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?
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
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 an Ecommerce Website
- Shopping Cart Compatibility
- Merchant Account Rates and Fees Explained
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
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
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
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 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?
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 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%.
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 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.