Joys of Processing International Credit Cards

Joys of Processing International Credit CardsTo those who are concerned about a “global big brother” resulting from all our digital and global village connectedness, I say humbug and let the global standards roll forth.

I say this partly in jest as I believe there is already a Universal All-knowing being, one who is loving and graceful but really really smart and ever expanding who already knows everything there is to know about each one of us, and on a more serious grounded earthly level, I was reminded recently of the glory of universal standards that come from collective agreements among men.

This reminder came by way of processing international credit cards for Tele-Vision DVDs. Up to now, most of my e.commerce exposure has been with processing Canadian and US credit cards.

As running start fyi, early on most of CoolTea’s credit card sales were for event tickets, thus we didn’t care too much about what your billing or shipping address was as you had to come to the event to get the deliverable.

But along the way, Mastercard and Visa started charging bill backs for merchants who failed to run AVS (address verification system). One day, six months after a big event where we had charged $5,000 worth of tickets, I was aghast to see an additional charge to our bank account in the way of several hundred dollars.

I called my Merchant bank and said, “What gives – where are these charges coming from?” and as politely and professionally clean as any large institution can do, they did their best to explain that these were billback charges from Mastercard and Visa because CoolTea did not pass the billing address information to the banks during the real-time credit card transactions.

I tried to explain that CoolTea was in the event business, and the likelihood of some hacker buying tickets with a fraudulent card and then showing up at the event was very unlikely, but they just laughed at me and said, “Sorry – take it or leave it. If you want to accept Mastercard and Visa, gotta play by their rules.”

CoolTea had been capturing your address info just-in-case we needed to call you or send mail but had not been passing this info along during the transaction.

Okay, ouch to bill back lesson ,and when we started passing the address info to banks, double ouch. Our customer service calls started to climb.

“Hey Chuck, why was my card declined?”

It turned out that most of the cards were valid but did not pass the AVS code verification – e.g., most of the time it was a simple faux pax by a customer in that they were at work using their personal cards but entered their work address; or it was the reverse – people working at home using their corporate cards but entering their home address. Most of this got cleared up when we changed our online forms and improved the language about billing address entered needing to match 100% with what is on file with banks.

I should also mention we were always getting your card’s three digit security code but Mastercard and Visa didn’t give us a break – they still wanted to see matching billing addresses, otherwise they would charge us more points.

There is nothing more frustrating than looking at accounting statements and thinking it was all settled and done, only to find a couple of months later that Mastercard and Visa decided to penalize us.

So fast forward and CoolTea has a wonderful e.commerce system, no more charge backs, almost no customer services calls, and all is good, until we ventured into the international scene.

First it was funny stuff like different characters for other languages – e.g., Norwegians have some funny characters, and no, I’m not talking about people, but literal text characters that are considered “high level ASCII” – you know, the E’s with the funny slants on top, the O’s with double dots, etc.

So these funny characters wrecked some havoc with our banking transactions. We got around this with some data scrubbing before passing the variables to the banks, but then AVS bit us again.

In particular, our German customers started complaining, “Hey I know my card is valid, my address is valid, my 3-digit code is valid, so why are you bouncing my card and transaction?”

This triggered my auto neurosis of “Now what have I done and missed” but alas, I came to find out after much technical digging with gateways and banks that there is no AVS with most of the international banks.

It’s not my fault that most international banking systems cannot confirm their customers billing address in real-time, so now what? Don’t do AVS and pay more points, don’t accept international customers, or ..??..

Suffice it to say we found a solution – some logic under the hood that says, “if US/Canada customer go this way, otherwise process it this way”, and now the international cards from around the world are going through the system without hiccups – at least for now until somebody changes the systems or rules, etc. – a reminder of the golden rule, “those with the gold rule” and since CoolTea is not on par with Mastercard/Visa’s gold, so be it and let’s learn to flow.

Which brings me full circle to standards.

The 1980s IBM PC is a great example of the explosion of growth that can occur when we collectively agree to open standards.

MIDI (musical instrument digital interface) is perhaps the most profound example of benefits from standards, but unless you are musically inclined and want to gig and share your music with other like-minded creative folks, it is perhaps a tad esoteric for the average person who is not musically inclined, so let me jump to open standards we all can relate to.

Without the alphabet (e.g., here are 26 symbols that mean this) and grammar (e.g., here is how we arrange the alphabetic symbols) and other open source frameworks like musical chords, notes and scales, what kind of a planet would we have, and how enriching would our lives be?

Thus I say, standards, especially open source, collectively agreed upon ones, are a good thing – even a beneficial thing and necessary for free, open democracies that win with growing markets.

After all, and looping back to credit card processing, I am grateful for the service that Mastercard and Visa provide. I am mindful of the thieves, scoundrels, and risks that the likes of Mastercard and Visa endure. And yet I am committed to providing our customers with the most efficient shopping experience possible that balances et al.

In summary – viva the open standards enthusiasts – and back to my opening point about already being known by some other intelligence – double bravo to accountability and transparency!

Is this a great planet or what!

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