processor Global Payments posted net income of $57.8 million for the fiscal first quarter ended Aug. 31, up 0.5% from $57.5 million during the same period a year ago. Revenue totaled of $441.3 million, up 8.7% from $405.8 million.

The processor's North America Merchant Services segment posted revenues of $303.9 million, up 6% from $286.6 million during the fiscal first quarter last year. US merchant-services revenue was $222.8 million, up 11% from $200.7 million last year. Canadian operations were $81.2 million, a decrease of 5.5% from $85.9 million.

Global Payments' acquired HSBC's UK business in June 2008 which helped a 28.7% revenue increase for the International Merchant Services segment to $105.9 million from $82.3 million last year. Within the segment, European operations posted revenue of $80.5 million, up 30.7% from $61.6 million last year. Asia-Pacific revenue grew 23.2%, to $25.5 million from $20.7 million.

Shopping Carts Abandoned by 87% of Consumers

cmiller@highriskmerchantaccount.co.uk (Chris) — Thu, 15 Oct 2009 07:42:00 +0000

Market research firm Amaze just released an excellent report on shopping cart abandonment. A full copy of the report is available on the Amaze website.

Interesting findings include that 87% of consumers abandon online shopping baskets. But, 75% of those abandoning carts said they would return at a later date to complete the purchase.

The study identified three types of online shoppers. The groups were labeled vague, cost conscious and window shoppers.

Vague shoppers were 42% of online shoppers. The vague label is applied to these shoppers because they seek more information from other people before completing the purchase.

Cost conscious shoppers were 42% of consumers. These shoppers said the reasons they didn’t buy were often attributed to high shipping costs or finding the item cheaper at another site.

Window shoppers accounted for 16% of people who abandoned cards. These consumers had no intention to purchase and were simply trying to get a thrill from shopping without purchasing anything.

Shopping basket abandonment was more common for books, movies and music, but less likely around more expensive items including clothing, jewelry, electrical and computing products.

Payment Processing Breach Expensive

cmiller@highriskmerchantaccount.co.uk (Chris) — Wed, 14 Oct 2009 08:01:00 +0000

US payment processor Heartland Payment System experienced a payment processing breach which is considered the biggest involving payment card data. The breach compromised more than 100 million credit and debit cards. Heartland disclosed the breach in January 2009.

The company faced 16 separate class-action complaints have been consolidated into one suit which has been filed in US District Court. The complaints were lodged by brought by financial institutions and allege that Heartland was in its duty to protect card holder data. The lawsuit seeks compensation from Heartland for the costs that the financial institutions say they have had to bear in notifying customers about the breach and in reissuing new cards

Heartland has spent $13 million on breach-related costs, and analysts expect that the incident will cost the company millions more in the coming years. In addition to financial penalties, the payment processor has suffered from negative publicity in the marketplace and loss of trust by many merchants.

Online Video Soars

cmiller@highriskmerchantaccount.co.uk (Chris) — Mon, 05 Oct 2009 08:12:00 +0000

How can video sharing sites monetize content? Mobile payments are the fastest and easiest way. There’s lots of free content. But, consumers have consistently demonstrated the willingness to pay for specialized video content.

Pew Internet and American Life Project released a new report on US online video viewing behaviors. Below are some key points that show the tidal wave of growth.

· 62% of U.S. adult Internet users watch videos on YouTube and other video-sharing web sites, up from 33% in late 2006. Online video viewing is almost universal among younger online users:

· Among Internet users 18 to 29 years old, 89% watch videos on video-sharing sites, up from 72% in 2008.

· Among Internet users 30 to 49 years old, 67% view content on video-sharing sites, up from 58% in 2008. mong Internet users 50 to 64 years old, 41% view content on video-sharing sites, up from 34% in 2008.

· Among Internet uses 65 and older, 27% view content on video-sharing sites, up from 19% in 2008.

· Among people who access the Internet with wireless devices, 71% visit video-sharing sites, compared to 38% of people who don’t access the web with wireless devices.

Noncash Payments Grow to $250 Billion

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 29 Sep 2009 05:54:00 +0000

The World Payments Report was released by Capgemini, RBS and Efma. According to the report, the growth non-cash payments continued in 2008. In 2007, non-cash payments increased 8.6% globally in 2007 to 250 billion transactions.

Much of the increase in non-cash payments is the result of increased use of credit and debit cards. The use of cards grew 14.5% in 2007 and 11.2% in 2008. Not surprisingly, the US and Eurozone, account for 61% of card transactions.

Global Transaction Services (GTS) is considered to be a stable and profitable source of income for financial institutions. GTS can have cost/income ratios as low as 50%. And GTS generates recurring, predictable revenues. Successful GTS required secure technology and strong international banking networks to drive network efficiencies.

The World Payments Report 2009 is available for download at this URL. Registration is required but there is no charge for the report.

Asia Leads the World in Spending on Virtual Goods

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 22 Sep 2009 05:22:00 +0000

Asians spend an estimated $5 billion a year on virtual goods. This accounts for over 80% of the current world-wide sales of virtual goods.

Of the $5 billion, about 80% of sales the sales are from online game. In Asia, online game playing is popular among adults as well as younger consumers and there is a huge portion of the population that is committed online games players.

Within social networks and virtual worlds, status consciousness is rampant. Therefore, Asians dress up avatars in the latest styles and each new outfit is a virtual item that produces revenues.

Most Asian social networking sites to be country specific but they have very active user bases. Qzone had 228 million active user accounts for the second quarter of 2009. In South Korea, Cyworld has 23 million visitors and month.

Asia has some innovative virtual business models as well. For instance, Cyworld rents background skins of popular South Korean baseball players for limited periods, driving repeat sales. Such rentals drive repeat sales and tap into continually changing trends.

Bank Risk from Merchant Chargebacks

cmiller@highriskmerchantaccount.co.uk (Chris) — Thu, 17 Sep 2009 12:05:00 +0000

Merchants frequently don’t understand what the big deal is about chargebacks. After all, the bank is making money from the processing receipts flowing through the bank. So why should chargebacks a little higher than normal matter?

Consider the bank’s point of view about chargebacks. The acquiring bank relies on the credit worthiness of a merchant. Merchant chargebacks become a credit risk to the bank for when a merchant has engaged in fraud, declares bankruptcy or is unable to cover financial losses from chargebacks for other reasons.

Banks have often been forced to cover large chargeback losses. Chargeback losses from a single or group of merchants can soar to hundreds of thousands of dollars per day resulting in losses of millions of dollars to a bank.

The bank’s contingent liability spans several months of the merchant’s sales volume because of the cardholder’s rights to dispute the charge and the chargeback. Depleted earnings and loss of capital can cause a bank to fail.

Additionally, the bank is liable for fines to the card card companies for excessive chargebacks. A bank can lose its acquiring certification and no longer be able to offer merchant account services.

SEPA Slow but Steady

cmiller@highriskmerchantaccount.co.uk (Chris) — Fri, 28 Aug 2009 10:46:00 +0000

The single euro payments area (SEPA) created a great deal of press. But, the number of cross-border transactions remains low and it could be years before the benefits of SEPA are fully realized and all European domestic payments are converted to SEPA.

The European Payments Council) is continuing to push the scheme forward because, ultimately, SEPA is a positive step towards truly opening up commerce across Europe.

Complying with SEPA is expensive for banks, although long-term cost savings justify the expense. The main reason SEPA has been a slow process only 2% of current payments traffic are cross-border. Therefore, there’s not much incentive or market demand for banks to move quickly. Even though the EU is a single economic region, each country within the eurozone is entrenched in it it’s own domestic payment system.

There is not much support for SEPA at a country level so banks corporations, consumers and banks are in no hurry for changes to take place. Each country has it’s own system in place which is working fine. For instance the French still write a lot of checks, whilst Germans prefer cash and Finland few consumers that use direct debits. .

Still there is no doubt that SEPA fundamental changes to the dynamics of the payments market will eventually take hold. The costs of running and maintaining separate payments systems can no longer be justified. Centralized payment systems that serve multiple regions, currencies and languages brings economies of scale and will sooner or later, the dreams of SEPA will be truly a reality across Europe.

AmEx Payment Processing Volumes Decline

cmiller@highriskmerchantaccount.co.uk (Chris) — Mon, 24 Aug 2009 15:23:00 +0000

The slump in the US economy continues to negatively impact payment processing volumes. AmEx reported that second quarter volumes dropped 15% to $104.8 billion in the second quarter, from $123.5 billion in second quarter of 2008.

AmEx cards are favored for travel and entertainment, particularly for businesses. Cut backs in corporate travel accounts and drop in consumer spending caused average spending per card during the second quarter was $2,861, a 13% decrease from $3,293 of the year before. International card transactions fell 19% to $46.6 billion. .

Revenue from payment processing 17%. The average merchant discount rate was 2.55.

Cardholder base also dropped 7% the second quarter to 49.8 million from 53.5 million in the year-earlier quarter. International cardholder base increased 33.9 million, up from 36.6 million a year earlier. AmEx canceled approximately 2.7 million inactive cards, primarily in the U.S., to reduce exposure to credit risk.

The net chargeoff rate in AmEx’s credit card portfolio rose to 10% of managed receivables in the second quarter, from 8.5% at the end of the first quarter. The increase in chargeoffs reflects lower average cardholder receivables and loans, offset by higher writeoffs and past due loans.

Report from Reuters available at (http://www.reuters.com/article/businessNews/idUSTRE56M6HG20090723?feedType=RSS&feedName=businessNews )

EU Payment Council May Warn Agains Magnetic Stripe Cards

cmiller@highriskmerchantaccount.co.uk (Chris) — Mon, 10 Aug 2009 09:12:00 +0000

By 2011, Americans travelling in the EU could have problems getting money from ATM machines using a bank card with magnetic strips. While the rest of the world has been moving towards chip and pin technology for years, US card issuers have held firm to magnetic stripe cards. As a result, Americans abroad may find it difficult to use US bank issued credit cards in Europe. .

The European Payments Council will decide by 2011 whether to advise its members not to issue or accept payment cards with magnetic stripes. The Council does not have enforcement power over its member banks but its advisories do carry a lot of bit of weight in banking circles.

EMV technology has certainly not eliminated fraud. In fact, a case could be made that fraud is as prevalent as ever before. The number of shops accepting the cards has increased significantly. Fraudsters simply have become more innovative in discovering methods of stealing PIN codes. They then create and use counterfeit cards at ATMs in countries not equipped to handle the more-secure chip technology, such as the United States and Canada

Online Games Reap Big Profits in China

cmiller@highriskmerchantaccount.co.uk (Chris) — Wed, 01 Jul 2009 13:37:00 +0000

The online game market in China increased 8.3% during the first quarter of 2009 compared to the fourth quarter of 2008. First quarter revenues soared to CNY5.514 billion. Market research firm Analysys International reports the, the market scale growth during the first three months of 2009 is due to the increase in online game players.

Chinese online game companies Shanda , Tencent and NetEase led the market by revenues. Shanda was in first place with revenue of CNY1.08 billion and 19.6% market share. Tenmcent was second with revenues of CNY910 million and 16.5% share. NetEase came in third with revenues of CNY710 million and 12.9% market share.

In fifth place was The 9 . The9 revenues decreased 6% from the previous quarter, pushing down its ranking from its previous fourth place. Taking over fouth place was Changyou with revenues of CNY420 million. Changyou is a subsidiary of Suku

In 2008, total revenues for China’s game industry was CNY54 million, accourding to the Game Software Department of the China Software Industry Association Chinese-made animation games represent about a 70% share of the Chinese game market.

The best payment options for online game publishers hoping to reap profits from the Chinese market are mobile payments and Chinese debit cards. Credit cards are not widely used in China.

Chinese Ecommerce Payment Processing

cmiller@highriskmerchantaccount.co.uk (Chris) — Mon, 29 Jun 2009 08:07:00 +0000

Most Chinese shoppers use a Chinese debit cards when shopping online. Credit cards, used primarily by non-Chinese citizens, make up only about 5% of online purchases. Low cost digital entertainment and purchases of virtual goods are often paid for by mobile phone.

Chinese debit cards are similar to cash payments. Online, Chinese debit cards function as a push payment whereby merchants are paid directly from the consumer’s bank account. Therefore, once payment has been authorized, the consumer cannot repudiate the payment unless proof of fraud can be demonstrated.

Prepaid cards are used often as a payment option. Prepaid mobile phone charge cards are particular popular. Close to 500 million Chinese have cell phones. Prepaid card mobile payment is hugely popular for purchasing digital content and low-ticket digital goods and services.

Recurring billing models are not common in China. Rather, merchants email customers notifying them that payment is due. The customer then uses a push payment through their bank to remit payment.

Chinese banks do not assist Chinese customers with payment disputes. Even if a credit card is used for payment, the banks have no chargeback provisions and there is no recourse for chargebacks on the part of the consumer. However, chargeback rights are available to buyers whose are not Chinese and who have cards not issued by Chinese banks.

If your business has presence in China, you must transact, settle and receive funds in Yuan (CNY). If you do not have a presence in China, you can only accept and receive payment in a currency other than CNY.

Pre-Paid Payroll Cards Fall Flat in the EU

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 23 Jun 2009 05:28:00 +0000

Pre-paid cards issued by banks (“open loop cards”) have experienced some success in the US markets. But, as US margins are getting squeezed, pre-paid card programs are looking to expand to international markets. Is that a good idea?
According to research from Mercator Advisory Group card programs will find the global market place difficult to successfully penetrate. Pre-paid card programs should not make the assumption that the rest of the world has the same opportunities as the US market.
The research points out that different legal and regulatory environments, business models, industry infrastructures, market readiness and product and market segmentation create part of the problem. Programs that have had some success in the US with particular market segments will find those markets cannot be replicated globally.
For example, the most profitable open-loop pre-pad card programs in the US are for payroll and government entitlement programs. In these applications, cards are reloaded on a regular basis, assuring continuing usage which generates associated fees. Cards are targeted to those who do not have direct deposit accounts or the “unbanked”, which constitute large numbers of people in the the US.
But in Europe, the unbanked make up a much samller part of the population. More people have direct deposit accounts at banks, along with debit cards associated with the account. Therefore, a large enough market to make pre-paid cards profitable doesn’t exist.

Mobile Carriers Face Powerful Competitors

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 16 Jun 2009 14:16:00 +0000

According to CTIA, one trillion text messages were sent in the U.S. in 2008, triple the number sent in 2007. In Australia, 6.9 billion text messages were sent by Telstra Telstra users alone during financial year 07-08, a 42.2 percent increase from the year before. The same dramatic growth in text messaging is occurring throughout the world.

Needless to say, SMS is a big money maker for mobile carriers. But, mobile carriers face increasing competition for the hearts and fingertips of text message users.

According to Liz Tay of IT News IT News the following are some competitors that are nipping at the heals of mobile carriers:

Skype Skype users incur on data access charges to send and receive messages from 400 million Skype users. The company free application already resides on the iPhone, Blackberry, and WindowsMobile.
Talki Any Java-enabled phone with an Internet connection can use Talki. Messages between Talki users are free. Text or picture messages to non-Talki users anywhere in the world cost five Euro cents
Meebo is used by 40 million people. As an ad-funded system, it is free to users

Gravy Train Over for US Issuing Banks

cmiller@highriskmerchantaccount.co.uk (Chris) — Wed, 03 Jun 2009 13:48:00 +0000

The new Credit Card Accountability, Responsibility, and Disclosure Act (http://www.govtrack.us/congress/bill.xpd?bill=s111-414 ) goes into effect March 2010. Opponents to the law say credit card issuers will be forced to raise rates and add new fees to make up for revenues lost. Expect to see issuers impose annual fees and fees as well as charging fees to apply for a card.

Highlights of the bill include:

Restrictions on penalizing individual cardholders for missing or being late on payments and exceeding credit limits.
Banning of universal default
Prohibits anyone under age 21 from applying for a credit card without a cosigner

US credit card issuers mailed 372.4 million card offers during the first quarter 2009. This was a decrease of 67% compared to first quarter 2008.

Tips for Selling in the EU

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 02 Jun 2009 09:20:00 +0000

The EU has a population of more than 500 million people, (http://www.internetworldstats.com/europa.htm ) many of whom are reasonably affluent. This vast market represents a great opportunity for you. But, if you are going to sell to the Europeans, some common sense advice is worth heeding.

You must do more than simply use the same website and offer “translation” into local languages in order to get more sales from the EU. Take time to study the cultural nuances and target your message to your buyers. Yes, the EU is a unified economic area. But each country is unique and special unto itself.

Translate your sites into local language. While it’s true that many Europeans are fluent in English, displaying in a native language helps build trust. It demonstrates you are an international merchant. It the height of conceit to believe English is the preferred language throughout the world.

There are 23 languages spoken throughout the EU. If translating into all 23 is too much to undertake, start with German, Spanish, French, Italian, Russian, and Swedish. Remember to have a native speaker review the translations for you. A native speaker will proof-read for grammar, phrasing, and correct usage of words.

There’s nothing worse than going to a site and seeing mistakes in language. It makes the site appear poorly planned and shoddily executed. Crisp, correct language usage is crucial if you expect to maximize sales from natives of particular country.

Use geo-optimization to automatically display your site in the language of the visitor. Offer payment options preferred by buyers in a particular country.. Direct debit, local bank transfers, and phone billing are some alternatives which are often preferred over credit card payments in the EU. But, it’s not a general rule since UK buyers like to use credit cards, whereas German buyers do not. Alternative billing solutions also help capture sales in countries that may be blocked from credit card usage.

Card Breaches Expensive for Banks

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 26 May 2009 08:11:00 +0000

Security breaches involving credit and debit cards happen all the time. Every day one sees in the news another story about stolen card numbers, often involving millions of potential victims.

Banks and merchants are on the line for monetary losses from fraud. Yet, one seldom considers how expensive it is for a bank to re-issue cards. Estimates are that it costs a bank $30 to reissue a card. It is more than sending out a piece of plastic to the customer. It takes time to uncover the fraud, notify customers, handle customer inquires. Not to mention that mailing costs are getting higher all the time.

This last week alone, I received 4 replacement cards from my banks. Multiply that times the number of card-holders and it’s easy to see how draining the problem is to the banks.

Credit card processing breaches continue to take a big financial toll on the banks. A single security breach at retailer TJX compromised between 40 and 100 million cards. Payment processor Heartland, who processed for 1 out of 3 restaurants in the US, was compromised as was Royal Bank of Scotland. The number of cards that will be replaced by banks is staggering.

Many banks are still stuck in the dark ages, using legacy computer systems that are years old. Banking systems are stressed to the limit and are scrambling to keep up with the ever escalating demands of responding to breaches.

One more burning room in the banking melt-down. With Congress cracking down on bank card fees, the ever-escalating increases in fraud, and the expense of dealing with security breaches, expect to see more banks moving away from card processing.

Royal Bank of Scotland Hides Out

cmiller@highriskmerchantaccount.co.uk (Chris) — Tue, 26 May 2009 08:07:00 +0000

Saying the name Royal Bank of Scotland (RBS) used to give one an innate sense of trust in the banking system. But trust no more, my friends.

Although RBS is slowly climbing out of the devastation caused by recent data breaches, trust in the bank is gone for lots of consumers and merchants.

The bank recently recertified as PCI compliant, but what does that really mean in actual security these days. RBC was certified PCI compliant when the breach occurred.

Reports of the RBS WorldPay card breach first surfaced in December 2008. More than 1.5 million cardholders had personal information stolen, including social security numbers.

Then, in February, RBC divulged that ATM thefts by fraudsters who cloned and manipulated stolen payroll card data and made 100 fake cards. The thieves then stole $9 million from 130 ATMs located around the world in just minutes.

RBS has been secretive about the breach since it happened. Apparently the bank is well-versed on disclosure laws. Consequently, it gives out only the minimum information required by law.

The bank may think that evading the publics’ scrutiny is good form. Common sense dictates otherwise.

The more that stays hidden, the more suspicious it appears. Who wants to stay with a bank that closes its door and full and honest disclosure in times of trouble? And allows thieves to steal $9 million with just 100 cards when I have to fight with them to raise my withdrawal limit $500.

3 International Payment Options to Increase Sales

cmiller@highriskmerchantaccount.co.uk (Chris) — Fri, 15 May 2009 11:31:00 +0000

Merchants who offer multiple payment options increase sales and revenues. Of course, credit cards are the most frequently used payment method. However, world-wide, only 59% of consumers prefer to pay by credit cards. That means a merchant can lose up to 41% of sales simply by not having additional ways for a buyer to pay.

Merchants need to give customers ways to pay that are popular in the region where the buyer lives. For example, Germany is the EU’s second’s largest online shopping market. Yet, only 26% of Germans pay by credit card. In China, 95% of payments are made by cash or with debit cards. 95.2% of

In the online payment world, transactions can be categorized as either “pull” or “push”. With a “pull” transaction, such as a credit card, the consumer is paying with a line of credit or pre-funded account.. “Push” transactions, on the other hand, are made by initiating the transaction from the source of funds such as the consumer’s internet banking account.

Here are some common payment methods used in Europe.

Internet Banking works similar to online bill payment. The buyer sets up the merchant as a payee on their online banking website and transfers the funds to the merchant. Transfer of money takes 2–5 business days which means the merchant must wait to ship the product. The delayed payment is offset by elimination of liability of chargebacks for the merchant.

Instant Bank Deposits are also known as international bank transfers. Consumers log onto their bank site directly from the merchant site and a preauthorization determines if there are sufficient funds available prior to processing the actual transaction. Funds are often advanced to the consumer immediately, although clearing still takes 2–5 days.

Electronic Funds Transfers – EFT, also known as electronic checks or echecks, work similar to a credit card. At checkout the consumer enters bank numbers rather than credit card numbers. EFT transactions take 2-5 business days to clear.

Carefully Manage International Bank Accounts

cmiller@highriskmerchantaccount.co.uk (Chris) — Fri, 15 May 2009 11:11:00 +0000

With the current economic downturn, international companies are examining banking operational efficiencies and seeking to trim expenses wherever possible. Minimizing bank fees, currency conversion costs, and using technology to automate processes is more important than ever before. .

International companies must manage mutlitple bank accounts across jurisdictions. Documentation required establishing accounts vary from country to country as do the laws on who may control the accounts. Internal to the organization, authorized signatories constantly change as personnel, titles, and functions change. . Managing disbursements in multiple currencies on a world-wide is complex and risky.

A complete audit trail of account activities is crucial for internal safeguardsa and to stay compliant with governmental and banking regulations. Companies should maintain an electronic repository of documents, including all bank correspondence such as a signatory information, statements, corporate and account resolutions, secretary certificates, articles of association, powers of attorney, depository terms & conditions, detailed service agreements, loan agreements and everything else that relates to each account. .

The risk profiles of all accounts should include the type of account, the account limits, the number of signatories, the transactions authorised to them, and risk mitigation services such controlled disbursement and positive pay. Similarly, the risk profile of a signatory must be maintained.

Ways to reduce exposure should always be explored. For example, introducing new bank services, setting new limits, restricting transactions are changing signatories. High-risk signatories may also be addressed by lowering limits or restricting the range of transactions or accounts granted to them. Carefully examine the need to open new accounts and completely vet any local managers who have access to funds.

For ease of administration, it is worthwhile to consider international bank aggregation accounts. These accounts provide access to multiple accounts throughout the world from a single source and greatly streamline the operations of international treasury departments.

5 Quick Tips to Protect Against Chargebacks

cmiller@highriskmerchantaccount.co.uk (Chris) — Fri, 15 May 2009 10:57:00 +0000

Utilize Address Verification Service (AVS). AVS verifies that the address the customer is providing is also the billing address of the account number being used. AVS is also a requirement for internet and MOTO transactions to obtain the best possible discount rate for the transaction.
Get the 3-digit security code which is printed on the back of all credit cards. This helps verify the buyer has physical access to the card.
Clearly post return/cancellation policies on your website. Include any restocking fees, if applicable. Include the policies in shipment boxes and verbally inform the buyer for telephone orders,
Wait until the merchant has shipped or the services have been provided before you process the transaction. You can obtain an authorization number (valid for 7 days) to ensure that the account number is valid and funds are available.
Obtain signatures as proof of delivery for shipped products. that is shipped to the customer. Without a signature, a customer can claim the merchandise was never received and the merchant has no way to prove that it was delivered

New Internet Gambling Bill Introduced in US

cmiller@highriskmerchantaccount.co.uk (Chris) — Fri, 15 May 2009 10:46:00 +0000

Chairman of the House Financial Services Committee, (http://www.house.gov/financialservices/) Barney Frank, introduced a bill that would let licensed online gambling sites accept bets from US players. The bill, called the Internet Gambling Regulation, Consumer Protection & Enforcement Act of 2009, would replace the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) which banned gaming sites from accepting wars from US players.

The proposed legislation establishes federal regulations under which internet gambling operators could obtain licenses to accept bets and wagers from U.S. residents. Operations would would have to maintain effective protections against underage gambling, compulsive gambling, money laundering and fraud.

The bill gives the U.S. Department of Treasury (http://www.ustreas.gov ) the exclusive authority to establish regulations and license Internet gambling operators. License applicants would be subject to review of their financial condition and corporate structure, business experience, suitability, and criminal background checks. They also would have to agree to be subject to U.S. jurisdiction.

The Treasury Department would have the authority to revoke the license of any operator that fails to comply with the bill. Violators could be fined and/or imprisoned for up to five years.