Is It Safe To Use Your Credit Card On-Line?

The Internet Marketing Newsletter
November 2004 #1

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++++++++++++ This Week ++++++++++++


Is It Safe To Use Your Credit Card On-Line?
By Robert Smith


+++++++++++ Feature Articles +++++++++++

Credit Card Fraud - Are You Protecting Your Business?
By Robert Smith

We Don't Work Here - We Just Make The Rules
By Robert Smith

Choose Your Merchant Account With Care
By Bob McElwain

What Merchant Service Companies
Don't Want You To Know!
By Denise M. Maling

The Easiest Thing You Can Do To Dramatically
Increase Sales On The Internet
By Robert Imbriale

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++++++++++ This Week's Tip ++++++++++

Is It Safe To Use Your Credit Card On-Line?
By Robert Smith http://smithfam.com/

The simple answer is YES! It is not only safe, using your
credit card is the safest and only way you should buy anything
on-line. It's actually safer to buy on-line with your credit card
than to use your credit card almost anywhere else.

More than ninety percent of all sales on the Internet are
processed using credit cards.

Internet credit card fraud today is big; it costs merchants
and credit card companies billions each year. As a consumer,
using your credit card on-line offers you special protections not
available with any other payment method.


Who Pays for Your Protection?

When you buy using a credit card, merchants pay a percentage
of their total transaction to the merchant's account provider.
Typical discount rates range from 2.5% to 5%, depending the type
of business and other factors. Some of the funds and a
per-transaction fee are used to pay for your protection, but it's
the merchant that pay for credit card fraud, not the customer.

When you use a check or a fake credit card or debit card
that draws funds from your checking account these protections
don't apply. Always use a real credit card and not a debit card
on-line.

Credit card companies are on the side of the consumer, they
want you to use your credit card because they earn a percentage
of every sale from the merchant. Fraud costs are mostly charged
to the merchant.

1) If you are a victim of any kind of fraud you can have the
charge removed.
2) If your product is not delivered you can have the charge
removed.
3) If the quality wasn't as represented, you can have the
charge removed.
4) In most cases if you just want a refund for any reason you
can get it without any hassles if you buy with your
credit card.
5) If you have trouble getting a refund for any reason you
can dispute the purchase with your credit card company
and have the charge removed.


Buying Off-line

When you buy off-line at a restaurant, mall or department
store, your purchase is actually much less secured than it is
on-line.

Off-line there is a paper trail where many people have
potential access to your information. Anyone anywhere along the
way can get access to your credit card information or even to
your entire identity.

Retail transactions are verified via telephone lines where
hackers can get access to your information. Always ask to get
your carbon returned every time your card is swiped so your
information is not left available to the staff or end up in the
garbage where identify thieves find it for identity theft.

Your personal information is only as safe as the computer
system where your account information is stored. Most retail
stores today use wireless computer networks to store your
information. Wireless computer hackers compromise hundreds of
thousands of accounts on a regular basis selling account
information to crooks.

Retailers may keep your information on file for future sales
without your permission, where anyone with access can compromise
it. In addition, many merchants will sell your personal
information without your permission to third parties.


Buying On-Line

When you purchase on-line, things are almost always much
more secure.

Assuming you only enter your credit card information on
secure servers your information is encrypted. A secure server
URL address starts with the prefix https not the normal http that
non-secure pages use the added "s" stands for secure. Your
browser should also show a locked padlock in the status bar if
you are on a secure server.

Your information is encrypted using 64 bit encryption
technology. This encryption is 100% safe and no-one has figured
out how to break it. In almost all cases your merchant doesn't
have access to your credit card number or card verification
number. They will have access to your name, address, phone
number, and authorization number for your purchase, just in case
they need to contact you about the sale or generate a credit or
refund later.


The Electronic Sales Process

1) Your encrypted credit card information goes directly to a
third party transaction payment gateway server where it remains
encrypted from human eyes. When you use your credit card, you
submit an electronic request to a third party processing network
for "authorization to capture funds" from your credit card
account in the amount of the purchase.

2) The processing network receives your electronic request in
real time. It determines if your account is valid and if the
funds are available. If they are, the processing network returns
an electronic response code. This response is called an
"authorization code"; it is the guaranteed authorization required
to capture the funds. Typically, this code is a six-digit number.
The transaction and its associated authorization are stored in a
"batch", where other transactions for that day reside. Only the
merchant and the processor have access to the authorization code
and the transaction number for the sale but neither will have
access to your credit card number.

3) The merchant's transaction gateway server sends you and the
merchant a transaction receipt via email. As far as you are
concerned, the transaction is complete. One more step required
for the merchant to complete the transaction.

4) At the end of the business day (usually), a final request is
submitted to the processing network to go ahead and "capture the
funds" that you obtained authorizations for during the course of
business that day. This is called "settlement". Any charge can
be voided before settlement occurs. This gives a merchant a
second chance to examine all transactions to see if everything
looks OK. This step is important because the merchant is
ultimately responsible for any fraudulent sales.

5) Within 48 to 72 hours (usually), the funds associated with the
batch are deposited electronically into the merchant's business
bank account. Typically, the discount rate your merchant pays are
deducted from the deposit before it transferred to the merchant's
bank account.

Real Time Credit Card Processing

If you intend to sell anything on-line you must be able to
accept credit cards; credit cards are the currency of the
Internet. Secure real time credit card processing removes the
barriers that might prevent you from doing business on the net.

A real time credit card processing system is a transaction
processing system that functions as a payment service using a
secure transaction server on the Internet. Merchants with a
merchant account can use the system to submit, authorize,
capture, and settle credit card or eCheck transactions on-line
without the need for a separate transaction terminal, device or
processing software. The company I have used for 5 years is
linked below.
http://tmsontheweb.com/application/?id=105425


How to Avoid Problems

Most Internet merchants are honest and deliver exactly what
you pay for. If they didn't they would lose their merchant
account. Your credit card company protects you from on-line
fraud. If you have a problem with a merchant you can't resolve on
your own, call the number on the back of your credit card to get
help or to dispute the sale.

The number one way your personal information is compromised
on-line is when you give it to someone who shouldn't have it in
the first place. Almost 100% of fraud can be avoided simply by
not buying from strangers via email. NEVER buy anything from
spammers, NEVER, no matter how good the deal seems.

The porn industry is another way people get taken. They
often collect credit card info in order to sell it to fraudsters.

A deal that sounds too good to be true or appeals to greed
are another way scammers get access your credit card information.
When someone tells you to keep their offer in confidence, assume
there is a reason. You should know you can't buy legitimate
products for 10% to 20% of the normal price.

Just use common sense. You haven't been specially selected
for anything. You haven't won $1,000,000 in a contest you don't
even remember entering, and no-one is going to send you millions
of dollars to help them get their money out of Nigeria or some
other country.

A legitimate business will never ask you to provide your
personal information via non-secure email.

Scammers often print one link on the email but when you
click, it may redirect you to another one. Any time you log onto
any site to provide personal credit card or banking information
type the secure URL address into your browser. Look at the
address you entered, if you are not 100% sure call the company
directly to confirm. At least validate the owner of the domain
in question using a DNS search tool like the following
http://www.betterwhois.com/

Don't be afraid of buying on-line, it's still the safest way
to buy anything, and it's usually cheaper than buying anywhere
else. Even with the cost of shipping, often you can buy cheaper
and safer on-line, even from the biggest retailers without even
leaving home.

<-------------===> About the Author <===------------->

ROBERT SMITH helps thousands successfully market their Internet
based business. You'll find tons of free marketing tools &
resources on his Internet Marketing web site at:
>> http://www.smithfam.com/.

The WebKit CD - Complete Marketing Toolkit
>> http://www.smithfam.com/webkit/

You can reach him by phone at: 689-1847 PST
and by email at.

<-------<===(**)===>------->

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"Insider Secrets to Marketing Your Business on the Internet"!
VERSION 2004

FIND A MARKET that is easy to reach and then find a need in that
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===============================================
++++++++++ FEATURE ARTICLES ++++++++++


Credit Card Fraud - Are You Protecting Your Business?
By Robert Smith © All Rights Reserved
With Credit Card Fraud averaging almost 5 percent of sales,
if you are selling goods or services online via credit cards this
is information you need in order for your business to survive.
>> http://www.smithfam.com/news2/july02a.html

<==========*($)*==========>

We Don't Work Here - We Just Make The Rules
By Robert Smith © All Rights Reserved
If you are selling anything on line via credit card, this
is information you must know. Now that you are the merchant; now
your rights are very different.
>> http://www.smithfam.com/news/feb01a.html

<==========*($)*==========>

Choose Your Merchant Account With Care
By Bob McElwain © All Rights Reserved
Choosing the right merchant account may be one of the most
difficult business decisions you make. Believe it; in selecting a
merchant account it is strictly buyer beware! What follows is an
attempt to make some sense of the bewildering morass of options
>> http://www.smithfam.com/news/april00m.html

<==========*($)*==========>

What Merchant Service Companies Don't Want You To Know!
By Denise M. Maling © All Rights Reserved
Today, there are thousands of merchant service providers
and hundreds of thousands of Internet entrepreneurs looking for
the right provider. In your endeavor to establish the best
processing solution for your company and wallet, you need to know
what goes on behind the scenes.
>> http://www.smithfam.com/news/dec99v.html

<==========*($)*==========>

The Easiest Thing You Can Do To Dramatically
Increase Sales On The Internet
By Robert Imbriale © All Rights Reserved
I want to tell you about something that you can do that is
so simple you'll wonder why you hadn't already thought of it! Yet
it is so powerful that it can increase your Internet sales by
more than 250%!
>> http://www.smithfam.com/news/feb99w.html


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