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Square Up and PayPal are Payment Aggregators | Benefits and Drawbacks

Posted by Alex Neir on Fri, October 19, 2012 @ 01:56 PM
Payment Aggregator
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:

  1. Fewer requirements for establishing the account. Most aggregators require only simple contact information and rarely require any financial documentation or credit information.
  2. Simplicity of set up.  Most of the time the account can be applied for and set up immediately.
  3. 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.
  4. 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:

  1. 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.
  2.  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.
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Tags: Merchant Account, Payment Aggregator, PayPal Comparison, Merchant Account better than Square Up, Square Credit Card Reader

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

Posted by Alex Neir on Thu, October 04, 2012 @ 04:19 PM
Bank Credit Card Processing

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?

 Click me

Tags: Credit Card Processing Account, Credit Card Processing, Credit Card Processing for Small Businesses

Maxx Merchants Virtual Terminal | Overview

Posted by Alex Neir on Fri, September 21, 2012 @ 01:59 PM

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 BillingRecurring 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.

Virtual Terminal Set Up

Tags: Payment Gateway, Electronic Check Acceptance, Virtual Terminal

Chargeback Tips | How to limit them

Posted by Alex Neir on Wed, September 12, 2012 @ 01:28 PM
Chargback Tips
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.

Tags: Chargeback Compliance, Charge Back Tips, Chargebacks

Authorize.Net Phishing Scam | Beware

Posted by Alex Neir on Thu, September 06, 2012 @ 01:44 PM
Authorize.Net Scam
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. 

Tags: Credit Card Fraud, Fraud Protection, Fraud Alert

Android Credit Card Processing | Features and Pricing

Posted by Alex Neir on Tue, August 28, 2012 @ 02:14 PM
Android Credit Card Processing
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
Sign me up!

Tags: Mobile Credit Card Processing, Android Credit Card Processing, Smart Phone Credit Card Processing

Batch Processing | An explanation

Posted by Alex Neir on Thu, August 16, 2012 @ 01:13 PM

Batch Processing

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:

  1. The authorization
  2. The capture
  3. 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. 

Tags: Credit Card Processing Account, Credit Card Processing, Batch Processing

Electronic Check Guarantee | Worry free check acceptance

Posted by Alex Neir on Wed, July 25, 2012 @ 01:44 PM
Electronic Check Guarantee

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?

  1. Upon check out the customer’s check is scanned using a check scanner or keyed into the electronic check acceptance terminal.
  2. The guarantee solution checks the customer in the bad check writer’s database.
  3. If the customer shows up in the database the check is declined.
  4. If the customer does not show up in the bad check writer’s database the check is approved.
  5. 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?

Tags: Electronic Check Guarantee, Electronic Check Acceptance, Electronic Check Verification, Electronic Check Conversion

Electronic Check Conversion | Eliminate trips to the bank

Posted by Alex Neir on Thu, July 19, 2012 @ 01:37 PM
Electronic Check Conversion

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

Tags: Electronic Check Acceptance, Electronic Check Verification, Electronic Check Conversion

Electronic Check Verification | Accept checks like a credit card

Posted by Alex Neir on Fri, July 13, 2012 @ 12:59 PM
Electronic Check Verification

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.

  1. Electronic check conversion
  2. Electronic check guarantee

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.

Tags: Check Guarantee, Electronic Check Verification, Electronic Check Conversion