Secure Electronic Transaction (SET) is a standard protocol for securing credit card transactions over insecure networks, specifically, the Internet. SET is not itself a payment system, but rather a set of security protocols and formats that enables users to employ the existing credit card payment infrastructure on an open network in a secure fashion.
SET was developed by VISA and MasterCard (involving other companies such as GTE, IBM, Microsoft, Netscape, RSA and VeriSign) starting in 1996. SET is based on X.509 certificates with several extensions. SET makes use of cryptographic techniques such as digital certificates and public key cryptography to allow parties to identify themselves to each other and exchange information securely. SET uses a blinding algorithm that, in effect, lets merchants substitute a certificate for a user's credit-card number. This allows traders to credit funds from clients' credit cards without the need of the credit card numbers.
SET was heavily publicized in the late 1990's as the credit card approved standard, but failed to win market share. Reasons for this include:
Network effect - need to install client software (an e wallet).
Cost and complexity for merchants to offer support and comparatively low cost and simplicity of the existing, adequate SSL based alternative.
Client-side certificate distribution logistics.
SET was said to become the de facto standard of payment method on the Internet between the merchants, the buyers, and the credit-card companies. When SET is used, the merchant itself never has to know the credit-card numbers being sent from the buyer, which provide a benefit for e-commerce.
Tuesday, July 8, 2008
LinkShare
LinkShare Corporation is a provider of technology solutions to track, manage, and analyze the performance of sales, marketing, and business development initiatives.
Linkshare boasts that it has created the largest network of affiliate partners of any program provider -- over 10 million partnerships -- in addition to becoming the first affiliate network provider to achieve sustained profitability. Linkshare also lays claim to being a pioneer in online affiliate marketing. The Linkshare network is touted by the company as the largest pay for performance affiliate marketing network on the Internet [1].
LinkShare clients are Fortune 500 and prominent companies doing business online, and include J.C. Penney, 1-800-Flowers.com, American Express, Avon Products and many others.
Linkshare boasts that it has created the largest network of affiliate partners of any program provider -- over 10 million partnerships -- in addition to becoming the first affiliate network provider to achieve sustained profitability. Linkshare also lays claim to being a pioneer in online affiliate marketing. The Linkshare network is touted by the company as the largest pay for performance affiliate marketing network on the Internet [1].
LinkShare clients are Fortune 500 and prominent companies doing business online, and include J.C. Penney, 1-800-Flowers.com, American Express, Avon Products and many others.
The Blue Network
The Blue Network was the on-air name of an American radio production and distribution service from 1942 to 1945, which traced its formal origins back to 1927. It was born of a divestiture, arising from anti-trust litigation, of one of the two radio networks owned by the National Broadcasting Company, and is the direct predecessor of American Broadcasting Company.
Early history
The Blue Network can, in one sense, date itself to 1923, when the Radio Corporation of America acquired WJZ, Newark from Westinghouse (which had created the station in 1921 [1]) and moved it to New York City in May of that year. When RCA commenced operations of WRC, Washington on August 1, 1923, the root of a network was born, though it did not operate under the name by which it would later become known. Radio historian Elizabeth McLeod states that it would not be until 1924 that the "Radio Group" formally began network operations. [2]
The core stations of the "Radio Group" were RCA's stations WJZ and WRC, the Westinghouse station WBZ, then in Springfield, Massachusetts, and WGY, the General Electric station in Schenectady, New York. [3]
RCA's principal rival prior to 1926 was the radio broadcasting department of the American Telephone & Telegraph Company. AT&T, starting in 1921, had been using this department as a test-bed for equipment being designed and manufactured by its Western Electric subsidiary.
The RCA stations operated at a significant disadvantage to its rival chain; AT&T used its own high-quality transmission lines, and declined to lease them out to competing entities, forcing RCA to use the telegraph lines of Western Union, which were not as well calibrated to voice transmission as the AT&T lines. [4]
Nevertheless, the WJZ network sought to compete toe-to-toe with the AT&T network, which was built around WEAF (today's WFAN). For example, both stations sent announcer teams to cover the 1924 Democratic National Convention, which was held in Madison Square Garden in New York City. [5] Promotional material produced in 1943 claimed certain "firsts" in broadcasting by WJZ, such as the first educational music program in April 1922, the first World Series broadcasts in 1922, and the first complete opera broadcast, The Flying Dutchman, from the Manhattan Opera House.
Early history
The Blue Network can, in one sense, date itself to 1923, when the Radio Corporation of America acquired WJZ, Newark from Westinghouse (which had created the station in 1921 [1]) and moved it to New York City in May of that year. When RCA commenced operations of WRC, Washington on August 1, 1923, the root of a network was born, though it did not operate under the name by which it would later become known. Radio historian Elizabeth McLeod states that it would not be until 1924 that the "Radio Group" formally began network operations. [2]
The core stations of the "Radio Group" were RCA's stations WJZ and WRC, the Westinghouse station WBZ, then in Springfield, Massachusetts, and WGY, the General Electric station in Schenectady, New York. [3]
RCA's principal rival prior to 1926 was the radio broadcasting department of the American Telephone & Telegraph Company. AT&T, starting in 1921, had been using this department as a test-bed for equipment being designed and manufactured by its Western Electric subsidiary.
The RCA stations operated at a significant disadvantage to its rival chain; AT&T used its own high-quality transmission lines, and declined to lease them out to competing entities, forcing RCA to use the telegraph lines of Western Union, which were not as well calibrated to voice transmission as the AT&T lines. [4]
Nevertheless, the WJZ network sought to compete toe-to-toe with the AT&T network, which was built around WEAF (today's WFAN). For example, both stations sent announcer teams to cover the 1924 Democratic National Convention, which was held in Madison Square Garden in New York City. [5] Promotional material produced in 1943 claimed certain "firsts" in broadcasting by WJZ, such as the first educational music program in April 1922, the first World Series broadcasts in 1922, and the first complete opera broadcast, The Flying Dutchman, from the Manhattan Opera House.
The Death Merchant
The Death Merchant is the title and lead character of a series of men's action-adventure books written by Joseph Rosenberger. Richard Joseph Camellion, as described in the books is a master of disguise, the martial arts and wet-work. Cynical and lethal in equal measure, his normal employer was the CIA - at a cost of $100,000 tax free bucks a mission.
He is described on the back of the books as "Richard Camellion, master of death, destruction, and disguise. He gets the dirty jobs, the impossible missions, the operations that cannot be handled by the FBI, CIA, or any other legal or extra-legal force. He is a man without a face, without a single identifying characteristic...except that he succeeds by being a Merchant of Death!"
Additional information about the Death Merchant is sprinkled every now and then in the series of books as follows:
Birthplace: #30, The Shamballa Strike reveals that Camellion's birthplace is St. Louis, Missouri. As an adult, Richard Camellion keeps a ranch in Texas where he lives when not on a mission.
Education: Two books, #30 The Shamballa Strike and #53 The Judas Scrolls mention Camellion studying at St. Louis University, where he received a Bachelor of Science degree. It is also stated in the former book that Camellion holds a degree in engineering from Washington University in St. Louis. Two books (#1 The Death Merchant and #9 Laser Mission) mention that Camellion is an ex-teacher of history, but this may simply be a cover story.
Hobbies: Gardening, Martial Arts, Amateur archaeology (mentioned in #9 Laser Mission and #61 Bulgarian Termination). Camellion is very interested in the occult, and especially the prophecies of Nostradamus.
Alias: James Valdorian, Chester Giffwangle, Leonard Higgdon , Emil Milrich , Cempt Tobtocpam , Thomas Wang-Ji. On two occasions, when asked if Camellion is his real name, he replies that it doesn't matter. #63 The Soul Search Project reveals that Richard Joseph Camellion is not the name on his birth certificate.
Frequently disguises himself (and fellow mercs) during operations
Worked with: ONI (Office of Naval Intelligence), NSA , CIA , MAD (West German counter-intelligence) Known enemies: the KGB , SWAPO , GROB (Indonesian Political Security Service), various terrorist organizations.
The Death Merchant has two pet pigs, known as Damon and Pythias.
The Death Merchant is notable in being rather more nihilistic than many of his 70's and 80's action series counterparts; he normally doesn't think twice about killing innocent people if it is the quickest way to get the mission accomplished. For example, #62, The Soul Search Project sees The Death Merchant's team cold-bloodedly killing over 50 New York Police Department officers who try to stop them during a mission.
Another interesting thing about the Death Merchant is that he seems to have little interest in women or sex; there is no "love interest" for Richard Camellion of any sort in any of the books. In an early book, however, he does mention a former girlfriend, "the one true love of his life" who had been killed by the KGB, however, in the first book "The Death Merchant", He has a relation with a disabled girl and show true feelings for her. He on one occasion states that he will not feel truly satisfied until the Soviet Union is "a sea of radioactive glass."
He has sex a few times in the books, although considerably less than many of his counterparts -- He does have sex aboard a boat in one book (The Billionaire Mission) and with a CIA staff girl in The Iron Swastika Plot.
The Death Merchant's face is not described in great detail, and it is mentioned that he has had plastic surgery to alter his appearance numerous times. He does, however, like his men's action adventure counterparts Remo Williams and Mack Bolan, have blue eyes which are occasionally described as "icy." The Death Merchant is described as being about 6 feet tall and having a slender, wiry frame.
He is described on the back of the books as "Richard Camellion, master of death, destruction, and disguise. He gets the dirty jobs, the impossible missions, the operations that cannot be handled by the FBI, CIA, or any other legal or extra-legal force. He is a man without a face, without a single identifying characteristic...except that he succeeds by being a Merchant of Death!"
Additional information about the Death Merchant is sprinkled every now and then in the series of books as follows:
Birthplace: #30, The Shamballa Strike reveals that Camellion's birthplace is St. Louis, Missouri. As an adult, Richard Camellion keeps a ranch in Texas where he lives when not on a mission.
Education: Two books, #30 The Shamballa Strike and #53 The Judas Scrolls mention Camellion studying at St. Louis University, where he received a Bachelor of Science degree. It is also stated in the former book that Camellion holds a degree in engineering from Washington University in St. Louis. Two books (#1 The Death Merchant and #9 Laser Mission) mention that Camellion is an ex-teacher of history, but this may simply be a cover story.
Hobbies: Gardening, Martial Arts, Amateur archaeology (mentioned in #9 Laser Mission and #61 Bulgarian Termination). Camellion is very interested in the occult, and especially the prophecies of Nostradamus.
Alias: James Valdorian, Chester Giffwangle, Leonard Higgdon , Emil Milrich , Cempt Tobtocpam , Thomas Wang-Ji. On two occasions, when asked if Camellion is his real name, he replies that it doesn't matter. #63 The Soul Search Project reveals that Richard Joseph Camellion is not the name on his birth certificate.
Frequently disguises himself (and fellow mercs) during operations
Worked with: ONI (Office of Naval Intelligence), NSA , CIA , MAD (West German counter-intelligence) Known enemies: the KGB , SWAPO , GROB (Indonesian Political Security Service), various terrorist organizations.
The Death Merchant has two pet pigs, known as Damon and Pythias.
The Death Merchant is notable in being rather more nihilistic than many of his 70's and 80's action series counterparts; he normally doesn't think twice about killing innocent people if it is the quickest way to get the mission accomplished. For example, #62, The Soul Search Project sees The Death Merchant's team cold-bloodedly killing over 50 New York Police Department officers who try to stop them during a mission.
Another interesting thing about the Death Merchant is that he seems to have little interest in women or sex; there is no "love interest" for Richard Camellion of any sort in any of the books. In an early book, however, he does mention a former girlfriend, "the one true love of his life" who had been killed by the KGB, however, in the first book "The Death Merchant", He has a relation with a disabled girl and show true feelings for her. He on one occasion states that he will not feel truly satisfied until the Soviet Union is "a sea of radioactive glass."
He has sex a few times in the books, although considerably less than many of his counterparts -- He does have sex aboard a boat in one book (The Billionaire Mission) and with a CIA staff girl in The Iron Swastika Plot.
The Death Merchant's face is not described in great detail, and it is mentioned that he has had plastic surgery to alter his appearance numerous times. He does, however, like his men's action adventure counterparts Remo Williams and Mack Bolan, have blue eyes which are occasionally described as "icy." The Death Merchant is described as being about 6 feet tall and having a slender, wiry frame.
Wednesday, June 25, 2008
Credit card terminal
A credit card terminal is a stand-alone piece of electronic equipment that allows a merchant to swipe or key-enter a credit card's information as well as additional information required to process a credit card transaction. A credit card terminal is a dedicated piece of equipment that only processes credit cards although it is common for related transactions including gift cards and check verification to also be performed. A credit card terminal typically must be plugged in to a power supply and connected to a telephone line. However, some terminals may be powered by batteries, communicate over the Internet or through the cellular phone networks. When a credit card is processed (either swiped through the magnetic stripe reader or keyed in to the keypad), it contacts the network to verify if the credit card can be authorized. The most popular credit card terminals consist of a modem, keypad, printer, magnetic stripe reader, power supply and memory card. They have had the same basic design since the 1980s. As with computers, there is a wide range of memory capacities and other features like built-in printers and debit card pinpads that affect the manufacturing cost of a credit card terminal.
A merchant may lease or purchase the terminal, or receive it free in exchange for a long-term contract or higher processing fees. Some providers use the general lack of knowledge regarding the cost of a credit card terminal to inflate prices into the thousands of dollars for a few hundred dollar device. They may also provide the merchant with a credit card terminal that is "locked" into only one provider, making it useless if the merchant wants to switch service.
When a terminal is leased there is usually a 3rd party leasing company involved and it is not uncommon in many U.S. states for these leases to be non-cancellable and possibly never ending unless notice is given to the leasing company at the end of the original term.
A merchant may lease or purchase the terminal, or receive it free in exchange for a long-term contract or higher processing fees. Some providers use the general lack of knowledge regarding the cost of a credit card terminal to inflate prices into the thousands of dollars for a few hundred dollar device. They may also provide the merchant with a credit card terminal that is "locked" into only one provider, making it useless if the merchant wants to switch service.
When a terminal is leased there is usually a 3rd party leasing company involved and it is not uncommon in many U.S. states for these leases to be non-cancellable and possibly never ending unless notice is given to the leasing company at the end of the original term.
Sunday, June 22, 2008
"Threat" to traditional affiliate networks
Affiliate marketers usually avoid this topic as much as possible, but when it is being discussed, then are the debates explosive and heated to say the least.[31][32][33] The discussion is about CPA networks (CPA = Cost per action) and their impact on "classic" affiliate marketing (traditional affiliate networks). Traditional affiliate marketing is resources intensive and requires a lot of maintenance. Most of this includes the management, monitoring and support of affiliates. Affiliate marketing is supposed to be about long-term and mutual beneficial partnerships between advertisers and affiliates. CPA networks on the other hand eliminate the need for the advertiser to build and maintain relationships to affiliates, because that task is performed by the CPA network for the advertiser. The advertiser simply puts an offer out, which is in almost every case a CPA based offer, and the CPA networks take care of the rest by mobilizing their affiliates to promote that offer. CPS or revenue share offers are rarely to be found at CPA networks, which is the main compensation model of classic affiliate marketing.
Affiliate marketing
Affiliate marketing is a web-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's marketing efforts.
Affiliate marketing is also the name of the industry where a number of different types of companies and individuals are performing this form of internet marketing, including affiliate networks, affiliate management companies and in-house affiliate managers, specialized 3rd party vendors, and various types of affiliates/publishers who promote the products and services of their partners.
Affiliate marketing overlaps with other internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization, paid search engine marketing, email marketing and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques like publishing reviews of products or services offered by a partner.
Affiliate marketing — using one site to drive traffic to another — is a form of online marketing, which is frequently overlooked by advertisers. While search engines, e-mail and RSS capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers' marketing strategies.
Affiliate marketing is also the name of the industry where a number of different types of companies and individuals are performing this form of internet marketing, including affiliate networks, affiliate management companies and in-house affiliate managers, specialized 3rd party vendors, and various types of affiliates/publishers who promote the products and services of their partners.
Affiliate marketing overlaps with other internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization, paid search engine marketing, email marketing and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques like publishing reviews of products or services offered by a partner.
Affiliate marketing — using one site to drive traffic to another — is a form of online marketing, which is frequently overlooked by advertisers. While search engines, e-mail and RSS capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers' marketing strategies.
Thursday, June 19, 2008
Multi tier programs
Multi tier programs
Some advertisers offer multi-tier programs that distribute commission into a hierarchical referral network of sign-ups and sub-partners. In practical terms: publisher "A" signs up to the program with an advertiser and gets rewarded for the agreed activity conducted by a referred visitor. If publisher "A" attracts other publishers ("B", "C", etc.) to sign up for the same program using her sign-up code all future activities by the joining publishers "B" and "C" will result in additional commission (at a lower rate) for publisher "A".
Snowballing, this system rewards a chain of hierarchical publishers who may or may not know of each others' existence, yet generate income for the higher level signup. This sort of structure has been successfully implemented by a company called Quixtar.com, a division of Alticor, the parent company of Amway. Quixtar has implemented a network marketing structure to implement its marketing program for major corporations such as Barnes & Noble, Office Depot, Sony Music and hundreds more.
Two-tier programs exist in the minority of affiliate programs; most are simply one-tier. Referral programs beyond 2-tier are multi-level marketing (MLM) or network marketing.
Even though Quixtar compensation plan is network marketing & wouldn't be considered 'affiliate marketing', the big company partners are considered and call themselves affiliates. Therefore, you may argue that the Quixtar company is the affiliate marketer for its partner corporation.
Some advertisers offer multi-tier programs that distribute commission into a hierarchical referral network of sign-ups and sub-partners. In practical terms: publisher "A" signs up to the program with an advertiser and gets rewarded for the agreed activity conducted by a referred visitor. If publisher "A" attracts other publishers ("B", "C", etc.) to sign up for the same program using her sign-up code all future activities by the joining publishers "B" and "C" will result in additional commission (at a lower rate) for publisher "A".
Snowballing, this system rewards a chain of hierarchical publishers who may or may not know of each others' existence, yet generate income for the higher level signup. This sort of structure has been successfully implemented by a company called Quixtar.com, a division of Alticor, the parent company of Amway. Quixtar has implemented a network marketing structure to implement its marketing program for major corporations such as Barnes & Noble, Office Depot, Sony Music and hundreds more.
Two-tier programs exist in the minority of affiliate programs; most are simply one-tier. Referral programs beyond 2-tier are multi-level marketing (MLM) or network marketing.
Even though Quixtar compensation plan is network marketing & wouldn't be considered 'affiliate marketing', the big company partners are considered and call themselves affiliates. Therefore, you may argue that the Quixtar company is the affiliate marketer for its partner corporation.
Affiliate Marketing
The beginning
The concept of revenue sharing, paying commission for referred business, predates that of affiliate marketing and the Internet. The translation of the revenue share principles to mainstream ecommerce happened almost four years after the World Wide Web was born in November 1994, when CDNow launched its BuyWeb program. With its BuyWeb program, CDNow was the first non-adult site to introduce the concept of an affiliate or associate program with its idea of click-through purchasing.
CDNow.com had the idea that music-oriented web sites could review or list albums on their pages that their visitors might be interested in purchasing and offer a link that would take the visitor directly to CDNow to purchase them. The idea for this remote purchasing originally arose because of conversations with music label Geffen Records in the fall of 1994. The management at Geffen wanted to sell its artists’ CDs directly from its site but did not want to do it itself. Geffen Records asked CDNow if it could design a program where CDNow would do the fulfillment. Geffen Records realized that CDNow could link directly from the artist on its Web site to Geffen’s web site, bypassing the CDNow home page and going directly to an artist’s music page.[2]
Affiliate marketing was used on the internet by the adult industry before CDNow launched their BuyWeb program. The consensus of marketers and adult industry insiders is that Cybererotica was either the first or among the early innovators in affiliate marketing with a cost-per-click program.[3]
Amazon.com launched its associate program in July 1996. Amazon associates would place banner or text links on their site for individual books or link directly to the Amazon’s home page.
When visitors clicked from the associate’s site through to Amazon.com and purchased a book, the associate received a commission. Amazon.com was not the first merchant to offer an affiliate program, but its program was the first to become widely known and served as a model for subsequent programs.[4][5]
In February 2000, Amazon.com announced that it had been granted a patent (6,029,141) on all the essential components of an affiliate program. The patent application was submitted in June 1997, which was before most affiliate programs but not before PC Flowers & Gifts.com (October 1994), AutoWeb.com (October 1995), Kbkids.com/BrainPlay.com (January 1996), EPage(April 1996), and a handful of others.[3]
The concept of revenue sharing, paying commission for referred business, predates that of affiliate marketing and the Internet. The translation of the revenue share principles to mainstream ecommerce happened almost four years after the World Wide Web was born in November 1994, when CDNow launched its BuyWeb program. With its BuyWeb program, CDNow was the first non-adult site to introduce the concept of an affiliate or associate program with its idea of click-through purchasing.
CDNow.com had the idea that music-oriented web sites could review or list albums on their pages that their visitors might be interested in purchasing and offer a link that would take the visitor directly to CDNow to purchase them. The idea for this remote purchasing originally arose because of conversations with music label Geffen Records in the fall of 1994. The management at Geffen wanted to sell its artists’ CDs directly from its site but did not want to do it itself. Geffen Records asked CDNow if it could design a program where CDNow would do the fulfillment. Geffen Records realized that CDNow could link directly from the artist on its Web site to Geffen’s web site, bypassing the CDNow home page and going directly to an artist’s music page.[2]
Affiliate marketing was used on the internet by the adult industry before CDNow launched their BuyWeb program. The consensus of marketers and adult industry insiders is that Cybererotica was either the first or among the early innovators in affiliate marketing with a cost-per-click program.[3]
Amazon.com launched its associate program in July 1996. Amazon associates would place banner or text links on their site for individual books or link directly to the Amazon’s home page.
When visitors clicked from the associate’s site through to Amazon.com and purchased a book, the associate received a commission. Amazon.com was not the first merchant to offer an affiliate program, but its program was the first to become widely known and served as a model for subsequent programs.[4][5]
In February 2000, Amazon.com announced that it had been granted a patent (6,029,141) on all the essential components of an affiliate program. The patent application was submitted in June 1997, which was before most affiliate programs but not before PC Flowers & Gifts.com (October 1994), AutoWeb.com (October 1995), Kbkids.com/BrainPlay.com (January 1996), EPage(April 1996), and a handful of others.[3]
Affiliate Networks
Affiliate network
An affiliate network acts as an intermediary between publishers (affiliates) and (merchant) affiliate programs. It allows publishers to find affiliate programs, which are suitable for their website and it helps websites offering affiliate programs reach its target audience.[1]
For merchants, services can include providing tracking technology, reporting tools, payment processing, and access to a large base of publishers. For affiliates, services can include providing one-click application to new merchants, reporting tools, and payment aggregation.
The networks are free to join for affiliates. The merchant on the other hand has to pay a fee. Traditional affiliate networks might charge an initial setup fees and/or a recurring maintenance fees. This differs from network to network. It is common for affiliate networks to charge merchants a percentage of the commission paid to the affiliates as fee for their services.
Traditional affiliate networks allow the merchant to offer its publishers revenue share or cost per action as compensation method. The majority of merchant programs prefer revenue share over cost per action.[2]
An affiliate network acts as an intermediary between publishers (affiliates) and (merchant) affiliate programs. It allows publishers to find affiliate programs, which are suitable for their website and it helps websites offering affiliate programs reach its target audience.[1]
For merchants, services can include providing tracking technology, reporting tools, payment processing, and access to a large base of publishers. For affiliates, services can include providing one-click application to new merchants, reporting tools, and payment aggregation.
The networks are free to join for affiliates. The merchant on the other hand has to pay a fee. Traditional affiliate networks might charge an initial setup fees and/or a recurring maintenance fees. This differs from network to network. It is common for affiliate networks to charge merchants a percentage of the commission paid to the affiliates as fee for their services.
Traditional affiliate networks allow the merchant to offer its publishers revenue share or cost per action as compensation method. The majority of merchant programs prefer revenue share over cost per action.[2]
Chargeback Fee
Chargeback fee
The chargeback is the largest risk that is presented to banks and providers and therefore their biggest fear. This is not to be confused with a refund, which is simply a merchant refunding a transaction. In the Visa and Mastercard rules, the merchant's processing bank is 100% responsible for all the transactions that the merchant performs. This can leave the provider open to millions of dollars of potential losses if the merchant operates in an illegal or risky manner and generates many chargebacks. The providers pass this cost on to the merchant, but if the merchant is fraudulent or simply does not have the money, the provider must pay all the costs to make the card holder whole. The chargeback risk is the largest part taken into consideration during the contract application and underwriting process. Some banks are many times more stringent than others when assessing a merchant's chargeback risk.
If a merchant encounters a chargeback they may be assessed a fee by their acquiring bank. A potential chargeback is presented on behalf of the card holder's bank to the merchant's credit card processing bank. A reason code is established by the card issuer to properly identify the type of potential chargeback based on the card holder's complaint. The most common complaint is that the card holder can not remember the transaction. Usually, these potential chargebacks are corrected when the merchant's processing bank sends over more details about the transaction. Some providers charge a fee for this service, known as a "Retrieval Request". A chargeback can also be related to a fraud or similar dispute that the card holder is claiming to the merchant. This fee can be charged by some providers whether the chargeback is successful or not and is not dependent on the amount of the chargeback.
Currently both Visa and Mastercard require all merchants to maintain no more than 1% of dollar volume processed to be chargebacks. If the percentage goes above, there are fines starting at $5000 - $25,000 to the merchant's processing bank and ultimately passed on to the merchant.
In all cases, a successful chargeback will cost the merchant the chargeback fee, usually $25-$50, plus the cost of the transaction and the amount processed.
The chargeback is the largest risk that is presented to banks and providers and therefore their biggest fear. This is not to be confused with a refund, which is simply a merchant refunding a transaction. In the Visa and Mastercard rules, the merchant's processing bank is 100% responsible for all the transactions that the merchant performs. This can leave the provider open to millions of dollars of potential losses if the merchant operates in an illegal or risky manner and generates many chargebacks. The providers pass this cost on to the merchant, but if the merchant is fraudulent or simply does not have the money, the provider must pay all the costs to make the card holder whole. The chargeback risk is the largest part taken into consideration during the contract application and underwriting process. Some banks are many times more stringent than others when assessing a merchant's chargeback risk.
If a merchant encounters a chargeback they may be assessed a fee by their acquiring bank. A potential chargeback is presented on behalf of the card holder's bank to the merchant's credit card processing bank. A reason code is established by the card issuer to properly identify the type of potential chargeback based on the card holder's complaint. The most common complaint is that the card holder can not remember the transaction. Usually, these potential chargebacks are corrected when the merchant's processing bank sends over more details about the transaction. Some providers charge a fee for this service, known as a "Retrieval Request". A chargeback can also be related to a fraud or similar dispute that the card holder is claiming to the merchant. This fee can be charged by some providers whether the chargeback is successful or not and is not dependent on the amount of the chargeback.
Currently both Visa and Mastercard require all merchants to maintain no more than 1% of dollar volume processed to be chargebacks. If the percentage goes above, there are fines starting at $5000 - $25,000 to the merchant's processing bank and ultimately passed on to the merchant.
In all cases, a successful chargeback will cost the merchant the chargeback fee, usually $25-$50, plus the cost of the transaction and the amount processed.
Merchant Networks
Marketing by ISO/MSPs
To market merchant accounts, an ISO/MSP must be sponsored by a member bank. This sponsorship requires that the bank verify the financial stability and suitability of the company that will be marketing on its behalf. The ISO/MSP must also pay a fee to be registered with Visa and Mastercard and must comply with regulations in how they may market merchant accounts and the use of copyrights of Visa and Mastercard. One way to verify if an ISO/MSP is in compliance is to check a website or any other marketing material for a disclosure "company is a registered ISO/MSP of bank, town, state. FDIC insured". This disclosure is required by both Visa and Mastercard and will cause a fine of up to $25,000 if it is not clearly visible. In almost all cases, if there is no disclosure, the company is likely to be an uninformed 4th party or worse. In many cases unregistered operators have been responsible for some of the worse horror stories from merchants.
Obtaining a merchant account through a registered ISO/MSP is the most common way to obtain an account. The process is usually much simpler than going directly through a bank. One reason is that the merchant approval process and underwriting is streamlined and more favorable to a variety of business types and products sold. ISOs/MSPs also add value to the basic services of card authorization and deposit. Many work directly with the underwriting bank to assure that support and customer service is targeted to many segments of merchants with unique needs. In many cases, merchant accounts obtained through an ISO/MSP can cost less than if the merchant contracted with the bank directly.
[edit] Rates and fees
A Merchant Account has a variety of fees, some periodic, others charged on a per-item or percentage basis. Some fees are set by the merchant account provider, but the majority of the per-item and percentage fees are passed through the merchant account provider to the credit card issuing bank according to a schedule of rates called interchange fees, which are set by Visa and Mastercard. Interchange fees vary depending on card type and the circumstances of the transaction. For example, if a transaction is made by swiping a card through a credit card terminal it will be in a different category than if it were keyed in manually.
To market merchant accounts, an ISO/MSP must be sponsored by a member bank. This sponsorship requires that the bank verify the financial stability and suitability of the company that will be marketing on its behalf. The ISO/MSP must also pay a fee to be registered with Visa and Mastercard and must comply with regulations in how they may market merchant accounts and the use of copyrights of Visa and Mastercard. One way to verify if an ISO/MSP is in compliance is to check a website or any other marketing material for a disclosure "company is a registered ISO/MSP of bank, town, state. FDIC insured". This disclosure is required by both Visa and Mastercard and will cause a fine of up to $25,000 if it is not clearly visible. In almost all cases, if there is no disclosure, the company is likely to be an uninformed 4th party or worse. In many cases unregistered operators have been responsible for some of the worse horror stories from merchants.
Obtaining a merchant account through a registered ISO/MSP is the most common way to obtain an account. The process is usually much simpler than going directly through a bank. One reason is that the merchant approval process and underwriting is streamlined and more favorable to a variety of business types and products sold. ISOs/MSPs also add value to the basic services of card authorization and deposit. Many work directly with the underwriting bank to assure that support and customer service is targeted to many segments of merchants with unique needs. In many cases, merchant accounts obtained through an ISO/MSP can cost less than if the merchant contracted with the bank directly.
[edit] Rates and fees
A Merchant Account has a variety of fees, some periodic, others charged on a per-item or percentage basis. Some fees are set by the merchant account provider, but the majority of the per-item and percentage fees are passed through the merchant account provider to the credit card issuing bank according to a schedule of rates called interchange fees, which are set by Visa and Mastercard. Interchange fees vary depending on card type and the circumstances of the transaction. For example, if a transaction is made by swiping a card through a credit card terminal it will be in a different category than if it were keyed in manually.
Merchant Account Marketing
Merchant Account Marketing:
Merchant accounts are marketed to merchants by two basic methods: either directly by the bank that will perform the processing, or by an authorized agent for the bank and additionally directly registered with both Visa and MasterCard as an ISO/MSP (Independent Selling Organization / Member Service Provider). Marketing details are by card issuers like Visa and MasterCard, and are enforced by various rules and fines.
Marketing by Banks:
A bank that has a merchant processing relationship with Visa and Mastercard, also known as a member bank, can issue merchant accounts directly to merchants. In practice it is usually harder to obtain a merchant account directly through a bank than it is through an ISO/MSP, and fees may be somewhat higher.
To reduce risk, some banks limit approval to merchants in its geographical area, those with a physical retail storefront, or those that have been in business for 2 years or more. These limitations along with different customer focus motivate some banks to sponsor ISO/MSPs to do the marketing and customer support directly, leaving the bank to do the accounting and processing.
Merchant accounts are marketed to merchants by two basic methods: either directly by the bank that will perform the processing, or by an authorized agent for the bank and additionally directly registered with both Visa and MasterCard as an ISO/MSP (Independent Selling Organization / Member Service Provider). Marketing details are by card issuers like Visa and MasterCard, and are enforced by various rules and fines.
Marketing by Banks:
A bank that has a merchant processing relationship with Visa and Mastercard, also known as a member bank, can issue merchant accounts directly to merchants. In practice it is usually harder to obtain a merchant account directly through a bank than it is through an ISO/MSP, and fees may be somewhat higher.
To reduce risk, some banks limit approval to merchants in its geographical area, those with a physical retail storefront, or those that have been in business for 2 years or more. These limitations along with different customer focus motivate some banks to sponsor ISO/MSPs to do the marketing and customer support directly, leaving the bank to do the accounting and processing.
Saturday, February 16, 2008
Merchant's Network
A casino is a facility that accommodates certain types of gambling activities. Casinos are often placed near or combined with hotels, restaurants, retail shopping, cruise ships and other vacation attractions. Some casinos are known for hosting live entertainment events, such as concerts and sporting events. Worldwide there are about 4750 casinos.Poker is a popular type of card game in which players bet on the value of the card combination ("hand") in their possession, by placing a bet into a central pot. The winner is the one who holds the hand with the highest value according to an established hand rankings hierarchy, or otherwise the player who remains "in the hand" after all others have folded (the player who makes an un-called bet.).
A loan is a type of debt. All material things can be lent but this article focuses exclusively on monetary loans. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.
The borrower initially receives an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt. A borrower may be subject to certain restrictions known as loan covenants under the terms of the loan.
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Insurer is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.
A loan is a type of debt. All material things can be lent but this article focuses exclusively on monetary loans. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.
The borrower initially receives an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt. A borrower may be subject to certain restrictions known as loan covenants under the terms of the loan.
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Insurer is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.
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