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P2PE – SILVER BULLET OR SNAKE OIL?

By Colin Neil, SVP Business Development, Adyen UK

 

Fraud is an ever-present problem for merchants, especially with the increasing number of payment providers, start-up challenger banks, and online shopping sites providing different levels of fraud protection. To ensure the best customer and business experience, merchants are faced with a raft of stringent legislation and regulations to follow. One solution that helps organisations with compliance and experience is point-to-point encryption, or P2PE.

 

What is P2PE?

Point-to-point encryption (P2PE) is a system that encrypts account data along the payments value chain – from the moment the merchant accepts the payment card to when it is decrypted and sent to the issuing bank. The P2PE standard was developed by the Payment Card Industry’s Security Standard Council (PCI SSC) and is designed to reduce the risk of access to payment card data. Without being able to access the card data, online and digital payments fraud becomes significantly harder.

Colin Neil

Larger organisations will typically employ the services of a Qualified Security Assessor, or QSA, to help assess the security of the data that runs through their network. More often than not, QSA’s will advise retailers selecting in-store payment systems that a P2PE solution is the best way to deliver the level of encryption required.

 

A silver bullet?

P2PE is an effective solution to deliver encryption across the journey that cardholder data takes and gives consumers peace of mind that their information is safe. P2PE reduces a merchant’s risk profile and in some circumstances across a traditional payments value chain, can reduce the scope of a merchant’s PCI Data Security Standard (DSS) assessment.

By using a P2PE validated solution, merchants are not required to fill out the Self-Assessment Questionnaire (SAQ) D. This is the most demanding form of self-certification with over 12 requirements, and 329 questions for merchants to answer. Instead, users with a P2PE solution only need to complete three requirements and answer 35 questions from the alternative SAQ P2PE document.

 

Snake oil?

As with any solution, P2PE isn’t going to be right for some merchants and can carry a number of unseen headaches. In the unfortunate event of a data breach, the weakest point in the chain is looked at first. Sadly, this is often the merchant’s adherence to the procedures laid out in the P2PE Instruction Manual (PIM). In order for retailers to realise a compliance benefit from P2PE, they must closely follow the PIM. While adherence to the PIM brings increased external validation, there is also the trade-off of increased operational effort in addition to the yearly assessment, all validated by the retailer’s QSA.

By adopting a P2PE solution, merchants are required to follow the PIM and put measures in place for store staff to record that terminals received haven’t been tampered with. PIM measures include checking serial numbers, cameras being in place aiming at the terminals in store, monthly site checks and more.

Alternatively, users can opt for an end-to-end encryption solution, or (E2EE). E2EE solutions offer the same encrypted payments pathway as P2PE but also can come with fewer regulatory requirements under PCI. Depending on their acquirer, E2EE users may only need to complete two requirements and 22 questions in the SAQ B-IP form, offering merchants greater flexibility and freedom when it comes to implementing security practices.

 

P2PE or E2EE?

The ultimate decision as to adopt P2PE or E2EE rests with the merchant as both options are suitable depending on their circumstances. Understandably, some merchants are more risk-averse than others, so prefer the extra measures put in place for their store staff that are provided through a P2PE solution. Some merchants prefer a more flexible system with fewer requirements – in that case they might be more suited to an E2EE solution.

If the complete payments value chain is managed by a single provider, then E2EE is just as effective in protecting against data breaches as P2PE. For an E2EE solution, if the gateway, processor and acquirer roles are all managed by a single provider, it forms an unbroken chain and the chance for hackers to gain access is much more difficult. However there are businesses that are required to only use a P2PE encryption solution, both for the added security around terminal handling but also for their own stakeholder requirements. In this case, where a P2PE solution is mandatory, by choosing a solution with a payments provider that manages the whole payments chain, encrypted customer data is that much more secure all the way through it’s journey.

Retailers should look for simplicity, especially when there are a number of regulations and restrictions businesses have to follow. Ensuring the best business experience, while maintaining high standards of customer experience through data security is essential. By opting for P2PE there’s the trade-off between the added value of external validation of the solution and the increased operational effort in both time and money spent. Any E2EE solution however should come directly from a payment provider securing the whole value chain to ensure maximum protection.

 

Business

3 KEY DIGITAL MARKETING TRENDS FOR 2021

– Emma

Digital marketing is an industry where the trends are changing on a daily basis, meaning those in the sector really need to stay on top of what’s new and what’s going on.

More and more companies are investing in digital marketing; a service that becomes more and more popular every year. However, this year, especially, brands and businesses have needed digital marketing more than ever, with many shops and businesses being forced to close in person, and being forced to offer their services and products online.

Here are three of the fastest rising digital marketing trends that we expect to go in 2021:

 

  1. Specialised Marketing Agencies

Due to the current situation, many businesses will have sadly made members of their team redundant. During the 2008 recession, sadly a lot of those that had job cuts were in the marketing department and these were one of the first teams to be cut, as businesses decided that marketing just wasn’t important.

Emma

If that is anything to compare this situation to, then there will be less in-house markers, and therefore more businesses will want to be using their budgets to outsource to specialists instead.

Rather than going to big digital marketing agencies, they will perhaps want more agencies that are specialist in their industry, such as beauty, sport or food so that they can be guaranteed the knowledge and expertise in their niche.

Foundation Agency is an example of an agency launched in the middle of the pandemic. They formed after Google data in May 2020 showed a huge shift in online user behaviour , with trends showing a surge in beauty and skincare, and 70% of consumers now saying they buy beauty products online more than before.

 

  1. Less PR Campaigns

The past few months have  proven that an event or a situation can take up every newspaper front page, every online article and every single social media mention, and there can be some days (or months in this case) where every day is quite a news heavy day. In this case, journalists won’t be looking for as many campaigns from PR professionals as they’ll already have a list of stories they’d want to cover.

Spending too much time and money on a campaign might backfire, and PR professionals and marketing professionals may use their time to find more reactive opportunities.

Kyle Sowden, Digital PR Executive at Liberty Marketing, says:

“I’ve been keeping a close eye on the amount of surveys that have been getting picked up in the media over the last two or three months and noticed that they’re hugely decreasing. Surveys can cost a few grand, depending on the niche of the respondents you want, what results you want and how many questions you want too. If you don’t get the results that you hoped for, then this could be a huge loss in terms of money and time.

PR professionals are better off spending their money on services like Response Source and HARO, as well as emailing journalists that they know will be writing about topics that they, or their clients, are able to supply comment to rather than producing one big content campaign. Maybe not forever, but certainly for the time being while the world is a bit weird.”

 

  1. More Social Media Advertising

Most of us have more time to spend, meaning more time to sit around on our phones or laptops. There have been a lot of furloughs and redundancies this year, as well as more slackers that are working from home, spending time scrolling through social media platforms.

Social media is one of the best places to advertise and market your brand or product, especially as we know many people have switched to online shopping now rather than going into the local town centres.

Ryan Walton, Founder of Aura Ads, says:

“With more time spare to scroll through social media and online shop, brands are well aware that one of the best ways that they can spend their marketing budgets is on social media marketing, specifically video as they know that’s what gets the highest engagement rates.”

Of course, these trends aren’t certain, but they’ve definitely been on the rise towards the end of the year, and we expect them to keep peaking. It’s important to check sites such as Search Engine Journal for your everyday marketing news, to see what sort of changes are going on in the digital marketing industry.

 

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Business

A GUIDE TO LLC TAXES FOR SMALL BUSINESSES

By Tricia Joyce

 

Starting a small business can be an exciting, if sometimes stressful, journey. While finally being able to be your own boss is definitely a perk, running your own business isn’t always easy.
One of the greatest hurdles that entrepreneurs are often underequipped to deal with is taxation. How much should you be paying per year, and what are the forms and processes? In our previous post ‘Corporation Tax – A Guide for Small Businesses’, we discussed the ins and outs of corporation taxes and other basic information. Today, we’re going to look at the specifics of paying tax as a Limited Liability Company (LLC).

 

Benefits of an LLC

Why choose to register as an LLC? Well, most entrepreneurs might think that registering as a sole proprietorship might be enough, but there are certain advantages to LLCs. Generally, LLCs offer more flexibility and liability protections, without the complicated procedures and extra costs of other business models.
Another main draw of forming an LLC is that they’re taxed differently from S corporations. The two models are fairly similar in that they protect the owners from double taxation. However, LLCs offer more flexibility, and have less complicated procedures. S corporations are also required to file business tax returns, which are not required for single-owner LLCs.

 

How Are LLCs Taxed?

As a “pass-through entity,” LLCs have a tax system that sets them apart from corporations. Like sole proprietorships, the profits and losses of an LLC are coursed through business owners or members. These business owners report this information on their personal tax returns, rather than filing for a separate corporation and personal tax.

 

Single-member

According to the Internal Revenue Service, single-member LLCs are considered “disregarded entities.” This means the LLC’s activities must be filed as part of the owner’s federal tax return.

Single-member LLCs must use the Social Security Number (SSN) or Employer Identification Number (EIN) of the owner for reporting income tax. Generally, these activities will be reported through Form 1040 or 1040-SR.

If the LLC is owned by a married couple in a community property state, and the couple continue to treat the entity as a disregarded entity for federal tax purposes, or as a partnership for federal tax purposes, then the LLC remains as reported. However, in non-community property states, the LLC must file as a partnership. It is important that you make sure to research what kind of rules for joint ownership of an LLC exist in your state.

 

Multi-member

If the LLC is owned by multiple members, such as a married couple as given in the example above, income tax is generally paid as a partnership. This means that individual partners will pay tax based on their lawful share of ownership in the LLC. This is called a distributive share, and is usually found in proportion to a member’s ownership percentage of the business.

The Balance has a small guide on paying taxes as an LLC. In brief, the partnership will file an information return on Form 1065. Each partner will then receive a Schedule K-1 showing the share of profits or losses in the LLC.

The Schedule K-1 information must then be transferred to Schedule E – Supplemental income. Each type of income, as broken down on your Schedule K-1, will be inputted in specific sections on the Schedule E. You can then include the income as reported in your Schedule E in the relevant sections of your Form 1040 or 1040-SR.

 

Is an LLC Right for You?

LLCs are favored for their adaptability and relatively simple procedures. However, if your multi-member LLC needs to retain a certain amount of profits, you may find it more beneficial to register as a corporation. In general, however, LLCs are great options for small business owners. Make sure to do extensive research on the tax laws in your state to ensure you’re choosing the right model for your business plan.

 

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