 Credit Card/Payment Systems
Tom Randolph formed Tom Randolph Consulting (TRC) in 2001 following his 32-year career at ExxonMobil Corp. At ExxonMobil, Tom focused on credit card acceptance and associated marketing programs and services. He was deeply involved with the development and launch of Mobil's Speedpass and pre paid (Go Card) card. In his latest roles, Tom served as Vice President and Director of Mobil's credit card bank and Vice President of Mobil Oil Credit Corporation.
TRC's core emphasis is within the payment card business, servicing all types of retail-based firms. TRC specializes in new business development, new technology offerings, strategic planning/partnering, credit card fraud prevention, management solutions, research and expert witness testimony.
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Recent Questions:
1) Credit Card transaction fees are becoming a tremendous cost to my business. How can I make sure that I'm not being gouged? Are their basics I need to know?
You should be knowledgeable of the different types of credit card transactions and the interchange cost associated with each type and request that your processor provide pass through pricing on interchange fees and have them separate the cost for authorization and settlement in their proposal and or contract. Many processors like to provide a blended rate, which is a combination of interchange and processing fees. If you request unbundled pricing your will be in a better position to negotiated the authorization and settlement fees. 2) What are the merchant's fee components for a typical retail credit card transaction?
There are four basic components: * Interchange fee -- reimburses card issuers for assuming costs and risks * Assessment fee -- membership in the Visa and or MasterCard association * Authorization fee -- pays the authorization vendor for approval of the credit transaction. * Processing fee -- covers the cost of settling credit card transactions Of these fees, only the authorization fee and settlement/processing fees are negotiable. Both are based on the merchant's transaction volume and dollar volume. More of both can mean a better rate.
3) I am having problems with credit card fraud at my card island terminals what can I do to help minimize the fraud?
There are several ways a merchant can reduce the risk of credit card fraud both at the card island terminals and inside the store. One effective way is providing your employees card fraud prevention training and implementing a zip code prompt program policy at the card island terminals with a combination of velocity limits. Most retailers using zip code prompt have seen a 90% reduction is credit card fraud.
4) What are the critical factors for establishing a gift card program and ensuring success?
Putting your cards on the counter is simply not enough. The success of the program is reliant on the following key factors: * Awareness -- Your store associates and your customers need to know about it. * Advertising and promotion -- traditional media, store signage, B2B opportunities, consumer direct mail and in-store promotions are among the many channels you can use to create awareness and generate excitement and about your cash cards. * Training -- Proper training of store associates and back office personnel is critical.
5) What types of control measures are in place to protect a cash card program from fraud or other related abuses?
Use only certified vendors for card encoding and production. Flexible card denomination, point of sale activation, velocity reports and dollar limit transaction alerts also help assure your cash card program is completely secure.
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