Maxx Merchant Services Blog

Maxx Merchants Virtual Terminal Instructions

Alex Neir — Fri, 31 May 2013 18:21:00 GMT

This post is intended to help with the most common tasks when it comes to the Maxx Merchants virtual terminal. We have broken the instructions into the following four categories.

Credit Card Sale
Credit Card Void/Refund
Transaction Reporting & Merchant Defined Fields
Additional User Account Creation

Using the Maxx Merchants Virtual to perform a credit card sale

Using the Maxx Merchants Virtual Terminal to complete a void or refund

The reporting functionality of the Maxx Merchants Virtual Terminal. We also discuss custom report exports and merchant defined fields.

How to create additional user accounts with in the Maxx Merchants Virtual Termainal.

If there are additional videos that you would like to see please don't hessitate to give us a call and we would be happy to produce it for you.

Support - (800)917-8026

How to set up an eCommerce Site | Protect your customers and business

Alex Neir — Fri, 19 Apr 2013 17:13:00 GMT

When setting up an eCommerce site for your business, security is the most critical component. It’s well documented that selling products and service online can increase revenue. It’s also becoming imperative to have an ecommerce presence if you want to stay competitive. That being the case, how do you set it up to protect your customers and your business?

Customer credit card security is important if you want to retain customers and protect your business. The first major vulnerability for an ecommerce site is the checkout page where the customer’s credit card information is collection and transmitted. At an absolute minimum you need to have your checkout page hosted on a secure server.A secure server is evidenced with a URL that starts with HTTPS:// and not the traditional HTTP://.

Secondarily, it’s a good idea to invest in an SSL or certified secure server page. Both the secured server and certified SSL will be offered by your hosting company and can easily be set up. A certified SSL comes with a certificate that customers can validate the encryption services and security of your website. Securing your checkout page limits the risk of your customer’s credit card information being stolen by identity thieves and therefor limits your liabilty.

A second and an increasingly apparent vulnerability for ecommerce sites are credit card validation procedures. It is a good idea to validate customer credit card information on as many fields as possible. Now there is certainly a balance here as you don’t want to force your customers to enter too much data at checkout, however to few and you open yourself up to fraud. Here are the minimums suggested.

Name
Billing Address
Billing Zip
Credit Card Number
Expiration Date
CVV Code

If you do not capture the CVV code at the time of checkout you waive your rights to fight charge backs initiated by the customer. Additionally, if you do not validate the credit card credentials you open your business up to liability from credit card testing programs. A credit card testing program is a computer generated attack on your website in which credit card numbers are tested to see if an authorization can be acheived. It is not uncommon for credit card testing programs to run 100,000 credit cards on your website overnight. The unsettling part, your business is liable for the transaction charges for the attempted authorizations. 100,000 attempted authorizations at $0.08 per transaction comes out to be $8,000 in transaction charges, over night.

Next, it is a good idea to choose a trusted merchant service provider that has tools to help limit your exposure to cyber-attacks. Let’s face it, more online business means more online criminals. The most common cyber-criminals are those attempting to steal credit card numbers to then purchase items with the stolen card numbers. How can you protect against these types of attacks?

Choose a merchant service provider that offers fraud protection tools

Fraud protection tools are cheap insurance against cyber criminals. The right tools can make the difference between a successful online presence and being put out of business. Fraud attempts can be eliminated with a rules based fraud detection application that examines each transaction before it is processed. Here are some examples of the rules that can be set up.

If a daily, weekly or monthly number of transactions or total dollar amount is exceeded. Flag transaction for review or auto decline
If a user tries a credit card X number of times, flag or decline
If the first XXX digits of a credit card are attempted, flag or decline
If daily, weekly or monthly number of transactions or total dollar amount attempted from a single IP address or block of IP addresses, flag or decline
Ban a single IP address or blocks of IP addresses
Ban specific credit cards
Ban geographic areas

More information on our fraud detection software.

Last, make sure your customers know the effort you have made to protect them and their credit card information. By taking the appropriate steps to protect your customers you are laying the foundation for a very successful online presence.

Introducing ProCharge: Free Mobile Processing with no gateway fees

Alex Neir — Fri, 15 Mar 2013 18:20:00 GMT

ProCharge is our exciting new offer that allows existing merchants to add a mobile processing terminal to their merchant account with no additional processing charges. Typically, adding a mobile terminal would require the addition of payment gateway fees. We have worked diligently to eliminate those fees, effectively allowing an additional mobile terminal to be added to the account with only a small equipment fee (mobile swiper).

For non-existing merchants the system can be added along with existing equipment with a conversion or can act as a stand alone account. The option is yours.

The cost of the mobile swiper is $25. The ProCharge app is available for free via the AppStore. For Retail merchants, all that is needed is to enter your current merchant account credentials into the setting for the app, plug the swiper into the headphone jack and the system uses your existing account to process payments. Its like adding an additional wireless terminal to your account for a one-time cost of $25. It doesn’t get much easier or cheaper than that.

MOTO merchants are also supported by ProCharge and the system would be set up the same way as the retail merchants.

The ProCharge system also comes with all the features and functionality you would expect from a enterprise level payment gateway without the cost. Gateway features include access to transactions, batches, and reports, access via the mobile device, virtual terminal and plug-in, recurring billing functionality and much more.

ProCharge is currently available for Iphone 3,4, and 5, as well as the Ipod Touch 3 or higher, and Ipad 2, 3, and Retina. The Android operating system is not currently supported but will be in 2 months. Our development team is working tirelessly to roll it out.

For more information please call our friendly support staff at (800)917-8026

How to set up credit card processing for your website

Alex Neir — Fri, 01 Mar 2013 23:33:00 GMT

Throughout the world, more and more people are turning to buying online instead of in the store, making a business's website credit card processing system one of the most important elements of their online presence. Not only will a credit card system encourage buyers to make an easy purchase, but it opens the business's website up to an international market.

Accepting Payments

The two main ways to accept credit card payments online are:

A merchant account
A third-party merchant or aggregator account

A merchant account is set up via a bank or ISO, and is essentially an account controlled by the business, which enables it to process credit card payments. A third-party merchant takes credit card payments on behalf of the business, usually in exchange for certain fees or a percentage of the profits.

Choosing a Merchant Account or a Third-Party

Merchant accounts are subject to requirements that vary between countries and between banks and between ISO (Independent Sales Organization). Many banks charge a set-up fee in order to open the account, but their individual transaction fees will likely be lower than a third-party merchant's. Choosing an option will be dependent on the business's needs, predicted growth, and ability to sell enough products to cover all fees and associated costs. Due to the variation between companies, it would be best to get multiple quotes from different banks/ISO’s and different third-party merchants that offer website credit card processing.

Setting Up a Merchant Account

A web developer can help a business set up the credit card processing system on the business's website, but it isn't always necessary. Both merchant accounts and third-party merchants have customer service representatives and instructions to allow the site owner to set up the processing system on the site. With a lot of third-party merchants this is as simple as copying the embed code from the third-party site and placing it into the HTML of the business's website. More complex website credit card processing systems may require more time or expert help, but the result is a professional, streamlined way for customers to pay for their purchases online.

Things to Keep in Mind

All small businesses should be able to make informed decisions on what website credit card processing system works best for them. Keep in mind the following:

Fees, including start-up fees and the cost of each transaction
Length of time for approval when applying for a merchant account
Length of time for setup on the site, especially in more complex systems
Quick, efficient, and knowledgeable customer support for the business
Length of contract and terms of cancellation
Security and fraud protection
Ease of use for both the business and customers
Ability to generate reports
Virtual terminals, shopping carts, and complete integration with e-commerce

With online credit card processing, businesses are able to increase their sales and not only attract more customers, but keep them as regular shoppers. Setting up a credit card processing system may take research in the beginning, but it provides additional benefits in sales and customer service, as well as reaching an international market.

5 tips for selecting a merchant service provider

Alex Neir — Fri, 08 Feb 2013 20:14:00 GMT

Selecting a merchant service provider can be a daunting task. With so many companies claiming to be an expert in the industry, how do you make the right selection? Here are a few tips to guide you on your quest.

1. Ask as many questions as possible

In order to feel comfortable with the company you select you will need to ask a few questions. The more questions you ask the better feel you will get from the provider.

Here are a few questions to ask when selecting a merchant service provider:

What are interchange fees and how are they determined?
What price structure will be set up for my business?
What can I do to make sure my credit card sales qualify for the best rate?
How will my fees be deducted from my account?
If I need equipment will it be leased or do I have the option to purchase it?
Is your equipment proprietary?
What is the early termination fee?
Is there a monthly minimum fee associated with the account?
What is the annual fee for the account?
What is the PCI Compliance charge?

2. Avoid a processing account from the banks

Merchant services and credit card processing is a specialized industry. You wouldn’t go to your dentist to get gallbladder surgery would you? No, simply because your dentist specializes in a particular part of the body. The same is true of the banking industry. The banks specialty is storing and lending money, not processing credit card transactions. Go with a specialist and your experience will be much better.

3. Understand how the fees are calculated

Understanding the fees associated with the account is very important. The credit card processing industry has intentionally made fee calculation cumbersome so that merchants don’t understand what they are being charged. Avoid this issue by taking some time to understand how the fees are calculated. If the provider you are speaking with is unwilling to explain it, move on.

4. Avoid an account with a cap

If the processor you are working with has an account cap that can’t be exceeded, move on. Most provider will have soft limits set up on the account. The soft limit represents the boundaries the processing account is set up with. These limits can be exceeded, hence the name soft limit. If your account is not able to exceed these limits it can inhibit your business growth.

5. Ask more questions

The more questions you ask the better your experience will be. Make sure you ask about the processors better business bureau standings, ask about the history of the company and their merchant attrition rate.

These tips will help arm you with the best information so that you can make the right decision for your business.

Credit Card Surcharge: New Rules

Alex Neir — Thu, 24 Jan 2013 21:37:00 GMT

Credit card surcharges have been a hot button in the industry for a number of years and recent changes to Visa regulations have opened the doors for merchants to begin charging a surcharge to customers that wish to pay via credit card.

Credit card surcharging is still illegal in the following states: Texas, Oklahoma, New York, Massachusetts, Maine, Kansas, Florida, Connecticut, Colorado and California. So if you conduct business in any of these states it is illegal to add a surcharge to credit card transactions per state law, which always supersedes regulation of a particular company (Visa).

The rest of the nation has limited authority to surcharge customers starting on Jan. 27^th, 2013 based on the rules established by Visa Merchant Surcharging regulations. It is strongly recommended that you review these rules before instituting a surcharge for credit card use to ensure you are in compliance.

Here is a condensed description of what is going to happen:

Your business must notify your credit card processing acquirer and Visa at least 30 days prior to establishing a surcharge.
You may only apply a surcharge to credit card purchases. You are not allowed to surcharge debit cards or prepaid cards.
You may only surcharge an amount equal to or less than the discount rate established by your processor.
You must disclose the fact that you are surcharging credit card transactions as a fee. You must clearly disclose the surcharge amount at the point of sale, online and on the credit card receipt.

Remember:

You cannot surcharge American Express
You cannot surcharge a debit or prepaid card in any circumstance
You cannot surcharge more than you are being charged to accept the card

These rules have been made part of the Visa processing guidelines that govern your merchant account. So, breaking these rule constitutes a violation of your card processing agreement and will result in your account being closed and your business being placed on the TMF list.

While this new regulation may seem like a benefit to your business it is strongly recommended that you proceed with caution if you intend on implementing a surcharge. The preferred method of payment for most customers is a credit card. So charging the customer more for using their preferred method of payment may alienate your business and drive customers to the competition. A good approach may be to test it for a month and pull it back to gauge the response of your customers.

Free Gift Card Program

Alex Neir — Mon, 07 Jan 2013 22:25:00 GMT

Maxx Merchants is proud to announce a completely free* gift card program. That’s right free.

Gift cards are a proven method to enhance customer loyalty and boost sales. A typical gift card solution can cost between $250 and $500 to start and has associated monthly processing fees. Maxx Merchants wants to give your business the ability to deploy a gift card solution for free. The only cost associated with the program is the cost to order additional gift cards and we’re giving you 50 to start – free. That way if the program has benefit for your business you can order more cards. If the program doesn’t work, simply never order more cards. You will be charged nothing. It’s that easy.

Benefits of a gift card program include:

Build loyalty – Offering your customers more options enhances their experience and builds trust in your brand.
Increase sales – Plastic gift cards generate 2 to 10 times more sales than paper certificates.
Enjoy float or slippage – On average 10% to 15% of all gift cards are never redeemed
Rewards – Reward loyal customers with a free gift card
Ease of use – Gift card program utilizes the equipment you are already using to process credit cards.
Build you customer database – Gift card users volunteer their contact information that can be used to build marketing programs.

Maxx’s free gift card solution includes:

Free 24/7 technical support
Hundreds of card design choices to choose from or submit your custom artwork – free. No artwork set up fee.
Front and back of cards are printed and customizable – free.
Free electronic card proof prior to print
The first 50 cards – free
Free marketing package which includes
1. 4” x 6” Acrylic Table Tent
2. 5” x 7” Acrylic Display with Card Holder
3. Acrylic Display Insert
4. 2 ½” Round Stickers
5. 3” x 5” Vertical Sticker Pack
6. Single Card Holders or Envelopes

*Free program is available to merchants with a Maxx Merchant's processing account.

Merchant Services in Denver

Alex Neir — Thu, 20 Dec 2012 19:30:00 GMT

Looking for a merchant service provider in the Denver and surrounding area? Choosing a local provider can be a great benefit as a face to face relationship establishes trust on both sides of the account. With so many merchant service providers offering service it can be overwhelming to select one.

The first piece of advice when selecting a merchant service provider in Denver, allow enough time to evaluate the company, proposal and contract. Rushing into an account will ensure a bad experience. Rates for accounts in Denver can vary greatly and so can the contract term.

Here are a few items to consider when evaluating companies in Denver.

Experience – An important aspect of selecting a provider is their experience and history. Look for companies that have been in business for over 10 years. Also, inquire as to the specality of the firm. Make sure they specialize in the type of account you are looking for.
Merchant Attrition – This is a fancy word for merchant turn over. Ask what the attrition rate is. The higher the rate the more turn over there is with merchants that work with the provider. This is a good indication that the provider does not have the merchants best interests in mind.
Services – What services are offered and are they complementary? Many providers will offer a number of different services and thats great if they complement one another. Problems arise with firms that try to do too much for too many. Select a firm that concentrates on electronic payment processing.
Rates and Fees – As mentioned earlier, rates and fees can vary dramatically from provider to provider in Denver. There are also many different pricings programs that can be set up. Familiarizing yourself with pricing can be a huge savings when negotiation the account. Here is a great reference on merchant account pricing.
Technology – The technology the provider offers will be an indication of their business investment. Make sure they offer leading technology. This is especially important in the ecommerce industry.
Customer Support – Mentioned last in the list but is absolutely the most important aspect when selecting a provider is the support. Make sure you select an merchant service provider that offers a dedicated representative as well as 24/7 tech support.

For more help with selecting the right merchant service provider in Denver, download our merchant services survival guide.

Merchant Account Best Practices | Simple guidelines

Alex Neir — Thu, 29 Nov 2012 21:02:00 GMT

Whether you are looking to start your first merchant account or you have been accepting credit cards for years, this post is intended to give you some simple and effective credit card processing guidelines. Following these simple rules will ensure you don’t experience any unnecessary headaches with your merchant account.

Don’t rush into an account. The credit card processing industry has many moving parts and there are quite a few things to consider when opening an account. Give yourself enough time to do the research necessary to make a good decision. Selecting the right service provider can make the difference between a great experience and a miserable one. Make sure you understand how you intend on accepting credit cards now and in the future. There are many different account types depending on how you interact with your customers. Choosing the right account type ensures the very best rates are available to your business. Make sure you understand how interchange works. The majority of the fees paid to process credit cards come from the credit card interchange networks. Understanding how the interchange fees are calculated will help you negotiate the best deal on the account. Make sure you ask questions on items you don’t understand and develop a working relationship with a service provider before you sign up. Make sure you select a provider that has a dedicated account representative for you to work directly with.
Abide by the rules. The merchant service agreement outlines the rules and regulations for the use of the account. Make sure you understand the length and term of the contract. Make sure you understand what you have been approved to sell. During the application process you indicate the products and/or services you intend to sell. The rules for a merchant account stipulate that you are only allowed to accept credit card payments for the products/services approved on the application. Selling something else with the account can lead to the account being terminated and the business placed on the MATCH list.
Angry customers can hurt your business. Make sure that you respond to customer billing complaints immediately. Customers that can’t get their billing complaints resolved with the business will contact their credit card issuing bank or the credit card association and initiate a chargeback. Excessive chargebacks can also lead to the account being closed by the processor not to mention hefty fines for each occurrence. The best defense is a a good offence. Makes sure your customer service number is displayed on your customer’s credit card statement along with your business name. That way they will call you first. Make sure you answer their call and help resolve their issue.
Stay within your limits. Your merchant account will have certain limits established for the high ticket amount and total monthly volume that can be processed with the account. These limits are known in the industry as soft limits. There is always a little leniency for exceeding the limits on the account but it is always a good idea to know your limits and be proactive if you intend on exceeding them. For example if you know you are going to exceed your high ticket amount with a certain sale, call in for authorization first. This demonstrates good management and will make it much easier to increase your limit amounts in the future.

Cheaper than Square Up | Swipe rate of 2.25%

Alex Neir — Thu, 15 Nov 2012 23:34:00 GMT

Maxx Merchants is proud to announce a new mobile processing platform that is much cheaper than Square Up, GoPayment or PayAnywhere. In addition to the cheapest rates available for mobile credit card processing we are proud to declare live human support!

Square Up has established a niche in the credit card processing industry by offering simplified credit card processing targeted for mobile businesses that process smaller monthly volume. With this simplified approach, two large pain points have been uncovered.

The first is the fact that Square Up has no customer service. If issues arise with a Square account there is no one to call to troubleshoot the problem. This can be extremely frustrating especially if you are with a customer and have no other way to secure payment.
The second is the fact the Square Up routinely holds merchant funds and also initiates a reserve on the account without merchant authorization. This is a legal practice as Square Up operates as a payment aggregator.

Wouldn’t it be nice if you could get all the simplicity of Square Up, achieve a lower rate and have a customer service organization available 24/7 that is staffed by live humans? Well now you can!

Benefits include:

No Registration Fee
No Access Fee
No Semi-Annual Fee
No Data Breach Fee
No Monthly Gateway Fee
No Termination Fee
Process on a Computer
Free Mobile App
Free Smart Phone Swiper (iPhone, Android, Blackberry)
Free Customer Support with a Real Live Human

Square Up and PayPal are Payment Aggregators | Benefits and Drawbacks

Alex Neir — Fri, 19 Oct 2012 19:56:00 GMT

First let’s discuss what a payment aggregator is. A payment aggregator establishes a merchant account and then lets other businesses accept credit card payments and bank transfers on the aggregators account. The payment aggregator facilitates the credit card transaction or bank transfer on behalf of the business. The business is then paid by the aggregator for the completed transactions.

The benefit of using an aggregator’s account to facilitate electronic payments (Square Up or PayPal) include:

Fewer requirements for establishing the account. Most aggregators require only simple contact information and rarely require any financial documentation or credit information.
Simplicity of set up. Most of the time the account can be applied for and set up immediately.
Ease of use. Most aggregators have identified a niche market and have simplified their system to accommodate their target market. For example Square Up is ideal for low volume mobile merchants that want to achieve a swiped card rate. PayPal’s niche is low volume internet businesses that want a simplified payment processing solution for website stores.
Cheap. Most aggregators pricing, for facilitating electronic payments, is less expensive than a traditional merchant account up to a certain volume level. At what volume should you switch off a Square Up account? At what volume should you switch off a PayPal account?

Drawback of using an aggregator’s account to facilitate electronic payments (Square Up or PayPal) include:

Money is not your money. The business receives a payment from the aggregator. The funds collected from customer’s credit card transactions or bank transfers are the property of the aggregator. The aggregator then makes a payment, equal to the total received from all the transactions, back to the business. Less fees of course. Now these businesses would not be in business long if they withheld funds from businesses that use their account. But it is very important to know that if you violate your terms of agreement they can hold your funds indefinitely. You don’t own that money.
Expensive at higher volume levels. Once your monthly volume exceeds a predetermined level, the cost associated with using an payment aggregators service is more than a traditional merchant account. When using Square Up, once your volume exceeds $4,300 it is cheaper to establish your own merchant account. When using Paypal, once you exceed $2,000 a month you are better off with your own merchant account.

Credit Card Processing with your local Bank | A good idea?

Alex Neir — Thu, 04 Oct 2012 22:19:00 GMT

It is often thought that opening a merchant account with the bank that handles the business checking account is the best way to ensure good rates and quality customer service for credit card processing. While there are instances where this is true, especially with very large business, often times it is the exact opposite.

Here are a few reasons why this is the case.

1.) Credit card processing in not their core competency

Most banks specialize in storing and lending money. Most, if not all have little to no experience in credit card processing and only see it as a way to leverage their customer relationships to increase revenue. Credit card processing is often outsourced to a third party where additional markup is added as a referral to a third party processor. Credit card processing is a completely different industry from the banking industry. The assumption that a bank is most capable entity for the set up and maintenance of a merchant account is similar to assuming a dentist can fix a broken arm.

Your business is much better served through seeking the assistance of a specialized company that only works with credit card processing accounts. Similar to the medical industry, you will be much better served through the use of a specialist and unlike the medical industry you will achieve a much better rate.

2.) The sales represenative is a 9 to 5’er

When working with a local bank to set up an account for credit card processing you will be working with a sales representative that has no financial interest in seeing that your account is set up and set up correctly. More often than not the representative will be a salaried employee working 9 to 5, or worse an hourly employee that will have no financial incentive for helping set up your account.

You would be much better served with a processor that has a sales force that is financially connected to the account creation and maintenance. If the representatives salary is connected to the processing account’s they set up, it’s amazing how efficient and available they become.

3.) Lack of flexibility

Most banks do not have the flexibility to set up merchant accounts on multiple networks. There are a handful of processing networks available and some are better than others depending upon the source of the transaction. For example the Omaha network is better than Nashville for retail swiped transactions. Again, it comes down to the fact that banks are not set up to handle the unique demands of credit card processing. Save yourself a lot of hassle and cost and seek a company that specializes in credit card processing.

Would you like information from a company that has specialize in credit card processing for over 10 years?

Maxx Merchants Virtual Terminal | Overview

Alex Neir — Fri, 21 Sep 2012 19:59:00 GMT

This blog is intended to detail the features and functionality of the Maxx Merchants virtual terminal and payment gateway.

The Maxx Merchants virtual terminal is a web based interface for transacting electronic payment processing functions. The features that will be addressed in this blog include the following:

Credit Cards
- Credit Card Sale – Enter your credit card details to transact payment. The Maxx Virtual terminal lets you configure what fields are presented to the user to capture. This allows your business to customize the sale screen with just the info you require for the sale.
- Credit Card Authorization – Separate authorization lets you authorize a sale and then capture the funds at a later time. Great for businesses that want to authorize the sale with the order is placed and then capture the funds when the order is shipped.
- Credit Card Capture – Capture funds at a future date.
- Credit Card Void / Refund – The terminal has full void and refund capabilities.
Electronic Checks
- Electronic check sale – Electronically capture a check account number and routing number to complete the sale. No longer have your customers mail a check only to then take the check to the bank for deposit. The process happens electronically and speed the whole process up.
- Electronic check void and refund
Recurring Billing – Recurring billing lets you set up intervals with which to bill a customer’s credit card. A very nice option to set up a subscription billing.
Customer Vault – Store your customer’s credit card information off site for easy encrypted retrieval. Each customer’s sensitive data is tokenized and stored off site on our secure servers. Customer data is easily retrieved by looking the customer up by last name and is returned with all credit card information masked.
CertifyPCI – This module offers additional certification pertaining to the payment card industries data security standards.
iSpyFraud – This module offers robust and configurable fraud detection rules that examine incoming sales to limit potential fraud losses
Reporting – The reporting module lets you examine all transactions run through the virtual terminal or payment gateway and holds those transactions for up to 7 years.

If you would like take advantage of a virtual terminal solution for your business please provide us with your contact information and a representative will be in touch shortly.

Chargeback Tips | How to limit them

Alex Neir — Wed, 12 Sep 2012 19:28:00 GMT

A chargeback is an element of accepting credit cards that cannot be eliminated. The ability of card holders to chargeback a transaction is a function of the security the credit card associations and credit card issuing banks developed to make consumers feel safe and secure with the use of credit cards.

A chargeback occurs when a customer calls their issuing bank to dispute a charge that appeared on their statement. Common reasons for customers to begin the chargeback process include, but are not limited to the following:

Unrecognized transaction on customer's statement
Fraud occurred
The quality of the service or merchandise that was received did not match what was promised
Incorrect amount charged
Transaction was not authorized
Consumer never received the service or merchandise promised

Based on this list, chargebacks cannot be eliminated. There are always circumstances that result in a chargeback but following a few simple tips can drastically reduce their frequency.

First, always ensure that the name that the customer recognizes is the name that appears for the transaction on the consumer’s bank statement. This is typically the DBA (Doing Business As) name that was used when creating the merchant account. If your business is Carl’s Super Store but the DBA that was used is Freedom Electronics there will be an increase in chargebacks as the customer will not recognize the name.

If you are contacted by an issuing bank with notice of a chargeback, make sure you respond within 12 business days. The issuing bank will usually request a sales draft to check the signature against what the bank has on file. It is recommended that the business retain sales drafts or credit cards receipts for up to 18 months.

Retail Merchants

If you are a retail merchant (have a retail store) make sure you always swipe the credit card through the terminal and get a signature on the receipt. If you must key the transaction in, make sure you get an imprint of the credit card and have the customer sign the imprint.

Internet or MOTO Merchants

If you are an internet merchant or mail order, telephone order merchant make sure you are using AVS (Address Verification Service). This service compares the address information provided by the customer with the information the bank has on file.

Make sure your processor includes your customer service number with your business name to be displayed on customer’s bank statement.

If you are selling expensive service or merchandise make sure you have an authorization contract signed by the customer. It is also a good idea to request a copy of the customer’s driver’s license to verify the signature on the authorization matches their driver’s license. This will eliminate the instances where the customer intentionally signs the authorization incorrectly so that it will not match the bank signature.

For more help with chargeback compliance and chargeback defense please contact our friendly staff at (800)917-8026.

Authorize.Net Phishing Scam | Beware

Alex Neir — Thu, 06 Sep 2012 19:44:00 GMT

Authorize.Net, a leading payment gateway provider has recently released a statement pertaining to a phishing scam that is currently in circulation via email.

The subject line for the fraudulent email is “Successful Credit Card Settlement Report”. The email explains that the business’s online service has expired and must be renewed immediately or service will be cut off. The email asks for the business to verify the account and to renew. A link is provided to login to the Authorize.net account.

Following the link and providing the login name and password is what the scam is after. Once that information is provided the scammer then has access to the business’s Authorize.Net account and can cause damage.

It is vital that this email not be responded to and that the attempt is reported to Authoriz.net. If you or any of your employees have responded to the email please contact Authorize.net immediately to determine if any fraudulent activity has been made.

As a general rule, never respond to email requesting information pertaining to sensitive information. It is best to contact the company that appears to have sent the email to verify the authenticity of the communication.

Android Credit Card Processing | Features and Pricing

Alex Neir — Tue, 28 Aug 2012 20:14:00 GMT

Accepting credit card payments from your Android based mobile phone is an easy and secure way to speed up the payment process for your business. Whether you have a brick and mortar retail store and want to expand operations at tradeshows and fairs or you have a mobile business, Android credit card processing is an inexpensive way to increase your business sales.

The solution consists of a downloadable application available through the Android Marketplace and a swipe device that plugs into the headphone jack of the smart phone. The Android credit card processing solution can be added to an existing merchant account or started new. The process for completing a sale consists of launching the application on your Android phone, swiping the customer credit card through the swipe device and entering the required information. Customer signature is captured directly on the device with an emailed receipt to the customer’s email address.

Features include:

Credit card sale
Void / Refund
Transaction history available on the phone and through the payment gateway. The payment gateway is a separate interface for complete customer transaction information and history.
Inventory tracking
Geo-location of the sale
Customer contact information, capture and management
Level II data capture including PO number, taxable amount and tip
Merchant and customer e-receipt
Signature capture

Pricing for the solution consists of a few components detailed here.

Free - mobile processing app
$79.00 - Unimag II Android Card Reader
Payment gateway account

$10 set up fee
$9.95 monthly license fee

Merchant Account

1.49% qualified rate
$0.18 per transaction rate
$9.95 monthly service fee

Batch Processing | An explanation

Alex Neir — Thu, 16 Aug 2012 19:13:00 GMT

When a customer uses a credit card to purchase goods or services, just how does the money get transferred from the customer to the merchant to complete the sale? Batch processing is the technical term and is explain in detail here.

There are three main steps in credit card processing:

The authorization
The capture
The settlement

When a customer’s credit card is swiped or keyed into the credit card terminal the first thing that happens is a request for authorization is transmitted. The communication comes from the merchant account and is sent to the bank that the customer’s credit card was issued from. The authorization will check that customer's account to make sure they have the funds necessary to complete the transaction. If they do, a hold is placed on the funds and an approval is sent back to the merchant account.

This process continues with all the other transactions over the business day. At the end of the day the business needs to collect on all the authorization holds that have been placed for the day’s credit card sales. At this point the business needs to capture and settle the authorization holds. This is the job of the batch process.

Batch processing can be setup to occur automatically or it can be a manual process. This depends on the specific requirements of the businesses. The batch process can be run more than once a day, if need be, however there is typically a charge associated with the batch process so you will want to factor that into your decision if you would like to run it more than once at the end of the business day. The batch processing component first contacts the banks where the authorization holds have been placed. It then captures the funds on hold and then transmits the funds to the merchant account. Once all the funds have been captured the funds are then deposited or settled to the bank account on file with the merchant account. The batch process takes between 24 to 48 hours to complete at which time the business will see a deposit in the account matching the total reported by the batch process.

It is very important for the business to examine the bank account to ensure the total deposited matches the amount reported by the batch process. If there is a discrepancy you will want to contact your processor immediately to determine where the error has occurred.

Electronic Check Guarantee | Worry free check acceptance

Alex Neir — Wed, 25 Jul 2012 19:44:00 GMT

The two previous blog posts have covered electronic check verification and electronic check conversion, so now it’s time to cover the last service offered for electronic check acceptance, electronic check guarantee.

Traditional check acceptance creates a liability for the business with customers who write bad checks. Electronic check verification is a service that can verify customer funds are available prior to payment acceptance. However, if the customer removes the funds prior to settlement the business will be unable to collect the money owed. The solution to this problem is an electronic check guarantee system.

What is electronic check guarantee?

An electronic check guarantee solution guarantees your customer’s payment regardless if the check is collected upon or not. The solution provider assumes the risk of insufficient funds so that your business does not have to.

How does it work?

Upon check out the customer’s check is scanned using a check scanner or keyed into the electronic check acceptance terminal.
The guarantee solution checks the customer in the bad check writer’s database.
If the customer shows up in the database the check is declined.
If the customer does not show up in the bad check writer’s database the check is approved.
Upon settlement, if the customer’s account has insufficient funds, the guarantee solution will deposit the full amount of the check into the business banking account. The guarantee solution then adds the customer to the bad check writers database.

If your business accepts a lot of checks an electronic check guarantee solution can be an invaluable product. This solution frees you up to focus your attention on the business and to forget about collection efforts.

Would you like more information on an electronic check guarantee solution?

Electronic Check Conversion | Eliminate trips to the bank

Alex Neir — Thu, 19 Jul 2012 19:37:00 GMT

Last week we covered the topic of electronic check verification so now we are moving on to electronic check conversion. Traditional check acceptance requires a business to physically deliver checks to the bank for deposit. What if you didn’t have to travel to the bank to deposit your checks? What if your deposits were electronically transmitted to the bank for deposit? Would that time savings amount to more revenue for your business? If so, electronic check conversion could be a time saver and money maker for your business.

What is electronic check conversion?

An electronic check conversion system allows your business to scan the customers check creating a digital copy of the check. The system then stores the check image for electronic deposit into your business bank account. Once the check is scanned it can be returned to the customer with the receipt. You no longer have to hang on to the customer’s check which eliminates the risk of losing the check prior to deposit.

Combining electronic check conversion with check verification and guarantee ensures that your business is protected from check fraud and risk of insufficient funds. With a check verification service, the system contacts the customer’s bank account as soon as the check is received to make sure the account has the funds necessary to complete the transaction. If successful the system provides an approval code stating that the account has funds. One thing to keep in mind, if the customer were to go to their bank and withdraw all the money in the account before the deposit is made the check could still bounce. A check guarantee system can protect your business from this scenario.

A check guarantee system guarantees the funds to your business regardless if the check bounces. This service provides peace of mind if you accept a lot of checks or have issues with customers writing bad checks.

Would you like information on our check conversion service?

Electronic Check Verification | Accept checks like a credit card

Alex Neir — Fri, 13 Jul 2012 18:59:00 GMT

Electronic check verification is a handy service if your business accepts a lot of checks. Traditional check acceptance exposes your business to risk of loss due to bounced checks. With an electronic check verification service your risk is reduced through funds verification prior to rendering service or providing goods.

How does electronic check verification work?

The electronic check verification system includes a check scanner. There are multiple check scanners available and most also function as a credit card terminal. When a customer hands you a check to pay for goods or service the check is either run through the check scanner or the routing and account numbers are typed into the terminal. The scanner then communicates with the customer’s bank to make sure that the customer has enough money in their account to complete the transaction. You will receive an authorization if the transaction is successful. If the customer’s account does not have enough money you will receive a decline.

This process gives you peace of mind when accepting checks. No longer will you have to wait for your bank to tell you that a check cannot be cleared resulting in a loss for your business. In addition to the electronic verification service there are a couple more services that are available.

Both these additional services will be discussed in detail in the next postings so please look forward to that. If you would like more information and pricing for our check verification platform simply click.

Bad Merchant Service Provider | Tips on how to avoid them

Alex Neir — Fri, 29 Jun 2012 17:31:00 GMT

With so many companies offering merchant services it easy to find numerous providers that are interested in only one thing - taking your money. Accepting credit cards is important for a business to be successful, however selecting the right merchant service provider is as important, if not more.

When shopping for a merchant service provider it is advisable to give yourself ample time to review and understand the account before moving forward. Rushing to get the account set up is the fastest way to lock yourself into an account and contract that is unfavorable. Make sure to read the entire agreement and ask questions on the items you are unsure about. A bad merchant service provider will be unwilling to spend the time necessary for you to feel comfortable with what you are signing up for.

Remember, you get what you pay for. The cheapest provider is usually a good indicator for a bad merchant service provider. No merchant service provider can attain wholesale pricing lower than another. That being the case, everything costs the same so the price charged should be about the same. If a provider is advertising rates significantly lower than the market rate they will make it up somewhere else. It’s simply a fact.

A bad merchant service provider will be pushy with the sale and inevitably try to lease equipment or charge a huge mark up. Never, repeat never, lease processing equipment, you end up paying upwards of 10 times the actual cost of the equipment. Check prices for equipment on the internet so you know about what the equipment should cost. If you are being charged significantly more, you have an idea that the provider is not acting in your best interest.

A good provider takes the time to help you understand what you are signing up for. The rates for the service are clearly outlined and explained. A good provider is willing to negotiate the rates so that you are comfortable with the pricing.

The merchant services industry is extremely competitive and in order to stay in business a provider must offer good service and rates. Make sure to check the age of the company you are considering. If they have been around for 10 years or more, chance are they are doing something right.

Merchant Account Terminal | What to consider

Alex Neir — Tue, 19 Jun 2012 21:36:00 GMT

When signing up for a new merchant account for your business you have many options when it comes to the merchant account terminal you will need. This article is intended to clarify the various merchant account terminal types to help you identify the terminal that is best for your business.

Merchant account terminal types:

Retail terminal
Virtual terminal
Mobile terminal
Point of sale terminal (POS)

A retail terminal is the most common type of terminal and the type you see at most retail stores across the country. This is the terminal you will need if you have retail store front that your customer visit and hand their credit card to you for payment. There are numerous manufacturers such as Verifone, Hypercom, Nurit, and Ingenico to name a few. You will want to select a manufacturer and terminal that offers the features you are looking for. Some common items to consider:

Do you have a phone line for the terminal to communicate on?
Do you have an Internet connect (IP) for the communication?
Do you need wireless capabilities?
What is your budget for the terminal?

A virtual terminal offers the same functionality as a traditional retail terminal however the interface is typically enabled through a computer. This is the terminal you will want to select if you do not perform face-to-face transactions.

A mobile terminal is a merchant account terminal that is enabled through a smart phone. Years ago the only way you could accept credit card payments in a mobile environment was to purchase a costly wireless retail terminal. Not only was this equipment expensive, but you are also required to purchase a wireless data plan from one of the major wireless carriers which added a great deal of costs. Now, with the abundance of smart phones most credit card processors have a mobile credit card processing terminal that can be downloaded to the phone. The application will be accompanied with a small piece of inexpensive equipment that will allow you to swipe your customer’s credit card to complete the sale.

A point of sale (POS) terminal is a merchant account terminal that is integrated or a part of a larger system that is set up to manage the entire business. POS systems are usually comprised of a computer, monitor, bar code scanner, credit card swiper and has lots of functions that stretch beyond payment processing. If you have a POS system you will want to make sure that the system supports the credit card processor you select. Not all processors work with all POS systems.

5 pitfalls to avoid with your ecommerce website

Alex Neir — Tue, 12 Jun 2012 19:19:00 GMT

Let’s face it, the Internet is as big as the industrial revolution in how it is reshaping the landscape for commerce. That being the case your business’s website is a giant extension of your brand and ability to deliver goods and services. So, are you making it easy for your customers to buy from you on your ecommerce site? We have put together a list of things you should try to avoid in the hopes of stream lining your online offerings.

1. Your website is slow

Speed is everything in this instant gratification society. If your customers have to wait around for your site to load you are going to lose them. It’s that simple.

However, site speed can be a tricky. You want to make sure you have a good hosting company that understands your business type. You also want to make sure the shopping cart you select is optimized for your site. Little site improvements can speed up the load time and will result in more conversions.

2. Your website is cumbersome

It is very important that your customers be able to buy from your site in less than 5 clicks. Research shows that conversions rates drop considerably once the 5 click threshold is breached. The lesson, condense the site and improve the flow. Customers want a clean, easy and quick check out.

3. Your credit card capture page is not intuitive

There is an industry standard for the order in which credit card information is to be entered. Do not waiver from this standard. Statics show that customers have become trained in how they enter credit card information. If the order is altered the customer is likely to make a mistake and their experience is degraded.

4. Overcharging for shipping

Some sites see shipping as a revenue generator. Others try to lower prices below the competition and make it up in shipping. Savvy consumers are factoring shipping as part of the total cost to purchase. The best thing you can do is reduce your shipping cost to as low as possible and pass those savings on to you customer.

5. Poor browser optimization

If your website is not optimized for all the different browsers that your customers are using, you are losing sales. Have you ever been to a site that was missing information or formatted incorrectly? What did you do? Did you stick around to try to navigate through to find what you were looking for? My guess is no, you simply hit the back button and when to another site. That is what you customers are doing if you’re not browser optimized.

Master Card Fraud Alert

Alex Neir — Tue, 05 Jun 2012 17:24:00 GMT

Master Card has announced a fraud alert. If you have received a “Master Card Security Alert” via email asking you to preform a credit card test transaction, please call Master Card immediately.

Apparently the criminals are asking unsuspecting businesses to conduct a credit card test in which the details of the transaction are to be sent to an email address that is not associated with Master Card. The intent is to acquire merchant transaction information in order to complete fraudulent transactions and refunds using stolen credit card information.

You should never receive an unsolicited phone call, email, social media request or fax request from Master Card. If you are contacted by someone that claims affiliation with Master Card, please do not respond and report the inquiry to Master Card at datasecurity@mastercard.com.

Small Business Credit Card Processing | What to consider

Alex Neir — Wed, 30 May 2012 20:34:00 GMT

Given the state of the market today it is becoming increasingly unusual to find a business of any size that does not accept credit cards. Even the smallest mobile business are accepting credit card payments given the decreased cost of mobile processing solutions. In addition, the internet makes it possible for any business to remain open and profitable around the clock with an ecommerce solution.

There are numerous companies offering small business credit card processing solutions. However, the level of service can very dramatically for one provider to another.

So, as a small business what considerations are necessary if you are ready to proceed with a credit card processing solution?

Considerations for selecting a small business credit card processing partner.

All credit card processing providers offer their service in exchange for a fee that is tied to the transactions completed by the merchant or business. These fees are made up of the following:

Interchange – this is the fee changed by the bank that issued the credit card the customer is using to pay with. This fee is a fixed cost and cannot be negotiated. The fee or rate represents the wholesale price of accepting credit cards. The fee is made up of a percentage of the sale, as well as a per transaction cost.
Association Dues and Assessments – these fees are charged by Visa, Master Card, Discover etc. and are also a fixed cost that can’t be negotiated.
Interchange Markup or Margin – this is the additional cost the credit card processor adds on to the interchange, dues and assessments in order to make a profit. This fee is negotiable and is determined by the risk profile associated to the industry of the business seeking an account.

As a small business it is important to understand that you have the ability to negotiate the markup charged by the processor. It is also helpful to understand the different pricing structures for credit card processing.

While price is an important factor when choosing a provider there are also other elements that should be considered.

Track Record – How long has the provider you are considering been in business? Ask for references if possible. Check the provider in the better business bureau. Also, check services like the rip off report.
Merchant Agreement – Make sure you review the agreement carefully before signing to make sure you understand the agreement you are making.
Network Compatibility – When looking to deploy the processing solution you want to make sure that the provider you select has adequate network compatibility to work with any existing equipment as well as future equipment.
PCI DSS Compliance – The Payment Card Industry Data Security Standards are the rules set up by the federal government for the protection of card holder data. It is very important to select a provider that is PCI DSS compliant.
Support – Some providers do not offer round the clock support. Additionally, it is common for most providers to outsource support overseas where it is difficult to get the proper level of tech support. There is nothing more aggravating than having an issue with your income and not getting the help you need.

We hope this is helpful as you consider small business credit card processing. If we can be of assistance please don’t hesitate to call our friendly staff at (800)917-8026.

Mobile Credit Card Processing | Top questions to ask

Alex Neir — Thu, 24 May 2012 19:21:00 GMT

The development of mobile credit card processing establishes a cost effective mechanism for any business to expand its reach. As this technology matures the solutions that are available for mobile credit card processing are more abundant, simpler and faster than ever. Is a mobile processing solution right for your business?

As more merchants adopt mobile technology it’s easy to argue its influence on simplifying sales. A mobile credit card processing solution can be used to transact sales from anywhere a cell phone can be used. This produces an environment in which revenue can be generated virtually anywhere. A mobile processing solution augments your payment acceptance options weather you have a retail store, ecommerce site or mobile sales organization. Here are the top questions to ask yourself as mobile processing solutions become more affordable and available.

What is interchange | We explain

Alex Neir — Tue, 08 May 2012 17:07:00 GMT

What is interchange when referring to your merchant account pricing? This is a common question that once understood can help you to drastically reduce your credit card processing costs.

What is interchange?

Simple – it’s wholesale. Wholesale is the price the manufacture sells the product to the retailer at. The retailer marks up the price and then sells the product to the consumer. This same thing happens with credit card processing.

The credit card associations (Visa, Master Card, Discover, American Express, etc) and the issuing banks (Chase, Capitol One, etc) set the wholesale price for processing credit cards. This wholesale price is called interchange.

The processor then marks up the wholesale price or interchange price and that is the pricing you see on your merchant account statement each month. Just like every other wholesale to retail industry there are no set standards on the mark up for the credit card processing industry. Therefor if you do not understand the margin that your processor has built into your rates it’s hard to know if you are over paying for the service. Here is a detailed analysis of how the interchange margin is calculated.

No one can pay less than wholesale or interchange to process credit cards, so the closer you get to interchange the better deal you have received.

Would you like a wholesale or interchange pricing quote? Simply provide us with some information on your business and a representative will generate a pricing proposal.

Android Credit Card Processing | Simple mobile payment processing

Alex Neir — Fri, 04 May 2012 21:20:00 GMT

Are you looking for a simple way to accept payments from your Android mobile phone? There are a few solutions out there and some are better than others depending on your total or estimate monthly processing volume. For merchants that have a total or estimated monthly volume of $4,300 or less, it is more cost effective to use a solution like Square Up. For businesses that are, or are planning to, process more than $4,300 a month, a traditional merchant account is more cost effective.

PayFox is an Android compatible mobile payment processing solution that allows your business to accept card present transactions. The solution consists of the PayFox mobile payment application available through the Android Marketplace combined with swipe device that plugs into the headphone jack of your Android phone.

Card Reader Capability

Multi-direction card capture
The lowest processing rates given swiped transactions
Little to no battery consumption
External power source not required
Small and portable

The solution provides your business a simply, cost effective way of transacting payment on the go. The solution has integrated signature functionality that allows for the customer signature to be captured directly on the device with email receipt capability. There is also built in tip capture for industries that accept tips. The solution is 100% PCI compliant so there is no risk of customer credit card information being lost or stolen. Additional security features reduce fraud with address verification services. The solution also has built in geo-location functionality to add map locations to the receipt.

For more information and pricing please call our friendly staff at (800)917-8026.

Electronic Check Verification and Guarantee | Simple check acceptance

Alex Neir — Tue, 01 May 2012 21:45:00 GMT

Is your business looking for a simplified system for check acceptance? Are you wasting valuable time making trips to the bank to deposit checks? Are you concerned about bounced checks? If you have any of these concerns, an electronic check acceptance system may be your answer.

CrossCheck is a revolutionary system that gives your business the ability to electronically process and settle checks from a single point of sale (POS). Think of the CrossCheck as a system to process checks in a similar fashion to accepting credit cards. The CrossCheck system has two distinct and separate functions. These functions can be enabled together or separately.

Verification
Guarantee

The verification process runs the customer’s check information through their bank to verify the customer has the funds necessary to complete the transaction. The process takes a matter of seconds and returns a recommendation for approval or decline. Check conversion is also available with this process. Check conversion converts the customer check information to an electronic format for deposit in your business checking account.

The guarantee process guarantees the customers check and protects your business from losses associated with bounced checks. Check conversion is available with this process as well.

Both processes are available with a supported check reader. The guarantee process with conversion requires a check imager. A check reader scans the check and reads the account and routing number automatically. A check imager captures a picture of the check so that the original can be returned to the customer.

Would you like more information on CrossCheck? Simply provide you contact information and a representative will be in touch shortly.

Interchange credit card processing | A simplified overview

Alex Neir — Thu, 19 Apr 2012 20:50:00 GMT

Understanding how interchange affects your business’s credit card processing rates is the single most important thing you should know. Interchange credit card processing is the least expensive way to process credit cards.

Interchange represents the wholesale price of accepting credit cards. The credit card issuing banks and credit card associations sell interchange rates as wholesale to the processing community. The processing community then marks up interchange in order to make a profit. So, understanding how that markup is determined can improve your ability to negotiate the very best rates available for your business type.

What is Interchange?

Interchange is network of interconnected financial institutions / banks. Every single bank that issues credit cards to consumers is connected to the interchange network. Connection to the interchange network ensures that the account associated with credit card the bank issues can be accessed by Visa, Master Card, Discover etc. Account access is necessary for money verification (approval) and money collection (settlement).

The credit card issuing banks and the credit card associations control interchange. As a group they determine the fee paid to access the interchange network. The fees are broken down into no less than 185 categories based on the industry of the merchant, how the transaction is being captured and what type of credit card is being used. These fees represent the wholesale rate for accepting credit cards. The amount above interchange that your business pays to process credit cards tells you if your pricing is good, bad or horrible.

Would you like to know if you are overpaying the wholesale interchange rate?

Interchange pricing vs. tiered pricing | Pay attention to the margin

Alex Neir — Mon, 09 Apr 2012 21:59:00 GMT

Interchange pricing and tiered pricing are two popular models used to calculate the rates and fees that your business will be charged to accept credit cards. Both interchange pricing and tiered pricing use interchange to determine the total fees charged for the month.

The term interchange is used to describe the rates that are charged by the credit card associations to accept a piece of plastic as payment. The interchange rates are set by each individual association, Visa, Master Card, Discover, Diners, JCB etc. Interchange rates are associated to each individual transaction according to:

Industry of the merchant (retail, restaurant, supermarket, etc)
Transaction method used to accept the payment (swiped / keyed in)
Credit card type (debit, credit, rewards card etc.)

Here are the published interchange rates for both Visa and Master Card:

Visa interchange rates: http://bit.ly/vPYwoj
Master Card interchange rates: http://bit.ly/Io2IZg

It is helpful to look at the differences between the two pricing models with an actual sales example. The example given below is for a retail merchant that is swiping 3 different credit cards through a terminal. The qualified rate applies to a swiped check card. The mid-qualified rate applies to a swiped rewards card and the non-qualified rate applies to a swiped corporate card.

Tiered Pricing	Rate	Interchange Plus	Rate
Qualified Rate	1.48%	Qualified Rate	Interchange + 0.30%
Mid Qualified Rate	2.29%	Mid Qualified Rate	Interchange + 0.30%
Non-Qualified Rate	3.05%	Non-Qualified Rate	Interchange + 0.30%

Example sales with tiered pricing

Qualification	Sale	Rate	Actual Interchange	Margin	Fee Paid
Qualified Rate	$25	1.48%	0.95%	0.53%	$0.37
Mid Qualified Rate	$25	2.29%	1.15%	1.14%	$0.57
Non-Qualified Rate	$25	3.05%	2.10%	0.95%	$0.76

Example sales with interchange plus pricing

Qualification	Sale	Rate	Actual Interchange	Margin	Fee Paid
Qualified Rate	$25	1.25%	0.95%	0.30%	$0.32
Mid Qualified Rate	$25	1.45%	1.15%	0.30%	$0.36
Non-Qualified Rate	$25	2.40%	2.10%	0.30%	$0.60

The fundamental difference between the two pricing models is that the rate in the tiered model is set at a predetermined level. The interchange plus model fluctuates based on the actual amount charged from Visa / Mastercard / Discover (aka Interchange).

It is important to pay attention to the margin. The margin is the difference between the rate that is charge by interchange and the rate your business is billed. With a tiered pricing structure there is quite a bit of margin built into each transaction. So as the number of transactions raises over the month so does the total margin paid. With Interchange plus the margin is pre-negotiated, stays the same for every transaction and effectively lowers your overall costs.

Merchant Account Virtual Terminal | Transact payment from anywhere

Alex Neir — Mon, 02 Apr 2012 19:41:00 GMT

A merchant account virtual terminal is a cloud based application that allows credit card payments to be transacted from any internet enabled device. This includes laptops, desktops, smartphones and tablets. The beauty of the virtual terminal is that it is accessible from the internet so you can accept payment from anywhere there is access to the internet.

When you sign up for virtual terminal access your business is given a unique user name and password to access the virtual terminal website. Depending upon how you are accessing the virtual terminal there are a few devices that can be incorporated with your account to enable your business to swipe credit cards. Swiping credit cards ensures you receive the very best credit card processing rates. Devices include a MagTek external card swiper that connects to a laptop or desktop via USB cable. There are also a number of swipe devices that are compatible with smart phones.

In addition to credit card acceptance, the virtual terminal also includes a number of value added functions that are not available through a traditional credit card terminal.

Recurring Billing
Electronic Check Acceptance
Electronic Invoicing
Robust Reporting

Recurring billing allow you to set up automatic billing to happen at a predetermined intervals each month, quarter or on an annual basis. The parameters are fully customizable to meet your specific business needs.

Electronic check acceptance gives your business the ability to accept check payments by simply entering the customers checking account number and routing number. This additional functionality helps you cut time and expense associated with traveling to the bank to deposit checks.

Electronic invoicing is a convenient feature that lets you create an invoice that is directly emailed to your customer. Within the invoice is a link for the customer to visit and pay their invoice either by credit card or check.

Reporting gives you access to every transaction processed through the virtual terminal. Transaction information is held in the virtual terminal for 7 years and is accessed through an easy to use reports tab.

If you would like take advantage of a virtual terminal solution for your business please provide us with your contact information and a representative will be in touch shortly.

Telephone credit card processing | Is it right for your business

Alex Neir — Tue, 27 Mar 2012 20:09:00 GMT

Accepting credit card payments is a proven way to increase sales and grow your business. However, it may seem like there is a lot of equipment you need in order to accept credit card payments from your customers. This not always the case as all you need is a telephone.

A telephone credit card processing account allows your business the convenience of accepting credit cards and all you need is a telephone. Once the account is set up you will be given a voice authorization phone number to call when you need to accept a credit card payment. When calling all you need to do is provide the credit card number, expiration date, billing zip code and the three digit code on the back of the card. Once that information is provided you will be given an authorization code that the credit card has been accepted. That’s it. A simple solution to accepting credit cards without the need for expensive equipment.

Another benefit about setting up a telephone credit card processing account is that you can expand the account as your business grows. You can add processing through a smart phone which gives your business the ability to capture customer signatures at the sale. You can also add a virtual terminal which gives your business access to a terminal at the office for instances when your customers call in to order products or service.

There are many conveniences to adding a telephone credit card processing account and very little expense. By making it easier for your customers pay, you are expanding your reach and are creating the infrastructure necessary to grow your company.

Merchant Cash Advance | Quick capital to grow your business

Alex Neir — Tue, 13 Mar 2012 20:23:00 GMT

A merchant cash advance is an easy, quick and cost effective way to get working capital for your business without the headache of a traditional loan. Qualification for a merchant cash advance is far less strenuous than traditional lending instruments. Cash is available in as little as 4 business days and is deposited directly into your business account.

How does it work?

A merchant cash advance allows your business to receive a lump sum payment based on your future credit card payments. You decide how much money you would like advanced. That money is then deposited into your account for use as you see fit. The cash advance is automatically paid back over a predetermined number of months. Over those months a specific percentage of each sale is used to pay for the advance. You have absolutely nothing to worry about as the advance is paid back automatically.

What are the qualification requirements?

Qualification for a merchant cash advance is easy and includes:

A least a 500 credit score
You are currently processing greater than $5,000 a month
Your business primarily swipes credit cards and your average ticket is less than $600
You perform at least 15 batches per month
Your business has been operational for more than one year

If you would like additional information on a merchant cash advance, please provide us with your contact information and a representative will be in touch to discuss the program in detail.

Which merchant account type is right for your business? | We explain

Alex Neir — Mon, 12 Mar 2012 20:26:00 GMT

When considering opening a merchant account it is important to understand that there are a few different merchant account types that your business can qualify for. The type of merchant account that is right for your business will depend on how you are accepting credit cards.

There are essentially two types of accounts that are offered, a swipe account or a keyed account. We will discuss both.

Swiped Account / Retail Account

This account type is set up for establishments that conduct business face to face and transact credit cards via swiping the credit card through a credit card terminal. The approval criteria for a swiped merchant account states that 80% or more of your credit card transactions must be swiped through a terminal. The transaction fees associated with a swiped account are the lowest available. The rates are lower for this account type due to the fact that occurrences of fraud are typically lower when the customer has to present the credit card in person. More information on protecting your business from fraud.

Keyed Account (Internet Accounts, Mail Orders, Telephone Orders, Fax Orders)

Keyed merchant accounts are set up for establishments that do not conduct business face to face. This account type is set up for situations where the credit card information is keyed or typed into a terminal, virtual terminal or website. This type of account represents a higher degree of risk for the processing bank. This is due to the fact that the identity of the customer completing the order cannot be guaranteed. The transactional rates for a keyed account will be slightly higher because of the increased risk of potential fraud. When accepting orders with keyed merchant account it is important to gather as much information as possible to verify the credit card information matches the information on file with the bank that issued the credit card. It is customary to gather the following at the very minimum:

Credit Card Number
Expiration Date
Billing Zip Code
CVV Code

If your business operates in an industry that has a greater degree of fraud attempts if might be advantageous to take advantage of additional fraud prevention tools.

Merchant account credit score | How it affects your application

Alex Neir — Fri, 09 Mar 2012 20:41:00 GMT

A merchant account is a line of credit extended to your business. As such the underwriting criteria for approving a new merchant account includes the credit score of all applicants presented on the application. A bad credit score does not, automatically, mean the account will not be approved. Other criteria are also considered and include; the business’s industry, the method in which credit card transactions are processed (swiped vs. keyed in), the business’s financial strength and business history.

A retail business (traditional brick and mortar) will have an easier time securing a merchant account with bad credit then an internet business or home based business. Additionally, certain industries are considered high risk and it will be more difficult to secure an account with bad credit if your business is categorized in a high risk category.

Another consideration for securing a merchant account with bad credit is to identify a merchant account processor that specializes in account approvals for low credit merchants. Another option is the addition of a co-signer on the account. The co-signer assumes some of the risk on the account and does not need to be a principal in the business.

An ecommerce SSL certificate, do you need one? | We explain

Alex Neir — Mon, 27 Feb 2012 21:12:00 GMT

What is an SSL (Secure Socket Layer) certificate and will you need one if you are selling online? These two questions are explored in this post.

First let’s discuss the SSL certificate. You will only need an SSL certificate if you are setting up and ecommerce website or a website you intend to sell products and services with. When you set up your ecommerce website you will select a company to host your website so that it is accessible from the internet. Once hosted, all of your individual webpages are then accessible to your visitors via a non-secure connection to the webserver where your website is hosted. Presumably your visitors will shop your site and place the items they wish to purchase into your site’s shopping cart. Once the visitor decides to checkout this is where the SSL certificate comes into play. The checkout page asks the customer to provide their credit card information to complete the purchase. This information must be encrypted before it is sent to the merchant account for processing. The ecommerce SSL certificate is the encryption service that makes sure the information collected from your customer is secure while it is communicated to and from your merchant account.

The SSL certificate is set up by your hosting company and is a requirement if you intend on processing your customer’s payments on your website. You do have the option to process the payment on your merchant service provider’s website. In this scenario the customer is redirected to your processor’s website (secure website) when they decide to checkout. The credit card payment information is gathered on the secure site and transmitted to your business’s merchant account for processing. Upon completion the customer is redirected back to your company site.

Both of these processes ensure your business is PCI DSS compliant. The decision is whether you want to provide a seamless checkout process for your customersor not.

If you are interested in selling your products and services online, check out our helpful guide - Sell your products online – A guide to ecommerce.

Annual Payment Processing

Alex Neir — Wed, 22 Feb 2012 19:57:00 GMT

Annual payment processing is one of the more difficult features to get approved when setting up a merchant account. The difficulty in getting this feature approved is due to the increased risk of liability for the processor. Risk of liability is increased for the processor based on the additional time the customer has to chargeback against the business.

With a typical merchant account, products and services are provided in full at the time that the credit card payment is collected. At that point the customer has up to 18 months to initiate a chargeback if the business does not fulfill their obligation to provide the product or service promised. In the situation of an annual payment the business is providing the product or service over an entire year. Therefore, the timeframe for initiating a chargeback is extended an additional 12 months for a total of 30 months of liability for the processor.

It is very important for a business looking to offer annual payment options to disclose this intent to the processor in the application process. Failing to disclose intent and proceeding with annual payment processing can result in a violation of the merchant account contract. Violating the merchant account contract will lead to the account being closed, the business entered on the terminated merchant file and funds for the business held by the processor.

Each business will be evaluated independently to determine if annual payment processing can be approved. Items that increase the odds of a successful approval include:

Strong credit of the applicant(s)
Strong business financials
Strong business history

If you would like a consultation to determine if your business can be approved for annual payment processing please click on the link below and provide us with your contact information. A representative will be in touch shortly to begin the process.

Seasonal Merchant Account | Explained

Alex Neir — Tue, 21 Feb 2012 17:57:00 GMT

A seasonal merchant account is an account that is only open for certain months of the year. The seasonal merchant account is set up to functional only in the months that the business is operational each year. For example a golf course in Colorado may only be open from May to September. Given this scenario it is advantageous to have the merchant account suspend each year from October to April saving the business owner the fees associated with keeping the account open in the months where revenue is not being generated.

Other examples of seasonal businesses:

Christmas Stores
Sumer Youth Camps
Alpine Ski Hills
Fireworks Stores
Ice Cream Shops
Lawn Care and Landscaping
Trade Shows

When setting up a seasonal merchant account you will indicate which months you prefer to have the account open and closed. During the months in which the account is closed your business will not incur any fees related to the account unless there are annual fees that are set to be billed in a month that the account is not active. Make sure to ask for full disclosure of all the fees involved with the account.

Some processors will also allow for the business to turn the account on and off numerous times each year. This is especially helpful for businesses that need a merchant account for trade shows that happen multiple times a year.

Merchant Account Contract Term Length | Explained

Alex Neir — Tue, 14 Feb 2012 18:39:00 GMT

When signing up for a merchant account it is important to understand the merchant account contract term. The term defines the length of time that the contract is enforceable. Knowing the contract term length and early termination fee will help you determine the commitment you are agreeing to.

There are typically 3 types of merchant account contract terms offered.

No Minimum Term
Specified Term
Auto Renew

No Minimum Term: This contract term is open ended without a termination fee. The merchant is free to terminate the contact at any time without penalty.

Specified Term: This contract term is for a specified period of time. The default contract term is usually 3 years. The contract term will be specified in the terms of agreement. If the merchant terminates before the specified period of time a termination fee will be assessed. If the merchant terminates after the contact term has expired there is no penalty assessed.

Auto Renew: This contract term is for a specified period of time and upon completion of the period the contract renews itself automatically for another full term. So if the merchant does not notify the processor of the intent to terminate at the end of the original term the contact will renew automatically and lock the merchant into the terms for another full period.

In conclusion it is important to understand the merchant account contract terms offered by the provider you are considering. Failing to address this item upfront can lead to a frustrating situation down the road.

A Merchant Account without a Personal Guaranty

Alex Neir — Wed, 08 Feb 2012 21:09:00 GMT

Signing up for a merchant account is an important step in extending the payment options your business offers. Signing up for a merchant account also carries financial responsibilities for the owner(s) and business. It is important to understand that a merchant account is a line of credit and will be underwritten with the processing bank as such.

The personal guaranty section of the application states that if the business suffers loses that cannot be covered by the business, the owner(s) personally guaranty repayment of such loses. This section is included in the application as protection from the high amount of risk the processor assumes from businesses that mismanage their account.

What to do if you would prefer not to sign a personal guaranty?

Most merchant service providers have alternate methods to evaluate the financial stability of a business and therefor waive the personal guaranty. The most common options are as follows.

Business Financials
Personal Letter of Credit
Reserve Amount

Business Financials: A business that has been operating longer than one year can supply financial documentation supporting the strength of the company. Typical documentation includes income statements, profit/loss statements and balance sheets. Documentation prepared by a third party is always a plus.

Personal Letter of Credit: A personal letter of credit can be extended that promises a specific dollar amount for a specified amount of time. The terms of the promise to pay are outlined in the credit letter and both parties have to agree for the letter to be binding. This is often a good solution if the business financials do not satisfy the requirements to waive the personal guaranty.

Reserve Amount: In the event that neither of the aforementioned solutions will satisfy the processor requirements to waive the personal guaranty, a reserve amount might. A reserve amount is a specific dollar amount that is held by the processor. A reserve amount will also have specific terms that outline how much will be held and how it will be collected. Typically a percentage of each settlement is withheld until the reserve is fully funded. Once the reserve is fully funded the processor holds the money in the event that the business is unable to fulfill the obligations of the account. The reserve amount is fully refundable if there are no contract violations.

Merchant Account Changes | Selling new products

Alex Neir — Tue, 07 Feb 2012 21:02:00 GMT

Do you currently have an approved merchant account and looking to sell new products or services in your retail store or on your website? This post is intended to outline the rules imposed by your processor with regard to changing the products or services your business sells.

When your business originally applied for your merchant account you were required to give a description of the products and services you intended to sell. This product and service description was used by your processor to determine the SIC code for your business. The SIC code associated with your business determines the risk category used to underwrite and approve the account.

It is important to understand that the risk associated to the products and services you sell is significant to the processor that approved the account as they are ultimately responsible for any chargeback liability. Certain products represent less charge back risk, examples include; shipping, restaurants, screen printing, office supplies etc. Other products represent higher risks for chargebacks, examples include; electronics, travel, pharmaceuticals, auctions etc. It comes down to the fact that some products have a higher level of fraud associated to them as thieves attempt to acquire them.

In conclusion if you are looking to change or add new products and services to your business you will need to determine if the new offering resides in the same SIC code classification for the account that you were originally approved for. If they do you can usually sell and accept payment with your current account. If the new or changed products and services are outside of the SIC classification of your current account you will need to apply for a new account. If you are unsure, it is advisable to contact your processor. There can be serious consequences if you violate your merchant services agreement by selling unapproved products.

Mobile Payments | As a retailer should you care?

Alex Neir — Tue, 31 Jan 2012 23:28:00 GMT

Trends show that consumers are adopting mobile payments at an increasing rate. A recent study from Gartner shows that mobile payment increased by 38% (to 141 million) between 2010 and 2011. Additionally, the Yankee Group predicts the value of mobile transactions worldwide to increase from $162 Billion in 2010 to $984 Billion in 2014, over a 600% increase. These predictions as easy to justify with giant players such as Verizon, AT&T, T-Mobile, Google, Sprint, Citi and MasterCard all jockeying for position in the virtual wallet space.

What is a mobile payment?

A mobile payment is the exchange of money through an electronic device such as a phone, tablet or any NFC (Near Field Communication) compatible appliance. NFC is the technology that allows for an electronic payment to be sent via contactless communication.

Will my merchant account be affected by mobile payments?

If your business has a retail shop, yes this trend will affect you. The assumption in the marketplace is that once consumers adopt the concept of a virtual wallet they will cease to carry conventional credit cards. A virtual wallet allows the consumer to convert their physical credit cards into virtual credit cards managed in a virtual wallet and accessible with a smart device (phone, tablet, PC, etc). If the consumer does not have a credit card to swipe and your business does not have an NFC compatible terminal you’ll be forced to key in the transaction and pay a higher rate. This is also known as a downgrade from a qualified transaction to a mid-qualified transaction.

What merchant opportunities are opening up with the emergence of mobile payments?

Mobile payments establish the convergence of payment, offer redemption, loyalty benefit and rewards all bundled seamlessly into the checkout process. Mobile payment enables merchants the ability to build a stronger relationships with customers through convenience, loyalty benefit and discounts.

Merchants can create offers or discounts for specific products and services that are delivered to your target market creating brand awareness. Offers are stored by the customer for redemption either in the store or online. Electronic wallet users can automatically store the offer within their wallet for automatic redemption.

Electronic wallets can also store rewards cards for participating merchants. This enables merchants the ability to seamlessly integrate offer redemption and loyalty benefits within the checkout process.

What equipment is necessary to take advantage of mobile payments?

Currently, the Google wallet (partnership between Google, Citi, MasterCard, First Data and Sprint) is utilizing MasterCard’s PayPass technology and is compatible with Pay-Pass enabled terminals. First Data also offers a contactless payment peripheral compatible with their terminals and POS solutions.

VeriFone reported back in March that all new terminals they manufacturer will be NFC equipped. VeriFone has also declared themselves neutral in the mobile wallet war providing terminals and POS systems that are compatible with ISIS (partnership between Verizon, AT&T and T-Mobile) and Google Wallet.

What to do?

Our good friend Michael Koploy over at Software Advice has written an excellent article if you would like more information on how to prepare for the emergence of mobile payments.

Would you like information related to strategies on how to take advantage of the emerging opportunities being created by mobile payments? Click the image below.

CostCo Credit Card Processing | Would you like a lower rate?

Alex Neir — Wed, 25 Jan 2012 19:47:00 GMT

Lowering overhead and expenses is an ongoing battle for any business. Credit card processing fees are a cost of doing business and can be reduced with a little investigation and the right questions. If you have found this post then you are already in the investigation phase. Maxx Merchants would like to offer credit card processing at a lower rate than CostCo is offering.

The CostCo credit card processing offer is extended through a company called Elavon. The advertised rates for processing are as follows.

Retail merchants with a small-ticket (average sale less than $15.00)
1.37% plus $0.12 per transaction
Retail Merchants (Credit Card Present, Person Present)
1.48% plus $0.20 per transaction
Internet and Mail Order and Telephone Order Merchant Accounts (Card Not Present)
1.99% plus $0.27 per transaction

Additional Fees

$4.95 per month Statement Fee
$25.00 Application Fee
No Batch Fee

Maxx Merchants is happy to announce the following reduced rates.

Retail merchants with a small-ticket (average sale less than $15.00)
1.35% plus $0.11 per transaction
Retail Merchants (Credit Card Present, Person Present)
1.45% plus $0.18 per transaction
Internet and Mail Order and Telephone Order Merchant Accounts (Card Not Present)
1.95% plus $0.25 per transaction

Additional Fees

$4.95 per month Statement Fee
$0.00 Application Fee
No Batch Fee

*Advertised rates are for Visa/Master Card and Discover and represent the qualified rate. AMEX and rewards cards will process at a higher rate. A monthly minimum charge of $20 will apply when transition fees and per item fees are less than $20.00 for the month.

6 Steps in Applying for a Merchant Account

Alex Neir — Wed, 18 Jan 2012 21:09:00 GMT

Are you considering applying for a merchant account? If the answer is yes then this post is for you. I will explain the process and give you specific direction on how to secure the very best rates available.

When applying for a merchant account there is a specific order in which you should approach the process. Below are the 6 steps when applying for a merchant account:

Review the different pricing option available and understand how your business is affected by each
Review some questions to ask when shopping for a merchant account
Shop at least 3 different providers
What to expect with the merchant account application
What will be required for merchant account support documents
Generally, how long do it take to set up a merchant account

A detailed understanding of the different merchant account pricing structures will help you when speaking to merchant service providers. Some providers will pitch you a pricing model that is more advantageous for them and one that is not the best fit for your business. Additionally, it is important to know how your business transactions affect your costs with respect to frequency and size.

When shopping for a provider it is helpful to know what to ask. We have compiled a set of questions that will get you headed in the right direction.

Always shop at least 3 providers. This will allow you to get a feel for multiple providers and will strengthen your chances of finding a good fit for your business.

Once you decide on a provider the next step is the application. The typical application is quick and easy to fill out. Most providers will gather the requirements on the phone and are able to consult you on ambiguous questions. Important pieces to pay attention to are the merchant account soft limits. You will want to make sure you give your account enough room to grow as the business expamds.

Along with the application you will be required to provide support materials related to the applicant and business applying for the account. A short list of support materials can be found here.

The length of time it takes to get an account set up depends upon your type of business, industry, requested volume and financials. The process can take from 24 hours up to 2 weeks.

If you found this post to be helpful and would like to inquire into and account with Maxx Merchants please give us your contact information and a representative will be in touch shortly.

Merchant Account Pricing | What to focus on

Alex Neir — Fri, 13 Jan 2012 18:08:00 GMT

Merchant account pricing can be confusing in that there are quite a few moving parts that determine the overall cost month to month. This post is intended to explain how merchant account pricing is set up and give your business specific direction when considering alternate pricing plans.

There are three pricing models used to establish merchant account pricing.

Interchange Plus – Transparent pricing in which you are assigned an exact markup over interchange
ERR (Enhanced Rate Recovery) – One advertised rate with disguised downgrades
Tiered Pricing – Multiple tiered prices depending on how credit cards are accepted

Regardless of the pricing model there are two components that make up the majority of your merchant account cost. The percentage of the sale and the per-transaction cost.

Most merchant service providers will have a preferred pricing model which is used to quote merchant account pricing. It is up to the business requesting an account to specify which pricing they prefer. The most cost effective pricing is Interchange Plus.

Specific direction when considering alternate pricing plans

Rule 1 – request interchange plus pricing. If the provider you are speaking with tells you that your business does not qualify for Interchange Plus pricing, look for another provider.

Rule 2 - Understand how your business’s transaction size and frequency affect your merchant account costs. First, determine your average sale amount. Take the total amount of sales for the previous month and divide them by the total transactions. Second determine the total number of transaction you are likely to conduct month or month.

With these two figures you can do a simple calculation to determine where you need to focus when negotiating your rates. If you have a higher average sale amount and lower transactional volume you need to negotiate a lower percentage of sale. If you have a lower average sale amount and I high transactional volume you need to negotiate a lower per transaction price.

For example - If your pricing is 1.59% and $0.25 per transaction:

A $1.00 transaction will cost $0.27 or 26.59%
A $100.00 transaction will cost $1.84 or 1.84%

Would you like more guidance on how to negotiate your merchant service pricing? Download our guide on questions to ask when looking for a merchant account.

Third party credit card processing | Allowed or Not?

Alex Neir — Wed, 11 Jan 2012 18:21:00 GMT

Does your business outsource customer service to a call center? Would you like the outsourced call center to be able to accept credit card payments from customers they are assisting? This can present some confusion as the privilege to accept credit card payments is reserved specifically for the company that has been underwritten and approved for the account.

When a business applies for a credit card processing account it is required that the business indicate what the account will be used for. The business must explain the products and service sold, the average ticket, high ticket and monthly volume that will be transacted with the account. This information, along with business financials and history will be used to determine if the account is accepted or not.

Once approved the business is permitted to use the account to transact credit card payments within the parameters indicated on the application.

So, what rules apply to a third party employed by the business that has been approved for the account?

Some providers have specific policies with regard to third party transactions and do not allow them. However, this is a very common practice and is not a violation of Visa/Master Card guidelines. Third parties that are granted permission to process on an approved merchant account must adhere to the rules outlined in the merchant services contract. Any violation of the terms and conditions of the merchant account contract become the liability of the business approved for the account. Violations can result in the business being included on the TMF (Terminated Merchant File) so it is very important to make sure that any third party that is granted access to the account understand the terms of the contract.

For more information on the specifics facing your business please don’t hesitate to call. (800)917-8026

CostCo Credit Card Processing | What to consider

Alex Neir — Fri, 06 Jan 2012 22:16:00 GMT

When considering credit card processing it is hard to ignore CostCo as a provider given their attractive advertised rates. It is also natural to expect savings given their brand is synonymous with savings. However, as with most things, analysis is needed to determine if the advertised savings will actually result in the best credit card processing account for your business.

Analysis needed

What are the rates and how do they apply
What does your business transactional volume look like

What are the CostCo credit card processing rates and how do they apply

CostCo credit card processing rates are advertised as:

1.48% plus 20 cents per transaction for retail merchants (card present, person present transactions)
1.99% plus 27 cents per transaction for mail order, telephone order and internet merchants (card not present transactions)
A free terminal rebate after 12 months of processing

It is important to understand that the advertised rate will only apply to transactions that meet specific criteria. For retail merchants the advertised rate will only be applied to Visa and Master Card swiped transactions for debit and non-reward credit cards. Reward credit cards are credit cards that offer a reward for use such as cash back, frequent flier miles etc. The rate will not apply for American Express or Discover. So in actuality, approximately half of your businesses transactions will downgrade to a higher rate. That higher rate is not disclosed until the application process is initiated. The typical downgrade is 1% so the advertised rate should be 1.48% – 2.48%.

What does your business transactional volume look like?

This is an important step in determining the right pricing for a merchant account. The CostCo credit card processing rates will affect the total monthly fee for the account differently depending on the volume of your transactions. For example:

If your business is internet based and the pricing is 1.99% and $0.27 a transaction

For a $5.00 transaction the total fee would be 7.39% of the purchase
For a $50.00 transaction the total fee would be 2.53% of the purchase

So if your business has a low average sale amount and a high number of transactions the $0.27 per transaction is where you need to focus. If your business has a high average ticket and a low number of transactions then you should focus more on the percentage of sale.

In conclusion it is important to understand how the rates for a credit card processing account will affect your specific business. Until you know that, it is impossible to tell if an advertised deal is actually a good fit for your company. If you would like help understanding credit card processing rates and there effect on your business please don’t hesitate to call our friendly staff as we would be pleased to help. (800)917-8026

Terminated Merchant File | What it is and how to avoid it

Alex Neir — Wed, 04 Jan 2012 22:40:00 GMT

The terminated merchant file, TMF or match file is a database that is maintained by MasterCard and Visa banks (also known acquiring banks) for the purpose of recording businesses that violate their merchant services agreement. This database serves as a reporting agency for the merchant services industry.

All merchant service providers, as a requirement of underwriting, will query new merchant applications against the terminated merchant file to determine if there is a match. The query will include the business name, business address and principal applicant(s) first and last name. If a match is uncovered the application will be declined.

What to do if you are on the terminated merchant file

You must first identify the acquiring bank that placed your business on the terminated merchant file. They are the only entity that can make changes to the listing. Once you identify the acquirer, it’s important to be persistent in requesting the reason for the inclusion on the TMF. It may take multiple calls to identify the right department to gather the information. Remember “kill them with kindness”. You are undoubtedly frustrated with the situation but airing your frustration will only prolong the process and increase your frustration. Once you understand the circumstances that led to your listing, do everything in your power to correct it and have the listing deleted. This may include legal counsel so make sure your hire a specialist if you choose this direction.

How to avoid being included on the terminated merchant file

Read your merchant account contract carefully and avoid any violations.
Make sure you remain within the soft limits of your merchant account.
Make sure you list your business phone number within the descriptor that shows on your customer’s credit card statement. This gives them the information they need to contact your business about questionable charges. You do not want your customers to call the bank directly.
Provide exceptional customer service and put your customers first. Consumers have a lot of power if they choose to contact their issuing bank to complain about your service and charges.
Don’t commit fraud.
Never run a sale for someone else’s business!

6 Considerations for a Merchant Account Processing Limits Increase

Alex Neir — Tue, 13 Dec 2011 20:21:00 GMT

The successful approval of any merchant account application is dependent upon the merchant account processing limits that are stipulated within the account application. The merchant account processing limits establish the boundaries for which the account must remain. Processing limits are defined with two account attributes.

The monthly processing volume
The high ticket or sale amount

Most businesses will estimate these attributes when establishing a merchant account to ensure room for business growth. However, if these attributes are exceeded the processor has the right to hold the excess funds until the overage is investigated and the processor is comfortable.

If your business’s monthly volume and high ticket amount have grown beyond that stated on your application, you can request a merchant account processing limits increase.

The acceptance of a limits increase is subjective so it is important to understand the factors considered for an increase.

Business Banking Balance
Business Credit Score
Business Processing History
Recurring Billing
Industry and Transaction Method
Reason for the Increase

Business Banking Balance – This is the amount of balance you are carrying in your business account from month to month. The underwriting department will want to see a strong balance in the account over the entire month. Not just the beginning and the end. This reassures the bank that if the increased limits result in chargebacks the business has funds available.

Business Credit Score – The credit score for the applicant(s) will always be investigated to ensure the applicant(s) are meeting their financial obligations.

Business Processing History – The business’s processing history will be reviewed to make sure the account has been managed correctly. The underwriting department will look to see if the account has exceeded the processing limits (soft limits) in the past. Chargebacks and refunds will also be looked at to determine how customers are behaving. Clean processing history is extremely important for an increase in processing limits to be approved.

Recurring Billing – Businesses that engage in recurring billing or automated re-billing are subject to higher levels of chargebacks and will undergo more stringent review for a processing limits increase.

Industry and Transaction Method – Certain industries are considered more risky and will have tighter processing limits to protect the processor for chargeback liability. Additionally the transaction method will be considered when reviewing a processing limit increase. Retail, card present businesses will have an easier time than internet based businesses.

Reason for the Increase – The underwriting department will want and explanation as to why the business is asking for a processing limits increase. Has the business expanded product lines, delivery channels etc.

Business growth is the goal of every business. Excellent business management is the key to growing the limits established by your processor as a protection from liability. If you would like to request a processing limits increase, please contact our friendly staff at (800)917-8026.

Merchant Cash Advance | An easy way to get capital for your business

Alex Neir — Tue, 06 Dec 2011 21:12:00 GMT

With the current climate in the lending industry it has become exceedingly difficult for small to medium sized businesses to qualify for a business loan. That being the case what other lending options are available to businesses to raise the cash necessary for business growth?

A merchant cash advance could be the answer.

A merchant cash advance is a lending instrument that allows your business to take advantage of future credit card receivables for an instant infusion of cash. The qualification process is quick and easy and your business can usually receive an advance in as little as 3 days.

How does it work?

Our underwriting department will analyze your merchant account statements to determine the cash advance amount you qualify for. The maximum cash advance amount available is $250,000. Once an advance amount has been identified that amount will be wired into your business account. At that point a pre-determined percentage amount will be held back from each subsequent settlement for a pre-determined amount of time. The percentage amount held will be applied to the repayment of the advance. A percentage of future credit cards receivables is used to ensure that a hardship is not imposed on the business as would be the case with a set dollar amount. The advance is automatically paid back so there is no action needed by the business owner or staff.

Qualification requirements

500 Fico
$5000 per month minimum processing
Average retail ticket less than $600
15 batches per month
Bankruptcies discharged for at least 1 year

Merchant Account Fraud – 3 ways to protect your business

Alex Neir — Thu, 01 Dec 2011 22:33:00 GMT

With the proliferation of the digital era more and more businesses are seeking the ease and convenience of the internet to increase sales. Unfortunately, the criminally minded have seen this as a giant opportunity to maliciously profit from unsuspecting businesses. As a business utilizing the internet as a sales channel how do you protect against potential losses from such criminals?

The answer is a fraud detection solution.

Most fraud detection solutions are based on a management utility that allows merchants to configure extensive filters to help in detecting fraud and screening suspicious transactions. The combination of an extensive reporting system gives merchants a quick and easy way to review transactions, block suspicious activity, and zero in on malicious users.

3 ways to protect your business from merchant account fraud utilizing a fraud detection solution.

Thresholds – Allows your business to set specific parameters for detecting fraud
User bans – Ban specific users by IP address, credit card number, country, etc
Exceptions – Set specific exceptions to make sure you don’t exclude legitimate customers

Merchant defined thresholds

Thresholds let your business define rules that are applied to each order as it is processed. Rules can be simple to complex and can apply in sequence. For example you can define a dollar limit for a specific order, total for the day or week. You can also set up limits for the number of orders in a given day or week. Limits can be linked to a specific IP address or credit card number. Additional features allow for limits to be set for the number of credit card numbers that can be used. This eliminates criminals from testing cards for approval. Once your specific rules have been configured you can set the system to flag the transactions for review of decline them immediately.

Merchant defined user bans

In addition to dynamic transaction review, static user bans are effective at eliminating known threats. For example if your business is experiencing repeated fraud attempts from a single IP address or band of IP addresses you are able to configure a specific rule to eliminate the threat. You are also able to ban specific credit cards numbers or bank bin numbers to eliminate credit cards from a suspicious bank. Known problematic geographic regions can also be banned.

Merchant defined exceptions

With any good fraud detection solution there will always be exceptions to the rules you establish. A proper fraud management solution should allow for specific overrides to be defined making sure legitimate customers are not prevented from a successful purchase.

Credit Card Re-bill Without Storing the Customer’s Credit Card Number

Alex Neir — Tue, 29 Nov 2011 19:20:00 GMT

How does a business re-bill a customer’s credit card after a purchase has been made? Doesn’t storing the customer’s credit card information open up potential liability for a business if that information is breached? These are very common questions related to payment processing with credit cards.

A credit card re-bill is common for businesses that have repeat customers or recurring billing options. It is often an added convenience to offer customers the ability to retrieve their credit card information rather than re-entering it.

For a business to store customer credit card information there are strict Payment Card Industry Data Security Standards (PCI-DDS) that must be adhered to. Credit card information is a primary target for identity thieves and as a result has come under stiffer protection regulations. Designing a properly protected and compliant credit card storage system can be an expensive and cumbersome undertaking.

So how can my business store customer credit card information cheaply and securely?

The simple answer – outsource the storage. By letting a third party store the customer’s credit card information the business gains all benefits of card information retrieval with zero liability. Outsourcing credit card data storage is a simple, fast, cheap and headache free option that is offered by a number of providers as part of their gateway services. A few of the companies offering this service include The Maxx Payment Gateway, Network Merchants and Authorize.Net.

How does it work?

Customer credit card information is stored off-site on secure computer servers managed by the company offering the service. Each individual customer’s information is accessible via an online interface or your businesses website (cloud service). A unique key is used to access the customer information and retrieve the credit card details for re-bill purposes. This functionality is typically pre-built and offered as a plugin to the overall virtual terminal or payment gateway service. Since the sensitive data is stored off-site with secure encryption used for retrieval, PCI compliance is maintained and your businesses liability is minimized.

Proper storage of sensitive information entrusted to your business is an important responsibility. Please contact our knowledgeable staff for more information about a credit card re-bill solution for your business. (800)917-8026

QuickBooks Merchant Account Solutions

Alex Neir — Tue, 22 Nov 2011 16:59:00 GMT

Does your business run QuickBooks? Are you interested in offering credit cards as a form of payment for invoices you generate from your QuickBooks account?

Integrating a credit card payment solution into the QuickBooks environment is exactly what we have done. Our QuickBooks plug-in installs directly into QuickBooks Enterprise, QuickBooks Pro and QuickBooks Premier software applications.

The power of the plug-in is to directly apply credit card payments to invoices that are created within your QuickBooks edition. Credit card payments can be applied to new invoices, open invoices and can even be split on a single invoice with ease and convenience.

All credit card information is securely stored off site in our PCI-DDS compliant facilities. At no time is any customer credit card information stored on your computer or business servers. The application supports card present swiped transactions as well as card not present keyed transactions.

Installation is a snap and the functionality is easy to use as is mimics the QuickBooks workflow. For more information on this revolutionary product please call our friendly staff at (800)917-8026 and request a demo.

Affordable Credit Card Processing | We have you covered

Alex Neir — Wed, 16 Nov 2011 20:23:00 GMT

Affordable Credit Card Processing | We have you covered

Are you looking for an affordable credit card processor? More often than not affordable and credit card processing don’t seem to fit well together. This is partially due to the fixed cost imposed on merchants to accept credit cards called the interchange rate. The second cost factor is the additional rates and fees imposed by your processor.

Now the term affordable is subjective. What is affordable for some may be expensive for others so let’s begin with a base line of affordability. When auditing a merchant account it is important to calculate the effective rate for your processing. The effective rate is calculated by dividing your monthly processing fees by the total volume processed. This number should be below 3.0% for low risk retail merchants.

So, that being said, anything above 3.0% becomes more expensive than it should be and therefor more unaffordable.

The beauty of the effective rate calculation is the fact that it is a retrospective look at all the rates and fees your business is charged. Lots of providers offer seemingly incredible deals on processing rates only to hit you with exaggerated ancillary fees to make up the difference.

So if you truly want an affordable credit card processing solution, stop negotiating the individual rates and get commitment from your processor that your effective rate be 3.0% or less. Then you know you are getting the most affordable merchant account possible.

Let Maxx Merchants review your processing and we’ll guarantee your effective rate is 3.0% or below* while also providing the best in class customer service and support.

*Certain restrictions apply

Bankcard Deposit Reconciliation | Top 4 Difficulties Explained

Alex Neir — Tue, 08 Nov 2011 22:16:00 GMT

Your merchant account is live and now you are attempting to reconcile the deposits made by your processor. In theory the deposited amount should match the amount on the settlement or batch report generated by your processing equipment or gateway. Anyone who has worked on reconciling the deposits knows that is seldom the case.

More often than not the settlement report that is run at the end of the day has absolutely no similarity to a deposit made into your bank account, ever! This can be overwhelmingly frustrating.

Why is it so difficult to reconcile?

The top 4 reasons are listed and addressed in detail below:

All the issuers settle at different times
PIN Debit and other cards settle separately
Your settlement time plays a role
Pricing also plays a role

Issuers settle at different times

The term issuers refers to the various associations of Visa, Master Card, Discover, American Express, etc. It has been a long standing issue that each, with the exception of Visa and Master Card, settle at different times. So if your business accepts all the above mentioned cards, deposits can vary from 24, 36 and 48 hours after the settlement or batch is run. Often times Discover and AMEX take longer to settle. So, for example, a deposit amount can contain settlements from the previous days batch (Visa and Master Card) in combination with the day before settlement for Discover and American Express.

PIN Debit and other cards settle separately

Adding additional complication is the fact that multiple card types (Diners cards, fleet cards, gasoline cards,etc) as well as PIN Debit use alternate networks to process and settle payment amounts. These additional networks also settle at different times. So the more cards types your accept the harder your bankcard deposit reconciliation is going to be.

Your settlement time plays a role

Your settlement time or batch time is the time you tell your processing equipment to issue a collection request for all the payments that have been authorized for the day. This can be a manual process or an automated process depending on your equipment and setup. Depending on when this process is run there can be additional complications added to the reconciliation process. For example, if you batch out your equipment before the end of your business day, you are effectively postponing payment collection for transactions that are completed after the batch is processed. This means that each days transactions are split into multiple deposits.

Pricing also plays a role

Certain pricing structures call for daily or monthly discount. With daily discount pricing the processing fees are deducted from the daily settlement or batched total. For merchants that have daily discount pricing, the deposited amount will never match the settlement or batch report as the deposited amount has fees deducted from it. Monthly discount does not operate like that as the fees are deducted separately from the deposited totals.

Would you like help tuning these variables in a effort to make your bankcard deposit reconciliation process easier?

Electronic Invoicing and Payment | Make it easy to get paid

Alex Neir — Tue, 25 Oct 2011 19:36:00 GMT

Electronic Invoicing and Payment | Make it easy to get paid

Wouldn’t it be great if you could email your customers an invoice with embedded payment options? It seems like and easy and obvious choice but many businesses today still mail paper invoices and expect a check for payment. Think of all the saving an electronic solution provides. Save the paper of the invoice and envelope, save the cost of postage, save the gas and time it takes to travel to the bank to deposit checks.

With Maxx Merchants Electronic Invoicing you have an easy to use, professional and cost effective electronic invoicing system that allows your customers to pay via credit card or check. Our system gives your business the ability to create line-by-line detailed invoices.

Invoices are emailed in .PDF format with an embedded link for payment processing. All payment information is collected via our secure payment gateway so the business is not responsible for handling sensitive customer information or exposed to PCI compliance issues. Invoices are stored within the payment gateway for easy retrieval, review, editing or re-presentment.

There is no limit to the number of invoices that can be created and the business does not need a website or to integrate the solution into a website to process payments.

Chargeback Compliance | Part 2 of 2

Alex Neir — Fri, 21 Oct 2011 14:10:00 GMT

Chargeback Compliance:

If the customer or issuing bank alleges that the merchant has violated Visa and MasterCard Operating Rules then it is considered “Out of Compliance” and the merchant will not be protected by the chargeback process. The issuing bank must certify that a financial loss did or will occur as a result of the rule(s) violation. Each side has an opportunity to present their case to the Visa and MasterCard Analyst assigned to the case. Compliance cases are filed within 90 days (Visa) and 180 days (MasterCard) from the transaction date. The date of a Retrieval Request ( the date of violation) is 90 days for Visa and 45 days for MasterCard from the date the issuing bank received notice from its cardholder of a violation (Date of Discovery)

Examples of Chargeback Compliance violations include:

Failing to properly disclose “limited refund” or “return policies” to the cardholder at the time of the transaction.
Preparing two or more transaction receipts to avoid authorization for a single transaction.
Quality of service received from a travel and entertainment merchant.

Chargeback Compliance Filing Procedures, Fees and Penalties:

If you, the merchant, face a Compliance Violation claim, then you will be required to complete a Visa and MasterCard Compliance form and provide a description of the grievance, and submit copies of all supporting documentation. The issuing bank is required to provide the merchant with a Pre-Compliance letter, 30 days prior to filing, in attempt to settle the matter. As with a standard Arbitration, there is a Filing fee of $150.00, a Review fee of $250.00 paid by the losing party. Further, a $100.00 fine may be assessed for each technical violation found against the opposing party.

Criteria used for Chargeback Compliance Violation Decisions:

The arbitrator will consider the following when determining financial liability ~

Was there a rule violation and a resulting financial loss
Was the cardholder’s complaint reasonable
Should the disputed amount be allocated between the two parties

When facing a Chargeback, Arbitration or Compliance claim keep in mind…

When a merchant is facing a Chargeback claim, Arbitration request or Compliance Violation charge, the most important thing to remember is to respond quickly and accurately with sufficient supporting documentation to defend your business. Failure to respond by the stated deadlines is an automatic forfeiture of the transaction which means you will lose the full transaction amount and could be subject to fines.

For more information on chargeback compliance please call (800)917-8026.

Chargeback Overview | Part 1 of 2

Alex Neir — Tue, 18 Oct 2011 18:40:00 GMT

CHARGEBACK OVERVIEW | Part 1 of 2

What is a Chargeback?

A Chargeback is the process whereby a customer disputes a credit card charge. The chargeback usually occurs after the customer receives their billing statement and does not recognize the charge, is dissatisfied with the quality or service, or did not receive what was guaranteed. Generally, the customer will call the credit card company directly to initiate the chargeback without prior notification to the merchant.

What is the Chargeback process?

The bank has a time limit by which to initiate a chargeback. Within 120 days of the transaction date, the merchant will be advised that the cardholder or bank is claiming a mistake has been made and is attempting to have the charges removed from their statement. The merchant’s account is then debited for the amount of the charge and the merchant must provide evidence that the transaction was valid and in compliance with Visa and MasterCard rules and regulations.

Typical Chargeback justifications:

Authorization not obtained for transaction
Fraudulent or Duplicate charges
Dispute over Quality, Service or Delivery
Refund credit not received

5 Steps in the Chargeback Cycle:

Presentment: The Presentment is the date at which the sale or transaction occurs.
First Chargeback: When the customer disputes a charge to their Credit Card Company or bank and the bank responds with a retrieval request to dispute the transaction. The First Chargeback is the point at which the merchant and their bank receive notification from the cardholder’s issuing bank. The merchant has 7 days to rebut, however, the merchants account is debited for the disputed amount until the chargeback is resolved.
Second Presentation or Re-presentment: The Second Presentment occurs when the merchant’s bank receives supporting documents from the merchant to substantiate the charge and, provided the documentation complies with Visa and MasterCard requirements, the chargeback is remedied. In some cases additional documentation may be required. If the chargeback is cleared then the merchant will be credited back the disputed amount and a letter will be sent to that affect. If the documentation does not satisfy their requirements then the merchant will receive a letter from Visa and MasterCard stating their decision and reasoning. This process can take up to 45 days.
Second Chargeback: If the second presentment is rejected by the cardholder, the issuing bank files a second chargeback. At the time of the Second Chargeback the merchant can dispute the cardholders claim and, if necessary, escalate to Arbitration.
Arbitration: Arbitration is the process the merchant and cardholder/issuing bank resort to when they cannot reach agreement through the chargeback process. All parties have an opportunity to present their case to a Visa and MasterCard analyst. Arbitration cases must be filed with Visa and MasterCard within 45 days of the Second Chargeback being issued. A Visa and MasterCard Arbitration form must be completed, along with a description of the grievance, and copies of all documentation submitted during the chargeback process. The losing party could be liable for fines of up to $500.00. Additionally, there is a Filing fee of $150.00 and a Review fee of $250.00 paid by the losing party (fees subject to verification). Either party can be assessed a $100.00 fine for each technical violation against the opposing party.

Who Wins?

If you end up in Arbitration, there are several criteria the arbitrator will consider. Split decisions happen when one party offers a reasonable compromise or solution to the disputed charges. Merchants usually get an unfavorable ruling if:

The merchant fails to address the issues raised by the cardholder
The merchant fails to sufficiently prove that the dispute was unreasonable
The merchant fails to present sufficient documentation to support their case

Maxx Merchants offers numerous tools to help prevent and manage chargbacks. If you would like more information please don't hessitate to call out friendly staff at (800)917-8026.

SwIPe – A New Lightweight Wireless Point-Of-Sale System

Alex Neir — Fri, 14 Oct 2011 20:48:00 GMT

SwIPe – An New Lightweight Wireless Point-Of-Sale System

SwIPe is a lightweight, Windows™ based software and hardware point-of-sale (POS) application for card-present transactions. The SwIPe solution is a best of breed POS solution that utilizes the storage capabilities of the Maxx Payment Gateway and the security features of next generation card readers with signature capture.

Merchants using SwIPe and supported hardware have a lightweight handheld card reader that can be used to easily and quickly accept payments. This solution is ideal for merchants looking to speed up the checkout process by enabling sales associates to roam the store to accept check out. Similar to how the Apple store works. Additional applications include trade shows, exhibitions, fairs, and business events outside your retail store. Restaurants can also benefit from this solution but reducing identity theft through table side credit card capture and signature. The customer’s credit card is never out of their sight.

KEY FEATURES AND BENEFITS

Record Retrieval
Immediately locate signed receipts stored in the gateway

Signature Capture
Fight disputes with chargeback representment

Useful Data
Store up to 20 merchant defined fields in the Customer Vault for future business

E-mail Receipts
Automatically e-mail receipts to customers.

Enhanced Security
Encrypted end-to-end PED compliant security protects cardholders against breach.

Green Initiative
Paperless receipts save trees and the environment

Cost Efficient
Save money by paying lower card present rates.

Business Payment Processing: Making Payment Transactions Easier

Alex Neir — Tue, 11 Oct 2011 17:06:00 GMT

Credit and debit card processing for businesses is almost a necessity for today's payment transactions. A venue without credit card processing is guaranteed not to get as much business as a competitor allowing this method of payment. Utilizing credit card processing will make payment much simpler, more efficient and more convienent for customers.

How Credit Card Processing Can Speed Things Up

There are several stages of credit card processing. The order in which the transaction is processed changes depending on the card issuer, easing the transaction itself while guaranteeing quick payment:

The first stage is authorization. This is performed quickly through any credit card processor and determines whether the card is approved or declined for the purchase.
The card is then authenticated by the banks using Card Security Codes and address verification and a PIN number in order to prevent fraud.
Capturing will occur just before settlement, when transaction data is collected and sorted out.
Next the transaction is cleared and settled, when the card issuer and the processing bank complete a payment transaction by sharing the transaction information and depost the transaction funds into the businessess account.

As a business, the only requirement is selecting a credit card processor that meets your business needs and works with either PIN-based or signature-based methods of card acceptance. PIN-based card acceptance is a more secure than PIN-less, it also costs about the same. As a merchant, learning how to handle credit cards is as easy as a 15 minutes conversation with a respectable processing firm.

Most of the major credit card companies' payment transactions are pretty much the same, though the transaction cycle itself may vary. Possessing a credit and debit card processor should speed your payment process up and save the consumers time during transactions as well. Along with swiftness of payment transactions, the minimal personalized credit card rate can also be available for every purchase using a trustworthy interchange-plus system. This can help to lower the price of processing in the end.

The right processing provider will ensure that a merchant account is created and that the business can initiate credit and debit card processing. Once this is done, payment transactions should be easier than ever.

Improve your business function with an electronic payment system

Alex Neir — Tue, 04 Oct 2011 20:04:00 GMT

Improve your business function with an electronic payment system

In today’s constantly changing times, it is important for any company to be able to stay afoot. When it comes to paying for services, cash or check had been the only way to pay for years. Now there are credit cards and debits cards so no one really uses anything but. A company should naturally find a way to appease these customers so that they will be willing to come back.

A step in the right direction would be to set up an electronic payment system. How will this help say a small business owner? Simply put if you are a small to medium sized business owner than this would help you tremendously. Instead of only being to help those customers who actually step foot in your shop, you can reach anyone worldwide. Here are a couple examples of this:

You can advertise online and receive your payment electronically
You can have someone place an order over the phone
Like always, your customers can come in to the store and have more abundant payment options.

An electronic payment system allows your business to expand its react. By utilizing the benefits of the internet you can easily and cheaply expand your target market and appeal to a wider clientele. It will also make networking and advertising an easier sell as well.

Additional benefits of an electronic payment system include:

Easy accounting: all your transactions will be stored electronically.
Security: all of your customers data is encrypted and stored off-site.
Convenience: most customers expect the convenience of multiple payment options

What is interchange? An Explanation.

Alex Neir — Tue, 27 Sep 2011 18:21:00 GMT

What is interchange?

The term ‘interchange’ usually refers to a location where two things meet. In the credit card business, however, it is a term used to describe a fee paid between banks for the authorization of card transactions. It is mostly the fee the merchant’s bank pays to the customer’s bank.

With regards to a credit card transaction, the bank that produces the card in a transaction will subtract the interchange fee from what it pays the merchant’s bank handling credit or debit card transactions for that merchant. Then, the merchant’s bank pays the merchant the amount of the transaction minus the interchange fee.

It is a fact that banks do not make a substantial amount of money from interest charges and late fees from those valued customers who pay in full each month. Instead, they earn a profit on the interchange fee charged to the merchants.

It’s important to remember that merchants pay ‘merchant discounts’ to their financial institution, not interchange fees. There is a very distinct difference. Visa, for example, uses interchange reimbursement fees as transfer fees between financial institutions for stability and growth.

What about the ATM?

When it comes to ATM’s however, the card issuing bank pays the fee to the acquiring bank for maintenance of the machine.

Do they vary?

Indeed. In the US, the average fee is approximately two percent of the transaction value. In the last few years, however, these interchange fees have become a subject of controversy because they have an intricate pricing configuration. In fact, on June 8^th, 2011, the announcement was made that the amendment to delay implementation of the Durbin Amendment that would cap these fees fell six short of the sixty needed to break a filibuster.

Then on June 29^th, Wednesday, a final ruling was established by the Federal Reserve creating a sensible and proportional criteria for a debit interchange fee. Issuers are required to include two debit networks (non-affiliated). This is for the purpose of routing. Details are available at: Durbin Amendment.

Payment Processing Solutions for Every Business

Alex Neir — Tue, 20 Sep 2011 18:24:00 GMT

Payment Processing Solutions for Every Business

Every business needs a payment process that is convenient, well structured and dependable. The right process will save you time, will be cost effective and will eliminate potential issues from occurring.

For Any Business

Whether your business is in retail, media, sports, health, etc., they can all benefit from credit card payment processing. This payment process is suitable for any business.

Retail - Merchandise is purchased and sold from an established and fixed location.

eCommerce - Used for buying and selling products and/or services via electronic systems, such as the Internet and other PC networks.

Mail Orders / Telephone Orders - The main source of income for a merchant is provided through mail and telephone sales.

Wireless - Wireless processing is utilized by merchants who operate their business remotely. A mobile business needs the ability to effectively process wireless payment transactions.

With the right service you will receive:

Experience - The right payment processor will have the experience and know how to efffectively deal with and meet any need that may arise.

Exceptional customer service - The right processing service will be available to answer any questions or concerns 24 hours a day, 7 days a week.

Expert Chargeback Management - Working with the merchants to decrease the amount of chargeback conflicts and disputes, as well as supply adequate procedures for payment processing.

Effective Fraud Prevention Tools - The right processor will effectively combat fraud. A good process will help to reduce fraudulent transactions from occurring. The processor will support systems including, MasterCard SecureCode, Verified by Visa, the Card Security Codes (CVV2, CVC 2, and CID) and the Address Verification Service (AVS).

The Takeaway

Merchants must be diligent in their search for the appropriate payment processing solution for their business. The right processor will be able to suit your needs and will provide the most efficient solutions. The ideal processor will have a well maintained processing structure, will meet specific areas of expertise and will provide excellent rates.

If you would like to speak to a represenative at Maxx Merchants to discuss a customized solution specifically addressing your businesses unique needs please call (800)917-8026. Or shoot us a messaage on our contact us page.

Merchant account effective rate: what you pay to process credit cards

Alex Neir — Tue, 13 Sep 2011 17:13:00 GMT

Merchant account effective rate: what you pay to process credit cards

Merchant Account Effective Rate

Adding merchant services capabilities to any business can significantly boost its bottom line. Ease-of-doing business not only makes the shopping experience more favorable for consumers, but it can contribute to ongoing repeat business. One of the features to understand when either adding or updating your current merchant services account is the effective rate charged.

So, what exactly is this charge and how should it equate into the overall decision making process about which vendor to leverage for your business?

Effective Rate Basics

In simplest terms, the effective rate refers to the NET percentage of a business’s sales that will be charged for the ability to accept credit cards; credit card processing fees.

For example, if a business receives $15,000 in credit card sales in any given month, and their total processing expense is $450; its effective rate for that month was 3.1%. While this calculation is very basic and straight forward, there is another consideration to be aware of; the qualified discount rate.

If you are offered a qualified discount rate, which is very common and an excellent option to consider, this is the base fee rate to be assessed. Once surcharges and other merchant account fees are added back into the equation, you arrive at the net effective rate. When determining your fees, be sure to break them out individually so you can assess each one independently.

Calculating your Estimated Effective Rate

For established businesses, this calculation will be fairly simple; take your average monthly credit card sales x the effective rate from the merchant services provider, to arrive at your average monthly processing fee. Newly established businesses or businesses with inconsistent sales will have a slightly more difficult time arriving at this calculation. In these instances, factoring a higher monthly average than anticipated will make it easier for the business to budget costs.

While an effective rate is indeed a cost assessed, it is often a small price to pay for the end value offered to your customers and ultimately to your business for this added payment option.

Reducing ChargeBacks with Credit Card Best Practices

Alex Neir — Thu, 08 Sep 2011 18:21:00 GMT

Reducing ChargeBacks with Credit Card Best Practices

Chargebacks are an inevitable business dealing when it comes to businesses accepting credit card payments. It almost always consists of a client saying that he/she did not obtain items for which they paid. Reducing chargebacks can save a business time and money by implementing certain guidelines:

Businesses should make sure that there is a refund/cancellation policy in place that ensures that the buyer has to agree before buying a product or service.
A business should tell their buyers what name to expect to show up on their credit card statements. This could prevent not only this chargeback but also other down the line.
Collecting CVV2 numbers during payment will help to reduce chargebacks because it will ensure that the person doing the buying has the actual card there in front of them.
The use of an AVS, or, Address Verification service will allow businesses to further authenticate the validity of the cardholder.
Businesses should make known to their customers the increased threat of fraud from developing nations. These nations and their practices are the cause of most chargebacks being contested.
Businesses should also provide an excellent form of buyer support. Almost all disputed charges will be because of a poor, uneducated customer encounter. If the business supplies their consumers with high quality expertise and value, then the probabilities and risks of having a charge being disputed minimizes greatly.

Unless businesses continue to provide education and support to their consumers, charge-offs will continue to rise. The only deterrence is to provide an excellent source of customer service and ensure that the consumers themselves are prepared going into any purchase they make.

3 Ways the Durbin Amendment Can Help Your Business

Alex Neir — Tue, 06 Sep 2011 19:57:00 GMT

3 Ways the Durbin Amendment Can Help Your Business

The Durbin Amendment has been highly debated since it was added to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. There are however, a few ways that it can help people with their business. Listed here are three ways that merchants will benifit.

1) The Durbin Amendment and what it means to business

Under the Durbin Amendment, card swipe fees will be regulated to a lower rate.
Merchants will also be allowed to apply surcharges on purchases made with either credit or debit cards.
In either of these cases, the swipe fee is detracted away from the consumer.

2) Businesses consumers will benefit

It is speculated that consumers could see lower prices as a result of a swipe fee reform. A Fed Chairman has publicly said that he expects certain retailers in a competitive and low margin sector could drive down prices, while those in smaller competitive sectors may opt to pocket their savings. These are savings that could be noticable to consumers.

3) Merchants will benefit

Proposed fees will cover the risk of fraud and other overhead charges and as of right now the fees a major source of profit margin for banks offering checking accounts. As a result, the competition between banks and other financial institutions is causing profits to be used to subsidize free premium services like surcharge free ATM's and no charge checking accounts. If the fees dropped to the proposed 7 to 12 cent charge, this would surely create a much larger transfer of wealth to the merchants from the card issuers.

The Durbin Amendment is not without its flaws and criticisms, but the advantages of such an amendment is much more prosperous to the consumers and businesses in the log run.

Merchant Account Discount Rate and What it Means to You

Alex Neir — Thu, 18 Aug 2011 13:37:00 GMT

Merchant account discount rate and what it means to you

When setting up a merchant account, sifting through economic euphemisms and bank jargon can be a daunting and perplexing task. All you really want to know is what do these terms mean to for me?

The Merchant Discount Rate, for instance, is a confusing term that, simply stated, means the amount you will pay to have funds from a credit card transaction deposited into your bank account. There are several factors that determine your fee scale, including your industry, the type of credit cards you accept, debit as opposed to credit transactions, and the volume of your sales. Here are some factors you should keep in mind when shopping for an optimal discount rate:

The Interchange Fee is the fee that the bank that issues the credit card pays to your bank for accepting the risk of the transaction. The credit card companies will pass this fee on to both the cardholder and the merchant. There are several rate “tiers” that merchant service providers can offer you. This rate is always in flux and you should shop around to secure the lowest rate available for your industry and business size.
The Authorization Fee is a flat fee levied when a request for authorization of the transaction is sent to the issuing bank. This may be itemized on your invoice or bundled into the invoice total.
Communication Costs depend on how the transactions are made. Different fees apply for transactions made in the store, over the phone, and on the Internet. Generally, on-line transactions incur the highest fees. You should work with your merchant service provider to determine which will be the most cost effective for you.
Downgrades occur when there a problem with your transaction—missing or incorrect data, a settlement time longer than two days, or authorization failure. Downgrades can really drive up your fees and should be avoided as much as possible.

You and your merchant service provider will agree to terms of the discount rate prior to settling on your service but these are a few things you should keep in mind when entering into an agreement.

iPhone Charge Card Processing for Small Businesses

Alex Neir — Tue, 16 Aug 2011 17:37:00 GMT

iPhone Charge Card Processing for Small Businesses

Just as the iPhone has changed many of the ways that people interact and do business, it is revolutionizing credit card processing. iPhone charge card terminals usually cost between $80 and $150. They connect to iPhones and process all major credit cards much like a traditional terminal. They are generally just as secure as traditional terminals, but less expensive and more mobile.

Security of iPhone Charge Card Terminals

Business owners and customers sometimes fear change. However, there is nothing inherently less secure about an iPhone terminal as compared to traditional charge card terminals. The same encryption technology ensures that the cardholder's information is not shared with an unauthorized party, and the mobility of the device allows the card to be swiped right in front of the customer. Some restaurants have even begun having their waiters and waitresses carry iPhone terminals with them in order to assure the customer that nobody is illegally copying the credit card information.

Some customers may be under the impression that the iPhone itself stores the credit card information. This is simply not the case. Much like a traditional terminal does not store information, neither does an iPhone terminal.

Cost of iPhone Charge Card Terminals

In general, the upfront cost of iPhone terminals is less than for traditional terminals. There usually are not monthly fees associated with iPhone terminals, either. Most services charge transaction fees of between 1.5% and 2%, just like any other credit card processing service.

Mobility of iPhone Charge Card Terminals

An iPhone terminal can go anywhere an iPhone can go, which means it can go virtually anywhere. Although mobile credit card processing is certainly not a new concept, most processing systems were bulky and not user-friendly. Not only can an iPhone be carried anywhere, it usually is carried everywhere, reducing the chance of missing a sale. They are also useful for much more than credit card processing. Employers planning to issue iPhones can be confident that their employees will be receiving many other capabilities that will enhance the business.

The use of iPhone charge card terminals may have other positive effects, as well. iPhones are cutting edge. They are efficient but also chic, and businesses may gain credibility with a variety of demographics by incorporating iPhones into a business model.

5 Credit Card Processing Pitfalls Merchants Should Look For

Alex Neir — Thu, 11 Aug 2011 21:57:00 GMT

5 Credit Card Processing Pitfalls Merchants Should Look For

For a merchant, Internet credit card processing is a viable way to grow your business. However, there are certain areas where you can run into trouble, causing a loss of money or business down the road. Here are five key ways a merchant can avoid these pitfalls:

Look out for quoted low rates from companies offering to process credit card transactions. Always scrutinize each quote received to view all of the cost factors involved in signing up; this will ensure the best deal is acquired for the business.
Do a comprehensive search to ensure the cheapest processing equipment is used for the business. Avoid leasing equipment, as it can drain financial resources quickly while hooking the business in for a long-term contract you may not want.
Negotiate your contract term, many business fail to ask if the contract term can be shortened. In many cases it can so be sure to ask.
Watch out for termination fees; they can be a sign that a company is not invested in helping the business grow, and would rather see a customer terminate his/her agreement early so that it can collect the pricey termination cost.. Also keep an eye out for reprogramming fees, as although a company may try to convince your business that it must lease or buy equipment in order to avoid having to re-configure the devices, this typically is not the case; in generally the virtual terminal used for Internet credit card processing is easy to set up or re-configure.
Pick out the proper merchant account for the business. Ensure the strengths and weaknesses of each account are known before entering into any agreements with companies to use their equipment. By choosing the account that best suits the business' cost and service needs, the business ensures it will remain profitable once the equipment is deployed.

Internet credit card processing can be a straightforward and profitable way to get a business going online, and by exercising caution before entering into any agreements, a business has the best chance to grow in a market beyond a retail store or warehouse.

For more information on Internet credit card processing please give us a call at (800)917-8026.

Small Business Startup – Setting Up a Merchant Account

Alex Neir — Tue, 09 Aug 2011 16:32:00 GMT

Small Business Startup – Setting Up a Merchant Account

Starting a small business can be equally vexing and liberating. Any given enterprise can present the ambitious entrepreneur with a wide array of perplexing variables. Paramount to the success of any consumer based business, particularly one in a metropolitan environment such as Denver, is the ability to accept the widest possible selection of payments.

Denver credit card processing can be handled by an assortment of merchant banks, easily found and readily available. What follows is a concise list instructing the determined business owner on how to obtain such an account.
Complete a merchant account application. This is a standard form in which basic information relating to both the business as well as personal information about the owner is collected. Details such as social security number, address, contact info, and bank account information are all required inclusions.
Agree to a personal guarantee, accepting liability for all debts should the business fail.
Provide necessary documents of business identification. These include Articles of Incorporation, or, if the business in question is a sole proprietorship, a list of all Doing Business As (DBA) names. In addition if the business requires a license to operate this must be presented as well.
Three months of financial statements pertaining to the business are typically required. In the event that the business has already been accepting credit cards and is simply looking for new service, recent processing statements will also be necessary.
Provide a voided check from the bank account associated with the business, opened with the listed DBA name.
Submit to a credit check.
A local inspection is required to determine if the physical facilities of the business are sufficient to conduct the owner's intended service.
The owner must clear a check of the Terminated Merchant File.
Lastly, a satisfactory examination must be made of the owner's previous merchant agreements if applicable.

The process of starting a Denver credit card processing account is quick and easy once your business is organized and ready to go. Please give us a call at (800)917-8026 if you would like to get started with a credit card processing account.

How to Find a Good Merchant Service Provider in Denver

Alex Neir — Fri, 05 Aug 2011 19:58:00 GMT

How to Find a Good Merchant Services Provider

Partnering with a strong Denver merchant services provider not only enables a business to facilitate timely payment processing, but to deliver quality end-user customer service. If your business isn’t currently utilizing merchant processing to accept debit and/or credit cards, you are certainly missing out on a significant piece of consumer or business-to-business sales.

Locating a Merchant Services Provider

As with most professionals, the best are often discovered through referral networks. When seeking to partner with a new organization, be sure to ask for referrals from trusted business associates, clients and your network of friends. In addition to scanning your current network, you can also locate a merchant services provider via completing an online search. Once you have narrowed your initial search to several organizations to evaluate, you will need to develop a list of questions of which will provide you with answers to compare against.

Selecting a Merchant Services Provider

When choosing a good Denver merchant services provider, keep these factors in mind:

Experience - How long has the organization been in business? What are the company’s customers saying about the services offered? What does the Better Business Bureau have to say about the firm?
Services Offered - Competitive merchant services providers offer a wide range of services, extending beyond addressing the basic processing needs of your business. And most, will offer these basic services at no cost to their customers.
Rates and Fees - What are the monthly or ongoing rates and fees for the services offered? Can you review those terms in writing? Is there a monthly limit on the transaction volume? If so, what rates will be assessed? Will you be assessed an application fee, set-up fee or installation fee?
Technology - Does the company use the most up-to-date technology for processing transactions? How often can you expect the technology to be updated?
Customer Support - Does the company offer 24/7 live customer service? What is the expected response time for addressing technical issues?

The most important decision when selecting a merchant services provider should be the level of value you are receiving for the level of service provided. Spend time performing not only your initial research, but with gathering facts about the firms you are considering to ensure that you select a Denver merchant services partner that meets or exceeds 100% of your requirements.

What’s Best - PayPal, Square Up or a Merchant Account?

Alex Neir — Fri, 29 Jul 2011 16:56:00 GMT

What’s Best - PayPal, Square Up or a Merchant Account?

Based on analysis completed over the last few months we have developed an easy to follow guide which will help your business determine the best credit card processing solution given your specific needs. Each credit card processing solution has strengths for specific situations.

When considering which credit card processing solution is the best it is important to start by asking 2 questions:

Is your business conducting sales face to face or over the internet?
What is the average credit card volume on a monthly basis?

With answers to these 2 questions we are able to guide you to the perfect credit card processing solution for your business.

Is your business conducting sales face to face or over the internet?

If you are conducting face to face sales it makes more sense to consider the Square Up solution or a merchant account. The reason, Square Up and a merchant account offer your business the ability to swipe the customer’s credit card. This function lowers the credit card processing rates dramatically. PayPal does not offer a swipe solution so it is not a good fit for face to face sales.

If you are conducting sales over the internet, you should consider PayPal or a Merchant Account. The reason, PayPal and a Merchant Account offer a payment gateway that can be used to connect your businesses website to a credit card processing platform. Square Up does not offer a payment gateway so it is not a good fit for internet based sales.

What is the average credit card volume on a monthly basis?

Now that we have determined the best solutions given the manner in which the sale is conducted, we will now look at the total monthly volume to narrow our selection even further.

For face to face sales with an average monthly sales volume below $4,300 the best solution is Square Up. Square Up’s fee structure is set up to be very cost effective for face to face sales under $4,300 a month. When the sales volume exceeds $4,300 a month then an actual Merchant Account becomes more cost effective than Square Up.

For internet sales with an average monthly sales volume below $2,000 the best solution is PayPal. PayPal’s fee structure is set up to be very cost effective for internet or ecommerce sites with sales under $2,000 a month. When the sales volume exceeds $2,000 a month then an actual Merchant Account becomes more cost effective than PayPal.

What the Durbin Amendment Means to Your Merchant Account

Alex Neir — Tue, 26 Jul 2011 18:37:00 GMT

What the Durbin Amendment Means to Your Merchant Account

The Durbin Amendment is new legislation that reduces the interchange fees associated with debit card processing. According to the Federal Government, which uses a transaction amount of $38 as an average, the cost of processing a debit transaction will be reduced by nearly 50%.

So, the cost of processing a debit card transaction is being cut in half, this is great news for businesses accepting credit cards, right?

Well, not necessarily.

In order for a business to benefit from the reduced processing rates the business must be on an interchange plus pricing structure. With interchange plus pricing the actual cost (interchange) associated with each credit card transaction is passed directly to the business. With tiered pricing or ERR pricing the cost of the credit card transaction is fixed at a specific tier. So, when the interchange fees are lower for a debit transaction, but the tier price remains the same there is no savings associated with the transaction. However, the margin the processor is collecting has gone up.

So, the Durbin Amendment has reduced the cost associated with accepting credit cards for merchants or businesses that have interchange plus pricing. If you would like to benefit from the Durbin Amendment you need interchange plus pricing. Find out how to get interchange plus pricing!

When is an Actual Merchant Account Better Than Square Up

Alex Neir — Thu, 21 Jul 2011 18:44:00 GMT

When is an Actual Merchant Account better than Square Up

When is an Actual Merchant Account better than Square Up? The short answer, when your sales total more than $4,300 a month.

The Square Up mobile processing solution is a great deal for very small businesses that are transacting less than $4,300 a month. Square Up advertises no monthly fees with a qualified rate of 2.75% combined with a non-qualified rate of 3.50% and $0.15 per transaction. This account set up is very attractive especially for businesses that are mobile and have relatively small sales volume.

So when does it make sense to set up an actual merchant account? There are a few factors to consider.

Square Up’s $1,000 weekly cap
A merchant account is less expensive at a monthly sales volume above $4,300

Square Up’s $1,000 weekly cap – Square Up imposes a weekly cap of $1,000 in card-not-present sales. If the account exceeds the $1,000 cap all monies that exceed the $1,000 cap are held for 30 days.

A merchant account is less expensive at a monthly sales volume above $4,300 – When we look at the percentage of total cost for both an actual merchant account and Square Up account we see that the total cost for a merchant account drops below 2.75% when sales exceed $4,300 for the month.

This analysis assumes the following:

Average sale amount of $25
Total monthly service fees for the merchant account total $19.00 a month
Total monthly service fees for Squared Up total $0.00 a month
Per transaction fee for the merchant account is $0.20
Per transaction fee for Squared Up is $0.00
Qualified rate for the merchant account is 1.49%
Qualified rate for Squared Up is 2.75%

Another important consideration when considering a switch from Squared Up to a merchant account is to make sure the new solution has the same mobile credit card processing capability.

If you are interested in how this information was compiled please drop me an email at alex@maxxmerchantservices.com

Merchant Services in Denver, CO – Top 3 Benefits

Alex Neir — Tue, 19 Jul 2011 20:50:00 GMT

Merchant Services in Denver, CO – Top 3 Benefits

Are you looking for a merchant service provider that is local to the Denver and surrounding areas? Maxx Merchants located at 609 E Speer Blvd., Denver,CO,80230 specializes in merchant services and credit card processing. Maxx Merchants has been dedicated to helping small and medium sized businesses establish fast, easy and reliable payment processing since 2001.

Maxx Merchants specializes in account creation for retail merchants, phone order merchants, and internet merchants. We have a very robust payment gateway that is easy to integrate to almost any website and facilitates payment processing from the iPhone, Android and Blackberry mobile operating environments.

Maxx Merchants has built its success through emphasis on customer services. We have dedicated technical support staff ready 24 hours a day, 7 days a week to assist with any processing related issues. All support staff have access to back end networks to ensure expedited resolutions. This means that all support related inquiries are resolved on the initial call.

What are the top 3 benefits to selecting a merchant service provider in Denver?

Personalized Service – When you select a local merchant service provided you get the benefit of a more personalized experience. It starts of with al face to face meeting to discuss the specific needs of your business. The application process is discussed in detail and explained thoroughly. A detailed explanation of the support materials needed to accompany the application into underwriting is given. The application is explained and completed. Once the application is approved, installation is handled personally and all systems are tested to ensure proper function and speed.

Expedited Issue Resolution – Another benefit of local merchant service in Denver is expedited issue resolution. There is something very reassuring about being able to call your account representative with any problems and having your rep available to assist first hand.

On-Site Consultation – One of the greatest benefits to local merchant service in Denver is on-site consultation. Consultation includes best practices in solution set up, installation accuracy with full testing and continued follow up to make sure everything is running efficiently.

Match or The Terminated Merchant File (TMF) – Beware

Alex Neir — Tue, 12 Jul 2011 21:15:00 GMT

Match or The Terminated Merchant File (TMF) – Beware

The Match file or, more commonly know as, the terminated merchant file or TMF is a database that the credit card processing industry uses to log merchants that have violated the terms of their contact and have subsequently been terminated.

Similar to how the major credit reporting agencies track consumer behavior in an effort to establish a credit profile. The Match or TMF database is used to flag business and principals that have miss-managed their merchant account in the past and been terminated.

When an application for merchant services is received the processor will query the Match or TMF database to determine if the business or principals have been terminated in the past. If a possible match entry is indicated it is the responsibility of the processor to determine if the entry is for the same business and/or principal(s) seeking account approval. If an exact match for business or principal is determined the processor will then inverstigate the reason for the match entry. At that point the account will be declined or a conditional approval will be granted which states that full approval is subject to the pervious processor removing the Match entry.

Once a business or principal is placed on the Match or TMF it is extremely difficult to get a merchant account approved. It is also very difficult to get a business or principal removed from the match or TMF database.

If you find that you or your business is on the Match file it is very important to determine what processor placed you on the file. Next you will want to contact that processor to determine the reason. Once you have determined the reason it is essential to rectify the situation, if possible and request removal from the database.

PCI Compliance – What it is and why it’s important

Alex Neir — Fri, 08 Jul 2011 18:24:00 GMT

PCI Compliance – What it is and why it’s important

What is PCI compliance?

PCI compliance boils down to compliance with a set of rules defined as the PCI DSS or Payment Card Industries Data Security Standard. The PCI Security Standard has been established by the major credit card associations as guidelines for the collection of credit card information. These guidelines have been established to prevent fraud and to minimize credit card security threats.

In order to achieve PCI compliance a business must have dedicated policies and procedures in place that define how credit card holder information is collected, transmitted and stored. If a technical system is used to collect credit card holder information, the system must demonstrate encrypted transmission and storage.

Why is PCI Compliance important?

Let’s face it, as credit card carrying consumers we all have sensitive data about ourselves collected transmitted and stored many times every day. With all that information being collected by so many individuals, businesses and charities it is very important that information is protected. As identity theft continues to grow the tolerance for mismanagement of credit card holder information is disappearing. The major credit card association have begun to institute large monetary fines for businesses that are found to have compromised credit card information.

Get compliant by selecting a vendor that manages your PCI compliance for you. Maxx Merchants is 100% PCI compliant.

CostCo Credit Card Processing – a deal or not

Alex Neir — Thu, 30 Jun 2011 13:12:00 GMT

CostCo Credit Card Processing – a deal or not

Anyone who has a CostCo membership is familiar with the value the big box wholesaler offers on all sorts of merchandise and food. But, does the value translate to credit card processing? The answer may surprise you.

First of all it is important to understand that CostCo in not providing credit card processing. They are partnered with a company called Elavon who is a subsidiary of USBancorp. It is Evalon who is setting the terms and rates for the credit card processing account. Current at the time of this blog post the advertised rates for a CostCo credit card processing account are as follows:

Retail Merchants: 1.48% for card-swiped transaction plus $.20 per transaction
Internet and Mail Order / Telephone Order Merchants: 1.99% plus $.27 per transaction

As with most credit card processing providers advertised rates the rates look great. It’s the fine print that must be read to understand the actual rates that will be charged once the account is set up. Looking at CostCo’s website for their advertised rates we see the fine print:

"Rates listed are for qualified transactions. Rewards cards process at higher rates. Monthly minimum fee amounts to $20 per month."

To the average business this can be very confusing. What difference do rewards cards have on the actual rate charged? The answer – a lot, as statistics say that rewards cards currently account for 40% to 45% of all credit cards in circulation and are on their way to 93%. Let’s investigate further by looking at an actual CostCo bill:

Looking at the bill you will see that transactions that qualified for the advertised rate are in green and transactions that did not qualify for the advertised rate are in red. Simple analysis determined that over half the transactions on the bill were charged a rate above the advertised rate. This is not uncommon for an advertised rate. That is why it is very important to understand how the rates will be applied once the account is set up. For a detailed understanding of what to ask when shopping for a merchant account, download our report!

Credit Card Processing in Denver, CO

Alex Neir — Tue, 28 Jun 2011 12:52:00 GMT

Credit Card Processing in Denver, CO

Is your business located in Denver or the surrounding areas? Are you looking for local credit card processing in Denver? Do you want the added comfort of a local business that is able to respond personally to any issues you may have?

Maxx Merchants located in Denver is a premier provider of credit card processing. Founded in 2001 Maxx has consistently maintained a top 5 standing with Wells Fargo for merchant retention. In other words Maxx Merchants consistently exceeds customer expectations when it comes to credit card processing.

Maxx Merchants offers a full line up of credit card processing products for the Denver market. Some of which include:

Our sales staff is required to maintain a rigorous understanding of our entire product suite with detailed comprehension on how to adapt each product to the specific needs of each business. Every sales associate maintains a working relationship with the business / merchant for life of the account. This attention to customer service ensures each business is set up correctly and is well cared for.

In addition to a dedicated sales representative each business has 24 hour a day 7 days a week access to technical support. Maxx’s tech support is US based, live, English speaking personnel that have direct access to the bank-end credit card processing network. This results in first call issue resolution. If your account experiences difficulties you are 1 call away from a resolution.

Our attitude is the customer comes first. We will do everything in our power to make sure your experience with credit card processing is a good one. Please allow us to show you how integrity, professionalism and attention to detail translates to a partnership for your credit cards processing needs.

Merchant Account Support Documents – What’s Needed

Alex Neir — Thu, 23 Jun 2011 13:43:00 GMT

Merchant Account Support Documents – What’s Needed

When applying for a merchant account your business will be required to fill out a merchant account application. The application is typically standard across most merchant service providers with regard to the information collected on the application. Please NOTE: the terms can very greatly from provider to provider so be sure to read the service agreement that outlines the terms of service.

In addition to the application your business will be required to provide support materials as they relate to the business and owners. Required merchant account support documents are as follows:

Business organization documentation

Business articles of incorporation
Or Non-Profit documentation
Or Sole Proprietor documentation

Applicant(s) driver’s license
Voided business check
Business or applicant financial documentation

Previous processing statements
Or business banking statements
Or owner(s) personal banking statements

Business organization documentation

Organizational documentation is needed to ensure the business is organized in the US and is in good standing.

Applicant(s) driver’s license

A copy of the applicant(s) driver’s license in necessary to verify the information on the application has been recorded accurately and will be used to perform a credit check on all listed applicants.

Voided business check

A copy of a voided business check is required to prove that the account associated to the merchant account has been established. This is the account that the funds received from credit card sales will be deposited into.

Business or Owner financial documentation

Financials are needed to illustrate the financial strength of the business and or applicants. Typically if the business has had a merchant account in the past all that needs to be provided are 3 of the most recent processing statements from the previous provider. If no previous merchant account is available, the next requirement would be the 3 most recent business bank statements. If the business is new and there is no banking history associated with the business then 3 of the most recent personal bank statements for the applicants will be required.

Merchant Account Soft Limits – Explained

Alex Neir — Tue, 21 Jun 2011 20:49:00 GMT

Merchant Account Soft Limits – Explained

When a business applies for a merchant account the application will ask for three financial figures that represent the credit card processing amounts requested by the business. These three figures are:

The average ticket or sale amount
The high ticket or sale amount
Monthly credit card sales volume

These figures help the credit card processor compile a risk profile for the business and ultimately drives weather the business is approved or not. A risk profile is considered based on the fact that the funds received from the end customer are deposited directly into the business bank account. The credit card processor assumes that the products or services purchased will be delivered. If they are not and the business disappears, the processor is responsible for refunding the customers money.

The sales figures requested on the merchant account application are weighted against the businesses financial strength to determine acceptance. If the business and owners are financially capable of supporting the requested amounts the application is approved.

Once approved these figures represent the soft limits for the account. The term “soft limit” is used because the account will allow these limits to be exceeded, however, the credit card processor reserves the right to hold funds that exceed the soft limits amounts on the account. Therefore it is important to understand your account limits and to stay within them.

What if you have to exceed your soft limits?

The best thing to do is be proactive. If you know you are going to exceed your high ticket amount or your monthly volume, call your processor ahead of time and explain the situation. By being proactive you are demonstrating good management of the account and most processors will work with you and will not hold your funds.

Maxx Merchants, Big Frog and ReSource Software Announce Partnership

Alex Neir — Thu, 16 Jun 2011 13:25:00 GMT

Comprehensive Point of Sale (POS) and Payment Processing for new Big Frog franchise owners

Maxx Merchants, Big Frog and ReSource Software have partnered to offer integrated POS and payment processing services for Big Frog franchise stores.

Our partnership ensures preferred pricing combined with simplified set up, deployment and customer service.

With any business, the key to success is maintaining a simple business process while, at the same time, keeping business expenses as low as possible.

ReSource and Maxx Merchant's “keep it simple” approach is designed to save Big Frog franchise owners time and money.

ReSource Software is the industry leader in small business POS and multi/unit franchisor solutions. ReSource offers the best of breed solution for Point of Sale, Inventory Management, Marketing, Invoicing, Statement Management, Accounting and Shipping. Resource’s customizable solution provides the entire package, from software and hardware to installation and training.

ReSource’s technology is only part of the story. While their support tools are equal to larger companies, their support staff is unrivaled. Superior customer service, delivered on each and every call, is the attitude ReSource emphasize most. Developing relationships with customers is the most important part of the business.

Maxx Merchant's goal is to deliver cost effective, secure and innovative credit card processing to small and medium sized businesses. By providing personal service and technologically advanced products, Maxx Merchants has become one of the fastest growing payment processors in the country. With over $1.1 Billion of annual processing volume their success is a result of long-term customer relationships, a well-trained sales force, superior processing platforms and a merchant friendly approach to sales.

Maxx Merchants is intent on engaging and inspiring Big Frog franchise owers by practicing the values expected from a premier payment processing company. Maxx is committed to creating an environment where the Big Frog comes first. Maxx Merchants recognize that success is not about numbers, but more importantly about people and relationships.

Integrated payment processing with ReSource Software's POS offers Big Frog franchise owers the best of breed solution:

PRICING: Big Frog has negotiated reduced credit card processing rates to ensure Big Frog franchise overhead stays as low as possible.

SET UP: ReSource Software’s POS system has been pre-integrated with Maxx Merchants payment processing suite to offer turn key credit card payment acceptance.

DEPLOYMENT: All components of the Big Frog POS and credit card processing system have been configured and tested prior to delivery. The Big Frog POS arrives on location ready for business.

CUSTOMER SERVICE: Industry leading customer service and response ensures timely resolution of any system related issues.

Merchant Account Funding Delays - Explained

Alex Neir — Tue, 14 Jun 2011 13:04:00 GMT

Merchant Account Funding Delays - Explained

A merchant account funding delay is the result of the merchant service provider holding funds that would normally be deposited into the businesses bank account. Typically the delay is the result of a temporary hold of funds due to exceeding the soft limits on the account or to reduce the risk associated with a particular business.

Merchant account funding delay due to exceeding account soft limits

When a business signs up for a merchant account part of the application asks for estimates on the total dollar amount to be processed each month, the average sale amount and the high sale amount. Each of these figures represents a soft processing limit for the merchant account. It is very important to give accurate estimates for these figures when you set up the account. The reason, your processor reserves the right to hold funds that exceed any of the processing soft limits on the account.

If a funding delay is implemented, the reason is the result of increased risk associated with the account. When a merchant account application is reviewed for approval by the credit card processor the criteria for an approval involves the evaluation of the information provided on the application. The processing volume, average sale and high sale amounts provided on the application are weighted heavily when the application is approved. If these limits are exceeded the risk profile for the business changes and the processor will hold funds. For example lets say a business is approved for an account with a monthly processing volume of $30,000, an average sale amount of $100 and a high sale amount of $1000. If the business runs a single transaction for $3,000 in a given month the high sale amount has been exceeded and the processor may hold the entire $3,000. Now, this hold will not be permanent as the processor my require additional authorization from the customer in order to complete the deposit. Another example is if the $30,000 monthly processing limit is exceeded. Any amount above the limit is subject to a hold.

It is good practice to remain within the limits of the account. If, however, you need to exceed the soft limits on the account, it often works to preemptively call into your processor and explain the situation for exceeding your limits. Most processors will see this as good management and allow for an excess amount to be run.

Merchant account funding delay to reduce the risk of a particular business type

This type of merchant account funding delay is usually called a reserve or rolling reserve. A reserve will be placed on an account if the account is perceived to be high risk. Typically for these types of accounts the reserve will be disclosed up front and will be a condition for approval. The reserve amount will specified in an addendum to the merchant agreement. Each month a percentage of the total sales volume will be held until the reserve amount is fully funded. Once the reserve amount is fully funded all remaining funds will be deposited in the business bank account.

High risk merchant account - explained

Alex Neir — Mon, 06 Jun 2011 21:37:00 GMT

High risk merchant account - explained

So what is it that causes a merchant account to be considered high risk? A common question and while the answer may seems straight forward it’s actually a little more involved than you may think. Every merchant service provider will have underwriters with slightly different guidelines for business classification. That being said below is a list of the most common criteria that is evaluated to determine the “riskiness” of a business.

Level of Chargebacks

A chargeback is when a customer calls their credit card issuing bank to complain about a charge on their statement. The level of chargeback’s for the business must be either, less than 1% of the total sales for the month and/or less that 100 chargeback occurrences. If either level is breached the business will be considered high risk.

Instances of Credit Card Fraud

Certain business types and industries have a higher level of fraud and fraud attempts. Industries such as on-line betting have high fraud instances and are classified as high risk. Additionally, it’s possible for a business to be approved as a low risk business only to have there account re-classified later if fraud attempts are not managed according to the guidelines outlined in the merchant service contract.

Product or Service Paid in Advance

If your business provides future dated products or services in which the customer must pay in advance, this business model is usually classified as high risk. It has been documented that this business model increases the occurrence of chargeback’s and therefore creates more risk for the processor. Air travel, subscription services and membership services typically fall into this category.

Target Market Location

Any business with a target market located outside of the United States will be considered high risk. When processing international credit card payments it is difficult for a domestic merchant account to perform an address lookup for the credit card being charged. The address lookup is a basic fraud prevention measure. Without the ability to perform address lookups the business account will be classified as high risk.

Sales Acquisition

The manner in which a business acquires sales and leads will be considered when classifying the business. Businesses that use aggressive sales tactics, over exaggerate results, use outbound telemarketing, multi-level marketing or fulfillment through a third party will be considered high risk.

Sales Transaction

Merchant account classifications will always take into consideration how the business intends to accept credit cards. Any business that is not swiping the customer’s credit card through a terminal will undergo more scrutiny. Additionally, any home based internet business will be classified as high risk.

5 Reasons Why Businesses Overpay for Credit Card Processing

Alex Neir — Thu, 02 Jun 2011 13:24:00 GMT

5 Reasons Why Businesses Overpay for Credit Card Processing

There are numerous reasons businesses overpay on their credit card processing. Here are the 5 most common reasons.

#1.) Misunderstanding of how the fees are applied

With many different ways to structure credit card processing fees it is sometimes difficult to determine how the fees are applied. The three most common pricing structures are tiered pricing, ERR pricing and interchange plus pricing. Depending on the pricing structure that is in place for your business, there are specific rules that dictate how the fees are applied. It is very important to speak to your sales representative to review the pricing that has been set up. Additionally, it’s important to discuss how your specific pricing works and how the fees will be applied to your account.

#2.) Ignoring your credit card processing statement

The main reason most businesses ignore their credit card processing statement is the fact that the fees for the service are automatically deducted from the business checking account. Therefore, if a check doesn’t have to be written the statement tends to be overlooked. The credit card processing statement details all the fees charged for service over the course of the month and will also include messages from the processor as to rate increases and special updates. It is very important to review the statement each month so that you are comfortable with the fees that are applied. If there are any surprises or charges you do not recognize. Call your representative immediately and question the fee.

#3.) Confusing credit card processing statement

Traditionally the credit card processing statement is one of the most confusing statements you will receive for your business. To make matters worse some companies intentionally over complicate their statements to hide exorbitant fees. It is very important to understand your processing statement sections and fee layout. If you are confused by your statement, call your sales representation and ask them to go over the statement with you until you are comfortable.

#4.) Failure to review your credit card processing rates

Price increases for your account can be imposed by Visa and Master Card or by your processor. It is important to review your rates at least once a year and compare the pricing to what you were paying when the account was set up. Typically Visa and Master Card raise rates on a yearly bases and the increases are usually very small. If you are paying considerably more today than you were when the account was created, odds are that your processor is increasing your rates and you should ask why.

#5.) Unintentional downgrades

A downgrade is the process of a transaction being charged at a higher level due to criteria for the credit card sale not being met. For example on a debit transaction if the PIN number is not captured, the transaction will be charged at a higher (or more expensive) pricing level. Additionally, for a swiped credit card transaction the terminal may ask for a zip code. If the zip code is not entered the transaction will be more expensive for the business to process. Speak to your sales representative to understand the criterion that needs to be captured to ensure you are qualifying for the best possible pricing.

Merchant account early termination fees | How they work

Alex Neir — Tue, 31 May 2011 13:15:00 GMT

Merchant account early termination fees | How they work

Most every merchant account contract will include an early termination fee. The early termination fee is charged to the business if the business closes the account before the end of the contracted term. It is important to understand what the early termination fee is before accepting the terms of service from your merchant service provider. The early termination fee will be spelled out in the service agreement so be sure to review the contract before signing.

Important things to know about early termination fees:

It can be negotiated
It can be calculated multiple ways
Be careful with refusal to pay

Negotiating your early termination fee

Some merchant service providers will allow for the early termination fee to be negotiated. Typically if you select an Independent Service Organization (ISO) to set up your merchant account the early termination fee is at the discretion of the sales representative. For example, if the business goes “out of business” it is reasonable to expect that the early termination fee to be waived. Make sure to have this conversation up front and get the agreed terms in writing.

Early termination calculation

The early termination fee can be a set amount, a prorated amount based on the remaining contract term or a combination of both. As an example we will use the following to illustrate how the early termination fee is calculated.

3 year contract term with the early termination fee equal to the greater of $250, or $35 multiplied by the number of months remaining in the then-current term.
Contract approved 01/01/2011
Termination on 04/01/2011

Early termination fee = $1,155 (33 months remaining X $35)

Be careful if you decide not to pay

It can be frustrating if you are charged an early termination fee for terminating a contract with a merchant service provider for a justified reason. It can seem unfair and unjust especially if you feel the service you were provided was unacceptable and you terminated to end a bad experience. It is commonly thought that a simple solution is to close the account for which the termination fee will be deducted from. I caution this approach as it allows for your provider to add your business to the terminated merchant file (TMF). The TMF is a file that represents businesses that have been banned by the industry. Once a business has been added to the TMF it is very difficult to get it retracted. Additionally, it makes it next to impossible to get a new merchant account set up.

QuickBooks Merchant Account Plug-In

Alex Neir — Thu, 26 May 2011 13:08:00 GMT

QuickBooks Merchant Account Plug-In

Does your business use QuickBooks and would you like an integrated payment processing platform that lets you accept credit cards and ACH payments? The Maxx QuickBooks Merchant Account Plug-In is extremely easy to use and makes it very simple for any business using QuickBooks to easily process electronic transactions without ever leaving your QuickBooks environment.

The Maxx QuickBooks Merchant Account Plug-In installs directly into QuickBooks Pro, Premier and Enterprise edition software applications and provides a direct interface within QuickBooks to apply electronic payments. Payments can be applied to specific invoices, against open invoices or against a new sales receipt. Additionally, multiple payments can be applied to a single open invoice at the touch of a button.

The plug-in is completely PCI-DSS compliant as all credit card and ACH account numbers are encrypted and masked within the application. The plug-in also has built-in functionality that allows for customer credit card and ACH account numbers to be recalled for subsequent transactions.

Both card present swiped transactions and card not present keyed transactions are supported within the plug-in. For swiped card present transactions, customer credit card information is loaded directly into the plug-in for processing. All customer data is loaded from the customer record from within QuickBooks.

The Maxx QuickBooks Merchant Account Plug-In adds integrated payment processing directly to your QuickBooks installation for easy payment application. Please give us a call at (800)917-8026 to learn more.

Top 7 benefits of accepting credit cards for your business

Alex Neir — Thu, 19 May 2011 20:12:00 GMT

Top 7 benefits of accepting credit cards for your business

Credit cards are one of the most accepted payment systems for the purchase of goods and services that add ease and convenience for both buyers and sellers. Lets look at how businesses can benefit by accepting credit cards as a mode of payment.

According to the researchers on consumer’s habit, people using credit cards to make purchases are mostly impulsive by nature. The average credit card user buys 2.5 times more than people who use other forms of payment. The obvious conclusion, any business that offers the convenience of credit cards as a form of payment can increase their revenue.
When you accept credit cards as a way of transacting payment, it creates a sense of security in the mind of your customers. If the product does not live up to the standards for which it was advertised, there is a dispute process in which the customer can get their money back.
It has been proven that credit cards help to enlarge the sales of a business by embracing a wider customer base. The ease and convenience of using a credit card to pay, plays a significant role in generating greater sales.
Companies that offer an online purchase option from their websites enable greater hours of operation. Credit card payment from the website allows for business automation that results in greater sales with less expense.
International sales become easy with an international merchant account. An off shore international account allow for sales to be completed in native currency with deposits linked to a single account in any desired country.
Credit card transactions are processed in real time. So settlement is quick and easy without the need for complicated account receivable management.
Setting up a credit card merchant account takes less than 24 hours.

Credit card processing, a bad experience

Alex Neir — Thu, 05 May 2011 21:06:00 GMT

Credit card processing, a bad experience

Like many things in life, individual experience with credit card processing shapes an opinion of the industry. More often than not, that experience is greatly influenced by the sales representative that was hired to complete the account set up. If your business has had a bad experience with a credit card processing account, the rep was most likely the reason!

Why was the rep the reason for a bad experience?

Within the credit card processing industry the vast majority of companies setting up accounts are referred to as Independent Sales Organizations (ISO), with the actual underwriting and functions of the account being handled by a credit card processor. The relationship between the ISO and the credit card processor is outlined in a contract between the two entities. The contract spells out the agreement and terms for which the ISO is able to sell credit card processing.

Each ISO negotiates their contract with the credit card processor individually to determine the specifics of the service the ISO is able to sell. Things like the commission payout, price, quota, and restrictions are all specific to each ISO’s contract. What this means is that a sales representative for one ISO may be able to waive the monthly minimum fee and annual fee on a credit card processing account while another representative, working for the same processor, can not.

Another major aspect of a perceived bad experience with credit card processing has to do with the price. Again, it’s important to understand that the price is a function of the contract in place with the processor. The sales representative your business works with has clearly defined pricing established with their processor. In order for the sales representative to make money they must “mark-up” the resale rate offered to your business. Therefore, if you feel like you have been taken advantage of, it is likely that the sales representative you are/were using had poorly negotiated contract pricing, or they are/were greedy.

Therefore, it is exceedingly important to select am ISO and sales representative that is able to set their own pricing. A good organization will be able to work directly with your business to customize a pricing structure that meets your businesses specific needs.

Another important item for consideration when selecting an ISO and sales representative is how they conduct their business. Your sale representative shouldn’t disappear once the credit card processing account has been approved and set up. Your sales rep should be available to consult your business on best practices, issue resolution, account maintenance and general support. Your credit card processing account should be a health relationship built on trust and responsiveness for as long as the account is active.

The credit card processing account agent you select functions as your ambassador and advocate for the life of your account. Selecting the right one can completely alter your experience and ultimately change your perception of the industry.

As a wholesale ISO, Maxx Merchants has established themselves as a leader in the credit card processing industry with exceptional pricing and the industries best customer service. Allow me the opportunity to set up your account and I guarantee your expectations will be exceeded. Contact me directly at (800)917-8026.

WordPress shopping cart, ecommerce made easy

Alex Neir — Tue, 03 May 2011 21:17:00 GMT

WordPress shopping cart, ecommerce made easy

Do you have a WordPress website for your business and are you looking to add a shopping cart to facilitate online sales or ecommerce? Adding a WordPress shopping cart has never been easier thanks to the Shopp plugin for WordPress.

Shopp lets you add a full blown shopping experience to your website with the simple installation of their plugin. Shopp installs just like any other plugin and once installed the application walks you through your product catalog set up. Setup has been simplified and streamlined to get your products configured with ease.

Shopp has been developed with ease-of-use as the primary objective. It is ready to go out-of-the-box and enables you to get your online store up and running in very short time.

What’s involved?

The Shopp WordPress shopping cart is available at their website http://shopplugin.net/store/. When you make the purchase you must also select a payment gateway to accompany the plugin. The payment gateway is the software that encrypts your customer’s credit card information and sends it to your merchant account. The merchant account then performs the authorization of the sale at the customer’s bank. The authorization is a reserve of funds to then be deposited into your bank account as payment for the products purchased.

If you are unsure which payment gateway to select I recommend Authorize.net. They have reasonable pricing and easy integration options to get your store connected with a merchant account.

Once you have made a gateway decision and completed the purchase of the plugins, simply install the plugin through your WordPress administration dashboard. Once installed follow the easy set up instructions to add your products to the shopping cart. You are able to test the layout and organization of the products as you go. Once you are satisfied with the operation you will need to configure your gateway and merchant account.

I would suggest contacting a merchant service provider to help you set up you gateway and merchant account. Once the gateway and merchant account have been integrated you are ready to sell you products on-line 24 hours a day, 7 day a week.

Here at Maxx Merchants we are WordPress specialists and can help with all aspects of getting your WordPress shopping cart up and running. For additional help and pricing please provide us with your Name and Email and an account specialist with get in-touch immediately.

Best practice account set up for international credit card processing

Alex Neir — Wed, 27 Apr 2011 22:08:00 GMT

Best practice account set up for international credit card processing

Does your business sell products internationally? Are you looking to establish a solution that is compliant with association regulations and sustainable?

Visa / Master Card association regulations state that a business should have only one Merchant ID (MID) per product line. However, there are exceptions to this rule, a merchant is permitted to have multiple accounts for a product line if the intention is to acquire greater volume limits. Multiple accounts are also permitted to route international transactions to an appropriate account for processing. NOTE: It is strictly prohibited for a merchant to acquire multiple merchant accounts in order to spread charge back volume and occurrence.

I order to achieve the best possible rate for processing international credit card transactions, it is important to route the transaction to a specific account for processing. This is achieved through the set up of multiple merchant accounts in addition to deployment of software that determines the IP address of the computer initiating the order. Once the origination of the order is determined the transaction can be routed to the appropriate merchant account for processing.

All United Stated originated sales should be routed to a US based merchant account. In order to establish a US based merchant account the requirements are as follows:

Incorporation in the United States
United States Bank Account
United States based credit history
United States identification

With a US based merchant account you will have a 5% - 10% limit on international transactions. There for any non-US originated sales need to be routed to an international or off-shore merchant account for processing.

International merchant accounts can be set up in numerous countries. Most merchant account providers offering international / off-shore merchant accounts will handle the entire account set up. Set up typically requires incorporation in the selected country as well as establishment of a domestic bank account. Again, the incorporation and bank account set up are offered as a service of the merchant account provider. Once complete, all international transactions (with the exception of the US based transactions if you are able to establish a US based account) should be routed to this account.

Lastly, all domestically originated transactions (relative to the businesses home country) should be routed domestically.

This merchant account solution set up ensures your international sales are routed to the account where you receive the best possible rate for processing.

For more information pertaining to merchant account set up for international sale please contact us at (800)917-8026.

How long should a business keep credit card receipts?

Alex Neir — Tue, 26 Apr 2011 20:48:00 GMT

How long should a business keep credit card receipts?

This is a very common question most businesses forget to ask once their credit card processing account has been approved and set up. Retaining credit card receipts for too long can become cumbersome and difficult. Retaining credit card receipts for too short a period can expose the business to liability.

The main reason your business needs to hold onto the transaction receipt signed by the customer is to fight chargebacks. A chargeback is the process of a customer disputing a charge that shows up on their credit card statement. There are many reasons customers chargeback against a business. Some reasons include; incorrect products or service received, fraud, unrecognized charge, etc. When a chargeback is initiated against your business the only defense is a signed copy of the sales receipt which includes the customer’s signature. The bank will use the credit card receipt to match the signature they have on file.

Another important aspect of retaining credit card receipts is for tax purposes. Only your accountant can advise you on the retention period relative to taxes but typically 7 to 10 years is sufficient.

The statute of limitations pertaining to customer initiated chargebacks is 18 months from the time the transaction appears on the statements. So, for chargeback purposes it is important to keep you business credit card receipts for 18 month.

Sell your products online – A guide to ecommerce

Alex Neir — Thu, 21 Apr 2011 12:29:00 GMT

Sell your products online – A guide to ecommerce

Are you looking to set up an online store? Are you confused with all the moving parts and how they work together? If the answer is yes, then look no further as our guide is intended to explain what you need and how to set it up.

This guide is broken down into 3 sections, each intends to explain how an ecommerce site works and what’s involved.

Starting and ecommerce website. Starting with the basics, what is involved? We begin by discussing each individual piece of the solution. We start with the website itself, next we talk about the shopping cart and hosting, last we discuss the payment gateway and merchant account. Don’t get discouraged as it seems like a lot in the beginning but once you understand how each piece works it becomes much simpler.

Shopping cart compatibility. In this section we discuss the shopping cart and payment gateway in detail. We offer a workflow on how the shopping cart and payment gateway work together with the merchant account to accept payments via the internet. We also have a shopping cart compatibility worksheet to help focus the information you need based on your set up.

Merchant account rates and fees explained. In this section we break down all the rates and fees associated with a merchant account so that you know what to expect. We offer a detailed explanation of each, as well as a guide to pricing.

The internet is a powerful vehicle for expanding your business reach. By opening an ecommerce store you are able to reach customers that you previously could not. You also allow your customers to purchase your goods and services 24 hours a day and 7 days a week. Additionally, you are creating a stronger brand as exposure on the internet increases brand awareness, brand availibility and loyalty.

Would you like to accept payments from your website? If so please click the image below.

Getting started with a merchant account – 5 Steps

Alex Neir — Mon, 18 Apr 2011 13:34:00 GMT

Getting started with a merchant account – 5 Steps

This guide is intended to help your business understand merchant services and arm you with the information you need to make an informed decision on setting up a merchant account.

Step 1 – What is a merchant account?
Step 2 – What kinds of merchant accounts are available?
Step 3 – How long does it take to set up a merchant account?
Step 4 – What do I need to know when setting up an account?
Step 5 – Who should I use to set up the account?

What is a merchant account? Starting with the basics, a merchant account enables your business with the ability to accept credit cards payment for provided goods and services sold. It is important to understand three fundamental principles:

A merchant account is underwritten by a financial institution so expect to provide financial documentation pertaining to your business.
A merchant account allows your business to accept payments via credit card.
A merchant account is treated like a line of credit. Money received from your customers is deposited immediately into your account, however that money be charged back for up to 18 month from the original sale. This creates a line-of-credit in the eyes of the funding bank.

What kinds of merchant accounts are available? There are many different merchant accounts that are offered depending on how your business intends on accepting credit cards. The 4 major account categories are:

A retail merchant account
A Mail Order, Telephone order (MOTO) merchant account
a internet merchant account
A Point of Sale (POS) merchant account

How long does it take to set up a merchant account? A merchant account can be set up in as little as 24 hours or as long as 2 weeks. It depends on a few factors.

Type of business
Industry of the business
Requested account volume
Business Financials

What do I need to know when setting up an account? It is beneficial to understand all the rates and fees associated with the account, how they are charged and what they mean. It is also beneficial to understand that a lot of the charges associated with the account are negotiable.

Who should I use to set up the account? There are many options when selecting a provider. Be sure to weigh the benefits and cost associated with each to make the most informed decision for your business.

iPhone Payment Processing – Accept Payments with your iPhone

Alex Neir — Thu, 14 Apr 2011 16:45:00 GMT

iPhone Payment Processing – Accept Payments with your iPhone

Are you looking for an iPhone payment processing solution that is secure and easy? Look no further than the iDynamo by Magtek. The iDynamo is a simple and elegant credit card swipe that attaches easily to the bottom of an iPhone, iPod or iPad. The iDynamo works with the iProcess payment processing application available free, through the App Store.

The iDynamo in conjunction with the iProcess app gives your business a robust and secure mobile payment processing solution. The solution is PCI DSS compliant in which all card holder data is encrypted at the read head, effectively eliminating fraud. The iProcess application automatically displays the encrypted card holder information and allows for a customer signature to be captured directly on your iPhone, iPod or iPad. Customer receipts can automatically be emailed while you maintain a fully executed authorization to collect payment.

It is important to note that for the iPhone payment processing solution to be fully functional, your business will need a merchant account that is compatible with the iProcess application. The merchant account is necessary for the solution to communicate with the card holders bank to authorize and collect the payments initiated by the iPhone payment processing solution.

For more information including a detailed quote for setting up an iPhone payment processing solution for your business please provide us with the following:

How to save on credit card processing for small businesses

Alex Neir — Mon, 11 Apr 2011 15:48:00 GMT

How to save on credit card processing for small businesses

There are many ways to save on credit card processing for small businesses. First you want to make sure you select a company with a good reputation. Always check www.ripoffreport.com.

Next, I always suggest asking for the customer service number and testing the customer service experience before going any further. Let’s face it you are trusting a company to handle, what will amount to, a sizable portion of your businesses accounts receivable. If that function has a problem it’s nice to know that it will be handled appropriately before you spend the time and energy of setting up the account.

Once you select a company it’s important to understand what you can negotiate. Interchange fees and association due and assessments are fixed but the processor markup and fees are completely negotiable. An example of these fees include but are not limited to; monthly statement fee, monthly minimum fee, per transaction fee, batch fee, PIN debit fee, address verification fee, annual fee, account access fee, PCI verification fee, termination fee, chargeback fee, set up fee, application fee, reprogram fee, etc.

Once you negotiate the very best rates and fees possible make sure, for retail businesses, the terminal equipment prompts customers to enter their PIN on debit/check card purchases (known as BIN Seeker technology). This has been proven to reduce costs up to 40%.

Lastly, make sure the business reviews their statement every month and compares each statement to the previous month. It is not uncommon to uncover junk fees that, when brought to the attention of the processor can’t be explained.

Want to know more? Check out: How to avoid big mistakes when opening a merchant account.

Save money on every credit card transaction with BIN Seeker

Alex Neir — Thu, 07 Apr 2011 12:46:00 GMT

Save money on every credit card transaction with BIN Seeker technology

BIN Seeker technology has been around for a while and traditionally available only to large retail merchants such as Safeway, Wal-Mart, Home Depot, etc. Maxx Merchants is proud to announce the availability of BIN Seeker technology on every model of credit card terminal we offer. The BEFIFIT – Bin Seeker technology is available to everyone.

What is BIN Seeker technology?

BIN Seeker technology is logic built into the credit card terminal that recognizes the type of credit card being swiped and automatically routs the transaction to the lowest possible interchange level.

For example: if a customer uses a debit card the terminal will automatically prompt the customer to enter their PIN number. At that point the customer can enter their PIN or they can elect to run the transaction as a credit card. We have case study statistics that show prompting customers for their PIN reduces interchange fees by up to 40%.

Another example revolves around the use of rewards cards. A rewards card is a credit card carried by consumers that offer a reward associated with the purchases made on that specific credit card. Common rewards are cash back, frequent flyer miles and reward points that can be exchanged for products and/or services. When a customer uses a rewards card, BIN Seeker technology recognizes the credit card as a rewards card and will prompt the customer to enter the zip code associated with their account at the issuing bank. The simple process of asking for the zip code associated with their account has been shown to reduce the businesses interchange fees up to 30%.

Interchange fees represent the largest single cost associated with accepting credit cards at your business. By introducing technology aimed at reducing interchange costs, Maxx Merchants helps your business reduce expenses and increase revenue.

BIN Seeker technology is available on every credit card terminal we offer.

For more information please contact our friendly staff at (800)917-8026.

Where do my credit card fees come from?

Alex Neir — Mon, 04 Apr 2011 12:50:00 GMT

Where do my credit card fees come from?

The credit card fees associated to your merchant account come from various sources and together represent the effective rate you pay to process credit card through your business. The sources of your credit card fees can be grouped into the following categories.

Interchange Fees
Dues and Assessments
Processor Markup
Processor Service Fees
Junk Fees

Interchange Fees

Interchange fees represent the true fixed cost of processing a credit card transaction. The definition of Interchange is: the network of interconnected financial institutions set up by the major associations (Visa, Master Card, etc) to facilitate the use of a plastic card to make payment. (More information on Interchange) These fees are fixed by the associations and can’t be negotiated.

Dues and Assessments

These fees are also fixed by the major associations, non-negotiable and applied to your merchant account every month. Currently Visa and Discover have dues and assessment of 0.0925% and Master Card has dues and assessments of 0.095%.

Processor Markup

The processor markup represents the beginning of negotiable credit card fees. The processor’s markup is discretionary and represents the cost the processor is charging for the services they are providing. The markup can be bundled with Interchange or separated out depending on the pricing structure that is offered. (More information on credit card pricing structures)

Processor Service Fees

The service fees charged by your processor are also negotiable and represent the additional costs you will be charged by the processor. These fees include but are not limited to; monthly statement fee, monthly minimum fee, per transaction fee, batch fee, PIN debit fee, address verification fee, annual fee, account access fee, PCI verification fee, termination fee, chargeback fee, set up fee, application fee, reprogram fee, etc

Junk Fees

Junk fees represent the credit card fees that are bogus. It is a common practice among some credit card processing companies to advertise very low rates and fees to attract businesses to sign up. Once the business signs up the processor slaps on enough junk fees to make up for the below market advertised rate. What makes this practice even more deplorable is that the fees are described very carefully as to make them sound legitimate. For example: Interchange BIN location, Interchange recalculation, Association access, etc.

With any merchant account it’s important to understand that you have a lot of negotiation opportunity and by simply knowing what to ask you can save your business a great deal of money when it comes to credit card fees.

For a review of your current fees or to set up a new account please contact our friendly staff at (800)917-8026.

Is your merchant account a rip off, your effective rate will tell you

Alex Neir — Thu, 31 Mar 2011 15:02:00 GMT

Is your merchant account a rip off, your effective rate will tell you!

A common question I am often asked is “How can I tell if I am getting ripped off on my merchant account?” I will most often advise the business of 3 fundamental tasks that will ensure they are not getting ripped off.

Check the statement every month and compare it to last month
Validate the account for PCI Compliance
Calculate the effective rate

Check the statement every month and compare it to last month

This is a good practice as it will make sure that your merchant service provider (MSP) is not adding junk fees to your account. Some MSP’s will incrementally add small junk fees hoping that the business will not notice them. After a while the small fees add up to a large some and you are paying a great deal more than when you signed up. The simple act of reviewing your statement every month and comparing it to the previous month will identify any new fees. If you see a new fee and don’t understand what it is – call your MSP and ask.

Validate the account for PCI Compliance

Most is not all merchant service providers will charge a PCI compliance fee. (More information on PCI Compliance) The fee is typically associated to the account to cover any liability that may result from a breach of card holder data. If your provider is charging a PCI compliance fee you should always ask if they offer a compliance survey that waives the fee.

Calculate the effective rate

Your effective rate is the easiest way to get a general sense of the cost of your merchant account. The effective rate is calculated by taking the total amount in fees divided by the total amount processed.

If your effective rate is greater than 3.0% to 3.3% you are getting ripped off and should start shopping for a new provider.

Other items to consider when evaluating a merchant account.

Can a merchant account grow my business?

Alex Neir — Thu, 24 Mar 2011 20:19:00 GMT

Can a merchant account grow my business?

It is often thought that a merchant account is a liability for a business based on the fees that are charged in conjunction with its operation. How true is that sentiment? Like any business decision, it’s prudent to weigh the costs against the benefits. On average you can expect to pay approximately 3% of your credit card revenue in merchant account fees. So, what is the benefit?

Many studies have shown that accepting credit cards can dramatically increase sales. One article released by Visa USA claims a 20 to 30 percent increase in sales for quick service restaurants. If sales can, in fact, be increased, what are some of the contributing factors that lead to increased sales?

Convenience for Customers
Expanded Sales Channels and Reach
Ability to Leverage Receivables

Convenience for Customers

Let’s face it, you want to make it as easy as possible for your customers to pay you. You don’t want to loose a sale because you aren’t able to accommodate your customers preferred payment method. Whether we like it or not, cash and check payments are becoming a thing of the past as more and more consumers rely on their check and debit cards to complete most transactions.

Expanded Sales Channels and Reach

Another distinct advantage of establishing a merchant account is the ability to take your business on-line. The internet extends your store hours to 24 hours a day and 7 days a week. You are also able to increase your geographic reach as you can be found by customers all over the world.

Ability to Leverage Receivables

A superior advantage that most businesses forget about is the ability to leverage future credit card receivables for a cash infusion known as a Merchant Cash Advance. A Merchant Cash Advance works like this: the business sells the future credit card receivables at a discount in exchange for a lump sum advance. The advance is paid back as a percentage of the future sales and is automatically deducted from the merchants deposits each month. Through the leverage of future receivables the business is able to re-invest and expand without the need for traditional business loans that can be extremely difficult to qualify for, especially in today's economy.

Based on this information would it be worth spending 3% to make an addition 20%?

Would you like more information about setting up a merchant account?

How to get a merchant account with bad credit

Alex Neir — Tue, 22 Mar 2011 22:13:00 GMT

How to get a merchant account with bad credit

Looking for a merchant account and your credit is less than perfect? The good news is that you have options. Having a low credit score does not automatically exclude you from opening a merchant account. Here is a list of items that can over shadow your credit score.

Merchant Account Type
History of the Business
Business Financials
Cash Reserves

Merchant Account Type.

The type of merchant account you are looking to open will place emphasis on your credit score. If you are looking to open a retail (brick and mortar) store your credit score won’t be scrutinized near as much as if you are looking to open an internet merchant account or MOTO merchant account.

History of the Business

The longer you have been in business the better. The idea here is that if you have decent business history you are giving the underwriter something else to examine other than personal credit. If the business is brand new you are forcing the analysis for approval to be centered around your personal credit as there will be nothing else to look at.

Business Financials

Similar to the history of the business, business financials give the underwriting department another peak into how your finances are being managed. If your credit score is low but you have strong financials associated with the business you are looking to set up. The chances are good that you will get your merchant account approved.

Cash Reserves

Another item that can offset a low credit score is a large cash reserve. It is best to have a least double the amount you are looking to be approved for as cash on hand. For example, if you are looking to get a merchant account approved with a monthly volume amount of $20,000, it is a good idea to have at least $40,000 as a revolving balance in your personal or business account.

If you would like help with other ideas on how to get a merchant account approved with low credit please don’t hesitate to call our expert payment processing staff at (800)917-8026.

Beware of anyone using a Square credit card reader

Alex Neir — Wed, 16 Mar 2011 18:35:00 GMT

Beware of anyone using a Square credit card reader

The Square credit card reader is a piece of hardware that attaches to smart phones and tablets that allows merchants to accept credit card payments.

It was announced that the Square credit card reader can easily be used to skim credit card information from unsuspecting customers. The issue is centered around the fact that the Square credit card reader does not encrypt the credit card information before it is sent to the device it is attached to. The fact that the credit card information is not encrypted allows anyone that is swiping the card to store the information for their own use.

The scenario can play out like this. The criminal orders a Square credit card reader from Square’s website. In a matter of less than an hour the criminal can develop an application for their smart phone or tablet. The application has the ability to store the card information that is normally encrypted and sent to the bank for authorization. You hand your card over to purchase an item from the criminal. They now have the card number, expiration, CVV code and all your personal information stored on their device. That information can be sold or used for their own purchases at a later time.

Most if not all credit card swipe devices for smart phones and tablets have encryption built into the device’s hardware. This is a critical as it maintains the trust of consumer that their credit card information is safe when the credit card is handed over for purchases. Square has effectively undermined that trust and should be held accountable.

Do not purchase from merchants using the Square credit card reader. If you are a merchant using the Square credit card reader you should switch immediately. The device is not PCI compliant (to put it lightly) and you could be held responsible for breach of card holder data.

How do I get the money from my credit card sales?

Alex Neir — Thu, 10 Mar 2011 20:24:00 GMT

How do I get the money from my credit card sales?

When you set up your merchant account you specify on the application your DDA (Direct Deposit Account). That is the account that your processor will use to deposit your credit card sales.

Your credit card sales will typically be deposited in your direct deposit account within 24 to 48 hours from the time the settlement process is run. The settlement process is the operation that converts the authorized amounts into settled funds for deposit. The settlement process can be run manually or can be set up to run automatically. It is recommended that the settlement process be run within 72 hours of the authorization or you run the risk of the authorization expiring.

It is important to understand that a credit card transaction is a two part process. The first part is the authorization, which amounts to a hold on the funds at the customer’s bank. The second process is the settlement process in which the authorization is collected. The settlement process is typically run once a day and will convert all the outstanding authorizations (credit card sales) for the day into one deposit into your direct deposit account.

Next week we will discuss how to decrease the time it takes to receive your deposits. So, please be sure to check back.

As always our friendly staff is always available to help answer any questions you may have with regard to merchant services so please don’t hesitate to call. (800)917-8026

Merchant account closed, what can I do?

Alex Neir — Tue, 08 Mar 2011 19:36:00 GMT

Merchant account closed, what can I do?

Your merchant account has been closed and you are wondering what to do next? The good news – you always have options.

First it’s important to know the reason your account has been closed. If you don’t know, call your merchant service provider and get as much information as you can with regard to the closure. Depending on the reason for the closure, I have some suggestions below.

Merchant Account Closed Due to Inactivity

This is a simple fix. Just explain to your current processor the reason for the inactivity and ask that they reinstate the account. If the account has been closed for less than a month you can usually turn the account back on without any additional paperwork. If the account has been closed for a longer period, you may have to submit a new application. It will depend on the provider.

Merchant Account Closed due to Rejected Fees

This is a tricky one as it’s a slippery slope. If the month end fees are rejected you typically have one month to pay the back fees. If the account is not current for the second month, the account is typically suspended and then closed as some point in the future. Depending on the length of time the account is delinquent and the efforts that are made to catch up, determine the difficulty of resuming the account. The worst thing to do is to ignore the past due balance. Depending on the merchant service provider, they could place your account on the TMF (Terminated Merchant File), which makes it very difficult to get another account.

Merchant Account Closed due to Excessive Chargbacks

This is the most sever account closure. All of the liability associated with a merchant account stems from chargeback risk. The chargeback ratio determines the acceptable amount of chargebacks for any given merchant and is usually 1% or less. The chargeback ratio is determined by dividing the total amount charged back by the total volume processed for the month. If your account has been closed due to excessive chargebacks your options are very limited.

Determine the reason for the excessive chargebacks and write a detailed plan on how you will reduce them.
Show visible proof that you are implementing the items listed in your detailed plan to reduce chargebacks. i.e. updating your website with clear terms and conditions, adding your customer service number as the descriptor on the customer bill etc.
Ask your current provider what steps you can take to reinstate the account.
Identify other providers that are willing to accept the account.
Begin to research an off shore account.

Merchant account closure can result in substantial losses for the business if you are not able to offer the convenience of credit card payment to your customers. It is always a good idea to give your merchant account the same attention you would any other business asset.

What is a monthly minimum fee?

Alex Neir — Thu, 03 Mar 2011 23:09:00 GMT

What is the monthly minimum fee on a merchant account?

The monthly minimum fee is the minimum amount you will pay in interchange fees on your merchant account regardless of how much, or rather how little is processed for the month.

It is important to understand that your monthly minimum fee is based on your total interchange fees and nothing else. For a list of all the fees associated to a merchant account please see: 7 items to consider with affordable credit card processing

Let look at an example. Let’s say you have a small business and credit card payments vary each month. Some months you have a lot and some months none at all. Below are the rates/fees set up on the account

Qualified Transactions: 2.39%
Non-Qualified Transactions: 3.39%
Statement Fee: $10.00
Monthly Minimum Fee: $15.00

All transactions are for $100 for simplicity.

Month one you have 3 qualified transactions and 1 non-qualified transaction.
The total interchange fees for the month: ($2.39 x 3) + ($3.39 x 1) = $10.56. This amount is less than the agreed upon monthly minimum fee of $15.00 so the $15.00 minimum gets applied to the bill.

Your month end bill would be: $25.00. Interchange plus the statement fee.

Month two you have no transaction.
The total interchange fees for the month = $0.00. This amount is less than the agreed upon monthly minimum fee of $15.00 so the $15.00 minimum gets applied to the bill.

Your month end bill would be: $25.00. Interchange plus the statement fee.

Month three you have 4 qualified transactions and 5 non-qualified transaction.
The total interchange fees for the month: ($2.39 x 4) + ($3.39 x 5) = $26.51. This amount is greater than the agreed upon monthly minimum fee of $15.00 so the $26.51 gets applied to the bill.

Your month end bill would be: $36.51. Interchange plus the statement fee.

From this example you can see the difference it makes to negotiate your monthly minimum. For additional help please contact our friendly staff at (800)917-8026 as we welcome the opportunity to help with any payment processing questions.

Merchant Account Discount Rate – Explained

Alex Neir — Tue, 01 Mar 2011 20:34:00 GMT

Merchant Account Discount Rate – Explained

What is the discount rate on a merchant account? This is a very common question. The discount rate is the fee charged for running a credit card transaction. There are typically multiple discount rates associated with a merchant account. The number of rates depends on the pricing that has been set up on the account. The 3 most common pricing structures are ERR Pricing, Tiered Pricing and Interchange Pricing.

In order to determine the discount rate that will apply for a specific transaction you must first examine the details on how the credit card information is captured and what type of credit card is being used. Is the credit card being swiped through a terminal or keyed into the terminal? NOTE: Keyed into the terminal also includes customers typing their credit card information on a website. Next, what type of credit card is being used? A check card, debit card, rewards card, corporate card, international card, etc. These details ultimately drive the discount rate that will apply.

Let’s look at an example based on a tiered pricing structure.

For our example we’ll use a 3 tier model. Each tier is identified as follows:

Qualified Discount Rate – Card swiped through a terminal
Mid-Qualified Discount Rate – Card keyed into a terminal or a rewards card
Non-Qualified Discount Rate – International card or corporate card

Each specific tier will have a discount rate associated with it:

Qualified – 1.79%
Mid-Qualified – 2.39%
Non-Qualified – 3.09%

Credit Card Transaction Amount = $100
Transaction Deatils	Interchange Fee	Discount Rate	Cost
Swiped, Check Card	1.70%	1.79%	$1.79
Swiped, Rewards Card	2.40%	2.39%	$2.39
Check Card, Keyed In	2.35%	2.39%	$2.39
Keyed In, Rewards Card	2.46%	2.39%	$2.39
Swiped, International Card	3.23%	3.09%	$3.09

Would you like to understand credit card pricing and which pricing structure is right for your business? Please give our friendly staff a call and we would be happy to consult with you. (800)917-8026

What are chargebacks?

Alex Neir — Thu, 24 Feb 2011 20:40:00 GMT

What are chargebacks?

A chargeback is the process in which a customer contacts their credit card issuing bank to dispute a charge on their credit card bill. All credit card holding patrons have the right to initiate a chargeback as it is part of the contract between the issuer and card holder. The chargeback process was established to protect card holders from the liability associated with stolen credit cards.

The chargeback process begins with the customer contacting their bank to dispute a charge. A dispute may arise from any number for reasons, as few are - an unknown or unauthorized charge, product delivered did not match what was advertised, the list goes on and on. Once a chargeback has been opened with the card issuing bank an investigation take place. The bank will call the merchant involved with the charge to determine the nature of the issue. In the case where the charge is disputed due to an unauthorized charge the merchant will be given the opportunity to prove that the charge was authorized. Typically the merchant’s best defense is a signed sales receipt or credit card authorization for the transaction. If the signature on the sale receipt or authorization matches the signature on file with the bank the merchant will usually win the dispute.

Card holders or customers have up to 18 months from the time the charge shows up on their statement to chargeback the transaction. So, it is VERY important for merchants to hold on to their sales receipts and authorizations for 18 month from the time of the sale.

Shopping cart compatibility, will any Internet merchant account work?

Alex Neir — Tue, 22 Feb 2011 21:33:00 GMT

Shopping cart compatibility, will any Internet merchant account work?

The short answer is no. For an Internet merchant account to be compatible with a specific shopping cart, the merchant account must utilize a compatible payment gateway. So, to simplify this, the shopping cart must be compatible with the payment gateway and the payment gateway must be compatible with the merchant account.

The job of the payment gateway is to form a bridge between the website’s shopping cart and the merchant account. The payment gateway will encrypt and transmit the customer’s credit card information securely to and from the merchant account.

Shopping Cart Compatibility Worksheet – Tips for getting a shopping cart set up.

My business already has a merchant account. You already have a merchant account and are looking to enable a web based shopping experience.

First, you will need to determine if your merchant account supports internet based transactions. If you have a retail store and have a merchant account set up, you will need to apply for another account that will allow internet transactions. If your current account is a MOTO (mail order, telephone order) account, you can typically turn on internet transactions without setting up a new account.
Next you will need to ask your processor “What payment gateways are compatible with my account?”
There are fees associated with the payment gateway so if you have multiple options you will want to investigate the cost and functionality associated with each one. Payment gateway functionality.
Once you have selected the appropriate payment gateway, you will want to determine the shopping carts that are compatible with that gateway.
Last, you will want to select the shopping cart that has the features you are looking for.

My business has a website and shopping cart and we’re looking for an Internet merchant account. You have already built your website and have selected a shopping cart or have built a custom shopping cart.

The first question is, what kind on shopping cart do you have? A commercially available pre-built shopping cart or a custom shopping cart?
If you have a commercially available pre-built cart you will need to investigate merchant service providers (processors) that offer a payment gateway that is compatible with the shopping cart. If the processor has a compatible payment gateway available it will also be compatible with the merchant account.
If your shopping cart is custom built you will need to investigate merchant service providers (processors) that have a payment gateway with an open and fully documented API (application programmer’s interface) available.

My business has neither a shopping cart nor an Internet merchant account. You are at the beginning phase of establishing an eCommerce site.

You will want to select a merchant service provider (processor) that offers a payment gateway that is compatible with multiple pre-built shopping carts and offers a open and fully documented API (application programmer’s interface). More information on starting an ecommerce website

What kinds of credit card processing solutions are available?

Alex Neir — Thu, 17 Feb 2011 21:50:00 GMT

What kinds of credit card processing solutions are available?

Determining the right credit card processing solution is easier than you might think. There are quite a few credit card processing solutions available and selecting the right one depends upon how your business is set up to accept payments.

Credit card processing solutions can usually be grouped into one of 4 solution categories.

Retail Account
MOTO Account
Internet Account
POS Account

A retail account is reserved for any business that has a physical location at which the customer visits to purchase good and services. This is traditionally thought of as a brick and mortar establishment. The important factor that drives qualification for a retail account is 80%, or more, of the payments accepted by the business need to be swiped through a credit card terminal. The rates for a retail location are the lowest of all the solutions.

A MOTO account (mail order, telephone order) is reserved for businesses that conduct the majority (21% or greater) of the payment processing via the telephone or mail. The rates for a MOTO account will be slightly higher than a retail account. For more information please see - Why are rates higher for Internet, Mail and Telephone order charges?

An internet account is selected for businesses that conduct sales over the internet. An internet credit card processing solution processes payments from the businesses website in real time. An internet account typically comes with a virtual terminal that allow for one-off payments to be transacted from a web-based terminal. There are also a number of other features available through the virtual terminal. The rates for an internet account are usually the same as a MOTO account.

A POS account (point of sale account) is a credit card processing solution that works with a POS hardware solution. A POS hardware solution includes a cash drawer, scanner, receipt printer, credit card swipe device and many other options that manage sales and inventory at the business location. A retail merchant account is typically integrated into the POS system via a middleware solution such as IC Verify or PC Charge (to name a few).

How long does it take to get a credit card processing account set up?

Alex Neir — Tue, 15 Feb 2011 19:55:00 GMT

How long does it take to get a credit card processing account set up?

The time it takes to get a credit card processing account set up depends on a few factors but can usually be set up in as little as 24hrs to as long as 2 weeks. The factors that determine the length of time it takes to get a credit card processing account set up are as follows and generally revolve around risk:

Type of business
Industry of the business
Requested account volume
Financials

The type of business affects the time-line of approval on a credit card processing account. Retail businesses are much quicker to set up than on-line business. This is due to the fact that a retail business is less likely to disappear over night. Therefore there is less risk associated with a retail location making it easier and quicker to set up.

The industry of the business can have dramatic effects on the length of time it takes to get an account set up. The more risky the businesses industry the longer the processes takes. This is due to the fact that additional scrutiny in need to determine how the business is functioning in the industry. Traditional high risk accounts include; credit consolidation, continuity, debt reduction, porn, gambling, bail bondsmen etc.

The requested account volume is the total dollar amount of credit card sales the business is asking for on a monthly basis. The higher the requested amount the more analysis is needed to determine if the business can cover the line of credit and therefore lengthens the time needed for approval. For more information please see why is a merchant account a line of credit?

The businesses financials are also a determining factor in the length of time it takes to get a credit card processing account approved. If the business has strong financials is speeds up the process dramatically.

For more information of setting up a credit card processing account please refer to our guide on how to avoid costly mistakes when setting up a merchant account.

*Image provided by Andres Rueda

Why are rates higher for Internet, Mail and Telephone order charges?

Alex Neir — Fri, 11 Feb 2011 21:54:00 GMT

Why are merchant account rates higher for Internet, Mail and Telephone Order transactions?

The rates charged for credit card transactions vary based on the perceived risk associated with the transaction. The transaction is perceived to be more risky when there is less control over who is initiating the transaction. Transaction risk has been established by the credit card associations (Visa, Master Card, Discover, etc) and can be grouped into three categories:

Card present, person present transactions
Keyed transactions
International and corporate card transactions

Card present, person present transactions, also known as swiped transactions, represent the lowest risk. The risk is lower because the merchant has more control over the customer initiating the transaction. The merchant can check the customer’s identification to make sure it matches the credit card being used. This greatly reduces the probability that the transaction is fraudulent.

Now, the rates for internet, mail order and telephone orders fall into our second category, keyed transactions. When a credit card transaction is completed via the internet, mail or telephone the order must be keyed into the credit card terminal by the business. The credit card is not present at the time of the transaction and therefore the identity of the customer placing the order can not be verified. Due to the fact that there is less control over the customer, the perceived risk is higher and therefore the rate is higher.

The last category, international and corporate cards represents the highest perceived risk. This is due to the fact that international cards are unable to be address verified leading to higher fraud and corporate cards have multiple authorized users also leading to higher instances of fraud.

If you would like help opening a merchant account please contact our friendly staff at (800)917-8026 and we can get you set up quickly and easily.

What is a merchant account?

Alex Neir — Tue, 08 Feb 2011 00:12:00 GMT

What is a merchant account?

A merchant account is a financial vehicle that lets you accept payments from someone else. The three important factors to understand about a merchant account are as follows:

A merchant account is….

Underwritten by a financial institution
Allows you to accept payments
Is a line of credit

A merchant account is underwritten by any number of financial institutions. Most major banks have the capability to set up a merchant account. However, most banks will actually refer the account to a licensed merchant service provider (MSP) or independent sales office (ISO). The reason; most banks see their core competency outside the merchant services area and will refer your business to an expert (for a commission, of course). An MSP/ISO is an institution that establishes relationships with a network of credit card issuing banks and credit card associations (Visa, Master Card, AMEX, etc) for the purpose of processing payments. In addition most MSP/ISO organizations offer many other services such as fraud detection, fund remittance, detailed reporting and customer service.

A merchant account allows you or your business to accept payments. Payment acceptance can be in the form of credit and debit card payments, automated clearing house (ACH) payments, and electronic check payments.

A merchant account is a line of credit. The reason a merchant account is a line of credit is a function of the liability that charge backs create.

If you are considering opening a merchant account please refer to – 7 items to consider with an affordable merchant account.

*Image provided by Andres Rueda

Why is a merchant account a line of credit?

Alex Neir — Wed, 02 Feb 2011 21:44:00 GMT

Why is a merchant account a line of credit?

2 Reasons:

The way merchant accounts are underwritten
Charge backs

How is a merchant account underwritten?
When a business applies for a merchant account they indicate the volume (dollars processed via credit card) they would like to be approved for. For our example we’ll use $50,000 a month as the volume being applied for.

The bank/processor underwrites the account much the same way banks underwrite any loan application. A credit risk profile is generated based on the volume requested and ultimately determines whether or not the business is approved for the merchant account.

It can be confusing as to why a “credit” risk profile drives a merchant account approval. After all, the business is collecting funds directly from the customer who purchases good and services with their credit card. Credit risk is between the credit card issuer and customer. Why is the business scrutinized for credit liability for the customer’s use of a credit card? In order to answer this question it’s important to understand the concept of a charge back.

What is a charge back?
A charge back occurs when a customer contacts their credit card issuer and disputes a charge on their statement. When this occurs the card issuer refunds the money to the customer and then investigates the claim to determine if the customer deserves to keep their money. All customers have the ability to institute a charge back on any credit card and on any purchase that has occurred over the previous 18 months.

Now, let’s relate this back to application for $50,000 a month in processing volume and why the merchant account is a line of credit. When the business is approved for the merchant account they have the ability to collect $50,000 a month in credit card payments from their customers. Funds collected from customers are typically deposited the next day into the businesses bank account. So at the end of the month the business has collected $50,000.

Now, worst case scenario, all customers charge back the following month. The bank refunds the money to the customers and is on the hook for that money until the investigation completes. At that point if the customers “win” the bank must recoup the funds from the business. The $50,000 becomes a line of credit extended to the business on behalf of the bank.

So in conclusion, a merchant account is a line of credit because of the credit liability associated with possible charge backs.

If you would like help opening a merchant account please contact our friendly and helpful staff at (800)917-8026.

Can I use someone else's merchant account to do my transactions?

Alex Neir — Fri, 28 Jan 2011 22:02:00 GMT

Can I use someone else's merchant account to do my transactions?

Unfortunately, this is not aloud. This practice is referred to as credit card laundering and also credit card factoring.

This practice is in direct violation of the contract the merchant has established with the processor for the purpose of running credit card transactions.

When a merchant account is set up there are very specific underwriting guidelines that must be met in order to secure the account. These guidelines include (amongst other requirements) a detailed business description, product and service description, business financial documentation and applicant credit check. All of the requirements are specific to the business and owners that have opened the account.

So, once approved, only that business has the privilege of accepting payment via the account. Further more that business is only aloud to accept payments in the form described on the application. For example, if a retail merchant decides to sell merchandise on a website, they would be required to open another merchant account. The original account was approved for retail card present transactions only.

If you run a transaction on someone else’s merchant account you are jeopardizing that merchants contract, which could result in their account being terminated and their business name included on the Terminated Merchant File (TMF). Once a business has been added to the TMF it is extremely difficult to be removed. Additionally, securing a new merchant account while included on the TMF is next to impossible.

If you would like more information on an affordable merchant account please contact Alex Neir at (800)917-8026 or visit get started with Maxx Merchants Processing-Get Started With Maxx Merchants Procesing.

SMS and Email Marketing combined to increase your repeat business

Alex Neir — Wed, 19 Jan 2011 20:38:00 GMT

SMS and Email Marketing combined to increase your repeat business

Most business owners will agree that loyal customers that repeat their purchases are the keystone to long-term success. The reason being, it is far less costly to get an existing customer to buy than it is to find a new one. The lower cost of sales acquisition leads to higher margins and ultimately higher profitability.

How do you increase repeat business?

The short answer is to market to your existing customer base. Traditionally this is accomplished through email and direct mail announcing your latest promotion, special, coupon, etc. Email and direct mail are an effective way to call attention to your business. However, new technology is making it easier for you to keep your brand in front of your customers and make it compelling for them to act.

All-in-one messaging applications such as Maxx Messaging makes it easy for your business to promote a special, an event, a coupon or any offer directly to your customers cell phone, inbox, instant message client or social network. Communication via multiple paths increases the stickiness of your brand and offer.

How does it work?

Use a single web-based software application to push your specific promotion to every popular message channel. One easy, cheap application to keep your customers engaged with your business.

Do you need a high risk merchant account?

Alex Neir — Fri, 07 Jan 2011 22:27:00 GMT

Do you need a high risk merchant account?

Selecting a merchant service provider for your high risk business is an important decision. It is very important to do a little homework on the merchant service provider you would like to use before submitting an application. Most merchants, high risk or not, don’t realize that by submitting multiple applications with many different credit card processors you are actually raising red flags associated with your business.

All merchant service providers (MSP), independent sales offices (ISO), member banks, credit unions, etc, use the same database to research businesses that are looking for credit card processing. If a number of applications for the same business name come into the system all at once, the application is typically rejected before it is even evaluated. Rejection is due to the fact that most underwriters will assume that the business has been shut down by a previous provider, can’t get a new account and are trying every provider possible. This is assumed regardless of the real situation.

What else can be done to increase the chances of an accepted high risk merchant account?

Be honest about the nature of the products you sell and the services you provide. Full disclosure of your business is necessary to determine the best processor for your industry. Incorrect placement results in a declined account and all declined accounts end up in the master merchant database.
Make sure that your business terms and conditions are clearly stated on your website check out page. Make sure your customers know what they are purchasing and what to expect if there is a re-bill.
Offer more than one option for purchasing products and services. Give your customers the option to purchase everything up front in addition to a monthly re-bill.
Maintain a cash reserve for the business. A large cash reserve demonstrates a healthy business and alleviates the sponsor bank's concerns about the potential for charge back liability.
Keep your charge backs under 1%. If your charge back ratio (total amount charged back / total volume processed) exceeds 1% it will be very difficult, if not impossible, to get an approved merchant account. If you are able to get approved expect a large rolling reserve to be associated with the account.
Include your customer service number as part of the line item description of your products on your customer’s credit card statement. This will help decrease chargebacks.

Regardless of your business type, selecting a merchant service provider that understands the high risk merchant account landscape increases your ability to get approved.

6 Reasons Your Business Should Offer Gift Cards

Alex Neir — Tue, 14 Dec 2010 22:29:00 GMT

The National Retail Federation (NFR) has recently released a new study that indicates gift card interest among consumers continues to rise. The study reports that consumers will purchase more gift cards this year as compared to 2009. The average amount spent this year is up 4% to $41.48 and it is estimated that 77.3% of all American shoppers will purchase at least one gift card this holiday season.

Gift cards continue to be one of the most popular and most requested items. With such popularity it is surprising that more merchants don’t offer gift cards at their businesses. This may be a function of the perception of many merchants that only large retailers or big box stores can offer gift cards. This is not true as it is very easy and inexpensive to implement a gift card solution.

So what are the benefits of offering gift cards?

Money Upfront: Money is received upfront with product and service fulfillment at a letter time.
Customer Loyalty: Gift cards ensure repeat business as the patron will likely return to redeem the card.
Increased Customer Base: Most gift cards will be given to friends, family, colleagues or acquaintances, furthering business brand awareness. Additional patrons give you the ability to build on these relationships and forge future business.
Word-of-Mouth Marketing: Gift card purchases represent an endorsement of your products and services. Most customers that purchase a gift card are excited about the product an service and want others to experience it.
Purchases Above Face Value of the Card: Studies show that customers typically spent more than the face value of the gift card.
Lack of Redemption: Not all gift cards get redeemed which results in more revenue toward your bottom line.

Interested in getting a gift card program started? Let us show you how.

FINALLY – Chargeback Fraud Leniency for Merchants

Alex Neir — Tue, 07 Dec 2010 20:41:00 GMT

Issuing banks have finally begun to side with merchants over chargeback fraud commonly called ‘Friendly Fraud’. Friendly fraud is the practice of a consumer making a purchase and then claiming that “it wasn’t me” in effect stealing from the merchant and bank.

It has been reported by Lexis Nexis that nearly 23% of fraud losses reported by merchants are a result of friendly fraud. As the economy continues to correct the prevalence of this type of fraud is likely to increase. The main reason – it’s easy to commit and get away with.

Most banks advertise that fraudulent charges will be hassle free with zero liability for the consumer. However, the increase in friendly fraud is forcing issuing banks to look into claims in much more detail. When the consumer claims fraud they call their credit card issuing bank and claim they did not make the purchase in question. At that point the chargeback process begins.

The chargeback process is the banks evaluation of the claim to determine who is telling the truth. Both sides present their evidence and a re-presentment is issued in which the result is rendered. Some banks are now requiring consumers to provide notarized affidavits pertaining to the claim. If the consumer wins, the money is refunded to the consumer and revoked from the merchant. If the merchant wins the money is awarded to the merchant. According to Julie Fergerson at Ethoca.com, a fraud prevention firm, banks are siding with merchants much more often lately.

In addition, according to the annual Merchant Risk Council survey, the “win” rate for merchants is up 14% from 3 years ago.

How Can You Protect Your Business From Friendly Fraud?

Always get a signature for the purchase
If your business is shipping products, require a signature upon delivery

Credit Card Processing – better with an ISO/MSP than your bank!

Alex Neir — Thu, 18 Nov 2010 20:31:00 GMT

This is just the plain and simple truth as it’s a function of specialization. But, unlike specialization in the medical field using a specialist for your credit card processing will get your business better service and a better price. How?

First let’s examine why businesses use their bank for credit card processing.

Habit
Convenience
Lack of understanding that other options exist

Many businesses select their bank for credit cards processing simply because they have always used their bank for financial functions. It is thought that the bank must be able to give them the best deal based on a history of loyal patronage of the business. The truth is that businesses that use their bank for credit card processing typically pays more than any other segment in the country.Equipment purchase and lease prices are, on average, double and the processing rates are often much higher than a merchant service provider’s. Businesses are locked into long term contracts with no options for termination.

The reason for generally higher prices and inflexible contracts is that fact that most banks outsource their credit card processing to a merchant service provider (MSP) or independent sales office (ISO). The problem with outsourced service is the introduction of a middleman and additional margin that must be covered. All but a few large banks outsource their credit card processing.

Many businesses feel that it is more convenient to have one entity handle all their financial functions. It is very convenient to have one place to see all the business financial data. However, aside from the deposits, credit card processing and banking are not integrated. There for the service you get from a merchant service provider or your bank will be exactly the same.

Most businesses don’t know of other options beyond their bank and subsequently don’t research the cost and customer service benefits of a merchant service provider.

So why is it beneficial to select a merchant service provider for credit card processing?

Well, first of all is specialization. Your merchant service provider only function is to provide credit card processing and electronic check processing.

Next is superior customer service, lower rates and better pricing on equipment. Most respectable merchant service providers have 24 hour a day, 7 day a week customer service. Your business will also be given a personal account representative for questions, issues and payment consultation. Your merchant service provider also has access to the payment network and can solve most every issue over the phone. Issues are resolved on the first call and don’t result in your business calling different departments looking for the right person to help. Equipment pricing is often the very best as your business is negotiating at the source.

Another significant advantage is the ability of your merchant service provider to work with many different banks. If your business processes with your bank and you have issues with your account you will have to switch out both accounts which can be a huge pain.

Your merchant service provider also has a much higher level of business expertise in setting up the right service for your industry type. Odds are that your MSP has numerous other businesses just like your and can instruct you as to the most beneficial set up.

Bottom line - merchant service providers have more industry experience, more available and focused customer service, better prices and are specialized in providing payment products and service for your business.

A $50,000 transaction, should you run it?

Alex Neir — Tue, 09 Nov 2010 19:57:00 GMT

When you signed up for your merchant account you specified your average transaction amount, your high transaction amount and your estimated monthly sales volume. These values were used during the underwriting phase of your account acceptance and represent the soft limits for your account. Most processors won’t have a problem if you exceed any one of these by a nominal amount. On the other hand if you exceed any one of them by an excessive amount you are raising a red flag with your processor.

Now should you run a $50,000 transaction with your merchant account? The question would be – did you specify a high ticket amount of $50,000 or more when you completed your application? Typically when a new merchant account is set up the business owner will estimate what they think the volume, average ticket and high ticket will be. It is always a good idea to exaggerate the values to approx double, ever triple the expected amount. This is a good practice to allow for expected growth of the business.

With regard to our $50,000 transaction, if your normal transaction size is $30,000 and your high ticket amount is $45,000 then you will likely have little problem with an amount slightly above at $50,000. Now if your average transaction is $35 and you high ticket amount is $500, then running a $50,000 transaction is a very bad idea. This transaction represents a great deal of risk for a business that is averaging $35 per transaction, both for the business and the processor.

Why is that a risk?

The risk of the transaction lies in the likelihood of fraud or a chargeback. This risk is substantial to your processor because if you commit fraud or have a large number of chargebacks with the inability to pay for them then the processor is stuck with the bill. Situations like these are handled differently with each processor. Some have automated systems that will flag a transaction if its outside the specified boundaries. Others have actual humans that review each account. Some processors allow for the business to exceed their limits temporarily while others will permanently shut down the account if the limits are exceeded. Regardless of the rules with your specific processor you are pretty much guaranteed to have your batch reviewed if it exceeded your specified monthly volume limit.

Most credit card processor’s risk departments have very specific operational guidelines they adhere to. It is very important to know that they have complete control over the money that flows though the account they have underwritten. That being said, if your account breaks the rules the consequences can be severe. Some will shut down your account and never release any funds that are in excess of the guidelines approved for your account. Some will hold the funds for extended periods of time. Others won’t tell you the funds have been held and will wait for you to call in. Once your account or funds are transferred to the risk department within your processor it can be a very long, frustrating and cumbersome process to correct.

What should you do if you absolutely have to run a larger transaction?

I always suggest you be proactive. Call you processor and tell them what you would like to do. They may approve the transaction on the spot. They may want a signed invoice authorizing the charge from you customer. They may want to see recent bank account balances for the business. The point is that if you call ahead and seek approval first you are likely to avoid a great deal of headache later.

To sum it up:

Always try to get approved for the maximum amount possible when opening your account and secondly always ask before you attempt to exceed the approved limits on your account.

4 actions to avoid with your merchant account

Alex Neir — Fri, 05 Nov 2010 21:31:00 GMT

This post is to offer friendly advice as to the actions that should always be avoided when operating a merchant account for your business. The most important things to avoid are those actions that will result in your account being shut down and secondly those actions that cost your business money.

Actions to avoid:

Never run a transaction on your own credit card
Never refund a customer’s transaction to a credit card that differs from the original credit card used for the purchase
Never refund cash to a customer that used a credit card for the original purchase
Never forget to batch out your credit card terminal, virtual terminal or point of sale system

Processing a transaction on the merchant account owner’s credit card:

This action is considered fraud and will result in your account being shut down and your business black listed for credit card processing. You should never process a transaction with the owner of the merchant account’s credit card, not even for a small amount. Owners may think this is a good way to pull money out of the business but that is incorrect. This action is strictly monitored and the consequences are severe. If you are interested in taking cash out of the business look for a merchant cash advance instead.

Refunding the purchase amount to different credit card:

This action is also considered fraud and will result in the merchant account being shut down. Pay special attention that you are refunding to the exact credit card that was used originally. If the original credit card is not available issue an in-store credit.

Refunding cash on a credit card purchase:

It may seem logical that a refund is a refund, who cares if the refunded amount is returned as a credit to the original credit card or as cash? Well, if you issue a cash refund for a credit card purchase you are enabling the customer the ability to receive two refunds for the purchase amount. The first refund is the cash they receive when the item is returned. The second refund can come in the form of a charge back initiated through the credit card company. Since the cash return does not match the original purchase on the credit card you will have little luck winning the charge back suit.

Always batch out your terminal at the end of the day:

If you wait, even a day, to batch out your transaction you will experience a downgrade on all the day’s transactions. You will also delay the deposit of those funds into your bank account. Monitor your bank account closely to ensure your credit card receivables are batch and deposited daily.

Don’t wish to know anything about your merchant account

Alex Neir — Thu, 28 Oct 2010 21:28:00 GMT

A merchant account is a vital part of any business as most customers expect to be able to pay with a credit or debit card. The merchant services industry is one of the most deceptive industries in operation today as providers prey on the fact that most business owners have little knowledge on a merchant account set up. The industry has been the same for the last 10 years and so have the attitudes of most owners.

It is very common for unsuspecting people to get seduced by teaser rates and free offers and subsequently get locked into contracts that are not beneficial for the business. Here is where a little research can go a long way.

Why haven’t things changed?

The main reason is because business owners don’t wish to know anything about their account. While this may seem like an overly generalized statement it’s true and unfortunately, understandable. Most business owners have much more critical items to attend to. Merchant services are boring with little excitement in its operation. Business owners want payment processing to operate transparently beneath the company. The only time it is thought about is when there is a problem or when processing seems over priced.

At this point you may be stuck with a processor that is unresponsive or unwilling to help lower your costs. Both are a major problem as the average merchant service contract term is 3 years.

What can be done with a minimal time investment?

Do a little research. I little time spent up front to understand the basics can go a long way in comparing providers. An hour or two of time spent up front can save countless hours and $100 if not $1,000 of dollars later. You want to know:

The types of accounts available to your business
The rates and fees associated with the account
The contract term and termination penalty

Compare your rates. Make sure you look at your contact and examine the rates that are displayed. It’s very easy to sneak in rates on the contract so make sure you read your contract and ask questions about anything you don’t understand or agree with.

Don’t rush into an account. You are substantially more likely to be taken advantage of if you have to get an account open quickly. Your account is a mission critical piece of your business but rushing to get an account open can end up costing a great deal over the life of the operation. Plan ahead and take your time with deciding on a provider. Trust me; you’ll be glad you did.

If it sounds to good to be true – IT IS! Merchant service providers have countless options in which to structure the pricing on your account. It is very easy to advertise a teaser rate – say 1.29% - while making up the difference with junk fees buried in your statement that no one can possibly understand. The unfortunate part is that these “bargain accounts” end up being far more expensive than a legitimately advertised accounts.

Begin your research with 7 items to consider when looking for affordable credit card processing.

Protect your business from merchant account fraud. Card Testing.

Alex Neir — Tue, 05 Oct 2010 21:27:00 GMT

Does your business accept payments from a payment gateway or ecommerce site? What you pass back to the customer when the credit card is declined may expose your business to a new form of merchant account fraud, called card testing and end up costing you a bundle.

Maxx typically recommends making the response to the customer as vague as possible and specific as necessary. After all, the goal is to retain the customer’s order through offering helpful messaging in the case of an error. There is a very important balance here as you do not want to provide too much information making it advantageous for card testers to use your site.

Card testing fraud is a two step procedure. Step one is the practice of using a computer program to test credit card numbers until a valid card number is found. Step two is to use a similar program to then find the correct expiration date to validate the transaction.

Your merchant account and gateway charges you for every transaction regardless of weather the transaction is approved or declined. There for if your site is providing the correct information to a card tester they will typically attempt as many transactions as necessary to get a card number and expiration match. The result – hundreds, if not thousands of attempts. Depending on you’re contracted per transaction rate, this could result in substantial costs to your business.

How can you protect your business?

First, block the IP addresses for known card testers. Here is a list of the IP addresses for know card testers.

Second, develop an error messaging strategy with different responses depending on the error passed from the gateway. Again, a good practice is to be as vague as possible and specific as necessary.

Some Examples:

“General: We are terribly sorry but the card you are attempting to use has been declined. Please use an alternate credit card and submit your order again. If you are still experience difficulty please contact us directly at (800)xxx-xxxx and we’ll be happy to assist you.”

“AVS mismatch, or other error: We are sorry but the address and zip code entered does not match the information on file with your credit card issuer. Please re-enter the address and zip code. If you are still experience difficulty please contact us directly at (800)xxx-xxxx and we’ll be happy to assist you.”

It is always a good idea to monitor your transaction closely to insure you are not victimized by fraud attempts. If you feel you are experiencing an abundance of merchant account fraud attempts there are numerous tools available to help mitigate credit card fraud. If you would like information on these tools please contact us at (800)917-8026.

Good rate on a merchant account? Your average sale will tell you.

Alex Neir — Tue, 28 Sep 2010 20:32:00 GMT

A common question often asked is “What’s a good rate on a merchant account?” The question seems simple and straight forward but in actuality depends greatly upon the average sale amount of the merchant.

The reason for the dependency has to do with the way in which merchant account rates are applied. There are two components that make up the charge total for each transaction completed by the merchant. The first component is a percentage charge and the second is a fixed per transaction fee.

Both the percentage amount and per transaction fee can be negotiated with your merchant service provider. Knowing your average sale amount gives you the ability to determine which component of the charge total is most important in keeping your costs down.

Let’s look at an example to see how a merchant’s average sale affects their total processing costs. In the examples listed below the sales volume for the month is $10,000.

Analysis of these two graphs tell us a couple of things. If your business has a low average ticket then savings are most abundant through lowering your per transaction cost. On the other side, as your average ticket grows (great than around $80) savings are going to be greatest through a reduction in the percentage component of your overall rate.

Knowing how your average ticket amount affects your total processing cost is helpful when considering a merchant services proposal. This is a very good example of why shopping for the lowest advertised rate will not always result in the lowest processing costs.

Business capital without a loan? A cash advance may be the answer!

Alex Neir — Tue, 21 Sep 2010 20:42:00 GMT

The lending community has tightened up considerably in the last few years making it extremely difficult to access additional business capital unless your business has large cash reserves. Wouldn’t it be nice if you could leverage your sales to secure an advance of cash instead of relying on traditional lending guidelines and requirements?

A merchant credit card cash advance provides working capital for your business secured by a portion of your future credit card receipts. The guidelines for a merchant credit card cash advance approval differ from a traditional loan as a merchant credit card cash advance is approved based on the history of receipts not on credit and collateral. These facts make it much easier for a small to medium sized business to attain the capitol necessary to grow the business.

Traditional underwriting requirements for a merchant credit card cash advance are as follows:

500 FICO score or better
$5000/ month minimum processing
Average retail ticket less then $600
15 batches / month
Bankruptcies discharged for at least 1 year
In business for at lease one year

Additional benefits include:

Advance is invisible: Advance does not show through the credit reporting agencies as a loan or line of credit
Large advance amounts: Up to $250,000
Repayment is automatic: A fixed percent of each future sale is directly debited
You don’t pay unless you get paid!

Interested in getting pre-approved for a merchant credit card cash advance? Our underwriting is fast and easy!

When is a merchant account better than PayPal?

Alex Neir — Tue, 14 Sep 2010 21:28:00 GMT

When is a merchant account better than PayPal?

This is a common question that most businesses struggle with when deciding to add payment processing to a web site. When should a PayPal account be utilized and when does it make sense to move to a merchant account?

First we need to look at the typical charges associated with a PayPal account and merchant account. To accept payments over the internet you need a payment gateway and a payment processing account. The payment gateway’s job is to capture the cardholder information from the business website, encrypt it and send it to the payment processing account. The payment processing account then authorizes, settles and deposits the funds into the business bank account. PayPal combines these services into one fee structure. The typical payment processor will split the two charges out. Both are represented below.

Type	Set-Up Fee	Monthly Fee	Percentage	Transaction Fee
Merchant Acct	None	$12.95	2.5%	$0.22
Gateway	None	$10.00	None	$0.10
PayPal	None	None	2.9%	$0.30

Now when examining these costs they don’t have much relevance unless we look at the costs as a percentage of sales. I have calculated the cost (as a percentage of sales) at various monthly sales volumes with a sales price of $25.

After analysis the answer to our question “When is a merchant account better than PayPal?” becomes clear:

On paper, PayPal looks to be a very cost effective solution and certainly is if you’re monthly sales volume is below $2,000 a month.
A merchant account is better than PayPal when your monthly sales volume exceeds $2,000 a month

Now our analysis up to this point has been an examination of direct purchase costs. We need to also look at the cost savings in terms of ease of use and time.

PayPal

PayPal has a delay in depositing sales into the business bank account and can place a hold on the money at any time without notification
PayPal does not allow access to card holder information including the credit card number
PayPal’s shopping cart is vey basic and can not handle shipping charges with any sophistication and offers no tax calculation.

Merchant Account

The payment gateway allows integration with most commercially available shopping carts. This allows your business the freedom to select a shopping cart that has the right features and functionality for your check out process
Allows your business to tailor the ordering approach to your customers, therefor maximizing sales
Allows for taxes and shipping to be calculated based on business rules
Allows complete control of customer information for entry into a marketing and sales database
Disclosure of the card holder’s information including the ability to edit the credit card number for easier refunds and chargeback investigation
Offers more freedom to manage your business

In conclusion, a merchant account is better than PayPal if your business if transacting more than $2,000 a month in sales. In addition a merchant account is a better solution if you require more flexibility and freedom to tailor the shopping experience to your specific business needs.

Time to open a merchant account? Download our free guide to avoid costly mistakes.

The 3 best price structures for credit card processing | Interchange

Alex Neir — Thu, 26 Aug 2010 22:18:00 GMT

The 3 best price structures for credit card processing | Interchange Plus

There are many ways to set up the pricing structure for a credit card processing account. We will discuss the 3 best price structures for credit card processingand give a detailed explanation of each.

ERR Pricing: One rate
Tiered: Two to four rates
Interchange Plus: Every rate

The third price structure for credit card processing is called Interchange Plus Pricing. Interchange Plus pricing gets its name based on the fact that the rate charged for the transaction comes straight from the Interchange table “plus” a surcharge amount.

As a merchant business with a interchange plus pricing structure, you will be charged the Interchange Table rate that the transaction qualified at plus a surcharge amount. The surcharge amount is negotiated with your merchant service provider. We will use 50 basis points or 0.50% for illustrative purposes.

(The Interchange Table is the rate table set up by Visa, MasterCard, Discover and American Express to facilitate the acceptance of plastic as a form of payment. There are currently over 180 different interchange rates that can apply. The rate is determined by how the card is transacted – swiped vs. keyed and the type of card that is transacted – debit card, check card, rewards card, corporate card, international card) More information on interchange fees

Transaction Amount = $100
Interchange Qualification	Interchange Rate	Surcharge	Cost
Check Card, Swiped	1.65%	0.50%	$2.15
Rewards Card, Swiped	1.90%	0.50%	$2.40
Check Card, Keyed In	2.35%	0.50%	$2.85
Rewards Card, Keyed In	2.45%	0.50%	$2.95
International Card, Swiped	3.07%	0.50%	$3.57

The interchange plus pricing structure for credit card processing is most advantageous for merchants that are transacting large volumes.

What pricing structure is right for my business?

The 3 best price structures for credit card processing | Tiered

Alex Neir — Thu, 26 Aug 2010 22:08:00 GMT

The 3 best price structures for credit card processing | Tiered Pricing

There are many ways to set up the pricing structure for a credit card processing account. We will discuss the 3 best price structures for credit card processingand give a detailed explanation of each.

ERR Pricing: One rate
Tiered: Two to four rates
Interchange Plus: Every rate

The second price structure for credit card processing is called Tiered Pricing. Tiered pricing gets its name from the fact that there are multiple tiers set up to determine the price associated with the transaction.

Typically there are 2 to 4 tiers that are set depending on the type of business. Retail merchants usually have 3 to 4 tiers and internet business tend to have only 2. For this example with will look at are retail business.

The 4 tiers set up most often for retail business are as follows:

Debit
Qualified
Mid-Qualified
Non-Qualified

Each tier’s rate is negotiated with your merchant service provider. We will use the following for illustrative purposes.

Debit: 1.10%
Qualified: 1.69%
Mid-Qualified: 2.29%
Non-Qualified: 2.99%

Each tier’s qualification parameters:

Debit: Debit cards where the PIN is entered by the customer at check out
Qualified: Check cards that are swiped through the terminal
Mid-Qualified: Check cards that are keyed in to the terminal, Rewards cards that are swiped or keyed into the terminal
Non-Qualified: Corporate or international cards swiped or keyed

As a merchant business with a tiered pricing structure illustrated above, you will be charged the tier rate associated with the transaction regardless of the interchange table rate.

Transaction Amount = $100
Interchange Qualification	Interchange Rate	Tier Rate	Cost
Check Card, Swiped	1.65%	1.69%	$1.69
Rewards Card, Swiped	1.90%	2.29%	$2.29
Check Card, Keyed In	2.35%	2.29%	$2.29
Rewards Card, Keyed In	2.45%	2.29%	$2.29
International Card, Swiped	3.07%	2.99%	$2.99

The tiered pricing structure for credit card processing is most advantageous for merchants that are transacting medium volumes.

What pricing structure is right for my business?

The 3 best price structures for credit card processing | ERR Pricing

Alex Neir — Thu, 26 Aug 2010 21:58:00 GMT

The 3 best price structures for credit card processing | ERR Pricing

ERR Pricing: One rate
Tiered: Two to five rates
Interchange Plus: Every rate

The first price structure for credit card processing is called ERR (Enhanced Rate Recovery) Pricing. ERR pricing is often referred to as the simplest pricing structure as there is only one rate that is associated with the account.

This ERR rate is negotiated with your merchant service provider. We will use 1.69% as the ERR rate for illustrative purposes.

As a merchant business with an ERR rate of 1.69% for your merchant account, you will be charged 1.69% for any transaction that qualifies on The Interchange Table at 1.69% or below.

For transactions that qualify above 1.69% on the interchange table you will be charged that rate, in addition to a surcharge determined by your merchant service provider.

For our example transactions below we will use 0.50% as the surcharge.

Transaction Amount = $100
Interchange Qualification	Interchange Rate	ERR Rate	Surcharge	Cost
Check Card, Swiped	1.65%	1.69%	0	$1.69
Rewards Card, Swiped	1.90%	1.69%	0.50%	$2.40
Check Card, Keyed In	2.35%	1.69%	0.50%	$2.85
Rewards Card, Keyed In	2.45%	1.69%	0.50%	$2.95

The ERR pricing structure for credit card processing is most advantageous for merchants that are transacting lower volumes.

What pricing structure is right for my business?

What are credit card interchange fees and why are they important?

Alex Neir — Tue, 03 Aug 2010 21:06:00 GMT

What are credit card interchange fees?

This is a very good question and is important to understand if your business accepts credit cards or would like to. When thinking about interchange fees, it helps to think of it as a toll way.

Interchange is, in effect, a toll road that must be driven in order to access the card holders (your customer) account information at the card issuing bank. The interchange fee is the toll for accessing that information.

The interchange fee is paid by you (the merchant) to the card issuing bank. The issuing bank collects the fee to recoup the cost associated with enabling consumers with the ability to pay with a piece of plastic.

Another item to be aware of is the assessment fee. The assessment fee is charged directly by Visa and MasterCard to cover their operating costs. The Visa assessment fee is currently .0925% and the MasterCard assessment fee is currently .0950%. Both Visa and MasterCard regularity adjust these fees and typically do so in April and October. The assessment fee is always applied as a percentage the total purchase price of the product or service sold.

What are the current credit card interchange fees?
There are currently 315 different levels of interchange fees. The reason for so many different levels and fees is due to a few factors.

The industry of the merchant. The industry of the merchant will be one of the initial factors considered when the interchange fee is applied. Some of the industry specifications include supermarkets, restaurants, hotels, passenger transport, etc.
The means in which the card is transacted. The means in which the card is transacted refers to whether the card is present at the time of the transaction and swiped through a terminal or the card is keyed into the terminal for processing.
The type of card that is transacted. The type of card that is transacted refers to the type a card presented by the customer. Typical card types include debit cards, check cards, reward cards, international cards and corporate cards.

What are some ways in which to reduce the interchange fees that are charged?

Swipe the card through a terminal rather than key the card data into the terminal.
Use an address verification service (AVS) when transactions are keyed into the terminal. This service helps to reduce fraud.
Run your batch process daily.

Through adhering to these three scenarios you give yourself the best chance at qualifying for the lowest interchange fees. The goal is to avoid being downgraded. You will downgrade (pay a higher interchange fee) when criteria for the lower fee are not met. Every time the transaction moves further away from the required criteria, more risk is associated with the transaction and it will cost more to transact.

Interchange fees for a retail purchase of $100

Example	Visa Interchange Rates	Interchange Charged to You
The card is swiped through a terminal; the transactions are settled an a daily basis	1.68 % + $0.10	$1.78
Transaction is keyed into the terminal, AVS is used; All transactions are settled on a daily basis	1.85 %+ $0.10	$1.95
Transaction is keyed into the terminal, AVS is not used; All transactions are settled on a daily basis	2.39 % + $0.10	$2.49
The card is swiped through a terminal; The transactions are settled on a monthly basis	2.80 % + $0.10	$2.90

I hope this article is helps you and your business understand credit card interchange fees. If you would like additional guidance in avoiding mistakes when opening a merchant account please download our whitepaper.

Considering a wireless credit card processing machine?

Alex Neir — Fri, 30 Jul 2010 19:22:00 GMT

Considering a wireless credit card processing machine?

Why go wireless? There are numerous reasons to select a wireless processing solution. This is especially true if your business is mobile or transactions are frequently conducted at events, fairs, tradeshows or any location away from your main office or retail store.

The first question to ask when considering a wireless credit card processing machine: What are the benefits?

(Credit: www.fotoaandekust.nl)

Lower processing rates. Your business is able to save a considerable amount on the processing fee if you are swiping the customer’s credit card through a terminal as opposed to keying the card in. This savings is passed on by the credit card issuer as there is less risk associated with the sale. Your business can typically save half to a full percentage point by swiping the card at the sale.
Added convenience. Depending on the volume of transactions, it can be very cumbersome to capture your customers card data only to have to key it all in at a later time. In addition, you no longer have to worry about loosing your customer’s card information and, therefore, the revenue from the sale.
Reduced exposure to fraud. Through processing the authorization at the sale you reduce your exposure to bad debit. If the customer has the funds necessary to complete the sale you are notified before your products and services are rendered.

Now that we have identified the benefits, what considerations need to be made when selecting a wireless credit card processing machine?

Equipment. As for equipment you have more than a few options. Almost every manufacture offers a wireless version of their wired terminal. However, the terminals tend to be a bit costly as most retail for around $600 to $900. Another option is to utilize a mobile phone as your wireless credit card processing machine. There are a lot of card swipers that have been engineered to work with mobile phones. Depending on the mobile device you have it may make sense to investigate the availably of a swipe device that is compatible. If you have an iPhone, Maxx Merchants has an iPhone charge card POS that could be a good fit.

Coverage Plan. The next consideration is the data plan needed by your wireless credit card processing machine to access a wireless network to complete the transaction. If you elect a traditional wireless terminal you will be required to purchase a network access plan for the terminal to work. This is another good reason to utilize a mobile phone as you will likely already have a data plan in place.
Fees. Your wireless credit card processing machine will require a merchant account to process payments. The fees associated with the account are negotiable. For a detailed explanation of the fees and rates please see our blog on affordable credit card processing.

I hope this article is helps you and your business determine the best wireless credit card processing machine. If you would like additional guidance in avoiding mistakes when opening a merchant account please download our whitepaper.

Automated Payment Processing

Alex Neir — Thu, 29 Jul 2010 19:14:00 GMT

Automated Payment Processing

Are you looking for and automated payment processing account for your business? The addition of an automated payment processing solution is an easy way to enable your customers to purchase products without direct assistance. Automation allows you to focus on other areas of your business rather than order placement.

Here are the areas of automated payment processing that we can help with:

With any business the first step is determining the area of the business that would benefit most from an automated payment processing solution. Once a need is determined the next step to consult with a payment processing provider to determine the very best solution available. Once a solution is identified the next step is to determine the costs. Please refer to affordable credit card processing for a detailed explanation of the cost associated with an automated payment processing system.

Once you understand the costs you are now in a position to make the best decision for your business.

As always please contact us if you would like assistance determining the best solution for your business. (800)917.8026

7 items to consider with affordable credit card processing

Alex Neir — Tue, 20 Jul 2010 22:23:00 GMT

7 items to consider when looking for affordable credit card processing

The term affordable credit card processing is thrown around a lot and can mean different things to different businesses. For the purposes of this article we will discuss the affordability of credit card processing in terms of the rates and fees that are charged for the service.

I have broken out the major rates and fees charged for credit card processing. Please keep in mind that there will always be other miscellaneous fees, so be sure to read your merchant contract carefully to understand all that apply and when.

Discount/Percentage Rate (interchange): This is the largest total expense for the account and is typically negotiable with your processor. There are typically three discount rates associated to the account (this example is for a retail location). The three discounts rates are referred to as the qualified, mid-qualified and non-qualified rates. The qualified rate is reserved for card present / person present transactions. The mid-qualified rate is reserved for keyed in transactions and certain rewards cards. The non-qualified rate is reserved for corporate and international cards. Some rewards cards will also downgrade to the non-qualified rate. When looking for affordable credit card processing you want to achieve the following for each discount rate:

Qualified Rate: Between 1.59% and 1.69%
Mid-Qualified Rate: Between 2.29% and 2.39%
Non-Qualified Rate: Between 2.99% and 3.09%

Per-Transaction Rate: In addition to the discount rate you will also be charged a per-transaction rate. The per-transaction rate is charged for each transaction that is run through the account. It is important to note that some processors will set up the account to authorize and capture as separate processes, effectively doubling the transaction costs per month. Make sure your processor is authorizing and capturing as one transaction. When looking for affordable credit card processing as a function of the per-transaction rate you want to be between $0.10 and $0.20 per-transaction.

Monthly Service Fee: This is the amount you are charged per month for customer service, account access, statement preparation etc. For an affordable credit card processing account you need to be between $9.95 and $14.95.

Batch Fee: The batch process is responsible for converting the credit card authorizations (promise to pay) into deposit of funds into your business account. The batch process is typically run on all days where authorizations are processed. For an affordable credit card processing account you want establish a rate between $0.15 and $0.25 per batch process.

Monthly Minimum: The monthly minimum is the amount that is charged if the account is not used or used minimally. An affordable credit card processing account will typically have a monthly minimum of $0.00 to $9.99.

Annual Fee: The annual fee is a fee that your business is charged once a year for maintenance of your merchant account. You are best served to negotiate this rate to $0.00.

Termination Fee: This is the fee you are charged if you would like to end your contract early. This fee varies greatly form one processor to the next. Make sure you understand the contract term and termination fee.

If you are looking to set up an affordable credit card processing account we can certainly help. Please contact us directly for a no obligation quote. (800)917-8026. Mention prom code affordable for additional discounts.

Starting an ecommerce website

Alex Neir — Mon, 12 Jul 2010 23:18:00 GMT

Starting an ecommerce website
Are you at the point where you need to start an ecommerce website to begin the process of offering your products and services online? If the answer is yes then I have a handy little guide to help get you started. The process of starting an ecommerce website begins with the website itself. It is always best to select a website that gives you the ability to update your content, products, prices, etc., on your own rather than relying on the developer. Some popular CMS (content management systems) include Wordpress, Drupal and Joomla. You will want to select the platform that work best with your shopping cart. We talk about that in just a bit.

The next consideration when starting an ecommerce website is selection of a shopping cart. The shopping cart software allows you to set up your products and services for sale on the Internet. There are many commercially available shopping carts available to choose from. You will want to select the cart that offers the functionality you are looking for. You will want to look for a cart that offers merchant tools, supports many payment options, offers configuration for shipping and taxes, offers real-time statistics and reporting, and has the appropriate security. You will also want to select a shopping cart that is compatible with your payment gateway. This will illuminate the cost associated with integrating your shopping cart and merchant account. Maxx Merchants is compatible with over 25 commercially available shopping carts.

Your next step when starting an ecommerce website is the hosting service. The hosting service provides a home for your website on the Internet and allows your customers to reach you. You will want to select a hosting service that offers the appropriate functionality for your site and shopping cart. Most services offer various packages for a monthly service fee. I like doteasy.com as the hosting is free and they let you upgrade as necessary for any functionality you might require.

So you have your website, your hosting service and your shopping cart all dialed in but the most important part of starting an ecommerce website is accepting payment.

There are 2 pieces that need to be considered when starting an ecommerce website; The Payment Gateway and the Merchant Account.

The payment gateway is the application that connects your website shopping cart to your merchant account. The job of the payment gateway is to collect the credit card information from the customer, encrypt it and sent it to the merchant account for processing. When selecting a payment gateway you want to select one that is compatible with your shopping cart, offers good pricing, has the ability to facility all payment functions (payments, voids, refunds, etc), offers robust fraud protection, is PCI compliant and has an interface for you to run reports on your sales. The Maxx Payment Gateway offers all these features giving you complete control over your transactions.

Next is selection of a merchant account. The merchant account’s job is to authorize the card that is being used for payment and then deposit those authorized transactions into your bank account. It’s important to choose a merchant account that offers good rates on processing, has 24 hour turn around on settled transactions, offers live customer support, has high approval rates and low merchant attrition. You want a processor that stands behind your account and consults you as to the very best way to set up your ecommerce website. Maxx Merchants can provide you the level of service you expect for your merchant account.

The last piece of the puzzle in starting an ecommerce website is your marketing. All of your efforts are wasted if no one knows your site exists. Make sure you design your site with all the current search engine optimization (SEO) techniques. You will also want to post your new site on all the most popular social networking sites.
Good luck and if you need any assistance I am here to help and you can contact me directly.

Alex Neir – (800)917-8026, alex@maxxmerchants.com

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Do you need an inexpensive merchant account?

Alex Neir — Mon, 12 Jul 2010 22:07:00 GMT

Do you need and inexpensive merchant account? Do you need and inexpensive merchant account for your business? What defines an inexpensive merchant account? Is the account an inexpensive merchant account if the rates and fees associated with the account are as the lowest they can be? I certainly believe that is one factor. What about customer service and reliability? How does the reliability of the account and available support factor into the “cost” of the merchant account? When growing your business it’s important to analyze the costs and benefits associated with any strategy intended to increase your bottom line. The addition of an inexpensive merchant account or the substitution of your current account with an inexpensive merchant account can be a very effective way to increase sales while keeping overhead low. Some of the benefits of an inexpensive merchant account include:

Convenience and immediacy – Taking your products and services to the internet allows your customers to acquire your offerings at all hours of the day or night.
Options and value - All things equal if you are selling the same products as a competitor and provide more options for payment your store is perceived to offer more value.
Higher average ticket – According to Dun and Bradstreet it is estimated that customers spend 12% to 18% more when using a credit card for payment.
Minimize bad debt – Reduce the instance of bad debt through offering credit card processing. You know the customer has the funds to complete the sale as the authorization tells you before the customer leaves the store.
Increased sales – Dun and Bradstreet estimate that the average business can increase sales anywhere between 12% and 35% thought offering credit to patrons.

Now that we have established some of the benefits to establishing an inexpensive merchant account let’s discuss the costs. With a typical merchant account there will be rates and fees associated with the various functions of the account. Some of these rates and fees include:

The discount rate
The transaction fee
The batch fee (settlement fee)
AVS fee (address verification)

Customer service fee
Monthly minimum fee
Termination fee
Online account access fee
Etc

The costs associated with running or establishing a merchant account should be thought of in terms of recurring costs verses prospective (future) costs. The recurring cost of the account can be boiled down to a percentage of total volume processed and is known as the effective rate (ER). The effective rate of an inexpensive merchant account are the fixed monthly costs incurred to attain the benefit of offering credit. These costs are usually the main focus of a business when selecting a merchant services provider. I believe it is important to point out the potential larger prospective (future) costs that can result from selecting the wrong provider. For most businesses, the revenue from credit card sales represents a significant cash flow source. If this revenue source is interrupted it can put substantial strain on the business operations and can represent significant costs to the business. Possible interruptions can result from any number of network issues very common in the processing industry. Interruptions are inevitable and the true costs associated with the interruption are determined by how long it takes to correct the problem. It is very important to select a processor that has a support staff that is available and knowledgeable in order to ensure merchant processing down-time is kept to a minimum. At Maxx Merchants our dedicated in‐house approach to the entire merchant service process is our mission. Our commitment to merchant customer support is of the utmost importance, leading to our industry high merchant retention rate. We are one of very few payment processors offering dedicated 24/7 technical support staff that are employees and not subcontractors. At Maxx Merchants we are able to offer you the ultimate inexpensive merchant account as your recurring costs (ER) will be very low and your prospective (future) costs are minimized with the best support in the industry. What does that translate for you? Increased profits!!

Please call us directly to get started (800)917-8026.

Point of sale credit card processing

Alex Neir — Thu, 08 Jul 2010 02:22:00 GMT

Point of sale credit card processing

A point of sale (POS) is the location as which the sale or transaction occurs and is typically associated with check out. A point of sale system is the hardware and software that is used to complete the check out.

Payment for the transaction is a fundamental piece of the check out process and is usually not included as a function of most the point of sale systems. Most point of sale systems will need a piece of middle ware to sit between the point of sale software and the credit card processing software. The job of the middleware is to translate the payment information into a language that the credit card processing software can understand. Some examples of point of sale payment middle ware include PC Charge and IC Verify.

Now that your business is interested in point of sale credit card processing you will need to determine which middle ware your POS is compatible with. Once you know the vendors that are compatible, you will want to check price and customer service for each vendor. I mention customer service as a few companies out there are notorious for poor customer service and support which will increase your overall costs to set everything up.

Once a middle ware vendor is selected the next step is to determine the payment network the middle ware vendor is compatible with. The bigger payment networks are First Data, Vital and Paymentech. The payment network is important as it will drive the credit card processor you are able to engage to set up your merchant account or credit card processing account.

Once you determine the credit card processors that are compatible, you will want to check the rates and customer service for each. Keep in mind you "get what you pay for" so make sure you are not baited into signing up with a company that offers rates that are considerably lower than all the others. They are hiding the true costs of the service and the customer service will be non-existent.

If you would like help determining the perfect point of sale credit card processing solution for your business please contact us directly at sales@maxxmerchantservices.com.