Inner Fence: Giving Square a Run for the Money?

Everyone is talking about the Square and it's capabilities to turn an Iphone into a mobile credit card machine.

Inner Fence along with Merchant Focus has acquired a competitor, Appninjas who had created the popular swipe program which allowed you to accept credit cards on various smart phones by keying in information. Now Inner Fence wants to promote hardware allowing you to swipe the credit card for lower fees. The problem is that now this is no longer an independent application perhaps. With the free software and hardware Inner Fence plans to give out there will surely be contractual obligations perhaps for 3yrs. That is why Merchant Focus was so interested in acquiring appninjas and their popular application as it will allow them to entice new merchants.       

Senate approves Debit Card Swipe Fee Limits

Bloomberg reports that the senate approved debit card swipe fee limits:

Lawmakers voted 64-33 yesterday to approve the measure from Senate Majority Whip Richard Durbin, who seeks to ensure that debit-card interchange, or “swipe” fees, charged to merchants “are reasonable and proportional” to the cost of processing transactions. Payment networks Visa Inc. and MasterCard Inc., which set interchange rates and pass the fees along to card- issuing banks, fell in early trading.

The amendment permits retailers to offer discounts for cash, checks or debit cards, or for a particular card brand, and would let merchants set minimums and maximums for credit-card purchases.

On one side you have the politicians stating that passage of the bill will help small business. Now they can fight against these high fees. You have MasterCard on the other side stating :“The Durbin amendment would give lobbyists for big retailers what they have been unable to achieve through other efforts -- the ability to maintain all the benefits they receive from debit-card acceptance while transferring the cost to consumers."

BBB Says " Beware of Credit Card Processing Scams".

Via the St. Louis Globe:

Several owners of small businesses say they were duped by a salesman who promised to save them money on credit card processing fees, but instead tricked them out of hundreds of dollars and locked them into long-term lease agreements they did not want.

The Better Business Bureau (BBB) suggests caution when dealing with Eric W. Sutton, who has operated under the name Providence Place Development. The firm has an “F” grade with the BBB, the lowest grade possible.


The owner of a sports card and collectibles shop in St. Peters, Mo., said Sutton reneged on promises to return a $350 deposit, pay off a $100 early cancellation penalty with the owner’s old credit card processing company, and pay him up to $400 for the shop’s old credit card terminal and check machine, which Sutton took from the store. The owner said Sutton also tricked him into signing a four-year, $117-a-month equipment rental agreement.

“He had me hooked like a big old bass,” the store owner said

Several other business owners recounted similar experiences with Sutton.

The owner of a West St. Louis County sunglasses business said Sutton promised him a flat $50 a month credit processing fee, with no percentage fees on his credit card sales. Instead, he said, he found himself locked into a four-year, $59-a-month contract with percentage fees. He said he has been paying on the credit card processing machine for nine months, even though it sits unused in a closet at his home. “He told me, ‘I will take care of everything.’ He did take care of everything; he took care of everything for himself.”

Michelle Corey, president and CEO of the BBB, said area business owners should be constantly on guard against salespeople who “promise huge discounts. While most salespeople are honest, business operators should get everything in writing and be sure they completely understand any agreement before signing it.”

The BBB offers the following tips for businesses dealing with outside salespeople:

• Do not meet with a salesperson during busy working hours. It’s too easy to become distracted. It’s important to listen closely to all terms of an agreement and read all documents carefully before signing anything.


• Do not sign a blank agreement or agreements that appear to be incomplete. Also, do not accept a salesperson’s word that you can ignore certain terms in a printed agreement.


• Never give a deposit to a salesperson unless you know how it will be used. If a salesperson promises your deposit will be refunded, make sure you get the promise in writing.

Target Credit Cards: No Longer Using Visa

Target has dropped Visa as a partner on it's store issued credit cards. The retailer has decided to opt for an exclusive in-store credit card that will be accepted at all Target stores and it's website: Target.com. The reason for this turn about is market research and testing.  Interestingly enough the testing showed that Target customers would spend more when using the in-store credit card vs the Visa issued credit card.

Appointment Setters Scamming Merchants

There are companies who are employed by corporations such as credit card processors to solicit retailers and set appointments for their sales reps.. The concept certainly makes sense and I guess if done correctly could be quite profitable. Perhaps as more merchants are getting these sometimes very obnoxious calls and tiring of them the call centers have to come up with a new ruse to hook them in for the appointment. One of these gimmicks is they use buzzwords like PCI Compliance (which most merchants are these days). They will try to convince you to make the appointment only to send in some dimwitted sales person to strong arm you into making the deal.

The call center gets a commission for every  appointment they set and this process allows them to increase their bottom line. Usually they fail to mention hidden fees surcharges and the fact that they lock you into a contract or getting you to lease equipment and pay 20 times what the machine is even worth.

Vermont Setting to Legalize Minimum Credit Card Purchases

The State Senate approved a bill allowing Vermont retailers to have a minimum charge on credit card purchases. Although many small retailers currenlty request a $10 minimum for purchases with credit cards, it is actually against their merchant account contract with Visa and Matercard. The Senate bill was actually altered from it's original version to allow for quicker passage through the House. The original version would also have allowed retailers to refuse credit cards that are assoicted with higher fees to the merchant i.e. reward and corporate cards. If the bill passes the house, it will  need  the Governor's signature to become law. Last year, 7-Eleven stores delivered 1.66 million customer signatures from a petition campaign urging Congress to stop unfair credit card fees. It was the most signatures ever delivered to Congress on a policy issue in American history. There has been a constant struggle between Visa/ Mastercard and merchants regarding interchange fees. The merchants claiming that these fees are simply raising their products pricing while the banks claim to providing a service and that the merchants are smply looking for more profit that customers will never see.

Hacker of TJX gets 20 years

As mentioned previously, hacker Albert Gonzalez had plead guitly and was convicted  and senteced to 20 years in prison for his role in a variety of computer fraud including TJX, Heartland payments 7-11 and other corporations. How did he do it you ask?

Using a SQL-injection attack, the hackers broke into the 7-Eleven network in August 2007, stealing an undetermined amount of card data. They used the same kind of attack to infiltrate Hannaford Brothers in November 2007, which resulted in 4.2 million stolen debit and credit card numbers; and into Heartland on Dec. 26, 2007. Of the two unnamed national retailers mentioned in the affidavit, one was breached on Oct. 23, 2007, and the other sometime around January 2008.

Once on the networks, the hackers installed back doors to provide them with continued access. They tested their malware against 20 different antivirus programs to make sure they wouldn’t be detected, and also programmed the malware to erase evidence from the hacked networks to avoid forensic detection.