Thursday, June 14, 2018

Credit Card Declines are LOST Revenue from failed payments

I'm reading more from Recurly's website, here's some info on loss from recurring credit cards that get declined.  There are strategies to address the likelihood of credit card declines both prior to trying to run the credit cards (ie updater) and after they've been declined (what's this called again?)

Wednesday, June 13, 2018

Credit Card Account Updater

The account updater is a service for vendors that run a monthly billing subscription service.
This is a service provided by some credit processors that tracks changes, such as new expiration dates, and updates the records before the attempted billing fails.  It works on  MasterCard, Visa, and Discover cards. 
An account updater usually has some costs associated with it. They run the updater across all the cards and either charge per card monitored or by changed made.  It works on both   subscribers credit and debit cards.
This is one way that companies improve their processing and results for recurring transactions.  

Dunning

Recurly sent out a great newsletter and I learned a new term: Dunning.
Dunning stands for Delinquent User Notification. Generally, it refers to sending emails or other communications, on a predetermined schedule, to subscribers when their payment fails.
Different businesses or different subscriber segments will have different responses to dunning, so it's important to constantly test and optimize dunning schedules and email content. In general, subscribers are more likely to respond to dunning emails that are customized to match the brand’s voice. Conveying urgency in each subsequent dunning email and presenting a clear call-to-action are also important for encouraging the subscriber to update their payment method.
To maximize its effectiveness in recovering revenue, the dunning process should function independently from the retry process.

Monday, November 20, 2017

Publix Credit Cards: Slow!!!

I've had a fascinating week with credit card readers. I went to Publix several time. I use an Amex card with a chip.  The Publix experience takes about 25 seconds. I mean once the cashier is finished, I put in my Amex card in the slot and have to wait 25 seconds for it to get processed.

This was really annoying at first since that's a long time to stand there when there's a line. But we got use to the new slower technology.

This week however I started shopping at Fresh Market. It's about half a mile from the Publix. Note that this is in Ft Lauderdale on US1 between Oakland Blvd and Commercial Blvd.

the Fresh Market processing of the same Amex card takes less than a second. Less than a second. That feels fast. It's like using Apple Pay.

What possible reason is there for Publix's processing to be that slow? IS it just lousy lousy lousy IT and programming? Probably.

Could it be that they are doing a financial check that the other stores aren't? I doubt it but possible.

Publix? Care to comment?

Saturday, November 11, 2017

Speed of Chip Readers for Credit Cards

I am shocked that when I go to Publix, the credit cards with a chip seem to take about 30-40 seconds to process.  This might not seem like a long time but since it holds the line still, it is a long long time. Basically, after the checkout process, the payment leaves the cashier sitting around idle waiting for the credit card to process.

What's weird is that in other super markets like the Whole Earth Store, it seems to be almost instantaneous, definitely less then 3 seconds.  Why can't Publix, with all their scale and resources, manage to accelerate the process.

Could it be that they are doing a credit check and getting approval in a way that other supermarkets skip?

On another note, I'd like to see whether blogger does trackbacks the way the wordpress sites do.  Seen the post on studying stem with bicycles?

Friday, December 23, 2016

K12 School Purchasing, Credit Cards, School P Cards, Procurement Cards

I run an edtech business, one part of which sells to schools and teachers. Most of that revenue (65%) comes in from credit cards, 35% from purchase orders.

Problem number one. You probably read that last sentence and thought it was the whole story. I wish it were. I use to think it was. It turns that there are lots of schools who purchase through a PO but when it comes time to pay, they pay with a credit card. So in fact, some purchase are purchase order AND credit card.  Sure messed up our accounting until we figured it out and learned to account for it.

Question number one. Q1. Of the 65% of the revenue that comes in from credit cards, is there a way to distinguish on our side between personal credit cards and school Pcards?  It would be really interesting to know.

Second question. Of the teachers paying with their personal credit card, should we start asking them whether they are being reimbursed by their school for it?

Fintech is a hot area as in school fintech with company such as Class Wallet and others looking at possibilities for improvement through technology to help education.

Sunday, November 27, 2016

Startup Advice - Merchant Accounts is where you make your money

Here's what I learned over the last decade about setting up credit card merchant account for my online business in which we sell an intangible good with card not present.

1. Like it or not, you are in the credit card business. It's where your revenue actually comes from and it's a few percentage points of your cost structure. It can also go horribly wrong. Learn the basics and pay attention to it.

2. Using Paypal as your merchant account vendor is not the worst thing in the world. Nor is it the best in the world. Their reports sort of suck but their support is reasonable. As far as I know, they are not real good at subscription service processing but I've never really tried it with them.

3. Be careful that any merchant account contract that you sign has a clear way to get out of it. Note,  if you are a subscription site, there are two levels of getting out of it: 1. Switching to a new vendor to start processing new subscription orders. 2. Getting existing subscribers credit card info switched to a new credit card vendor. In my experience, the latter is impossible. You just have to add a new vendor for new subscribers and then over time, as users login, get them to update their credit card info and in doing so, switch it to a new processor.

4. Costs. The pricing for credit card fees to you is weird. As far as I know, there are three systems:
- one where each credit card has its own fee structure and you pay them
- a tired system where your process puts the cards in tiers and charge you by the band. By tiers I mean, debit cards vs credit cards. Credit cards with special benefits (miles, money back, free massages) vs credit cards without benefits.
- a fixed price system which Paypal seems to use.
The fees are a mix of monthly fees (for no reason), start up fees, % of bill fees, and a fixed per item processing fee. There are also fees for credit card verification, refunds, and other chargeback disputes.

5. Security. Keep your website secure. Update your CMS (ie Wordpress) at each update as well as your coding languages (ie php), and your tools. Run your PCI vulnerability scan every month. Screen your employees.  When they talk about security needs, listen!