Costco advertises unbeatable credit card processing rates of 1.64% and 1.99% in their November magazine. The problem? It's like a national long distance provider advertising a flat $.05 per minute that actually only includes your zip code.
And the first benefit Costco touts regarding their services? "No Hidden Fees"
Any business that accepts credit cards will tell you that this advertisement is misleading. If a merchant were to actually sign up, expecting to pay these rates, they would be unpleasantly surprised to find out that the actual rates are:
* 1.64% and $.20 for swiped transactions
* 1.99% and $.27 for non swiped transactions
* 2.96% $.32 for rewards, business, corporate, non-AVS, authorizations not settled within 24 hours, and a host of other conditions.
* 3.80% $.32 for government or international cards
I don't know about you, but that's a minor * that I would want to know about before buying.
Come on Costco, you're a brand we trust. We realize others in the industry do the exact same thing, but your customers deserve better.
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I recently listened to a presentation by a security group that performs forensics work when a merchant experiences a credit card data breach. Here are the breach trends they've seen during 2008:
Methods of entry - largely unchanged
Breaching credit card data - evolved strategies
Techniques used - most apply to software POS
Case Study
In one case study they shared the criminal was able to penetrate the network via remote access software. They then installed a debugging tool to collect RAM contents and malware to parse track data. The malware then uploaded the data to a Russian website. The merchant was using a PABP POS that was not collecting prohibited cardholder data.
