Alto Global Processing: Taking it Online or Offline – The New Definition of Location

By Ed Jay, Senior Vice President, U.S. Small Merchants for American Express

Location, location, location.  The mantra is storied as the most important aspect for choosing real estate, whether it be personal or commercial. For small merchants, it is critical to be where your customers are. But as technology continues to evolve, so does the definition of the word location. 

The internet, social media, and the growing availability of mobile payment technologies have connected buyers and sellers, making it possible for small merchants to reach consumers from all over the world. Most significantly, it has changed the entrepreneurial landscape and the way businesses operate.  Depending on a merchant’s products, marketing scheme and customer base, this could mean operating solely as an e-commerce business, maintaining a traditional storefront or creating a competitive mix of both.

Setting Up Shop – Online

Opening a digital storefront comes with many direct benefits for entrepreneurs. The most explicit is that it is significantly less expensive to create, build, renovate and operate a digital storefront than a physical retail shop. Online businesses can be automated, where shop owners do not have to be physically present at all times and instead, can focus on the product or maximizing their online presence.

Equally as important, is that retail customers are online and being online creates greater selling potential to untapped customers. Research firm, Forrester estimates that by 2014, U.S. online retail sales will grow to almost $280 billion – up from $155 billion in 2009. Having an online presence provides ease and convenience for consumers to shop anytime, anywhere without having to worry about store hours. Also, selling online allows small businesses to capture important customer data that can help merchants target the right audience more effectively.

There can also be challenges to operating an online business. The biggest hurdle is re-creating the right online experience. An online business is the first entry point for consumers to experience the product and requires small merchants to carefully consider the design, content and navigation of their online store. Websites that are cluttered and difficult to navigate can be a barrier, which could confuse and frustrate consumers.  However, when a digital storefront is designed to be user-friendly, it could bring customer engagement to new heights, create a unique and personal shopping experience and expose the business to millions of potential customers.

There Will Always be a Need for Stores

Although technology provides new avenues and capabilities for expanded sales, small merchant storefronts are still crucial to the development and growth of America’s economy and its local communities.  In fact, 75% of consumers feel that the ability to evaluate a product first-hand influences them most on whether or not they will make a purchase, according to a recent report by Forrester.

No matter how developed digital communication gets, there is no substitute for human interaction and personal service.  Local businesses are part of the neighborhood, and residents want to support them.  We have seen through our Shop Small and Small Business Saturday initiatives, which encourage consumers to shop at their favorite local businesses, that these small merchants are community landmarks, and connected to neighborhoods in a variety of ways.

During the most recent Small Business Saturday, a group of small merchants in the Tribeca neighborhood of New York created their own “Shop Small” map, directing consumers to each other’s storefronts in a show of solidarity and support for the local stores that keep a neighborhood alive.

Consumers are also supporting the movement by showing their support online. The Small Business Saturday Facebook page has more than 3.2 million fans, many of which have recounted the meaningful and long-lasting relationships they have with small merchants in their communities.

There are many factors to consider when thinking about a storefront location. From a product perspective, one deciding factor is the relationship that the consumer has with the product.  Maybe a merchant’s items require a certain touch and feel, as the purchase is a significant investment for the customer either because of price or sentimental importance.  This is true for a variety of specific needs, including the bride-to-be trying on her first dress or the runner with a wide foot who is looking for the best shoe fit.

Another might be that a merchant’s focus is immediate purchases, such as convenience stores, bakeries or delis.

Sugar Sweet Sunshine, a New York City cupcake shop, operates solely out of its Lower East Side neighborhood storefront.

“100% of our business is through our storefront,” said Debra Weiner, co-owner, Sugar Sweet Sunshine.  “We don’t just sell cupcakes – we sell a personalized customer experience that cannot be replicated online.  We get to know our customers, not only by name, but who they are, what their tastes are, and the cupcake flavors they would like.  It helps our business and it lets us create stronger ties within our community, and the only way we are able to do that is by being physically present.”

Social Media Helps Level the Playing Field

Whether your location is offline or online, it’s no secret that social media and digital interaction have changed the way businesses – large and small – interact with their customers.  Recent research from Deloitte indicates that 85% of consumers who have use a retailer’s app or website during a shopping trip made a purchase the same day.  These social and mobile tools give small merchants the ability to bring their unique relationship-based approach to an untapped base of potential customers.

Through chat features on websites, and free platforms such as Twitter and Facebook, merchants can communicate directly with customers, both in their local neighborhood and all over the world, to gauge demand and solicit feedback to improve their customer service.  Likewise, the explosion of smartphones has changed consumer behavior. Consumers are harnessing the power of the virtual community for real time recommendations and review sites such as Yelp can greatly impact a business. These online social tools help to connect consumers to offline merchants and vice versa.  Merchants can also utilize these platforms as advertising tools to develop a closer relationship between customers, the business and its products.

Ultimately, this levels the playing field for small merchants.  Now, mom-and-pop-shops share the same customer audience, communication platforms and sales possibilities as big-box businesses with multiple locations. With a little creativity, the impact can be both memorable and profitable.

Tips for determining online, storefront or both

The truth is that no two businesses are alike, and in the world of small merchants, nothing is black and white.  Some businesses operate and flourish solely online, others are fixtures within the community, and there are also ones that do both.

Warby Parker, a merchant that sells classically crafted eyewear at affordable prices, has developed a successful blend of online and offline. The company was established as an online business, but quickly found value in operating a small showroom out of the company’s headquarters. The company has since expanded its offline retail presence through partnerships with boutiques in key markets and standalone Warby Parker storefronts.

“By operating both online and in-person, we can reach our customers using the channels that they prefer, and engage with them on their terms,” said Neil Blumenthal, co-founder of Warby Parker. “We have worked hard to create a unique shopping experience for our customers, and are able to connect with them on a personal level both physically and digitally.”

Each entrepreneur has to decide what is best for their business, and what type oflocation would most effectively attract the most costumers.  Below are a few tips to help you sift through the advantages and disadvantages of each direction, and find one that fits your business model and marketing scheme.

  • What is your initial budget?  Opening a digital storefront is significantly less expensive than renting, renovating and maintaining a physical one.  If your budget does not enable you to take on such an ordeal, maybe selling products online would be a more effective business model.  This way you can focus on other essential aspects of your business like advertising, and developing a superior product.  You could also use the less-expensive digital route to test the market, and see if you can build the customer demand to warrant taking on the risk of opening a brick-and-mortar business.
  • Who and where is the customer base you are looking to attract? Ask yourself: Where are they, and how are they going to hear about your store? – a 5-star restaurant most probably isn’t going to effectively gauge interest in its product by testing with a food truck.  If your customer base is infinite, is reachable online, and would prefer to make purchases online, maybe a digital storefront is the way to go.
  • What is the relationship that you want your customers to have with your products? Are your products the type of things that people come in knowing exactly what they want, or do they need to get a sense of the look and feel.  If your customers need a chance to look around and use your product before purchasing, then a physical storefront makes the most sense.
  • Does your business type have a hyper-local connection?  People who are invested in their communities are inclined to interact with businesses that are woven into the fabric of those particular regions.  If you are planning on developing a deep and meaningful relationship with locals most of all, then a physical storefront will best help you meet your community- and business-focused goals.

Just remember – taking the leap as an entrepreneur is an exciting journey, whether it is a virtual or physical one.

Bio: Ed Jay is the Senior Vice President, U.S. Small Merchants for American Express.

Source https: //knowledgecenter.americanexpress.com/ArticleRead/ManageArticle/191

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American Express Plans Adding EMV to US Premium Corporate Cards by BusinessWire

Source: BusinessWire 

A Global Leader in Corporate Card Issuance Now Offers the Chip and Signature Feature for U.S. Cardmembers to Streamline International Usage

NEW YORK–(BUSINESS WIRE)–American Express Company (NYSE: AXP), a global leader in corporate card issuance, today announced that the Company will begin issuing Corporate Cards with chip & signature technology to U.S. Corporate Cardmembers, beginning with the premium Card portfolios in the first half of 2013. U.S. Corporate Cardmembers will now be able to experience a seamless international payments process as EMV technology becomes the standard for authorizing transactions around the world. Cardmembers with chip & signature Cards will be able to use their Cards wherever American Express® Cards are accepted, in the United States and internationally.

“In some countries, chip technology is becoming standard for card authorizations. By providing a chip-enabled solution, the new chip & signature Cards will help U.S. Corporate Cardmembers avoid disruptions while traveling internationally”

“As we continue to enhance our global footprint, our priority is to ensure our Cardmembers have superior security features and the full complement of American Express benefits when using our products internationally. Our EMV technology adds another layer of protection so that our Cardmembers know they are further safeguarded from fraud and can leverage the flexibility that chip & signature provides across the globe,” said Darryl Brown, President, Global Corporate Payments Americas, American Express.

The new chip & signature Cards offer an extra level of transaction security by employing dynamic encryption technology, which makes it more difficult for unauthorized users to copy or access Card information. American Express currently offers chip & PIN and chip & signature Card capabilities throughout their global markets. American Express allows merchants and Card-issuing partners to adopt the EMV solution that best meets their individual market needs.

“In some countries, chip technology is becoming standard for card authorizations. By providing a chip-enabled solution, the new chip & signature Cards will help U.S. Corporate Cardmembers avoid disruptions while traveling internationally,” added Brown.

american expressAbout American Express Corporate Payment Solutions

American Express Corporate Payment Solutions provides the Corporate Card, Corporate Purchasing Solutions, and other expense management services to mid-size companies and large corporations worldwide. In the U.S., American Express is a leading issuer of commercial cards, serving more than 70% of the Fortune 500, as well as tens of thousands of mid-size companies. For more information, visit www.americanexpress.com/corporate.

Contacts

American Express
Christine Elliott, 212-640-0622
christine.s.elliott@aexp.com

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Alto Global Processing: More States Consider Ban On Credit Card Surcharges By Herb Weisbaum The Consumer Man

Source: NBCNews.com

Charge a fee to use your credit card? It’s legal for merchants to do that, unless barred by state law. Ten states already ban such surcharges – California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas – and more may join the list.

The legislatures in 13 other states are currently considering bills that would prevent these so-called “check out” fees. Lawmakers in Hawaii, Illinois, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Washington and Tennessee are responding to a rule change that took place late last month. A similar bill will soon be introduced in West Virginia.

Visa and MasterCard agreed to let merchants add a surcharge to credit card transactions as part of the settlement agreement in an antitrust lawsuit brought by retailers. Until Jan. 27, both Visa and MasterCard had prohibited merchants from charging the customer for the cost of processing that credit card transaction.

The settlement does not affect Visa or MasterCard debit cards. American Express still
prohibits a surcharge on any of its cards.

New Jersey Assemblyman Vincent Prieto (D-Secaucus) said he introduced a bill to ban surcharging because it would hit consumers in the pocketbook.

“The amount of the surcharge may seem miniscule on paper, but in the family budget 1.5 to 3 percent could add up to a shorter grocery list or less to spend on gas,” he said in a statement.

In Utah, Sen. Curtis Bramble (R-Provo) is sponsoring a bill that would prohibit surcharges on any type of “financial transaction card” which would include debit cards.

Major retailers are not expected to tack on a credit card surcharge, at least not any time in the immediate future. Wal-Mart, Target, Sears and Home Depot told NBC News they have no plans to add a credit card surcharge. But just the possibility has spurred some lawmakers into action.

“It’s a waste of the legislative process,” said Mallory Duncan, senior vice president of the National Retail Federation. “They could take steps to bring greater competition into the marketplace by prohibiting the price fixing of the hidden swipe fees merchants pay to process credit card transactions.”

Trish Wexler, spokesperson for the Electronic Payments Coalition, whose members include Visa and MasterCard Worldwide, told NBC News it has not taken a position on the issue.

“No one knows how checkout fees will work their way through the system,” Wexler said in an email statement, “but the settlement provides sufficient consumer protections while the process plays out.”

What about disclosures?

The advocacy group Consumer Action has published a booklet on credit card checkout fees. It warns shoppers to be on the lookout for these fees and advises them to express their dissatisfaction.

“Customers shouldn’t stand for it,” said Ruth Susswein Consumer Action’s deputy director of national priorities. “Our advice is to tell them you don’t like the fee and this makes you want to take your business elsewhere.”

The new rules from Visa and MasterCard require retailers who apply a credit card surcharge to post a notice at the store’s entrance. The exact percentage of the surcharge does not need to be disclosed until the point of sale. The customer receipt must list the amount of the surcharge.

Online stores with a surcharge will not be required to have a notice on the home page.
They only need to alert shoppers about this when they reach the page where credit cards are first mentioned. In most cases, that means the final step of checkout when the purchase is being completed.

Not the end of this story

The settlement that allows merchants to impose a credit card surcharge is only preliminary. The court has yet to issue its final ruling in this case. That’s expected later this year.

Once that happens, various retailers and business groups plan to challenge the settlement. That could drag into late 2014.

The possibility that the settlement could be modified will probably keep most businesses of any size from instituting credit card fees for the time being.

Source: http://www.nbcnews.com/business/more-states-consider-ban-credit-card-surcharges-1C8455523

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitteror visit The ConsumerManwebsite.

 

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Alto Global Processing – The Social Credit Card: AmEx Syncs With Twitter To Turn #Hashtags Into Savings

Special thanks to Fast Company and the writer Austin Carr for allowing us to share this story

Today, American Express unveiled a new program with Twitter to let cardmembers sync accounts with the social network, and earn savings from big brands such as Whole Foods, Best Buy, and Zappos–just by retweeting certain hashtags.

With the partnership, AmEx helps fortify its role as the credit card for the social media generation–and, apparently, following through on the whole Social Currency idea beyond offering membership points rewards. In addition to its partnership with Twitter, the company, which boasts more than 90 million cardholders worldwide, has already rolled out a national program with Foursquare for check-in deals and Facebook for rewards through Likes. AmEx aims to be the connective tissue between merchants and consumers on social media that will provide a mix of offers, data, and branding to its members.

As with Foursquare, the process of syncing your AmEx account to your Twitter account is a quick, one-time process. Once linked, U.S. cardholders have the opportunity to earn rewards by tweeting special offers from hashtags. “Tweet #AmExWholeFoods, get $20 back 1x on next $75 in-store purchase,” Whole Foods might tweet. Once the consumer tweets the #AmExWholeFoods hashtag, the offer is automatically loaded into that member’s account, ready to be redeemed effortlessly the next time he or she shops at Whole Foods.

“Twitter is already being used as a platform to connect buyers and sellers, but no one has really nailed it in terms of proving that Twitter conversations can drive directly to commerce, or that tweets can really be linked to transactions,” says Dave Wolf, VP of global business and market development at AmEx. “That’s what we’re really excited about doing.”

The benefit of the service is as much about the deal for the consumer as it is the data for the merchant. “We can go to Whole Foods or any merchant we work with and give them information and analytics,” says AmEx vice chairman Ed Gilligan. “How many people used the offer? What was the size of the shopping cart when they checked out? Did that customer come a week later or a month later?”

In other words, AmEx has finally developed a way to demonstrate a tweet’s ROI–and not just in terms of commerce. The deals will also have a benefit on Twitter, leading to “more trending topics, more followers, and more conversations,” says Leslie Berland, SVP of digital partnerships and development at AmEx. “Are our followers growing? Are people talking about our business? Are people engaging with our content?”

It’s a social strategy AmEx has used to take the friction out of the point of sale, and turn something as simple as a hashtag into a potential future transaction. It’s also a social strategy we should expect AmEx to continue to pursue beyond Facebook, Foursquare, and Twitter.

“We want to go where our cardmembers are,” Berland says. “So when you talk about Instagram, if they presented an opportunity where it evolved into something that would be a natural fit for this, we would definitely look at it. We are looking at platforms that both have scale, and that we’re able to put our technology in in a very authentic way. But yes, we can do this with a variety of different partners, and we, candidly, have many partners beating down our doors to do exactly that.”

Source: http://www.fastcompany.com/1823041/social-credit-card-amex-syncs-twitter-turn-hashtags-savings

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Alto Global Processing: American Express Moves Ahead of MasterCard; U.S. Credit Card Purchase Volume Marks First Double-Digit Growth Since 2007

Story by the Nilson Report

CARPENTERIA, Calif.–(BUSINESS WIRE)–There were several important developments in the fortunes of U.S. credit card companies in 2011, according to the annual special report on General Purpose Credit Cards, published in the most recent issue of The Nilson Report, a respected trade newsletter on the payments industry.

“This is the first time since MasterCard was known as MasterCharge back in the 1960s, that American Express has experienced more purchase volume”

American Express overtook MasterCard to gain second place among credit card brands in the U.S., based on spending at merchants. “This is the first time since MasterCard was known as MasterCharge back in the 1960s, that American Express has experienced more purchase volume,” said David Robertson, publisher of The Nilson Report. While purchase volume increased for all four card brands (Visa, Amex, MasterCard, and Discover), American Express credit cards had an increase of 13.4% to $540 billion dollars, vs. an increase 6.1% to $508 billion for MasterCard credit cards.

For the first time since 2007, combined American Express, Discover, MasterCard, and Visa consumer and commercial credit, debit and prepaid cards generated a double-digit increase in spending at merchants. The combined cards generated $3.595 trillion in purchase volume in 2011, up 10.4% from 2010.

Credit card outstandings, the unpaid balances owned by all Visa, MasterCard, American Express, and Discover general purpose credit card accounts totaled $713.27 billion in 2011, up $1.99 billion or 0.3%. This was the first increase since 2008.

About The Nilson Report

The Nilson Report is a highly respected source of global news and analysis of the credit, debit and prepaid card industry. The subscription newsletter provides in-depth rankings and statistics on the current status of the industry, as well as company, personnel and product updates. David Robertson, Publisher of The Nilson Report, is a recognized expert in the field, and is a frequent speaker at industry conferences. Over 18,000 readers in 90 countries worldwide value The Nilson Report to track industry trends and market information.

Source: http://www.businesswire.com/news/home/20120222006974/en/American-Express-Moves-MasterCard-U.S.-Credit-Card

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