About QR Codes

Posted in: ABR Handouts, Blog, Business Development, Technology by Mallory Malloy on August 29, 2011 | No Comments

A QR code (abbreviation for Quick Response code) is a specific matrix barcode (or two-dimensional code) that is readable by dedicated QR barcode readers and camera telephones. The code consists of black modules arranged in a square pattern on a white background. The information encoded may be text, URL, or other data.

Although initially used for tracking parts in vehicle manufacturing, QR codes now are used in a much broader context, including both commercial tracking applications and convenience-oriented applications aimed at mobile phone users (termed mobile tagging). QR codes may be used to display text to the user, to add a vCard contact to the user’s device, to open a Uniform Resource Identifier (URI), or to compose an e-mail or text message. Users can generate and print their own QR codes for others to scan and use by visiting one of several free QR code generating sites.

QR codes storing addresses and Uniform Resource Locators (URLs) may appear in magazines, on signs, buses, business cards, or almost any object about which users might need information. Users with a camera phone equipped with the correct reader application can scan the image of the QR code to display text, contact information, connect to a wireless network, or open a web page in the telephone’s browser. This act of linking from physical world objects is termed hardlinking or object hyperlinking.

The use of QR codes is free of any license. The QR code is clearly defined and published as an ISO standard. Denso Wave owns the patent rights on QR codes, but has chosen not to exercise them.

Recently, QR codes have become more prevalent in marketing circles and have been integrated into both traditional and interactive campaigns. Media where QR codes have been deployed include: billboard ads, guerrilla marketing campaigns, in-store displays, event ticketing and tracking, trade-show management, business cards, print ads, contests, direct mail campaigns, websites, email marketing, and couponing just to name a few. QR codes are of particular interest to marketers, giving them the “ability to measure response rates with a high degree of precision” on marketing budgets. QR codes also have been used at trade shows and in conferences.

In July 2009, QR codes were created for character design and promotional materials in the Shane Acker film 9. The use of QR codes was part of the characters in the movie and culminated into a promotional campaign with unique QR code cards, posters, and street advertisements on billboards or public transportation for major popular art events. These advertisements were largely focused upon the attendees of the 2009 San Diego Comic Con and 2009 Academy Awards. QR codes were integrated into the artwork and symbolized individual characters in the movie. Instructional pamphlets and videos were released to explain how the codes could be retrieved and deciphered. QR-coded artwork could be read with QR-capable cellphones for prizes and access to exclusive online content. This was one of the first major integrations of QR codes with Hollywood studios and urban environments.

New vs Old Marketing: Which is Better?

Posted in: Blog, Business Development, Leadership, Technology by David Richins on July 18, 2011 | No Comments

Marketing seems to be evolving rapidly. In these tough economic conditions, many marketers are looking to adapt to the latest trends in order to stay competitive. But sometimes it’s good to take a step back and ask ourselves, “Does this really make sense?”

Let’s take a look at how marketing has changed over the past few years.

We’ve seen the following trends:

• Ability to avoid advertisements. TiVo, satellite radio, and spam filters, etc. have made traditional advertising less effective than before.
• Growth of Internet. More and more communication is happening digitally.

These trends propelled the growth of new marketing channels:

• Blogs - conversational online content as opposed to traditional PR
• Web video content – since people are too ADD to read
• Search engine optimization – aligning your content so that you become what people are searching for
• Social media – personal interaction and networking online
• Targeted digital advertising – Placing your ad where your target customer is likely to find it (in search results or web content)

This new style of marketing is sometimes referred to as permission marketing. Other terms we often hear are inbound marketing and interactive. The basic idea is that we don’t have as many options to push our products and services any more. Instead, we have to create pull from our customers so that they will desire our communications and opt in.

All of these channels are good, but is it possible that all this talk about Web 2.0 has made us go overboard? I believe there is indeed evidence of excess:

• Marketing “experts” sound like philosophers. Proponents of inbound marketing, especially followers of Seth Godin, like to talk about democratization, paradigm shifts, and being “remarkable.” Godin’s mantra is “Ideas that spread, win.”  But has marketing really changed all that much? Companies need to create value for their customers, not just innovative ideas. 
• Explosion of poor quality content. There are millions of blogs out there, and I think most of us would agree that there is a lot of clutter. How do we sort out the valuable from the ordinary?
• Desire to go viral. People want to do outrageous things in order to get noticed.
• Too many leaders, tribes. Seth Godin appears to advocate that everyone should create their own tribe. Is it really possible for everyone to be a leader? When everyone is trying to be a leader, we all get pulled in too many directions.
• Superficial relationships. How well can you really get to know someone over Twitter?

With all the changes happening in marketing, maybe we ought to reflect on what remains the same:

• You still have to advertise your product somehow.
• You still have to provide something of value to your customer, not just talk about providing it.
• You still have to win over your customers one by one. (You can’t just create a mass phenomenon without effort.)
• Face-to-face communication and personal selling are still important.
• Traditional channels such as direct mail, TV and radio are not dead.

So, how can we take advantage of new channels and new trends without abandoning what works? Here are my suggestions:

• Integrated marketing. Use a variety of channels. A combination of channels, new and traditional, can be more effective than each one alone.
• Quality over quantity in content. Make sure the content you put out, regardless of the channel, is high quality. Quality content is something that is informative or interesting; it conveys value or helps people get to know you better. It doesn’t have to be meaty, but it should help to build connections.
• Build reputation and credibility, not just innovation. To cut through the clutter, customers are looking for evidence of competence and credibility. Do others vouch for you? Is there evidence that you can deliver on your promises?
• Relationship building. In your interactions, are you building meaningful relationships? Or are they superficial? Are people getting to know you? Do they understand the value of what you do?
• Initiate face-to-face or telephone communication first, when possible, then follow up online. When you meet someone in person, you can really get a sense of what they are like. Then when you follow up online, you easily stay in touch and learn even more about them.

In conclusion, while new media offers many new exciting opportunities for sales and marketing, we should continue to exercise common sense and wisdom when it comes to growing our business.

Web Video Marketing: Don’t Go Viral

Posted in: Blog, Business Development, People at PBS, Technology by Gregory Noe on July 12, 2011 | No Comments

Here at PBS, we like to stay abreast with the latest trends in small business marketing. One of the important trends we have noted is the use of online video.  More and more internet users are watching videos.  Here are a couple statistics from Cisco systems:

• By 2012, Internet video will account for over 50 percent of consumer Internet traffic.  Internet video was 40 percent of consumer Internet traffic in 2010 and will reach 50 percent by year-end 2012.
• It would take over 5 years to watch the amount of video that will cross global IP networks every second in 2015. Every second, 1 million minutes of video content will cross the network in 2015.

The viewing of videos is not limited to consumers.  Forbes reported that 75% of senior executives surveyed said “they watch work-related videos on business-related websites at least weekly; more than half (52%) watch work-related videos on YouTube at least weekly.”

So how can businesses most effectively use video to their advantage?

David Richins, the digital technology go-to guy here at PBS, shares his thoughts on what makes for effective video.

PBS: What got you interested in video?

David: I found that video can be more persuasive than just text. It provides more of an immersive experience. As we think about marketing, the goal is to inspire people to take action. Sometimes in order to achieve this, we need to connect at an emotional level with people, and video has the capability to do this.

PBS: What do the trends in video mean for small businesses?

David: Clearly, a lot of people are watching videos, so it’s a good medium to consider. People these days are short on attention, so video provides easier communication than text, and it allows users to multitask. At the same time, the internet is getting flooded with content, so that means companies need to work harder to stand out.

PBS: How can companies use video to build their business?

David: Video can be a great addition to a company’s social media strategy. Keep in mind that social media is about building connections. If you try too hard to advertise your business, you will turn people off.  Internet users have more control over the content they view, so you can’t approach online video the same way you would approach television advertising. I think the goal should be to use video to build credibility and connect with potential clients.

PBS: How does that work? How do you build connections with video?

David: I really like documentary-style video. I think when people read company blogs or watch company videos, they are interested in getting to know the people in the company. When I put together promotional videos for companies, I like to show people speaking extemporaneously. Nowadays there is so much advertising that comes across as simply fake.  There is lots of hype and overpromising and not enough substance. I think when people visit a website or watch a video, they are looking for evidence that the company is able to deliver on its promises.  It’s great when a business owner can get on camera and explain his value proposition effectively without any rehearsal. That shows evidence of competence.

PBS: Does video need to be professionally produced?

David: Not necessarily. Sometimes amateur videos can be effective because they come across as more genuine. But you should definitely put some care and effort into it so you don’t look sloppy.  Poor lighting and audio or cheesy graphics can be a distraction.

PBS: What advice do you have for companies that want to produce a viral video?

David: I would say that you need to seriously rethink your strategy. It’s natural in today’s ADD culture to want to produce something that will create immediate results, but that type of content doesn’t help in the long run. There are several reasons why viral video is not good for business. For starters, it’s hard to manufacture a viral video; they usually happen by accident.  Second, in order for a video to spread virally, it has to have some element that shocks or wows the viewer. You generally don’t want strong emotions associated with your brand.  And finally, you have to ask yourself if you really want your marketing strategy to be an uncontrolled social phenomenon. Despite the new marketing trends, business hasn’t changed that much. You still have to win people over one by one.

Optimizing for Local Search

Posted in: ABR Handouts, Blog, Business Development, Business Planning, Technology by Mallory Malloy on July 10, 2011 | No Comments

You have probably noticed that most searches now bring up local business results on Google SERPs (Search Engine Results Pages) even if you do not put the location in the search query. Now, if you are asking the question, “Why are the local results showing up if I did not search for anything local?” you are asking the wrong question. The right question would be; “Why do I not show up in that list?”

Recently, Google started putting more emphasis on local search results and universal search. “Local Results” is when Google displays local businesses relevant to your search query. For example, if you search for “Plumber”, you will see that local businesses from Google Maps are displayed right above the fold along with website results. If you do another search for “Plumber Miami”, you will get the same results if you are actually in Miami that is. What does this mean?

This means that Google is doing something, which they have not done for the past 8 years; they are displaying local results based on your computer’s IP address and location. The reason is simple; it’s more relevant. After extensive research and analysis for billions of searches, they came to the conclusion that most users are searching for local results for certain search queries, like services for example.

This will better illustrate the point. If you search for “Internet Marketing”, you might be looking for just info, so no local results are displayed. However, if you search for “Internet Marketing Services”, you will see that local results do show up. This is because you are looking for “services” so you would prefer someone local and close to you. At least that’s what Google thinks. And at least, you are given the option not to choose the local results.

How does this affect small business?

Small local businesses have more power now to get leads from Google Searches. All you really need to do is submit your business to Google Local. Of course, some optimization does help in this process and if you have multiple locations, you are going to get more visibility. By doing this, Google is providing a unique and vital service to the user. Remember the days of yellow pages where you had to look through thousands of pages to find a service or a plumber? Not anymore; you can search for just plumber without even writing your city and you are instantly shown results, businesses, reviews, phone numbers, and websites.

For previous Anderson Business Roundtable topics click here.

Cloud Computing

Posted in: ABR Handouts, Blog, Technology by Mallory Malloy on June 15, 2011 | No Comments

Computing has come full circle. In the early days of mainframe computers, everyone interacted with large centralized mainframes through terminals. Wide area access to the huge computers were through long distance serial communications links, all hooked up to dumb terminals.

After that came the PC.

Everyone could now own their very own computer. People began to do cool things that once took millions of dollars. Businesses then wanted their employees to work together online, and client/server technology was born. Small companies, and departments of larger companies could now have their very own software applications using cheap servers. Client/server technology pushed computing capability out into the edge. Sun Microsystems said that “The Network was the Computer,” anyone remember that tag line?

Then came the internet.

Websites proliferated. People used simple software called browsers to access their applications which resided in the “cloud” somewhere. When more and more applications came about, their capabilities broadened. Soon people were able to do their everyday productivity stuff over the internet. Application providers needed some infrastructure that could cope with sudden surges in application usage.

Thus was born “cloud computing“.

Plain English Definition: Computer applications accessed over the Internet. Data and software are not stored on your computer, but rather on the “cloud” servers. 

Examples:

·         Google Docs/MS Office Live

·         Salesforce CRM

·         Humyo (online storage)

·         Webmail

·         QuickBooks Online

What does it mean?

·         Different cost structure: Monthly access fee vs one-time purchase

·         Lower capital investment

·         Where’s my data?  Security and privacy concerns

·         Greater opportunity for collaboration, team projects

·         Virtual work environment (blur between work and home)

·         Easier to sync information from different sources

Form Filling Software

Posted in: ABR Handouts, Blog, Technology by Mallory Malloy on June 12, 2011 | No Comments

Form filling software is safe, easy to use, and eliminates the daunting task of filling your personal information out online.  The software is password protected and there is no risk of your private information falling into the wrong hands.  This software saves you valuable time that you could be utilizing in a more productive way.  So if you’re tired of going through the same endless routine of giving your information out online take a free copy of RoboForm provided by PBS and make your life easier.

• Ø No more passwords to remember
• Ø Log into websites automatically
• Ø Simple. Secure. Everywhere.

-Keep all your logins completely in sync. No more worries about remembering your passwords. Access your favorite sites quickly and securely.

-Save time with easy one-click form filling. This password manager fills in your data on almost any web form. No more needless typing!

-Whether you are on your desktop, laptop, or mobile device, you can always securely access your password manager from anywhere.

Card Scanning Technologies

Posted in: ABR Handouts, Blog, Technology by Mallory Malloy on June 10, 2011 | No Comments

Credit card scammers have perfected the use of miniature hand held devices that can scan gift card numbers, expiration dates, and security codes in half a second while staying concealed in the scammer’s palm (even through packaging!)

Here’s how the scam works, thieves look for gift cards that are displayed on grab and go racks. They use a cheap hand held scanner they purchased online to read the code behind the magnetic strip on the back of the card. That, along with the card phone number, gives them everything they need to steal the value of the card. They put the card back on the rack, and then later, an unsuspecting person buys the worthless card that has already been spent by the thief.  Some scanners are so advanced that all the scam artists needs to do is walk by a rack of gift cards and all of the information can be pulled from the cards and onto the device.

Although gift cards are an easy gift idea and they seem relatively secure they have a magnetic strip on them that can be a very big weakness.  The magnetic strip keeps track of any funds outstanding on the card as well as what it has been used for.

The stores who provide gift cards run a service which enable the purchasers to check their balance, the scammers can utilize this to determine when a card has been authorized and credited.  As soon as they find one with a worthwhile balance they will take a blank card and reprogram it as a clone of that card.  Then they are free to go and spend the entire balance that the victim had credited the card with or, alternatively, they will sell the card in order to make a quick profit.

Credit & Debit Cards plus the Durbin Amendment

Posted in: ABR Handouts, Blog, Technology by Whitney Recker on | No Comments

 It seems all too simple. You walk up to the checkout counter, or you hit a web site’s checkout page, you whip out your credit card and – in seconds – you’ve paid for your purchase and you’re on your way.

And while it does seem simple from the shopper’s point of view, there is a lot going on behind the scenes in those few seconds between the times the merchant captures the shopper’s credit card number and the time the approval is received from the credit card issuing bank.

Let’s take a peek behind the scenes:

In the credit card world the customer is called the “Cardholder.”  They receive their MasterCard or Visa (Discover and AMEX also) credit card from what is called the “Issuing Bank.” There is no requirement for the Cardholder to have any other type of relationship with the issuing bank. In fact, in many cases the issuing bank is not the bank where the Cardholder has his or her checking account. It is simply the bank where the Cardholder chooses to get their bank card.

The place of business that accepts the credit card is called the “Merchant.”  In order to be able to accept credit cards, the Merchant must open a “Merchant Account” with a “Merchant Bank” which is also known as a “Sponsoring Bank” or an “Acquiring Bank.”

This is the bank that receives the “Net Settlement Amount” from the Issuing Bank after the transaction is processed.  The Net Settlement Amount is the amount of the actual sale minus percentage-based transaction fees called the “Discount Rate.”  In some instances merchants may also have to pay “Pass-through Fees” which are additional transaction fees that are charged when a transaction does not meet some particular requirement such as passing the Address Verification System (AVS) test.

Credit Card Processing Steps

1. A transaction begins when the magnetic stripe on the back of the credit card is passed through a credit card terminal, or the credit card account number is entered into the system manually by either the merchant or the cardholder.  This enters the transaction information into the Processor’s network.

2. An “Authorization Request” is generated.

3. The Processor links up with the Visa/MasterCard network in order to transmit the Authorization Request to the Issuing Bank’s computer network.

4. The Issuing Bank verifies that a valid credit card number has been received and that the Cardholder has enough money available (“Open to Buy”) to fund the transaction.

5. A “hold” for that amount is placed against the Cardholder’s Open to buy thereby reducing the amount of his or her Open to buy for future transactions.

6. Once the approval is received, a “Deposit Transaction” is transmitted which finalizes the transaction. The merchant then releases the items purchased by the Cardholder.

7. The Net Settlement Amount is deposited to the Merchant’s account usually by the end of the same business day.

When Credit Card Processing Go Wrong

There are times, however, when the process hits a snag and human beings have to get involved. Although it is 100% computerized, the Visa/MasterCard network is programmed with many “triggers” that will route the transaction to a human being for closer scrutiny when one of those triggers are pulled.

The most common triggers are:

• Unusual spending patterns that do not match the Cardholder’s normal purchases.
• Purchases of products or services that are considered to be in a “high fraud” category.
• Purchases made outside of the country where the cardholder lives.  In fact, some Card Issuers require their Cardholder’s to notify them when they will be traveling outside of their home country.

What’s really amazing is not that the entire processing cycle is flawlessly repeated millions of times per hour, but that it all happens in just seconds!

Debit Card Processing

There are currently three ways that debit card transactions are processed: online debit (also known as PIN debit), offline debit (also known as signature debit) and the Electronic Purse Card System.  One physical card can include the functions of an online debit card, an offline debit card and an electronic purse card.

Online Debit System

Online debit cards require electronic authorization of every transaction and the debits are reflected in the user’s account immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine (ATM) cards. One difficulty in using online debit cards is the necessity of an electronic authorization device at the point of sale (POS) and sometimes also a separate PIN pad to enter the PIN, although this is becoming commonplace for all card transactions in many countries. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing lag on transactions that may only issue online debit cards. Some on-line debit systems are using the normal authentication processes of Internet banking to provide real-time on-line debit transactions.

Offline Debit System

Offline debit cards have the logos of major credit cards (for example, Visa or MasterCard) or major debit cards. This type of debit card may be subject to a daily limit, and/or a maximum limit equal to the current/checking account balance from which it draws funds. Transactions conducted with offline debit cards require 2–3 days to be reflected on users’ account balances. In some countries and with some banks and merchant service organizations, a “credit” or offline debit transaction is without cost to the purchaser beyond the face value of the transaction, while a small fee may be charged for a “debit” or online debit transaction (although it is often absorbed by the retailer). Other differences are that online debit purchasers may opt to withdraw cash in addition to the amount of the debit purchase (if the merchant supports that functionality); also, from the merchant’s standpoint, the merchant pays lower fees on online debit transaction as compared to “credit” (offline) debit transaction.

Electronic Purse Card System

Smart-card-based electronic purse systems (in which value is stored on the card chip, not in an externally recorded account, so that machines accepting the card need no network connectivity) are in use throughout Europe.

Prepaid debit cards

Prepaid debit cards, also called reloadable debit cards, appeal to a variety of users. The primary market for prepaid cards is unbanked people, an umbrella term used to describe diverse groups of individuals who do not use banks or credit unions for their financial transactions.

The advantages of prepaid debit cards include being safer than carry cash, worldwide functionality due to Visa and MasterCard merchant acceptance, not having to worry about paying a credit card bill or going into debt, the ability for anyone over the age of 18 to apply and be accepted without regard to credit quality and the ability to direct deposit paychecks and government benefits onto the card for free.

Debit Card vs. Credit Card: Which Is Better?

Many of us know we have an option to use a debit card but don’t take advantage because we lack knowledge or interest or simply are in the habit of writing checks. While checks, ATM cards and credit cards are fairly self-explanatory, many people fail to see much difference between a credit card and a debit card.

So is there a significant difference? And is one better than the other?

Every time you use a credit card, you actually are borrowing money that is made available to you by a bank or other financial institution. The institution pays the debt to the vendor and, in turn, you pay the money back to the institution. By signing up for a credit card, you agree to pay back the money that you borrowed, in addition to any interest drawn on the amount you borrowed.

Odds are, you have a debit card in your wallet or purse right now, since many ATM cards are programmed to have debit options. Issued by your bank, debit cards take funds directly from the money that you have in your bank account – acting much like a check, just faster. With a debit card, you don’t have to carry cash or checks, and it is very convenient to shop at a variety of places including gas stations, grocery stores, restaurants and retail stores. They provide instant access to your money and are accepted worldwide.

Debit cards are used much like credit cards, meaning that the store where you are shopping ‘swipes’ them and you are normally given the option of signing your receipt instead of using a required PIN number (you can enter your PIN number if you prefer). You also typically do not have to show a picture ID.

Maybe you still don’t see much difference, besides where the money comes from and when you have to pay up. So which one is better to use? It depends upon how careful you are with your card and why you are using the card.

The features that make debit cards convenient – instant access to your money, lack of a required PIN number and not having to drag out your photo ID when you use it – make fraud that much easier. Unless reported quickly, theft of your debit card can quickly devastate your bank account. This is where you begin to see the difference.

Credit card companies are held to strict liability laws; the law limits consumer liability for credit card fraud to $50. For example, if you notice suspicious charges on your credit card statement such as double billing or an incorrect charge, the credit card company is obligated to investigate if you send in a written request within 60 days.

For debit card fraud, your liability is $50 if you notify the bank within two days of noticing the fraudulent charges. After two days, your liability increases to $500, and up to your entire account balance after 60 days. So, if you report the theft after two days, you can be held responsible for paying for purchases or charges that you didn’t make. Although many banks have started to implement voluntary plans to limit customer liability to $50, there is no federal law regarding this issue.

The key to protecting yourself when you suspect that your stuff has been stolen is acting fast! The Federal Trade Commission offers an excellent resource that can help you respond quickly in case your wallet or purse is stolen.

In addition to stricter liability laws, credit cards offer more consumer protection on purchases made. Use credit cards for very large or fragile purchases and for objects that will be delivered to your home after the purchase. This gives you added insurance in case the purchase is damaged in route.

Another advantage of credit cards is that they are helpful for consumers seeking to establish or reestablish an attractive credit history. Responsible credit card usage can improve one’s credit rating, which will improve your chances of obtaining favorable credit terms (low interest rates, low fees, etc.) for automobile loans, mortgages and personal loans.

One pitfall for many debit card consumers is not keeping up with their debit transactions. This is like writing checks and not recording your purchases – you may end up trying to spend money that you don’t have! Discipline yourself to keep up with your transaction receipts.

A debit card is not just a card – it’s ready access to your money. Be as careful with it as you would with your wallet if it contained the contents of your entire bank account.

In the situation of a fraudulent charge with a debit or credit card is that if you are using a credit card and report a fraudulent charge your money is returned to you immediately.  The merchant has to prove that the transaction is valid.  If the same situation occurs with a debit card you must prove the transaction is fraudulent, not the merchant, and you are out of money in the meantime.

A final note on the comparisons between a debit and credit card is how the merchant is charged on how they are run.  If you go to the grocery store and run your debit card as a credit card the merchant gets charged for the processing fee.  If you run your debit card as debit you get charged for the processing fee.  The Durbin Amendment is going to change how both credit and debit cards are processed by the merchant.  Instead of the merchant footing the bill for these transactions, whether or not they are run as credit or debit, the customer will be paying more for the transaction processing.

How Merchants Generate Revenue

Merchants can profit from credit card and debit card processing in 5 ways:

• Discount Rates-The percentage rate processor gets 1.9%-5% on every transaction processed.  In the case of rewards cards the merchant is paying for the rewards of the card holder, and sometimes the discount rate changes due to the type of card and if the rewards are paid.  You might think you have a 1.9% rate but that could not be the case.  Your percentage rate could be higher than you think.
• Transaction Fees- Merchants can be charged flat amounts from 1-2 cents up to a quarter per transaction.   This can be significant if you’re a restaurant and you have hundreds transactions
• Monthly Statements-They are or statement fees and sometimes they wrapped together with paper and paperless fees costing $5-$25 dollars per month.  Even if there are no transactions the statement fees will exist, so if you are a merchant that has few credit card transactions these fees are going to be more significant.
• Equipment Fees/rentals-sometimes the seemingly best deal compared to the above fees.  This fee charges the merchant for the rental of the processing equipment.  The fees can be from $0-$1000 over the life of a contract.
• Termination Fees- Often times the arrangement provides a contract of 2-5 years, termination fees are not just for early termination prior to the end of a contract, we see them now no matter when you terminate your contract.  A merchant may have to pay up to 500 dollars for a termination fee.

The Durbin Amendment

The goal of the Durbin Amendment is to lower credit card and debit card transaction fees for businesses.  The Amendment will eventually lower transaction fees 44-24 cents per transaction.

Durbin Amendment Article:

How familiar are you with the Durbin Amendment? The “what” amendment, you may be saying. Maybe you’ve heard about it in the news but didn’t really see the application to you and your business. Then again, it possibly slipped right by you. If you accept debit cards for payment of goods/services in your business, you need to understand this new legislation. It will have a great impact in savings to your bottom line…maybe! Let me expand on that a bit more for you if I might.

Congress has recently passed the Durbin amendment which is a landmark decision. This is the first time we have ever seen this large of a reduction in processing costs. This cuts the costs for Pin Based Debit and Signature debit almost in half. Pin based debit and signature debit combined make up to 50 – 70% of the processing in the marketplace, nationwide. Imagine paying up to 1.00% or half of what you currently pay on 50% -70% of the cards you process.

This reduction on costs does not go into effect until October 1st, 2011. It’s up to you to take action and make sure you see these savings. Many processors are choosing not to pass through these savings.

As mentioned above, these pricing changes from the Durbin Amendment take effect on October 1, 2011. Until this time, merchants will still be charged the same as they are today. On October 1st, a processor can choose to pass through the new reduction in costs, or not! However, if you are on Cost-Plus or Interchange-Plus pricing, the savings will automatically be passed along. If, on the other hand, you’re not on this type of pricing, you should be asking your processor why or look for another provider who is willing to provide this more transparent form of pricing.

What kind of relationship do you have with your current provider? Does your rep, and the company, truly have a keen interest in maintaining a mutually rewarding relationship with you? Have they frequently been in touch with you to see how things are going and make beneficial cost-savings, profit increasing recommendations to you? Are they willingly being totally transparent in their pricing structure that they have set up for you? These are important questions to be asking yourself and now, more than ever.

I know that when it comes to owning and operating a business, and continuing to remain profitable in today’s economic environment, there are a myriad of things that vie for your attention. Looking more in depth at your credit card processing is probably not high on your list of priorities. Let me encourage you, however, with the introduction of this Durbin Amendment, you need to become fully aware of what you’re paying for, and furthermore, what you shouldn’t be paying for…

Summary of Amendments

1. Durbin-Leahy-Landrieu Amendment (#3771) to stop credit/debit card networks from

Imposing anti-competitive restrictions on the small businesses, merchants and government

Agencies who accept their cards.

• With this amendment, Visa and MasterCard could no longer use their dominant market

power to force those who accept their cards to also agree to anti-competitive restrictions

on the discounts they can offer and on their ability to choose the forms of payment they

accept.

• The amendment would say that sellers can do the following things without being

threatened or punished by card networks like Visa and MasterCard:

• Offer discounts to customers to use a competing card network (e.g., the

Amendment would let a store that accepts Visa offer a discount for a customer to

use MasterCard or Discover. Visa currently prohibits such discounts);

• Offer discounts for use of cash, check, debit card or stored-value card (current law

does not fully ensure that merchants can offer these discounts); and

• Set a minimum or maximum transaction amount for payment by card (small

businesses lose money on transactions when they cannot set these amounts).

• This amendment does not involve any government regulation of interchange fees. All it does is allow more market-based competition and more discounting options for consumers.

2. Durbin Amendment (#3769) to ensure that interchange fees charged for debit card

transactions are reasonable and proportional to the costs incurred in processing the transaction.

• With this amendment, Visa and MasterCard will be prevented from continuing to

increase debit card interchange fee rates, which currently amount to 1% — 2% of the

transaction amount even though the actual cost of processing a debit transaction is far

less.

• The amendment would direct the Fed to issue regulations to ensure that interchange fees imposed on debit card transactions be “reasonable and proportional” to the cost incurred in processing the transaction. (The rules would have a carve-out for small bank debit cards).
• Without this amendment, Visa and MasterCard (which control nearly all of the debit card market) will continue to raise debit interchange fees simply because their enormous market power means that merchants can do little to fight back. Reducing debit interchange fees would be like a tax break on every debit card sale a merchant makes.

In summary, the goal of the Durbin Amendment is to reduce overall transaction costs and shift the burden away from merchants.  Currently, transaction costs average $ 0.44.  After Durbin the average cost is expected to go down to $0.24.  However, it is expected that card based transactions, especially debit card, will increase dramatically to offset the reduced “per transaction” costs.  Risk to the banks is also reduced because “loans” will decrease.

SEO Basics

Posted in: Blog, Business Development, Technology by David Richins on April 22, 2011 | 1 Comment

Note: This article is my summary of this online SEO tutorial by Derek Jansen.

What is SEO (Search Engine Optimization)? Optimizing your website so it ranks well in search engines.

Should I pay for it or do it myself? You can do it yourself, but it takes some time. Any SEO effort takes at least 3-6 months to yield results, even if you do pay.

What is the basic process of SEO?

1.    Keyword research

2.    On-site optimization (inserting keywords into your website)

3.    Off-site optimization

4.    Analyze and tweak

5.    If necessary, bring out the big guns (PPC, viral marketing)

How do I go about keyword research? Find words or phrases with high traffic and low competition. Use Google’s Keyword tool (go to adwords.google.com and click on “Get keyword ideas”).

How do I optimize my site? Place keywords in the title, meta tags, header tags, image tags, and file names.

What is most important when it comes to website content? Writing interesting, original material that people actually want to read.

What is off-site optimization and how to I go about it? This is getting backlinks – links on other sites that link back to yours.  Suggestions:

• Forums
• Google Places
• Article directories (e.g. ezinearticles.com)
• Comment on blogs
• Social media

How do I analyze my site? Use Google analytics, Google webmaster tools. Look at bounce rate, average time per visit, number of pages per visit, etc.

Does pay-per-click work? Yes, usually within hours. Of course you have to pay for it. Per click.

Which is better – organic SEO or PPC? Organic SEO hands down

Viral marketing – how do I get in on that? You have to produce something that people want to share with others. Here are some ideas

• Email newsletters – provide useful content
• Write interesting articles that are likely to spark conversation
• Produce podcasts
• Produce videos