A credit card processing primer by John Monarch
BETTER PROGRAMS THROUGH BETTER
BANKING
• Merchant Accounts/MIDs
• Gateways
• Customer Relations Management (CRM) and Shopping Cart Software
• Approvals, Declines, Errors
THE BASICS
• What is a Merchant Account, and what does “MID” mean?
• Who has Merchant Accounts?
• ISO/MSP vs IPSP vs Bank
• Paypal?
• Clickbank, Plimus, Google, etc.
MERCHANT ACCOUNTS
• Why do I need a Gateway? Isn’t a merchant account enough?
• Equivalent of Point of Sale. Passes data.
• Who provides Gateways? Authorize, NMI
• How does a gateway impact my business?
PAYMENT GATEWAYS
• CRM vs Cart – Direct Response and eCommerce
• Why does this matter?
• What to use? Limelight, Magento, OSCommerce, etc.
• This impacts conversions?
CRM/CART SOFTWARE
• Merchant Account decline rate and reasons for this
• Gateway errors
Spaces in CC# not accepted, security violations, invalid Luhn checksum, CVV2 invalid, expired card
• Data handling errors
• CRM errors
HOW EACH IMPACTS CONVERSIONS
• Gateway code definitions
• Some declines may be good.
• BIN verification
• NSF – Not Sufficient Funds (not always bad!)
• Fraud prevention
NOT ALL DECLINES ARE EQUAL
• Bank Identification Number
• Certain BINs should be blocked
• How to know which BINs to block?
• What do BINs mean?
• Sample: 511122, 489212, 448279, 514503 – all GreenDot
WHAT IS A “BIN”?
Prefixes• 0 – ISO/TC 68, Reserved for Future Assignment• 1 – Airline Cards• 2 – Airlines and Future assignments• 3 – Travel and Entertainment, Banking & Financial. AMEX, JCB• 4 – Banking and Financial – VISA reserved• 5 – Banking and Financial – MasterCard, Diners Club, Maestro
Debit• 6 – Merchandising, Banking & Financial – Discover, China Union
Pay• 7 – Petroleum, future assignments. FUELMAN, Exxon, Sunoco• 8 – Healthcare, Telecom• 9 – National Assignment, Governments
BIN MEANINGS/ISO-IEC 7812
• 3715** - American Express Platinum• 356210 – HSBC Hong Kong JCB Credit Card• 401180 – SunTrust Visa Debit Card• 603220 – WalMart Discover Credit Card• 923362 – SwedBank Temporary ATM (30 Day) Card• 3715** - American Express Centurion• 434256 – Wells Fargo Visa Debit Card
• A live example – anyone want to volunteer the first six digits?
EXAMPLES
• Integrating BIN verification to reduce fraud and increase conversions
• Automatic BIN rejection
• Automatic MII selection on checkout to remove an extra menu
• All combined advice can raise conversion rate up to 30%
• BIN Base, BinDB and other services
INTEGRATION
• http://en.wikipedia.org/wiki/Bank_Identification_Number• http://en.wikipedia.org/wiki/
List_of_Bank_Identification_Numbers• *(Note: BIN list on Wikipedia is accurate, but
infrequently updated)• The American Bankers Association (http://www.aba.com/
default.htm)• http://www.binbase.com and http://www.bindb.com• International Standards Association (http://www.iso.org)
REFERENCES
