Merchant Services for Credit Card Payments
Whether you do business from a store front (brick and mortar) or from an Internet website you’re going to need merchant services for credit card payments. Your merchant services account is a type of bank account that allows you to accept payments by debit or credit cards.
It’s an agreement between you as a retailer, your customer’s bank who issued him his credit card and a payment processor for the settlement of credit card or debit card transactions. Without a merchant account you cannot accept credit card and debit card payments from your customers.
Getting a merchant account if fairly easy and can be done on line. The following are a few that I recommend. They are not in any preferred order.
Credit card processing services vary greatly in prices and services. Do your due diligence if you want the best deal and the one most suitable for your business. The list of service fees you could encounter are setup, gateway, transaction, statement, batch, minimum monthly processing, technical support, customer support , and termination or cancellation. However, Not all bankcard
services charge all of these fees. Be sure to get a complete list.
Your type of business, volume, your credit rating will have an influence on your fees. A given credit card processing service may offer a low discount rate but charge more for one or more of the other fees. The low discount rates, below 1.5%, are reserved for high volume merchants with perfect credit. A nationwide department store will get a much lower rate than the little mom and pop operation.
Find out exactly what the credit card processor’s chargeback policy is, including arbitration procedure and the cost of a chargeback to you. Not all, but some charge you a fee if you have a chargeback. A customer disputes a credit card charge, and bingo, you have a chargeback on your hands. He can do that for many of reasons including dissatisfaction with the product, price or service.
I had a chargeback for a $3.00 item. I didn’t think much about it until I got a $15.00 charge for having the chargeback. That really smarted.
Approach the “free” merchant accounts warily. Don’t believe them. There is no such thing. Those ads only mean that you won’t be charged a setup fee. However, the bank card services provider makes it up somewhere else such as gateway fees, or monthly fees. Just as the old saying goes, “There ain’t no free lunch!”
Some merchant accounts require you to use their software for your shopping cart and the “Payment Gateway.” The “Payment Gateway” is the communication tool that enables credit card processing service to authorize, settle and manage credit card payments over the Internet. It’s the link from your “buy” page (where customers input their credit card information) to the merchant
account and the credit card organization, basically the same thing as a physical point of sale terminal in a retail store.
Check to see if you’re locked into using your merchant service provider’s shopping cart. Maybe there is an easy way to download a module to enable your own or a proprietary shopping cart. Often it’s less expensive to use your service provider’s cart rather than a proprietary shopping cart. Logistics for support may go smoother too.
Maybe you don’t need a shopping cart. You may get by with a virtual terminal. That’s a secure connection to the payment processors website where you can login and use your computer to accept credit card payments you’ve received by telephone or email. There’s no automation, and you’ll have to key in each transaction.
Before signing with anyone, you’ll want to know if you’re dealing with the actual payment processor or an Independent Sales Organization (ISO). An ISO is not the credit card payment service provider, and won’t be servicing your account after you’ve signed the agreement. You may prefer to deal directly with the service provider.
Finally, check to see what kind of customer service you’ll be receiving. Is it outsourced overseas, or will you be talking to someone in-house? Is it 24/7/365 or only during business hours and in what time zone? It’s better to know those answers before signing up rather then learning them while in the middle of a transaction.
OK, you’ve signed on with a service provider, how soon will you be able to start processing credit cards? Well, once your merchant account is approved, you should be able to accept credit cards upon receipt of your terminal (if you need one) and e-commerce password. Usually all within one business day of your account approval.
Now the most important question about taking credit cards as payment. “When do I get my money?” That depends upon your service provider, but in most cases, within two business days after you close your batches. Your service provider deposits the money in the bank account that you designate at the time you make your application.
Happy hunting for your merchant service credit card payment processor, and good luck!
What Are High Risk Merchant Accounts?
Nowadays every business whether an internet merchant or brick and mortar business needs to have an efficient electronic money processing solution for its customers. The introduction of plastic money like credit cards and debit cards has offered a convenient way for the buyers to purchase the things they want without the hassle of handling cash; therefore people prefer those businesses accepting credit cards as a payment method.
In order to be eligible to accept credit and debit cards, the business needs to have a merchant account with a financial institution that settles the card payments of the customers in the businessman’s favor. The merchant account forms a connection between the businessman’s payment processor and the customer’s bank. Whenever a customer makes a payment to the businessman through his credit card, the payment processor of the businessman contacts the bank of the customer and retrieves the payment for the businessman.
The merchant account service provider charges a fee for handling the payments, which is dependent upon the volume of business and the size of the company. A huge wholesale store can get a fee rate that is even lower than 1.5%, while a small shop is not eligible to get such a discounted rate. A merchant account is considerably easy to get for most businesses, except the high risk merchants.
There are some businesses that may have a high volume of sales, are susceptible to fraud and are mostly unable to control the irregularities in the business processes. These businesses are deemed as high risk businesses. According to the website www.merchantaccounts.cn/high-risk/what-is-a-high-risk-merchant-account/ the following are the businesses that are termed as high risk businesses:
- Online casinos and other gaming/ gambling agencies including sports wagering.
- Adult services and products.
- Pharmaceutical products.
- Travel services.
- Telemarketing businesses.
- E-wallet and E-cash.
- ISP and hosting services.
- Online cigarette or tobacco vending.
- Online auctions and debt services.
- Online dating services.
- Online sale of replica products.
High-risk businesses can not apply for a basic merchant account and must opt for a high risk merchant account. A high risk merchant account is not easily available because most service providers are reluctant to offer merchant services to high-risk businesses. This creates a huge problem for the high-risk business owner as they would lose a huge segment of customer-base that prefers to deal in plastic money. Because there are no credit card processing alternatives, a merchant needs a merchant service account in order to accept credit cards. Most banks are reluctant to open a high risk merchant account so the businessman has few options and has to take pretty much whatever he can get.
Opening a high risk merchant account is very costly as the merchant account fees are much greater than a normal merchant account. This is due to the higher ratio of chargeback and the possible fraud involved in these types of businesses. The customers doing business with these merchants are more likely to use a high risk credit card. The applied charges include a huge setup fee and high rates for utilizing services such as credit card processing. Nonetheless, a high risk merchant can shop for the lowest of the high rates offered him. There will be differences in what is offered by various service providers. A high risk merchant can help himself by working smart and using good security practices to reduce the ratio of chargebacks to sales.
See our post about 8 Tips for Merchant Credit Card Processing Account Safety for more information about security practices.
8 Tips for Merchant Credit Card Processing Account Safety
A merchant credit card processing account is critically important to your business’s success. In addition to being able to accept cash and checks for payment, it enables you accept debit and credit card payments. However, while there’s many great benefits in accepting credit cards, there are also potential pitfalls. A few things that you need to consider in order to avoid fraud and charge backs follow.
- Exercise caution in your International transactions. I’ve had problems with Eastern European, some Asian and other developing nations. The major culprits in fraudulent purchases live in those areas. Be especially wary of an order for a large quantity of high priced items.
- Insist upon getting the CVV number.This number is located on the back of the card, on the signature line, following the 16 digit card number. Card companies estimate that somewhere around 25% of charge backs can be avoided by demanding that number. Some credit card processing services will refuse to authorize a transaction without it.
- Look suspiciously at orders for your most expensive items with a request for overnight shipment. This is especially appropriate if the items can be easily converted to cash on the street. This applies to very large orders as well.
- Don’t hesitate or be afraid to exercise extreme due diligence with suspicious orders. It’s imperative to verify the customer and his address If you get an order that is out of the ordinary, seems strange, or just doesn’t feel right.Satisfy yourself that the transaction is authentic.
- If you receive a suspicious order ask for and get copies of identification and the credit card being used. Demand that the purchaser fax in copies of their licenses and credit cards. This will offer you protection from fraudulent purchases. A legitimate customer may object and say it’s too much hassle, but consider the fact that in that case you may only lose the sale.However, if you shipped to a fraudulent buyer you would lose the merchandise and the cost of shipping to him.
- Use Google.Com or 411.Com (reverse phone lookup) to verify addresses and telephone numbers.
- Specify that the delivery service you use gets a signature when delivering your product to customers. Get copies of these signature for your own records. Your buyer may tell you to have the delivered package left on the porch. Just be aware that you’ll have to replace it if he can’t find it when he gets home.
- Be up front, firm and consistent with your safety and security measures. Be sure your employees know and understand those measures too.
Putting the points above in use will reduce, if not eliminate fraudulent purchases. Most criminals avoid sites that take safety and security seriously. They will quickly move on to many other places on the web that are easier prey.
Your merchant credit card processing service certainly wants to help you with security. When you lose money because of fraud they do too. Ask for their advice. they will be happy to help.
PayPal Card Payment Processing
PayPal may well be the easiest merchant service to set up on your ecommerce site. It has a quick setup that doesn’t require advanced programming skills. All that’s required for a single item site is a little payment button. Their instructions for installing it are easy to follow. You’ll be up and running in about 15 minutes.
You need to have a PayPal account for yourself in order to use them as a credit card processor for your business. Engaging them as your merchant services provider does not require a credit application, setup fees or monthly fees.
Their rates are higher than other merchant services providers. Depending upon your sales volume, it may be a good trade off for no setup or monthly fees. There is a rather high fee for a chargeback.
PayPal is one of the most secure services out there. They have automatic fraud screening, address (AVS) and card verification (CVV2) checks, and 128-bit encryption at no cost. Customer information is safe with PayPal’s PCI-compliant standards for data protection. That’s good for you as a merchant too. You don’t see the customer’s card information or any other credit information.
Anyone with a credit card can pay for your products. the customer doesn’t have to have a PayPal account. This includes overseas customers. You’ll be able to accept payments in 22 currencies from 190 countries and markets worldwide. PayPal handles the currency exchange for you.
Your account information is readily available to you. You’re able to view a summary of your account activity each month, including monthly sales, inventory, and profit and loss statements. You can export your transaction information to Excel, QuickBooks, or Quicken.
It takes a couple days to get your money out of PayPal if you transfer from your account to your bank account. A faster way to get it out is to spend it through PayPal. That can be done online or through the PayPal Debit MasterCard® Business Card. Money left in your PayPal account earns interest though their money market fund.
A nice feature is the shipping tool. It lets you print shipping labels and buy postage for every order, and reduce those costly address errors.
The PayPal system is good for a low volume site without the need for an elaborate shopping cart.
More information is available by clicking here PayPal
Read our posts about these other merchant account services:
Charge Dot Com Merchant Account Services
Charge.Com may have the fastest and most accepting approval rate in the merchant services industry. An online application is used and they indicate that most approvals are made within 24 hours.
The charge.com site says they have no fees for application, setup, shopping cart software, or other software. However, they do not mention monthly fees, statement fees, or gateway fees.
Three options are available for processing credit cards. They offer real-time processing with a virtual terminal. This allows you to process telephone orders, mail orders, or purchases made in person. It’s a web-based credit card processing terminal with all the features of an electronic keypad terminal. It keeps detailed records of all your transactions, and generates printable invoices. It also allows you to set up automatic recurrent billing for monthly subscription payments or other payment plans.
The second option is ecommerce software for either PC or Macintosh. This would presumably be shopping cart software. the credit card processing done through it would be in real time.
The third option is using an electronic keypad terminal. This would be for store processing for card-in-hand customer-present transactions.
Their advertised discount rates are attractive. Card-in-hand face to face rates are as low as 1.26%, and mail order and Internet ecommerce rates are as low as 1.79%. Transaction fees are “as low as” 15 cents for both retail merchants and Internet marketers. However, there is no indication of what would qualify you for those very low rates.
Charge.Com appears to be a good low-cost merchant services provider. Be certain, though, to do your due diligence and find out what they charge for monthly fees, statement fees, or gateway fees and how much volume is required.
More information is available by clicking here Charge.Com
Read our posts about these other credit card processing services:
Intelli-Collect Bankcard Services
Intelli-Collect is a merchant services company that provides a means for various businesses to accept payment in the form of credit cards, debit cards (also known as check cards), electronic checks, and checks by telephone or fax. They boast that they are “the Walmart of electronic payment processing (in terms of pricing).” A Google search for merchant services rates shows that their rates are, indeed, amongst the lowest.
They service large and small businesses, including retail merchants, mail/phone order merchants, and Internet-based merchants. Even the small home-based business is welcome.
They are very up-front about the cost of doing business through them, making sure that the prospective client understands that they have no hidden fees.
As with all merchant services their fees and discount rates are determined by type business and risk involved.
The discount rates are 1.75% for card present/swiped transaction, and 2.14% for ecommerce and MOTO (mail order, and telephone order).
All transaction fees appear to be $.20 per transaction
Annual fee is $15.00 per year
Monthly fee is $8.00 for ‘card in hand’ brick and mortar locations, $14.95 for for ecommerce and MOTO (mail order, and telephone order), and $24.95 for the electronic check and ecommerce package. The fees for e commerce and electronic check package include the gateway fee.
There is a wireless terminal account for card present/swiped transactions available. The monthly service fee for that is $24.95. You may use your own credit card terminal. However if you don’t have one Intelli-Collect will furnish a Nurit 8020 (retail price of $600) for an additional $64.00 added to the monthly fee.
There’s also a non-wireless credit card terminal for card present/swiped transactions if you don’t have your own. They will provide the Nurit 8320 (retail price of $400-$500) if you accept an annual fee increase of $64.
Intelli-Collect does not charge for Address Verification System fees, Batch or Settlement fees, Cancellation or Termination fees, or any set up fee for Authorize Net Gateway.
There is no shopping cart available from Intelli-Collect. However, two excellent free shopping carts sanctioned by Authorize.Net are Zen Cart and AFCommerce.
We recommend this company. It has our highest rating.
Click this link Intelli-Collect for more bankcard services information.
Read our posts about these other credit card merchant services:
Authorize Net – Excellent Credit Card Processing Service
Authorize Net is excellent payment gateway used by top ranking Internet resellers and merchants. It manages secure payment transactions through the power and speed of the Internet. Your payment gateway account enables you to accept all major credit cards, electronic checks from bank accounts, gift cards, and signature debit cards from your e-commerce Web site.
You have various methods available to connect to the Authorize Net payment gateway. they include linking to the Authorize.Net secure hosted payment form, hosting your own secure payment form, or using one of our certified shopping cart solutions.
Click here >> Authorize Net << to sign up or get more information about this service.
Your Authorize Net account enables you to
- Accept a Variety of Payments – All major credit cards, eCheck.Net (electronic checks from bank accounts), gift cards, and signature debit cards.
- Manage Your Transactions – Use our full-featured Merchant Interface to monitor and control payments through your Web site. You are able to manage and review transactions, configure account settings, view account statements, download reports, and more via a password-protected Web site.
- Use A Virtual Terminal – Virtual Terminal and Batch Upload features of the Merchant Interface allow you to enter and upload individual and batch transactions manually.
- Prevent Fraud – Identify suspicious transactions with our value-adding products and built-in fraud tools. Authorize Net is committed to providing merchants with tools and best practices to prevent fraud.
- Have Risk Management – Sensitive data is stored in the Authorize.Net PCI-compliant data center, never on your computer.
- Receive Payments Quickly – Your funds are automatically deposited into your merchant bank account within days.
- Get Free Help – Authorize.Net provides live technical and account support to merchants via phone, e-mail or online chat, as well as access to online documentation and user guides.
- Use the Verified Merchant Seal – When displayed on your e-commerce Web site, the free Authorized Net Verified Merchant Seal increases customer confidence that their transactions are secure.
Click here >> Authorize Net << to sign up or get more information about this service.
Read our posts about these other credit card processing companies:
