How Credit Card Processing Impacts Conversion Rate

BETTER PROGRAMS THROUGH BETTER BANKINGA credit card processing primer by John Monarch

THE BASICS• Merchant Accounts/MIDs• Gateways• Customer Relations Management (CRM) and Shopping Cart Software• Approvals, Declines, Errors

MERCHANT ACCOUNTS• 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.

PAYMENT GATEWAYS• 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?

CRM/CART SOFTWARE• CRM vs Cart – Direct Response and eCommerce• Why does this matter?• What to use? Limelight, Magento, OSCommerce, etc.• This impacts conversions?

HOW EACH IMPACTS CONVERSIONS• 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

NOT ALL DECLINES ARE EQUAL• Gateway code definitions• Some declines may be good.• BIN verification• NSF – Not Sufficient Funds (not always bad!)• Fraud prevention

WHAT IS A “BIN”?• 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

BIN MEANINGS/ISO-IEC 7812 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

EXAMPLES• 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?

INTEGRATION• 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

REFERENCES• 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)

How Credit Card Processing Impacts Conversion Rate

by Affiliate Summit on Jan 12, 2012

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How Credit Card Processing Impacts Conversion Rate — Presentation Transcript