Today’s guest columnist is Stacey Pandeloglou from Distribution Technology Group. We’ve known Stacey for many years. He works with many electrical distributors in helping them choose “best of breed” technology providers to address their challenges while helping improve productivity. Recently he mentioned credit card fraud issues facing distributors. Knowing that many distributors are experiencing an uptick in credit card usage due to the economy, we asked Stacey to share his thoughts.
I had previously written a blog for TED Magazine that discussed in detail the PCI (Payment Card Industry Council) mandate that was effective on July 1 of this year. What surprises me is that it is now three months from when that law took effect and many distributors are still:
- Non-compliant and probably paying a monthly penalty
- Purchasing third party software for their ERP provider to become compliant
- Pondering what they should do and how to do it
It seems evident to me that card member data security is not at the top of a distributor’s mind. In fact, it should be a primary consideration for every distributor that accepts credit cards and debit cards for the payment of goods or services.
In a nutshell, PCI Compliance mandates that distributors of all sizes must now ensure that their cardholder data is protected from a security breach. A typical breach can cost a small business like yours $25,000 – $50,000. That number can be much higher depending on the number of cards compromised! To protect card holder data and mitigate financial exposure, it is imperative that all distributors that use credit cards must validate and demonstrate PC-DSS compliance.
Specific companies provide a PCI Compliance Program that takes a comprehensive approach to help your distributorship manage cardholder data and ensure compliance with these new requirements. PCI compliance will protect your reputation as well as your bottom line.
The correct choice can provide your company with a processor that provides your business with credit card processing and equipment with high quality merchant account services. They also offer a simple, easy and free way to compare your current credit card merchant accounts to a competitive rate that is PCI compliant.Integrated value added solutions are also available to help increase efficiency, help drive new business to both your front door and website. For example, a robust loyalty card program can get your best customers coming back more often. An electronic gift card program can help bring new customers in for that first visit. In addition, a merchant cash advance can help buy new inventory or finance business expansion.
The good news is that there are options that extend easy to understand credit card processing rates to small and medium sized business enterprises. By putting some thought into this effort, distributors can leverage the payment processing platform to provide additional “Value Added Services” which can help grow their sales.
And over the past year we’ve spoken to a number of distributors who say that they have seen their customers increase their credit card usage –to pay down their bills; for purchasing materials when they are on COD or credit old; as a way to earn more points; end-users using P-cards to manage discretionary spending and for other reasons. While credit card usage goes up, credit card fee expenses increase as does your potential security liability.
For more information about reducing credit card processing fees and credit card compliance, please email me at stacey@dtgworldwide.com or visit www.dtgworldwide.com.
Are you seeing increased credit card usage? What have you done to ensure credit card data security? Did you know about the PCI mandate?
2 Comments
Stacey touches on a very sensitive issue here that not many distributors have been made aware of…Credit Card Information Security.
Increased Credit Card usage for all sorts of purchases (paying off debt or current product purchases)increases a distributors exposure.
We are glad to have Stacey as a guest contributor.
This is a very confusing program to understand both in it’s interpretation and enforcement. To add the confusion most legal representatives, accountants, or banking managers out there are not making any of there clients/customers aware of it. It still seems as if this compliance is industry self regulated. It’s hard to understand in general whether its a Federal or State law? The information circulating about it seems very vague and with that said, I can’t understand why those institutions/companies who are trying to exploit this program feel surprised that there are still those out there who are not yet compliant.
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