Issue #13 Spring Securing your point of sale

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1 Issue #13 Spring 2014 Mosaic DISCOVER MERCHANT REPORT Secure Your Point of Sale to Help Protect Your Customers Card Data Moving forward in a rapidly changing merchant environment While the data breaches that occurred during the 2013 holiday season were certainly not the first or even the largest, they seem to have brought the payments industry to a tipping point. Merchants are taking action to keep their businesses from falling victim to hackers while consumers are scrambling to protect their credit and avoid ID theft. Consumer response to merchant data breaches It s too early to identify specific trends resulting from the recent incidents, however, after a decade-long trend of well-publicized hacking episodes, consumers have become knowledgeable and vigilant. Consumers fear of having their information stolen has caused many to decrease their use of payment cards and turn to cash as their primary payment method. For the three-month period ending Dec. 31, 2013, cash withdrawals reported by financial kiosk provider Cardtronics went up 24.5% from the same period in Securing your point of sale The recent data breaches were perpetrated using malware, which was introduced when hackers used stolen login credentials from an outside vendor. They breached the retailers systems and installed malware designed to obtain consumer data from payment card readers and save it on an outside server. Once malware enters a merchant s POS, it quietly goes about its task, collecting and transmitting data until the breach is revealed. The attacks could have been prevented by proper adherence to the Payment Card Industry Data Security Standard (PCI DSS), which continues to be the gold standard for merchants in blocking card fraud. The ongoing process requires merchants to continuously assess their operations, fix any vulnerabilities, and communicate with their acquiring bank and the card brands. For detailed information about the PCI DSS, visit pcisecuritystandards.org/merchants. n 1 pymnts.com, A Cashless Society? Recent Stats Suggest We re Heading The Other Way, accessed 2/11/14. IN THIS ISSUE 2 Welcome Discover Cardholders and Show Them You Accept Their Card 3 Discover Card Identification Features 4 Discover Extras Powerful Partnership, Extraordinary Results 5 Ready for Easier Signage Ordering? So Are We. 6 Merchants Role in the EMV Timeline Group Executive Message After a winter that s been defined by erratic weather, many of you are probably looking forward to the more predictable days of spring. This issue of Mosaic provides you with an abundance of ideas for attracting new customers and building your business. Read about some of the incentives enjoyed by Discover Cardholders and you ll be motivated to reach out to them. They re the kind of customers you need. Even with all the high-tech security in the payments environment, we continue to hear from law enforcement about counterfeit cards that make it past a merchant s POS. Look for our card identification guide on page 3 so you and your sales associates know what to check for when you accept a Discover card. Our Discover Extras program is designed to help you attract Discover Cardholders via direct mail, and statement messaging. Be sure to check it out. We re also keeping you up-to-date on the progress of EMV. There s still much to be done, and we ll be there with the answers you need. Peter Illian, Vice President, Marketing & Product Solutions, Discover Network

2 Welcome Discover Cardholders and Show Them You Accept Their Card Increase sales by attracting customers loyal to Discover Research shows that 71% of customers prefer to look for signage rather than ask which cards are accepted, and some will choose another merchant if they don t see their card s logo at the point of sale, especially if they re getting rewards points or a cash-back rebate from their preferred card. Some merchants mistakenly believe that Discover transactions carry higher acceptance costs than others. In reality, competition within the payments industry extends to card associations as well, and Discover fees are comparable to most other rewards cards. Many acquirers offer merchants the option of combining all payment card transactions Visa, MasterCard, Discover and American Express and their affiliates on one bill at a single base rate. Discover Cardholders get incentives to use their card Consumers carrying the Discover card are loyal to the brand, and with good reason. In addition to the Cashback Bonus they get on all their purchases, special quarterly incentives give them a 5% Cashback Bonus when they use their card at specific merchants (i.e., at home improvement and furniture stores during April through June). Cardholders can shop year-round with their Discover card at ShopDiscover.com, the Discover exclusive online shopping portal featuring more than 200 popular online retailers offering between 5% and 20% Cashback Bonus on purchases. They have a wide range of options for redeeming their rewards, including statement credit, gift cards or even charitable donations. Global alliances extend your reach Many major foreign payment cards have reciprocal card acceptance agreements with Discover. This gives you the opportunity to accept payments from affluent foreign consumers and business travelers. JCB, Japan There are currently 80 million JCB cardmembers. The alliance between JCB and Discover enables merchants to accept JCB cards. UnionPay, China The only domestic bankcard organization in the People s Republic of China has an alliance with Discover that allows acceptance of China UnionPay cards on the PULSE network in the U.S. BC Global Card, South Korea The largest domestic payment network in South Korea issues both signature credit and signature debit card products. They have 11 member financial institutions and have issued 55 million cards. DinaCard, Serbia The largest acquiring network in Serbia, DinaCard has more than 2.5 million customers who can use their card at Discover Merchant locations. If you are unsure, look for the Discover logo on the back of a foreign card. Be ready for international customers, and let them know they can use their preferred card at your business. Promote your card acceptance Let customers know you accept their cards by displaying card acceptance signage in your window, at your point of sale and on your website. It s a proven way to attract new business. We ve provided a decal for you on page 5 of this newsletter. Place it at your point of sale or near your front door to let customers know their card is welcome at your business. Potential customers can be easily turned off if you don t accept their preferred card, or even if you don t display signage that shows which cards you accept. Be sure they have that information by placing a decal in your storefront window or displaying the logos on your website. It s a low-cost sometimes free way to attract new business and build your profits. n Mosaic Spring

3 Discover Card Identification Features Identify the security features built right into every Discover card Counterfeit credit cards and lost or stolen cards make up the vast majority of payment card fraud. By becoming familiar with the security features that are built into every Discover card, you can learn to identify fraudulent cards in face-to-face and card-not-present transactions. Protecting you and your customers is our top priority. If you ever suspect fraud or are suspicious of a customer, call , and ask for a Code 10 authorization. If you have general questions about fraud prevention, call our Fraud Help Desk at to speak with a fraud specialist. n 1 The word DISCOVER appears on the front of the card under an ultraviolet light. 2 Card numbers will appear on either the front or back of the card. Card numbers begin with the number 6 and are composed of 16 digits that should be clear and uniform in size and spacing. 3 The Valid Thru date may appear on either the front or back of the card in an mm/yy format that indicates the last month in which the card is valid. 4 The cardholder name and, if applicable, business name will appear on either the front or back of the card. 5 Cards must contain either the security hologram on the front or back of the card OR the holographic magnetic stripe on the card back. 6 The words DISCOVER or DISCOVER NETWORK appear on a signature panel on the back of the card. An underprint of void becomes visible if erasure of the signature is attempted. 7 A security character, displayed as an embossed stylized D, appears on the front of embossed cards. 8 A minimum of the last four digits of the card number are displayed on the back of the card, printed in reverse indent printing on the signature panel. A 3- or 4-digit CID is printed in the same style in a white box to the right of the signature panel. 9 The Discover Acceptance Mark will appear on the front of most cards, and may also appear on the back of the card, with other affiliated logos. 10 This example shows features that may appear on contactless, chip and unembossed cards. Features on Discover Debit, Private Label and Prepaid cards may differ from those shown here. Chip-enabled cards will have an embedded smart chip. Contactless cards must display the Discover Zip indicator and the EMVCo contactless indicator. The cardholder name, card number, member since and expiration date are thermal printed on unembossed cards and therefore are flat. The stylized D does not appear on unembossed cards. The phrase Electronic Use Only must appear on unembossed cards. 3

4 Discover Extras Powerful Partnership, Extraordinary Results Looking to find new customers, build brand loyalty and grow your business? Try the Discover Extras program. Discover Extras is a partnership program that helps merchants attract new customers, build brand loyalty and grow their business. Through the Discover Extras program, merchants send relevant, valuable offers and deliver targeted communications via multichannel touch points. By participating in Discover Extras, your business will benefit from: s Above-average response rates s Ability to reach targeted segments of the highly engaged Discover Cardholder base s One-on-one expert support with list generation, creative development, production, mailing and analytics s Post-promotion results and analytics Grow your profits by attracting Discover Cardholders Discover card has been ranked #1 in customer loyalty for 17 years running, and our cardholders are among the most reliable and engaged customers your business can attract. 1 They appreciate a great value, are financially responsible, and live active family-focused lifestyles. 2 Customized strategy Tailor your Discover Extras campaign to fit your specific objectives. n Sophisticated Targeting You can target either prospects or existing customers based on competitive set and spending data. n Compelling Offers We ll work with you to develop the right offer for your campaign. Typical offers include: Point-of-sale discount Percentage or dollar amount savings, savings based on spend amount, or buy-oneget-one. Repeat visit reward Customers earn discounts at the point of sale by making multiple purchases over a set time period. Cashback Bonus offers Customers earn additional Cashback Bonus rewards based on specific purchases at your business. Discover fulfills the rewards and invoices you for redemptions after the promotion. n Participation Fees You can choose to pay a flat placement fee for participation, or your fee can be based on program performance metrics. Targeted campaigns Our dedicated team will develop the campaign and deliver your message through communication channels including mobile, , direct mail and statement inserts. Discover Extras campaigns have achieved compelling results for our past participating partners: 3 20% average incremental sales lift for prospecting campaigns % response rate for loyalty campaigns 2 If you have an article topic that you would like to see included in Mosaic, or if you would be willing to contribute information, feel free to contact the editor of Mosaic at mosaic@discover.com. We welcome your input and feedback! 3 Up to 5% average response rate for prospecting campaigns 2 us at discoverextras@discover.com to learn about how our data-driven targeting can help your brand generate more sales. n 1 Discover ranked #1 in customer loyalty, according to the 2013 Brand Keys Customer Loyalty Engagement Index report. Discover has won the credit card category 17 years in a row. 2 Consumer Insights research commissioned by DFS Services LLC. For client support, visit our website at DiscoverNetwork.com Fraud and Security Account Center Training and Support Marketing Toolkit Operations Support 4

5 Ready for Easier Signage Ordering? So Are We. We ve given DiscoverSignage.com a site-wide update so we can serve you better Did you know... You can also accept Diners Club International, JCB, China UnionPay, BC Global Card and DinaCard. Order FREE signage and supplies at DiscoverSignage.com. As a registered member, your and password have not changed. You ll be able to log in, browse and place orders as always, and you ll have a host of new features to make ordering easier. If you have any questions about the update, please signage@discover.com. You re already set up for Discover acceptance Your processor handles your Discover transactions just as they do your Visa and MasterCard transactions. Plus, all your card payments will appear on one statement with one point of contact. Place the attached decal on your door or register our cardholders look for it! Then run the simple test transaction (see instructions at right). Validate your terminal with this test transaction 1. Prompt your terminal or point-of-sale device for a manual sales transaction. 2. When prompted, enter the following test card information: - Test card account: * - Expiration date: 09/14 - CID: Transaction amount: $ ZIP (if applicable): A declined status means the test was successful and your terminal is ready. * If you receive an error message when running the test, please contact your payments processor for assistance. Remember to tell your employees to accept Discover! Mosaic Spring DFS Services LLC

6 Merchants Role in the EMV Timeline Innovation in payments is happening at a rapid pace, and merchants of all types need to stay in touch with the changes in order to maintain customer loyalty. Most merchants will need to upgrade their hardware and software in the next couple of years to be compliant with the Europay, MasterCard and Visa (EMV) global standard for chip-based cards. In October 2015, fraud liability will shift to the acquirer and ultimately the merchant who will bear the liability for fraud at the point of sale (POS) if an EMV-enabled card is used and the terminal processing the transaction is not enabled (excluding Automated Fuel Dispensers). Meeting this deadline will require time and effort, but it can also create an opportunity for you to bring significant value to your customers. You can differentiate your business from the competition by having the right equipment at your POS and well-trained, knowledgeable sales associates on hand. Keep up with evolving payment technology When was the last time you updated your POS solutions? Why not jump into it now and be ready when EMV payments join the mainstream? Your acquirer can help you determine the best technology based on the needs of your business and get you set up with payment terminals, card readers and software that will enable you to accommodate the data transmitted in chip-based payments. By installing hardware and software designed for EMV payments, you ll be ready when customers come in with chip-enabled cards. Train your team members Your sales associates will play a key role in educating consumers about how EMV works and how it benefits them. Be sure they are well prepared to field a variety of questions from customers. You can set your business apart from the competition by anticipating your customers needs and having the right solutions in place as EMV payments become a reality. n Like us on Facebook. Follow us on Twitter. Follow us on LinkedIn. 6