Last year, Visa/Mastercard and all their member banks lowered credit card limits across the board. “What I believe we started to see,” Tanzy says, “was that customers stopped using their credit cards for convenience purchases, and they saved some of those credit lines for emergencies. Because of that, discretionary purchases have become more cash. I can’t prove it, but logic tells me that in dealerships, cash business has increased, and credit card business has decreased.”
Don’t Fall for This PCI Compliance Scam
Dealers and wholesalers wishing to store their customers’ credit card information must pass a set of security guidelines called PCI compliance. The process involves applications, fees and audits. What it doesn’t involve is the changing of terminals, says Matt Tanzy, managing director of the MIC BankCard program.
“A scam that is happening right now,” he says, “is that a lot of credit card processers have sent letters and e-mails telling their customers, ‘Look, we need to ensure that your equipment is PCI-compliant, and you may need to purchase new equipment to remain PCI-compliant.’ They’re doing that because they want to sell a bunch of terminals.
“I’m unaware of any terminal out there that stores any credit card information,” Tanzy says. Even if the terminal software did store it, he adds, all a dealer would have to do is reprogram the terminal.
Canadian Dealers and International Sales
The MIC BankCard program is of limited use to Canadian dealers because the country’s nationalized banking system.
“The only way we can process is if a dealer has an American depository account,” says program director Matt Tanzy. “We can’t do money conversion and deposit to a Canadian bank account, so a lot of those border Canadian dealers will have a bank account in the United States. Then we can process all day long, as long as it’s U.S. currency.”
For U.S. dealers wishing to sell to Canada and other foreign countries, the risk of fraud is worse than ever, Tanzy says. To help decrease the risks, he recommends dealers follow these procedures before shipping products overseas:
- Obtain a photocopy of the front and back of a valid driver’s license or passport.
- Obtain a photocopy of the front and back (signed) of the credit card to be used.
- Ensure the name on the ID exactly matches the name on the credit card.
- Require the courier/shipping service to obtain a signed proof of delivery.
“And the proof of delivery has to match the driver’s license,” Tanzy says, adding that normal address verification works only about 20 percent of the time with international cards.
OEM Private-Label Cards: Will They Ever Integrate?
Matt Tanzy, director of the MIC BankCard program, says he wishes dealers could process their OEM private-label cards using the same system. “It’s one of those things where one day, before I retire, I want to say I finally did it. I integrated these things.” (Continued)