Posts Tagged ‘online payments’

Can’t Collect Payments? New Chip Technology Could Be Hurting Business’s Bottom Lines

Thursday, October 15th, 2015

EMV Technology Impacts Netflix’s Q3 Earnings

EMV Technology - Ohio CPA Firm

Netflix, known for offering award-winning shows like House of Cards and Orange is the New Black to users online recently reported a lack-luster third quarter performance. The company points to its inability to collect payments from users who have not yet updated their Netflix account information to reflect new payment card information they may have been issued as a result of the new EMV technology.

Since the United States made the switch to EMV (EuroPay, Mastercard and Visa) chip technology in October, some companies are beginning to report unexpected side effects – sluggish growth in the third quarter. A recent story from Patrick Kulp on Mashable, a global media company, reported that Netflix’s lack-luster third quarter earnings may be directly linked to the new technology.

Read Also: Will EMV Technology Change The Online Payment Option?

Why? Because, according to Kulp, “[many] Netflix users may not want to go through the hassle of updating their payment records, and some may even use the switch as an excuse to bail on the service. As a result, the company can’t collect their fees.” Now, as third quarter earnings continue to roll in, business analysts are beginning to speculate as to what this means for businesses hoping to finish the year on a high note.

Why Was EMV Implemented?

In September, I provided insight into the reasoning behind the new chip-based technology, which pointed to the increasing number of credit card breaches as the reasoning behind the change. Over the years millions of credit card numbers and associated data have been stolen, leaving the credit card industry on the hook for the fraudulent transactions. In an effort to transfer liability from payment card companies to individual businesses, while providing greater protection to users against credit card fraud, the PCI Security Council supported the addition of EMV chip technology to the existing PCI (Payment Card Industry) Security Requirements.

The ultimate goal of EMV is to stop and prevent further fraudulent activity. Success has already been noted in countries outside the U.S. “Currently, almost half of the world’s credit card fraud happens in the U.S. where magnetic stripe technology is the standard,” stated David Navetta and Susan Ross in a blog on Data Protection Report. “Outside the U.S., an estimated 40 percent of the world’s cards and 70 percent of the terminals already use the EMV technology. These countries are reporting significantly lower counterfeit fraud levels with EMV cards than with the magnetic stripe cards.”

Click here to read the full article

Unintended Outcomes

Businesses have rushed to accommodate the transition to avoid liability for any losses that result from fraudulent transactions. From installing devices that read the new chips, to training employees to address any questions and concerns that may come up during the payment process. Unfortunately, in order to bring the American public up to speed, payment card insurers are issuing new chip-enabled cards to card holders and, in many cases, users are being issued new card numbers as well.

Companies such as Netflix are beginning to feel the pinch as they are realizing that their customers are in no hurry to update their card numbers in their accounts, which means the company can’t collect subscription payments.

“Our over-forecast in the US for Q3 was due to slightly higher-than-expected involuntary churn (inability to collect), which we believe was driven in part by the ongoing transition to chip-based credit and debit cards,” the company said in its earnings release.

Is Your Business Witnessing Unexpected Consequences?

Third-quarter earnings are just beginning to be reported, which means we are unable to adequately identify how widespread this particular issue is.

So, we want to hear from you. Since the EMV chip technology went into effect on Oct. 1, what has your experience been? Have you had trouble collecting renewal payments from your customers? Comment below or send us a quick email.

If you have a specific question about EMV technology or another business challenge, you can always let us know by filling out the brief form at the top, right side of this page. And don’t forget to subscribe to Dear Drebit to get great business tips and advice delivered directly to your inbox!

By Brian Garland, CPA (Dublin office)  

Are you looking for more ways to prevent fraud from taking control of your business? Check out these articles:

Who Is That Email Really From?

Malware Threat Spreads To Smart Phones

Businesses Beware: Sloppy Data Security Could Cost You

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Will EMV Technology Change The Online Payment Option?

Monday, September 21st, 2015
Online Payment Option -Ohio CPA Firm

Does a company that doesn’t physically swipe credit cards have to worry about increased liability when the new EMV rules are implemented in October?

Dear Drebit: Does a company that doesn’t physically swipe credit cards have to worry about increased liability when the new EMV rules are implemented in October? Sincerely, Online Payments Only

Dear Online Payments: As you may already know, I recently wrote an article to inform merchants about the Oct. 1 deadline to implement Credit Card EMV (EuroPay, MasterCard and Visa) technology. When this change takes effect, the liability for fraudulent transactions will no longer be assumed by the credit card issuing institution. Instead, if you continue to use the credit card’s magnetic stripe to process payments, your business will assume liability for any resulting fraud. For most businesses – especially smaller businesses – a single instance of fraud could be crippling.

EMV technology essentially swaps out the magnetic stripe used on credit cards today for an embedded chip. The chip scrambles sensitive cardholder data at the point of sale, which makes it increasingly difficult to fraudulently access and replicate consumer data.

Click here to read the full article.

But what changes lie ahead for businesses that utilize online payment methods and don’t require customers to physically swipe their credit card to pay for a product or service? Do they need to be concerned about this liability switch on Oct. 1 too?

EMV Concerns For Online Merchants

Your third-party processor (such as PayPal), is responsible for ensuring that the payment is authentic. These companies validate payments using a variety of methods.

Natalie Gagliordi, a blogger with Small Business Matters, writes that “for most online merchants, whatever payment processing technology they are using will likely contain out-of-the-box security and authentication protocols.” PayPal, for example, “has developed complex end-to-end encryption to help protect consumers and merchants with their payment information.”

But just because your business doesn’t bare the sole responsibility for keeping your customers’ credit card data safe, doesn’t mean you have nothing to worry about – quite the contrary. Some experts expect credit card fraudsters to pay more attention on hacking online consumer data. This means, for your customers’ sake, you must continue to be informed of online security best practices and should not only be knowledgeable about what your third-party payment processor is doing to keep credit card data safe, but what your third-party payment processor requires of you to maintain your compliance. This could include maintaining current antivirus protection, a secure firewall and other online safety protocols.

The EMV Migration Forum’s Card-Not-Present Working Committee recently published an informative whitepaper to address the growing threat of Card-Not-Present Fraud. This resource will give online merchants a little more insight into the numerous options currently available to help authenticate online payments.

In the meantime, if you have additional questions or concerns, contact your third-party payment processor immediately. Requirement 12.9 of the Payment Card Industry Data Security Standard v3.0 states that they must provide you with – in writing – the details of its role in providing PCI compliancy, as well as any requirements of your organization. Click here to learn more.

How Can Drebit Help You?

Readers, do you have questions about data security, fraud, accounting, succession planning and other general business topics, but don’t really know who to ask? Let Drebit help find the answer! Simply fill out the brief form at the top, right side of this page. You can also click here to reach out to one of fraud experts directly. If you like the advice we offer, why not click here to subscribe to Dear Drebit and get notified of new articles and updates the minute they are posted?

By Brian Garland, CPA (Dublin office)  

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How To Pay Your Tax Bill In 6 Easy Steps

Wednesday, April 1st, 2015
Pay Your Tax Bill With Direct Pay - Rea & Associates

Available 24 hours a day, seven days a week, Direct Pay has proven to be a popular choice among Americans who are looking for a quick and easy option for settling their tax balances.

By now, you probably have a good idea whether you have an outstanding tax bill from the government, but did you know you can settle your balance online? Since May 2014, Direct Pay, a free and secure payment option, has provided millions of taxpayers with the option of making payments to the Internal Revenue Service at a time, and in a place that is convenient for them.

Late last year, employers learned that they were expected to file their taxes and make payments exclusively online. Click here to read more.

According to the IRS, four months after the initial launch of the payment program, more than a million payments, totaling more than $1.7 billion, were successfully processed. The web site currently accepts payments for current year tax returns, estimated tax payments, extension payments and prior year balances.

Available 24 hours a day, seven days a week, Direct Pay has proven to be a popular choice among Americans who are looking for a quick and easy option for settling their tax balances. Those who make payments receive an instant confirmation message that their payment has been submitted. Or, if you need a little more time, you can schedule your payment up to 30 days in advance as well as choose if you would like your payment to be withdrawn directly from a checking or savings account. Making a payment is as easy as following six simple steps.

How To Make An Online Tax Payment

  1. Visit the government website at www.irs.gov/payments
  2. Click on the blue box labeled: “IRS Direct Pay”
  3. Choose the reason for making your payment. Your choices are that you are making an installment agreement payment, a tax return payment, an estimated tax payment, an amended return payment or “other” type of payment. Be sure to choose the applicable year.
  4. Next, verify your identity by confirming your filing status, social security number, address and date of birth. ID verification is required for each payment requested.
  5. Then, you must enter the amount you plan to pay and your bank information. (The IRS does not retain any routing or account numbers.
  6. Finally, you will be directed to a “final authorization” page, which will provide you with an online confirmation.

Once your payment has been submitted using Direct Pay, allow two business days for processing. Note: Payments submitted after 8 p.m. EST will be processed on the next business day. And if you need to make a change to your scheduled payment, you can edit or cancel the payment up to 11:59 p.m. EST two business days before the payment is scheduled payment date.

Ohio Online Tax Payments

If you owe taxes to the State of Ohio, you can make your payments online as well by visiting www.tax.ohio.gov. The state’s online payment system also allows for advance payments and does not require registration.

Online payment options are another way government entities are making an effort to provide more user friendly services. By using Direct Pay, or the state’s web-based payment option, you can avoid a trip to the post office and, better yet, have more control over when your payment is made and received. Your tax preparer can help you determine if online payments make sense for you and can answer any questions you may have. Email Rea & Associates to learn more.

By Wendy Shick, CPA (Mentor office)

 

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Employers Must File Taxes, Make Payments Electronically

Tuesday, December 2nd, 2014

Starting this January, employers filing in the state of Ohio will be required to use the Ohio Business Gateway (OBG) to file and remit payment for state and school district income tax withholding returns, according to the Ohio Department of Taxation. The new rule was finalized earlier this month and will go into effect on Jan. 1, 2015. The OBG Electronic Filing system was established to save Ohio time and money by simplifying business’ relationships with government agencies while providing them with an easier means to comply with regulatory requirements.  However, it is understood that some employers may not be able to use the electronic filing system at this time, which prompted the department to allow some preparers to opt out of the requirement if they can establish a valid reason for why they are unable to comply. To opt out of the department’s new rule, employers must provide the department with the following information on form WT OOR, including their:

  • Business name
  • Address
  • Phone number
  • Employer withholding number and Federal Employer Identification Number (FEIN)
  • Withholding type
  • Detailed reason for the request to be excluded from electronic filing and payment provisions.

“Preparers seeking to opt out of electronic filing must present strongly compelling reasons to justify the waiver of the requirement,” the department states in the Frequently Asked Questions page of its website. “Preparers filing tax returns with the state of Ohio should plan to comply with the electronic filing mandate and not assume that their request to opt out will be granted.” Anyone may apply to be excused from the electronic filing requirement and permitted to file their return by non-electronic means. However, if approval is given, it is only valid for one year. Preparers are required to resubmit their requests annually. The opt out request form can be found on the “Forms” portal of the department’s website or by calling 888.405.4039 – option 1. Additional assistance with navigation, filing a return and/or remitting payment, can be found by visiting the Self Help eLibrary. Email Rea & Associates to learn how you can stay in compliance with these new filing requirements and lessen the stress of filing and paying your state and school district withholding returns.

By Lisa Beamer, CPA (New Philadelphia office)

 

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