Visa and MasterCard have been into the business for quite some time now and it seems that it will take them a lot of time to beat each other ultimately becoming the top. Both the companies have been in the banking industry for years now. The companies are operating payments from around the world from credit cards, ATMs and credit purchases over the network every year. People have conceived as if both MasterCard and Visa issues credit cards themselves.

Your bank or the financial institution that you are dealing with might be processing all the details and issues the card. The banks only use Visa and MasterCard payment methods against which the Visa and MasterCard charge their fees.

History of Visa and MasterCard:

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Visa started its operation in the world of banking and finance some 50 years ago in the United States and is now accepted around 170 countries in the world. MasterCard came into business somewhat later in the mid of 1960s and covers the equal number of countries today with the product range and services quite similar to Visa. There was a time when Visa penetrated all major markets and it had an edge over MasterCard but you will hardly find a retailer these days who accept the Visa card and not the MasterCard. There are approximately 30 million locations around the world that are expected to accept payments through Visa and MasterCard.

The best move:

There seems to be no difference in the services provided by both the companies but there are some people who prefer to have cards from two different financial institutions so that they have one card from each brand. This helps them have both the options open to them in case they are travelling around the world. There might be a situation where a retailer accepts one payment method and not the other so they prefer not to take a risk. You should even research a bit in order to have resources with you while travelling in order to make sure that the card that you carry has a worth in the location that you are about to visit. Both the cards are widely accepted therefore you need not to worry about the usability.

Credit Card for you:

The Visa and MasterCard tag has got nothing that sets them distinct compared to the other. There isn’t anything to be concerned of about these companies but the major impact on your credit card is through the company issuing you the card so you are supposed to make the right details there. There can be banks, credit unions and building societies that might be issuing you card and those are the companies that make the difference.

Two Visa cards from different banks will have completely different features compared to each other. Look out for the cost and feature of your card and not the fact that they belong from MasterCard or from Visa. Look at the terms and conditions in detail to make sure that you make no mistakes about your card.

Take all the time that you want before making a selection and look into the following details:

• Terms and conditions
• Annual Fees
• Interest rates on purchases and cash
• Interests on installments
• Reward programs

These are the details that matter before you buy a credit card and not Visa or MasterCard.

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Photo by Don Hankins

Beware Visa’s warnings

Visa Inc. last week sent a fraud alert to banks and payment processors warning them to look out for a “large batch settlement fraud scheme” involving a merchant account in East Europe. That alert is focusing renewed attention on a longstanding need for banks to tighten up the standards for authorizing merchants who accept credit and debit card payments.

Batch settlement fraud schemes – What are they?

Batch settlements refer to the common practice where merchants store all authorized payment card transactions that occur during a day and then send them in a batch for settlement to their acquiring bank at the close of business. An “acquiring” bank, in payment industry parlance, is the financial institution that basically vets and clears a merchant to accept payment card transactions.

In its alert, Visa said it had received reliable information from a “third-party entity” that a criminal group planned to submit a large batch settlement through a merchant account approved by a bank in Eastern Europe. “The criminals claimed to have access to account numbers and the ability to submit a large batch settlement upload to occur over a weekend,” Visa warned.

The company said it had no details about who exactly was involved or when the fraudulent activity might occur. The alert noted that the people behind the scheme were likely a “consortium of online merchants that have been trying to secure processing arrangements after being shut down at several acquirers across many geographies.”

Viable solutions according to Visa

In an e-mailed comment, a Visa spokesman said that card issuers and acquiring banks routinely monitor for unusual batch settlements. Even so, it issued the alert as a reminder to “critical stakeholders so they can take cautionary or mitigating steps” against fraud.

The situation is largely a result of the relatively loose manner in which merchants are approved to accept payment card transactions. Credit card companies and acquiring banks need to tighten up their accreditation process and how they onboard new merchants.

There are also too many third parties and Independent Sales Organizations (ISO) acting on behalf of banks to approve merchant accounts. The standards for approval used by such organizations have allowed too many illegitimate merchants to establish accounts and access to the payment systems.

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New Visa Innovation: Contactless Mobile Payments Via iPhone

How many times have you told  yourself how indispensable your iPhone is? Or how you can’t live without it? When it comes to fun and productivity, this gadget can definitely improve your life and entertain you at the same time. Now, there’s another reason why you can’t afford to lose your iPhone or let it out of your sight, because Visa is going high-tech by offering a mobile payment solution that lets iPhone users make purchases with a wave of their mobile devices. Visa is quick to partner up with DeviceFidelity to take advantage of the fact that approximately 40 to 50 million iPhones will be sold this year by launching this cutting-edge mobile payment technology for iPhone 3G and iPhone 3Gs owners.

payWave for iPhone: The Future is Here

payWave in itself is already a groundbreaking technology in the past, giving cardholders the ability to wave their credit cards at the checkout counter when they purchase items. Now, with a staunch partnership with the high profile DeviceFidelity, the payWave technology will be revamped to suit the Apple iPhone usage. This will be done by introducing a special protective iPhone casing containing a secure memory card that houses Visa’s contactless payment application.

Some may not be aware but payWave has already been established since the year 2007. It’s main rival is MasterCard’s PayPass solution that also lets consumers wave their credit cards in front of terminals in lieu of cash. However with the new payWave technology for iPhone, Visa is set to garner even more customers, setting it apart from its main competitor.

How the Visa mobile payments work
When you think about it, there are huge advantages attached to mobile payments via the ever popular iPhone and one of them is convenience itself. Let’s see what can be done with your trusty iPhone contained in this special Apple-approved case:

• Make payments at various retails stores nationwide
• Pay for fast food on the go (let’s not forget your favorite cup of Starbucks coffee)
• Quickly pay the cab driver by waving your iPhone instead of rummaging for cash
• Pay for tickets and other merchandise during sporting events (baseball, boxing, football)
• Pay for items from vending machines without digging for small change

Is Safety Guaranteed?

As with all new financial solutions, doubt will rise as to whether this new technology is safe or not. The common questioned being asked now is if iPhone owners will be protected from fraud if they lost their device. In fact, iPhone owners need not be worried because the payWave for iPhone technology has superior password protection features. It works just like a credit card. Once a loss is reported, steps will  be taken to deactivate the account.

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Well, it looks like Visa is again extending its reach across the world. The financial world is abuzz over Visa’s acquisition of Cybersource. The world’s largest electronic payments network made headlines when they acquired CyberSource Corporation, a prolific online payment services provider for a record total of $2 billion. In cash, no less. Their offer price of $26 per share for all outstanding CyberSource shares has also been made public. The whopping $2 billion price tag is the biggest one yet since Visa went public in the year 2008. Michael Nix, a portfolio manager for Greenwood Capital Associates, opined that it was indeed a very sizable premium but one that will do more good than harm for Visa, especially when it comes to adding long-term value and the juicy e-commerce potential.

This acquisition is in line with Visa’s objective of making their online presence even more powerful as well as to challenge rivals such as PayPal and ClickandBuy. Visa’s authority in the online payment, fraud prevention and related areas are expected to grow even more impressive, as their e-Commerce growth accelerates.

About Visa
Currently Visa is known as the largest digital payment system operator, with more than 200 countries utilizing this system. That’s practically the entire world! As if that is not astounding enough, another mind-boggling fact will have you reeling in fascination – More than 1.7 billion Visa plastic cards are being used by consumers across the globe! Visa is also deemed the most advanced processing network known to man with the capability of performing over 10,000 transactions per second! These transactions consist of authorization, clearing, as well as settlement, done on behalf of countless merchants like you and me, as well as notable financial institutions the world over.

Visa’s shares closed down 0.98 percent at $93.13, while CyberSource’s surged 32.3 percent to close at $25.72. CyberSource was the second-most active stock on Nasdaq on Wednesday.

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Illustration by Eddie Guy

MasterCard and Visa are highly reputable brands in the financial world – but what happens when card issuers misuse their power and ride on the giants’ reputation for their own gain? Apparently money cannot buy love, but money will buy them the license to issue cards bearing MasterCard and Visa’s emblem, ultimately sending huge profits along their way.

Hallmark Bank & Trust – Cause for Concern
Take the case of Hallmark Bank & Trust for example. With headquarters in the Turks and Caicos Islands, is affiliated with MasterCard and is well known industry player. They have a healthy relationship with MasterCard: Hallmark pays MasterCard in exchange for the right to use its name on cards issued by Hallmark (no relations with the greeting card company whatsoever!) and in return, MasterCard stand to gain a percentage of sales generated by Hallmark through these cards.

However, all is not fine and dandy with Hallmark’s financial and legal background. They have been slapped with a civil lawsuit in the year 2007 whereby the US Inland Revenue Service claimed that Hallmark-issued MasterCards have been used in elaborate money laundering schemes. Two US accounting firms have been charged with advising their clients to evade taxes by shipping money out of the country. Brian F.J. Trowbridge who is Hallmark’s president, used to be a director with Lake Shore Alternative Financial Asset. An affiliate with this company, namely Philip J. Baker, was accused of cheating US currency investors out of a whopping total of US$300 million. Trowbridge got away scot-free and wasn’t accused of criminal conduct. Recently, Greg Hurd, a Hallmark executive who was in charge of securing banking services for Lake Shore Asset Management, was involved in a civil fraud suit.

With all that was said and done, one wonders what would it take for MasterCard to really sit up and take notice of all these fishy happenings. When will they severe ties with this dubious company and its president before MasterCard’s reputation is tarnished even further?

Questionable Intent
MasterCard and Visa are two of the strongest names in the industry. They maintain that they employ stringent regulations and often check individual cards for misuse and have always taken care to avoid doing business with dubious banks. Most, if not all banks that are associated with both Visa and MasterCard are renowned with a loyal following of consumers who like and trust their quality of service. However, the downside is that they also strike bargains with shady financial execs and financial institutions with murky backgrounds.

One good example is the Global Bank of Commerce in Antigua. Perhaps unknown to Visa, Global advertises an “unembossed” Visa card via its website. This means that almost anyone can obtain a Visa card without putting his or her name on it. Is the public aware about this? Even more important, is Visa or the authorities going to do anything about this? When contacted, Global’s president Brian Stuart-Young said that they “hold detailed financial information for anyone who might get an unembossed card.” He also maintains that the cards’ limits are typically lower than most. Former IRS investigator A. Jack. Fishman begs to differ. He said such cards can still be used in money laundering or tax evasion. “Why else on earth would you need an anonymous credit or debit card, unless you were trying to move illicit funds?” he added.

How long these card issuers can survive before they get into hot soup remains to be seen. Till then, be aware that not all card issuers can keep you out of trouble just because they are associated with Visa or MasterCard.

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How many times have you said this to yourself: “I swore I had $50 in my wallet before I left the house…” If this has happened to you before, then you are not alone. More of more US consumers are admitting to the fact that they cannot keep track of their expenditure. As a result up to $1000 is unaccounted for annually. This phenomenon is even more worrying in younger Americans whereby as much as $2500 is lost each year.

These findings were made public by Visa recently. Although an increasing number of consumers vowed to spend less, they still find it difficult to keep track of their cash flow especially when it comes to the hectic holiday season.

“Where did my money go?”
Industry experts say that consumers are likely to have lost track of their money during these occasions:

• 1 out of 3 people have difficulties keeping track of their cash during grocery shopping
• Approximately 1 out of 4 consumers said they do not know where their cash went during leisurely shopping sessions
• 31 percent admitted that they exercise less control on their cash during night outings with friends
• 26 percent ate outside and claim they do not place huge importance in controlling their finances when it comes to food

The solution at hand
So what can consumers do to help curb this worrying activity? Two words – Debit Card. A debit card can help consumers track their cash flow and eliminate the worry of losing money that is unaccounted for. Debit cards gives you a statement which you can access to see just how much you have spent, something that you cannot do with conventional cash.

Perhaps it is time you make the switch to a debit card instead of paying solely by cash. Debit cards also give you more security and enhanced peace of mind, knowing that you have not oeverspent especially when the new year is approaching.

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The carrot on the stick
Imagine this scenario: You’ve stumbled upon a spiffy looking website online offering a free trial pack of colon cleansing products together with an impressive looking e-Book. All you need to do is submit your name, address, credit or debit card details (for a nominal “shipping and handling fees”), as well as other personal details, and you’ll enjoy a month’s supply of colon cleansing product, JUST the thing you need to lose some weight in time for Christmas… RIGHT?

A nasty shock
WRONG! Yes, you will receive your trial package in a timely manner, but in 30 days’ time you will also find a credit or debit card charge for an astoundingly high amount – quite different from the initial S&H charge! Surprise, surprise. Upon deeper scrutiny, you find out that there is a tiny fine print on the website you signed up for your trial offer dictating that unless you call or write in to cancel that offer, you will be billed CONTINUOUSLY for the product! That means an extra $50 or more for you to pay, sometimes unknowingly each month!

Negative option
This problem stems from a clause called “negative option”. Unethical merchants take advantage of this by egging on customers to sign up for the trial offer, and not letting them know about the fine print. Customers who DO know about this, find it difficult to cancel the offer and by the time they managed to get through to the merchants via email or telephone, it will be too late.

Visa to the rescue
Knowing how rampant this scam is, Visa decides to terminate some 100 merchants’ credit card processing account recently. Online shoppers can find solace in the fact that Visa is stepping up on their security measures so that consumers will not be scammed by such unscrupulous tactics again. Visa group president William M. Sheedy says that Visa has been hot on the tail of unethical merchants since summer and will continue to wipe out such merchants before more customers get scammed, especially with the approaching holiday season.

So the next time you shop online, be aware of scammy looking acai berry or diet product scams.

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The scam Recently, it has been reported that merchants are facing a new threat in the form of unethical credit card processing salespeople. These salespeople resort to unethical methods in order to garner more sales. It is believed that this is a rampant occurrence in Springfield where a company hires people to “force” merchants into switching their credit processing companies. Banks and credit card issuers who found out about this claim that these acts are not illegal but merchants are crying foul over the lack of ethics displayed by the salespeople in question.

Getting a foot in the door Why unethical, you ask? Consider this: Samantha Rushing, who owns a tanning salon, nearly got scammed recently when she picked up a call from a woman who claims that she was representing Visa and MasterCard. She claims that the person at the other end of the line purportedly said that the salon owner’s terminal was overcharging customers. Not believing her in the least, Samantha tried to end the conversation but the sales representative was adamant in visiting her establishment to check out her terminal. When she arrived, they couldn’t find a single problem with her credit card terminal but the salesperson tried vehemently to persuade her in changing her credit card processing company.

Be warned Along with Samantha, many other merchants have been inundated by calls and not-so-friendly visits from credit card processing companies. Authorities warned merchants not to fall for this trick and instead, asked them to be on high alert for such shady individuals. They should also be doubly careful about those who tamper with their terminals or try to use scare tactics in order for merchants to sign up with their credit card processing company. Merchants should also be wary about being forced into signing a contract they have not read or rushing headlong into something they are unsure of.

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