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

Posted by Alex Neir on Fri, July 29, 2011 @ 10:56 AM
Credit Card Processing Solutions

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:

  1. Is your business conducting sales face to face or over the internet?
  2. 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

Credit Card Processing Solutions2

Tags: PayPal Comparison, Credit Card Processing Solutions, Merchant Account better than Square Up

What the Durbin Amendment Means to Your Merchant Account

Posted by Alex Neir on Tue, July 26, 2011 @ 12:37 PM
Durbin Amendment

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! 

Tags: Interchange Fees, Credit Card Processing Denver, Durbin Amendment

When is an Actual Merchant Account Better Than Square Up

Posted by Alex Neir on Thu, July 21, 2011 @ 12:44 PM
Merchant Account Better Than Square Up

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.

  1. Square Up’s $1,000 weekly cap
  2. 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.

 Merchant Account Better than Square UP

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 [email protected] 

Tags: Merchant Account, Merchant Account better than Square Up, Square Credit Card Reader

Merchant Services in Denver, CO – Top 3 Benefits

Posted by Alex Neir on Tue, July 19, 2011 @ 02:50 PM
Merchant Services Denver

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. 

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Tags: Benefits to Local Service, Credit Card Processing, Denver Merchant Services

Match or The Terminated Merchant File (TMF) – Beware

Posted by Alex Neir on Tue, July 12, 2011 @ 03:15 PM
Terminated Merchant File

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. 

Tags: Match File, TMF, Merchant Account Termination, Terminated Merchant File

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

Posted by Alex Neir on Fri, July 08, 2011 @ 12:24 PM
PCI Compliance

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.

 

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Tags: PCI Compliance, Credit Card Fraud, Merchant Account Education