We may be able to waive the PCI compliance fee for certain retail accounts
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Tuesday, February 27. 2007
The logos of credit cards displayed on the main window of restaurants do not just make the appearance colorful, but also increase sales. No wonder, the window that has the maximum number of logos displayed invites the maximum sales. In today's world, paying by plastic rather than paper is not only a fashion statement but is also the norm. As a restaurateur, you have to keep up with customer tastes and thus your menu has a wide range of choice, so that your customer does not leave without ordering. Similarly, you must also offer multiple choices to the customer when it comes to paying the bill. The customer may settle the bill by cash, by check, or a credit card. Accepting credit cards is a nice way to show that your restaurant is popular and is keeping with the times. This attracts customers. The question is how do you go about accepting credit cards? The answer is simply by opening up a restaurant merchant account with a preferred merchant account provider. Your merchant account provider will offer you a Point of Sale (POS) machine, which is a machine used to swipe credit cards. Now when a customer pays by a credit card, you simply swipe the card in the POS machine and the bank credits the amount to your restaurant merchant account. The customer is happy that the payment has been made by a credit card, and you are happy that you have received the payment of your bill. It may be possible that the customer pays by a stolen credit card, and in such a case, you may face a loss with a chargeback, which means that you would have to return the amount to the concerned bank. However, such instances are very rare, and should not prevent you from accepting credit cards. If your restaurant experiences heavy traffic, then you can also have wireless POS machines, which the waiters can carry with them. The waiters can effect the payment right at the table, thereby improving efficiency and displaying an up-market image. (Please note, however, that wireless credit card terminals are associated with higher monthly costs.) To further increase sales, you may even have a website highlighting your restaurant. The website may feature your location, a map with detailed directions, your days and hours of doing business, your menu, special events, home delivery options, and enable you to accept advance table bookings. The website can be viewed globally, and outstation visitors when they are in your city may come to your restaurant. Advance table bookings can be taken, by international as well as local customers, by making an advance payment through your website, assuming your site has credit card processing capability. By giving the facility of paying via credit cards through your website, you would definitely provide convenience and prove to the customers that your restaurant is a very popular one. The website credit card processing facility is integrated with your bank, so that any payments made are directly deposited in your restaurant merchant account. A restaurant owner who sets up an online presence can also utilize a third party credit card processor as opposed to a true merchant account provider. By availing the services of a third party credit card processor, the payment from the customer goes to the third party's merchant account, which is then forwarded to you in your local currency. It may be directly credited in your bank account or a check may be issued, as per your instructions. A third party merchant account can be initially inexpensive and is availed by thousands of businesses worldwide due to its low setup and maintenance fees. (We assert, of course, that our merchant account program will be most cost-effective, priced lower than any third party account, especially when monthly volumes begin to increase.) At the restaurant itself, third party processors are generally not in the credit card processing picture as they are e-commerce based. However, there exist a plethora of merchant account providers who will offer a restaurateur a swiped credit card processing platform, either offering tiered rates or those based off Interchange. You must, as always, do your homework by thoroughly researching the available options. You must also understand all the terms and conditions, including the fine print, in the application form of the restaurant merchant account. Once you are clear, you should go ahead with providing the facility of accepting credit cards to your customers. This is no longer a luxury but a need that has to be addressed promptly for continued business survival. Soon, you shall see how your sales experience a quantum leap towards profitability.
Friday, February 23. 2007
When it comes to trading, we still follow the primitives. Nothing much has changed. Consider the primitive barter system. In earlier times, goods were exchanged for goods, and now, goods are exchanged for money. Money has become a globally accepted commodity that can be exchanged for any item, be it goods or service. The form of money has progressed from metallic coins, to paper money, to plastic credit/debit cards, but the old barter system has remained unchanged. What significantly has changed is the market size and the ease of its accessibility. The market has expanded from a local market to a global market and can be accessed easily with a click of the mouse. Amazing! This is primarily due to the rapid advancement of science and technology, especially in the last few decades. Today transacting business over the Internet is a feasible and a profitable proposition, with the credit card being the most accepted form of money for barter. Accepting credit cards is a prime function of any Internet merchant. It increases the business volume while providing convenience to the customers. The major benefit of accepting credit cards is the speed by which the transaction takes place. Within a few moments, money is transferred from the buyer's account to the seller's account, irrespective of the geographical distances between them. Yes, buying silk from China or cotton from Egypt, while sitting in New York, was never so easy. Moreover, the entire transaction takes place under safe Secured Socket Layers (SSL). This ease of purchasing does increase what psychoanalysts term as "impulse purchasing", but then you do get what you want, without budging an inch from your laptop. Welcome to the Internet marketing age, the age of credit cards! Accepting credit cards over the Internet requires a payment gateway and a merchant account. Both of which you can easily have if you have a good credit standing with a large turnover. However, the setup and maintenance fees may be high (although exceptions exist, such as the programs available at our company  ) and for a smalltime merchant this option may not be practical. For merchants with low turnover, utilizing a third party's payment gateway and merchant account may be more economical, as the setup and maintenance fees are generally low. There are numerous merchant account providers and the best way to find them is over the Internet. Type in "merchant account provider" in any search engine like google, msn, yahoo, etc., and you will have lot of choices. Study the facilities that each one offers before zeroing in on any single merchant account provider. One of the prime facilities should be the capability to provide credit card processing of a large number of cards. Electronic commerce rests on the acceptance of multiple credit cards. Some cards that you should look for are MasterCard, Visa, American Express, Discover, Diners Club International, and JCB. MasterCard and Visa are the world's most preferred cards. American Express is America's #1 card. Discover is the largest independent credit card in the US. Diners Club International is a favorite amongst high fliers and JCB is Japan's #1 card. All the cards cater to different economic segments of the society, and the cards are marked as silver, gold, and platinum to make the differentiation. Accepting credit cards of all types and from all issuers enables you to minimize the chance of a lost sale. Different charges are applicable to different types of cards. The charge applicable to a platinum cardholder is not the same as the charge applicable to a silver cardholder. Moreover, there is no uniformity amongst the applicable fees of the different issuers of the cards. The charge of a platinum card of MasterCard is not the same as the charge of a platinum card of Visa card. You as a merchant should be aware of these differing charges. In an attempt to outbid the competition, many times the cost of the product is kept so low, that after the deduction of the credit card processing, you may face a loss in the sale deal. Hence, price your product accordingly, keeping in view the credit card processing charges besides the packaging costs, shipping costs, and your profit. The most frequent complaint that an online merchant faces is the prospect of a chargeback, where the buyer charges back the credit extended to the seller. This means that the buyer wants his or her money back for the goods or services purchased online. This may be due to a variety of reasons, like unsatisfactory quality of the merchandise, duplicate charges, fraudulent charges, etc. In such a case, the issuing credit card company applies the amount of the chargeback plus an additional chargeback fee to the merchant account provider, who in turn debits it from the online merchant's account. This is the reason why funds are locked in for sometime, a period of 15 to 30 days, after the sale is completed. Here also fees differ from provider to provider. You should clarify the merchant account provider's policy regarding chargebacks before committing yourself to their services. Many merchant account providers enable tracking facility by which you can track the IP address of the buyer and thereby locate the country of origin. This helps to some extent in preventing purchases made by a stolen credit card. You must understand all the associated charges, which vary from provider to provider. Once the whole scenario is clear and transparent, go ahead, access the whole world and sell your unique product or service. E-commerce has the potential to make millions of dollars in a relatively very short time. However, you should remember that online commercial success is dependent on various factors, one of which is the ability of accepting credit cards. The other factors include what you sell, and how well you understand the primitive barter system with its art of negotiation and closing deals. Best of luck for your e-commerce success by accepting credit cards and your first e-commerce million dollars!
Sunday, February 11. 2007
With the advent of the Internet and especially with its major component, the World Wide Web, communication has become smooth, fast, and cheap. The whole world has become one global village. Electronic commerce or E-commerce has spawned unheard of opportunities. B2B (Business to Business) and B2C (Business to Consumer) websites have become commonplace. The major part of the e-commerce set up is how the credit card payment is made and received by the buyer and the seller respectively. This is where the services of the merchant account provider is needed, to allow cross-border acquisition of goods or services, utilizing a methodology that ensures to settle credit card payments, fast and in a secure mode, via the Internet. Merchant account providers can be broadly classified into two groups as given below: a) Banks and financial institutions like First National Bank of Omaha, Citibank, Bank of America, Chase, Washington Mutual, etc., who provide you with your own merchant account with your own payment gateway. b) Private parties like PayPal, WorldPay, 2CheckOut, etc., who allow you to use their merchant account and their payment gateway.
Depending upon the nature of your business, you can opt for any of the two given options. Let us briefly evaluate both the options. Pros and Cons of having your own merchant account The pros are that you can process large volumes, have total control, and have a transparent checkout with your own personalized API (Application Programming Interface). You also create a professional look and image as customer statements' have your business name on it. You can use your merchant account as a separate processing gateway. You can also negotiate rates. The cons are that a credit check is performed before you can get this account. With low volume business or bad credit, you may not be eligible for this account. It cannot be used for personal use, with a high-risk business higher rates are charged, and you may have to accept a multi-year contract. Pros and Cons of having a third party processor The pros are that it is comparatively very easy to obtain even if you do not have a legally registered business or may have been rejected for a merchant account of your own. No credit check is undertaken and you may utilize the third party's merchant account even if your name features in the Match File or the Terminated Merchant File, which is the file containing the credit card processing industry's blacklist. Additional fees and charges associated with merchant accounts are not attached here. Third-party providers usually charge only when a payment is accepted via a credit card. They eliminate the costly setup fee and monthly fee. They also have no cancellation charges and no hidden charges. Hence, they are ideal for small merchants with low volumes. They provide a simple code which can be placed on your website to enable credit card processing. They can accept high-risk businesses without any higher rates and you can stop utilizing their services anytime. The cons are that the rates are not negotiable and you have to accept all their rules. It cannot be used as a separate processing gateway, and the third-party's name appears on your customers' credit card statements. The funds that are deposited in your account can take about one month to be withdrawn. 15 questions to help you to find the best merchant account provider 1. Is there any account setup fee? 2. What is the discount rate - the percentage of the sale that the merchant account provider will take? 3. How much is the transaction fee for each transaction? Is it a flat fee or a variable fee? Be specific for each card type. Different types of cards have different rates. Get the fee structure clear for Visa, MasterCard, Amercian Express and Discover cards. 4. If there is a debit card purchase, then what is the transaction fee and the percentage of sale charged as commission? 5. Is there any monthly fee to keep the account active? Is any monthly minimum balance to be kept? 6. Are there any gateway set up fees? Any gateway monthly fees? 7. How many transactions do you estimate per month? Find the average transaction per month to arrive at your average cost per month. 8. How much will the average customer spend? Find the average ticket size to determine your average monthly sale. 9. Can daily transactions be settled every evening automatically? 10. Can immediate deposits be made in my checking account? If not, then how long is the wait period? 11. Is it necessary to enter into a long-term contract of three-five years? You can opt for a lower lock-in period with tactful negotiation. Are there any cancellation charges? 12. What are the anti-fraud and the security systems installed? 13. Do you have cashback features that allow customers to get cash from the cash register along with the transaction? 14. Do you have Point of Sale (POS) terminals? What are their rentals? 15. What are your policies in case of chargebacks? Do you provide chargeback insurance? Based on your business model, your market, and your customer profile, you have to decide which type of merchant account would be most suitable for your business. Every business is unique and has its own distinct requirements. Answers to the above 15 questions may help you to compare different merchant account providers and arrive at the most suitable merchant account provider for your business.
Friday, February 2. 2007
Setting up your business is not half as complex as running it successfully. There is help at hand to guide you through the pre-commencement stage. But, rarely do you find pragmatic and useful advice on a number of problems that daunt you when your enterprise is off the ground. High Risk Merchant Account is one such confounding issue. Consider receivables management. It is foolhardy to believe that all your transactions would be cash-and-carry. Debtors or those who owe you money for products or services you have supplied are inevitable. By extending credit you create a favorable image. But then, locking up your funds in debtors could create severe cash crunch especially when you are a start up or doing small volumes. It is for this reason that most merchants accept payment through credit cards. With payments through cards, the burden of debt shifts to the Card Company or bank while the merchant gets a reliable source of finance. Therefore, every businessman relies on a merchant account with a bank or a credit card services operator. You can open a merchant account for processing the invoices you raise on your clients. The traditional method of open merchant account works well when using the card physically. But a growing number of businesses accept orders and payments online. A high risk merchant account is required by a merchant to process online transactions in high risk businesses like telemarketing, online pharmacy, dating, gaming and often adult products. With online payments, merchants face the following problems: · Security-related features: The merchants have to adopt stringent security features required by the card companies. · Fraud: There are several instances of goods being bought on stolen card information. · Chargeback: Many customers often reject or backtrack on payment commitments. This creates the chargeback burden on the merchant. · High costs: It follows therefore, that card companies agree to operate a merchant account only on the basis of strict guidelines. They are scrupulous with respect to credit history, business experience, chargeback levels, discounts, interest rates etc. We gather from above that a high risk merchant account is usually difficult to open. Most card companies are not convinced of the business model in the case of such high risk categories. A high risk merchant account can nevertheless be obtained if you convince the card company in the following aspects: · Payment gateways: Mostly payment gateways are not linked to the card you choose to accept. Even then, by adopting a reputable gateway that has appropriate security features establishes your credibility as a high risk merchant account seller with adequate safeguards. · Credit history: When you show the card company that you have a good credit history, personal and business, it satisfies them about your financial soundness. Most high risk merchant account businesses run on less than acceptable financial strategies. A reasonably good credit history proves that you are not out to make a fast buck and that you have a genuine business model. · Buyer verification: Often products that high risk merchant account businesses sell find international buyers. The chances for frauds and chargeback are higher in such cases. Therefore, you need to prove that you have a system of verifying suspicious buyers and also that all international orders are adequately scrutinized, with a written authentication, if need be. · Business experience: If you are a novice, the card company may not be willing to offer a high risk merchant account to you. Ditto if you do low volumes. On the other hand, if you have an established business and are looking for diversification, then they could consider your application.
Therefore, when you shop for high risk merchant account with card services company, always present a honest and favorable picture. At the same time, go through their conditions – the fine print- regarding monthly fees, chargeback levels, interest rates, discounts etc. The rate of interest and service charges is usually higher for high risk merchant accounts. Try to negotiate a bargain on interest rates and service charges. You could save by agreeing on a rate based on each transaction rather than a monthly figure.
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