Three Reasons Every Merchant Needs Chip Card Readers

by Elizabeth Sherman 14. December 2016

3 Reasons Every Merchant Needs Chip Card ReasersAt the supermarket recently, I had the opportunity to chat with the manager. I noticed that the store, part of a regional chain with a huge corporate owner, had not yet installed readers for the increasingly ubiquitous chip-cards, so I asked him why not.                          

After all, chip cards are meant to protect consumers from fraud. And there’s plenty of evidence that they’re working as intended.

The manager’s response surprised me. He told me the chain wasn’t worried about the cost of upgrading, but about the prospect of losing business. He explained that transactions take longer with chip card readers. And he worried they’d lose customers if they force people to do that.

My view is that they’re much more likely to lose customers if they don’t upgrade (more on that in a moment), but the store is far from alone. According to the business management consultants at the Strawhecker Group, only about 29 percent of American merchants were ready for chip cards — also known as EMV cards, which stands for Europay, MasterCard®, and Visa® — as of September.  

That’s disappointing. Chip cards are our best defense against card fraud. According to the trade newsletter The Nilson Report, U.S. card losses for banks and retailers reached $8.4 billion in 2015. And that number is expected to reach $12 billion by 2020.  

That’s why a consortium of card issuers, banks, and others developed the EMV standard for cards and readers. These chip-enabled cards, which customers “dip” instead of “swipe,” provide greater security from fraud. That’s because swipe cards create a record that crooks can grab and use to make purchases. “Dipped” cards, on the other hand, create a one-time code that can’t be reused. 

Europe has been using this technology for a while now, but it really got going in the United States last year. So far, banks have issued about 600 million chip cards to U.S. consumers, according to the U.S. Payments Forum. And starting Oct. 1, 2015, the liability for card fraud at most merchants without chip-card readers shifted from the card’s issuer to the retailers. And many more U.S. merchants will start accepting chip cards by October 2017, when gas stations will start facing those same liabilities. 

However, many retailers still resist purchasing the upgraded reader. That’s why I want to share with you three reasons why just about every merchant should be chip card-ready: 

1. Peace of mind for you.

A store clerk recently told me that she didn’t understand the “hassle” behind chip cards. So I put my banker hat on and explained that the chip-card machine takes the liability off the merchant (her boss) and puts it on Visa® and MasterCard® if there is fraud. It’s as simple as that.

For those merchants who say, “I never had fraud before,” well, how do you know that? MasterCard® and Visa® were taking it on the nose for you before. They’re not doing that anymore. So if you’re a merchant that hasn’t installed the new card readers, you’re doing yourself a disservice. It’s an easy, inexpensive upgrade that will protect you financially.

2. Peace of mind for your customers.

Your customers know that card fraud is happening. They’re seeing odd charges pop up on their credit card statements — and then spending hours on the phone cleaning those messes up. Chip cards reduce the likelihood of fraud significantly — and your customers are learning this.

You don’t want them to be afraid to use their credit cards in your store. So, being up to date on your POS technology will give them peace of mind as well. You’ll gain their trust.

3. You'll gain an advantage over your competitors.

Staying on top of chip card equipment now means you’ll be more comfortable with the next rounds of payments technology — including chip-and-PIN cards (which allow customers to input a number instead of signing), “tap” cards (which allow them to simply tap their card against the reader), and mobile payments. The more forms of technology you’re familiar with and ready for, the more potential customers you’ll have. And that translates into more dollars coming in.

The Smart Choice

Card fraud rates are already down thanks to EMV. According to Visa®, chip card-friendly merchants recorded a 47 percent drop in card fraud from May 2015 to May 2016. That shows why every merchant should be installing EMV technology if they haven’t already. Your customers will soon be expecting it — and may choose to patronize someone else if you don’t have it.

Most community banks, including 1st Mariner Bank, provide merchant processing services. That means they can get you access to industry-leading chip card POS equipment and solutions. To set a retailer up to take EMV cards, we gather information, fill out applications, get everything through the approval process and order and install equipment. And if our equipment doesn’t fit your budget, we can even help you find better deals.

If you’re ready to get started, or for more information, just contact our business banking services department.

Vetting a New Bank for Your Business? Ask These 4 Questions

by Elizabeth Sherman 16. September 2016

I have a friend who researches everything to the Nth degree. He dives deep and never lets a penny get by him. You probably have a friend just like him. (If you’re smart, you are him.)                         

We were talking recently about his relationship with his bank. And when I asked him what questions he asks whenever he’s vetting a new bank, his answer intrigued me.

His most important query wasn’t about the bank’s services or its lending process. “Those are questions I ask, of course,” he said. “But really, here’s what I want to know: Am I going to be able to get in touch with you? And how do I get in touch with you? Do I get your phone number and email, or do I have to make my way through a phone tree?”

I got what he was saying. He was asking about what kind of relationship he could expect to have with his bank. Would it be hands-off or collaborative? Would he work with an individual, a team, or a machine. 
 
And so, in the spirit of my friend’s questions, we’ve put together this list of Top Questions to Ask Your Banker. You’ve checked the bank’s interest rates and branch locations, and you likely are ready with some inquiries specific to your situation – but these are four questions you should always ask.

“What will our relationship be like if I bank here?”

As my friend’s passion demonstrated, he thinks it’s essential to have an advocate at your bank. If you agree, make sure you’ll be assigned a relationship manager, and clarify how they’ll handle your business. Will you meet regularly at the bank or at your business? Will you be able to get your relationship manager on the phone quickly?

Your advocate can guide you through the loan process. They can let you know about important new products and answer questions about them. They’ll give you news about the bank before you hear about it on social media or the evening news.

Nail down how easy it is to get in touch when you need to – and typical response time to such queries. Be assured that your phone calls and emails will be answered quickly.                              

Plus, that relationship shouldn't end at the bank itself. Community banks can help you connect with the local business circle. Those sorts of connections can lead to customers, advisors, contractors, and even other lending options.

Finally, don’t just take the bank’s answer to these questions for granted. Seek out your peers and grill them about their relationships with their banks. Let that lead you to a great choice.

What Is Your Lending Process for Businesses Like Mine?

It’s tough to get a loan. Community banks are approving only about half of their loan requests. Big banks are even more daunting; they approve just 21 percent. So before applying, you want to know that the process is simple and straightforward. If it’s not – if the banks starts obfuscating before you even submit an application – walk on. Here are three things you should determine before you get started …

  • Does your company qualify for the loans this bank offers? Many banks won’t loan to businesses under a certain size, or that have less than a three-year track record, or that are seeking a loan of less than $5,000.
     
  • What is the lending process? What financial records and tax records are required? Will there be interviews, and to whom will you speak? Is the decision made locally?
     
  • What’s the timeline? How long does the approval process take after you apply?

Most importantly, find out whether you will have an opportunity to sit down with bank representatives before you kick off the loan process. This is yet another chance to build a relationship and pick up advocates who can guide you through the lending process.

What Is the Financial Strength of the Bank?

Do some homework before sitting down with a bank representative. First off, don’t even think of approaching a financial institution not insured by the FDIC. Additionally, look at the bank’s ratio of non-current loans to total loans (if it’s above 10 percent, walk away), deposit growth, available cash, and “record” with the FDIC.

Then, when you get in the room with a bank rep, get a feeling for the overall health of the bank. You want to hear – with confidence – that the bank is doing very, very well, that it’s well capitalized, that it’s lending lots of money. Listen for buts. 

What Are the Banking Services I Need Right Now? What Will I Need in the Future?

Have a list of what services you think you need: easy online access, anti-check fraud services, wire transfers, credit lines that cover cash shortfalls, etc. If you’re not sure what you need, then just be ready to discuss your business; a good banking relationship manager should be able to connect you to the right services for you. Also, ask how the bank charges its business customers: Is it à la carte or a full menu?

As for the services you’ll need in the future, your representative should be able to make some predictions but the answer mainly depends on how your business evolves. The important thing here is to start building a relationship. You want to bank with someone who’ll let you know what you need to add – and what you can drop – as your business grows. They’ll also alert you to new services the bank is offering.

Finally, keep an eye on this during the vetting process. If the bank asks you what services you’re currently paying for and, critically, whether you’re using them, that’s a good sign. This is our chance to save you money. If the bank you’re assessing is smart, they’ll want to do just that.

If you have any further questions – or if you want to get started your vetting process – get in touch. 

Online Business Banking: Making Sense of All the Services

by Elizabeth Sherman 2. June 2016

Are you still using paper checks to pay vendors? If so, you’re taking a big risk with your security.

Thieves who get hold of one of your checks can do more than just cash it and pocket the funds; they also have your account number and routing number. With that information in hand, they can easily print counterfeit checks in your name or make online purchases with your money.

If you’re not one of those people who look at your account balance every day, it could be a long time before you realize what’s happened. And your bank may or may not be able to get the money back.

Fortunately, there is a simple yet effective service called Positive Pay that can help business owners prevent such check fraud before it happens. Yet many businesses neglect using this service until it’s too late.

Here’s how Positive Pay works. Each day, you tell your bank which checks you’ve issued. As those checks are presented for payment, your bank reconciles the information you’ve entered and makes sure everything matches. If it does, the bank pays the check. If it doesn’t, an exception is created and the bank lets you know about it. You can then go online and determine whether or not you want to pay the check.

It takes just a few minutes a day and costs a fraction of what you might lose to fraud.

Positive Pay is just one way that the age of internet banking has made life easier and money safer for business owners. Yet for so many businesses, banking services exist that remain a mystery. Here’s a guide to some of the most common online business-banking options.

1. Information Reporting

The cornerstone to your online business banking, information reporting makes access to your account and its entire history from your computer and mobile devices easy. Anything related to your account is available: copies of checks, deposit tickets, what’s coming into your account tonight, any debits that are posting. 

With this (usually) free basic service, you can also manage your checks, transfer funds between your accounts, and check the status of any commercial loans you have through the bank.

2. Automated Clearing House (ACH)

This network for financial transactions makes electronically transferring funds between banks a breeze. With ACH, you can instruct the bank to pay a certain amount of money to a vendor, an insurance company, or your employees on a regular basis. You’ll be able to view these “standing orders” and then change or cancel them as needed.

Using ACH will save you time and make it easier to track funds transfers. It’s not for everyone, but most businesses who have employees, or who make a significant number of regular large payments should consider it.  

3. Bill Pay

For smaller onetime payments, look to Bill Pay services, which are usually free with basic online business banking. Using Bill Pay rather than cutting a physical check has several advantages. It’s quicker and almost fraud-proof, and you can set the day you want the bill to be paid. And don’t worry if the entity you’re paying doesn’t accept online payments. If they’re not in the network, your bank will cut them a check – you don’t need to do anything else.

4. Wire Transfer

The business world has operated at “real time” speed for some time now.  As such, you’re likely to find yourself needing to make real-time payments frequently. In these instances, Wire Transfer is your best bet. You can use it to set up a onetime payment or regular payments. And it provides the convenience of initiating transfers from your office rather than making a trip to the branch.

5. Remote Deposit

Depositing your checks at the closest branch probably sounds easy… until it isn’t. And think about this. It may take an hour to drive to a branch and then back to the office or to home. It takes 30 seconds to scan a check at your desk and another minute to deposit it remotely.

Talk It Over

The most important thing to remember when it comes to making the most of your online banking is to leverage the advice of your banker. I’ve noticed that many business owners may know the services available but may not understand them or think they are only for larger companies. While it can be said that certain services are better for some kinds of businesses more than others, the core business banking services will help businesses of any size. However, I’ve seen many businesses that pay for services they have little use for, while ignoring those they could benefit from.  The irony of making the most of your online business banking services is that it requires that occasional live conversation with a trusted advisor. For a conversation about what’s right for your business, let’s talk.

 



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