Whatever business you are in, it is important to accept payment in as many ways as possible.  Merchant account processing will allow you to accept payment through credit cards, checks and online quickly and easily.  However, fees and rates for this service can quickly add up.  We ask if merchant account processing is worth the cost?

There is little doubt that merchant account processing is worth the cost.  The ability to accept credit cards is essential in modern business.  It is true that rates and fees can add up pretty quickly but this is a fact of life for the modern merchant.  And considering the amount of extra business accepting credit cards brings, it is well worth it.

Not only does accepting credit cards bring more customers, they will be likely to spend more using a credit card than they would using cash or checks.

By accepting credit cards you will be attracting two new types of customer - those who are short of cash and those who use their credit card or debit card for all their purchases. This covers a sizeable chunk of the population and more and more people are using plastic as their primary method of payment.  Consequently, if you do not already accept credit card payments you should start doing so immediately as you will most likely notice an immediate increase in business.

However, before you sign up for a merchant account service there are a couple of things you should do.  First, you should gain a clear understanding of the fees and charges you can expect to pay.  Secondly, you will need to find a merchant account company that will suit your needs and provide you with quality service.

So let's first take a look at merchant account rates and fees.  These can be quite complex and many less scrupulous operators are not very transparent when it comes to publishing how much they charge.

If you have a merchant account, you will be charged a percentage every time a customer uses their credit card to buy a product or service from you.  If you accept a lot of credit card transactions this will most likely be the costliest part of having a merchant account.

As a general guide, you should look for a merchant account that charges between 1.7% - 1.95% for retail accounts and 2.15% and 2.4% for Internet accounts per transaction.  (Swiping a customer’s card always entails less cost than if the information is inputted.)  Please note the existence of a higher non-qualified discount tier, and is generally applied for corporate, government, foreign cards, and certain rewards cards.  A non-qualified fee can also be assessed for an AVS mismatch (i.e., when the customer’s billing address does not match the one listed on his/her credit card) or if the merchant takes longer than 48 hours to batch out the transactions from the time that they were first initiated.  Non-qualified discount rates can vary, typically between 2.95% and 3.75%.  Also bear in mind that a transaction or authorization fee will be charged for each transaction. This can range from 20 cents to 35 cents per transaction.

As well as the fees paid on each transaction, you may also have to pay a range of one-off, monthly, quarterly or annual charges.  There are many of these to watch out for.  Indeed, the subject merits an article, or a number of articles, in itself.  However, for the purposes of this post we will alert you to the most common charges.

Look out for start-up fees, statement fees, gateway fees and monthly minimum fees.  For a closer look at merchant account rates have a look at our recent post on the subject.

Choosing the best merchant account for you can be complex, but it is worth the trouble. Approach a number of companies for details of their fees and charges.  Try to estimate an average month for your business and calculate how much each merchant account would cost you.  From this, you should be able to decide on which one provides the best value for your money.

However, as well as finding a company that offers competitive merchant account rates, you will want to find a reputable provider that provides all of the features you need.  For example, if you do a lot of business online it will be essential that you can accept payments on your website.

Depending on your business, other features you may need include: Payment Gateway, e-Check services, a point of sale swiper, a virtual terminal or processing software. And perhaps more importantly, make sure that the merchant account service you choose allows you to accept all the major credit cards.  At the very least, you should be able to accept payment through Visa, MasterCard, American Express and Discover.

You will also want to choose a company you can trust.  You should search the web for testimonials on merchant accounts that you are considering, or seek recommendations from business associates.

If you have already approached a number of companies for details of their merchant account rates and services you should have gained some idea of the level of service they would offer in the future.  Any company that is reluctant to disclose all of its merchant account rates should be avoided.

You should also expect a high level of customer service from your merchant account company.  During your initial research, make sure that it is contactable by telephone and fax, not just by e-mail. Also, many of the better companies will offer 24-hour technical support.

Finally, you will want a merchant account company that will do its utmost to protect your business.  Credit card fraid is a fact of life for businesses so you will want a service that will help you cut your losses.  A good merchant account should include some kind of fraud protection, as well as address verification, SSL, CVV2 acceptance and real time processing.

There is little doubt that merchant account processing is worth the cost.  If you are in business, it is not really a question of whether you should have a merchant account, but more a question of which is the best account for you? 

          ________________________________________________________

To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.

The next time you’re out shopping and you pay be credit card, take a minute and ask yourself if you know how merchant credit card processing actually works.  I mean, sure, it’s easy enough to know you hand over your card, the details are swiped or input, authorization is given and you walk off with your purchase.  But that’s just the half of it. There’s a lot more to merchant credit card processing than meets the eye.

It’s especially worth taking the time to understand it if you have any kind of business yourself where you accept credit card payments, or want to.  After all, you’ll need to set up some form of credit card payment account, whether it’s via PayPal or a dedicated merchant credit card processing account.  The good news is that although it is a bit more in-depth than simply taking a payment, it’s fairly easy to understand.

Understanding the Basics

When you get approved for a credit card, you then become what is known as a cardholder by your card issuer, whether it’s Visa, MasterCard, American Express or Discover. You’ve probably seen the word ‘cardholder’ on your monthly statements – it just makes it easier for companies to refer to you when making authorizations.

Your credit card company is what’s known as the issuing bank (whether they’re an actual bank or not), and they will authorize any purchases or payments you make.  When you make a purchase, the retailer or whomever you’re using your card with is known as the merchant.  This is where the term merchant credit card processing comes from.

To be able to allow you to make purchases, the merchant has to have what is called a line of credit.  You may even have a line of credit yourself, if you own a business – for example, if you use suppliers and you pay within an agreed timescale, the time and amount you’re given is your line of credit.  It just allows you leeway with funds until you’re able to pay.

To get a line of credit, the merchant will often open up a merchant account with a merchant bank or lender.  While you may have assumed that whoever provides your credit card has its own funds, this isn’t always the case.  For example, you could take out a credit card with Virgin Music, but they’re not a bank or lending company, so they wouldn’t have the money to pay for your purchases until you paid them.  Hence the need for a merchant account.

When you make a payment with your card, the merchant bank will cover the administration of the transaction, in exchange for your card issuing bank paying them the amount of the purchase less an agreed discount.  You then pay your card issuer back when you get your monthly statement.  As you can see, it’s a simple process, but very involved.  And it’s not all that happens.

Behind the Scenes

The actual mechanics of a merchant credit card processing request begins the moment you hand your card over to the retailer, or whoever you’re making a payment to.  The black strip that you find on the back of your credit card is a magnetic security strip, and has various pieces of information about you and your card.  This includes the number of the card, the name of the holder, expiration date, etc, and is there to help prevent fraud.

Once the card is swiped (or input manually, if the retailer doesn’t have an automatic swiper), the processing machine will send your card information to the merchant’s acquiring bank, which in turn, sends the financial transaction details to the card issuing bank.  This is where the transaction will be authorized, or not, depending on the funds in the customer’s account.  If authorized, the amount that you’re spending is placed in what’s referred to as a “hold account”, meaning that amount will be deducted from your balance.  This ensures that you can’t go over your credit card limit, which again works as extra security for your account.

Once the sale or payment is authorized, the card issuing bank forwards payment to the merchant’s acquiring bank for the product or service less an Interchange fee.  Subsequently, the acquiring bank deposits the funds in the merchant’s local account, minus the discount rate and transaction fee.  (The combined discount rate and transaction fee will be greater than the Interchange paid by the acquiring bank to the card ssuing bank.  The acquiring bank/merchant account processor does not want to lose money!)

This same process works whether or not you’re physically in a shop, or online – the only difference is the ability to take home what you’ve bought immediately, as opposed to waiting for delivery if bought online.

Possible Problems

Despite merchant credit card processing being relatively straightforward, like anything else there will always be a chance that difficulties can service.  Since the transaction is computerized, any errors that do happen have to be resolved by an actual person.  This can either be the owner of the business you’re making a purchase from, the retail clerk, or your card issuer’s customer service team if your transaction is over the phone or online.

The reason something goes wrong is usually attributable to two simple reasons – lack of funds, and fraud. The lack of funds example, although embarrassing, can easily be rectified – simply pay off of the debt, clearing some of the outstanding amount.

However, the fraud aspect is more awkward, although it is reveals a perfect example of merchant credit card processing and its security measures at work.  If your card has been stolen and you’re unaware of this and someone is trying to spend an unusually large amount on it, a red flag will be raised on the transaction and flagged as suspect.  The same goes for many purchases within a short time of each other, or purchases made in a different country. 

If you’re in possession of the card and it’s flagged for the above reasons, a simple call to your card issuer and some security checks will suffice. You’ll then be able to use your card again.

As you can see, there’s a lot that goes on both upfront and behind the scenes whenever you use a credit card.  Maybe the next time you go to use it, you’ll offer a little smile of appreciation, knowing all the effort that this simple merchant credit card processing transaction has involved.

To learn more about our merchant account services, please visit us at  http://www.intelli-collect.com.

If you are looking for a good merchant account service, one of your primary concerns will be to find out how much it will cost you. You will be charged for every transaction, so finding the best merchant account rates will be pivotal in your choice of merchant account provider.

Unfortunately, merchant account rates are not always transparent, with many providers reluctant to publish rates for their transaction processing accounts. And these kinds of underhand tactics are giving the merchant account industry a bad name.

Standard banks and lenders are required to clearly publish all fees, charges and rates and even update customers when there are any changes, and the same should apply to merchant account companies.

Not only do merchants have the right to know all the fees and charges associated with their merchant accounts, providers have a responsibility to educate and enlighten merchants before they do business.

In any line of business the customer has the right to know what they are buying and how much they have to pay. This is basic business ethics and it should be no different with merchant account rates.

While a business may not be legally obliged to clearly publish all its costs and fees, it does have certain moral obligations. While the maxim of 'buyer beware' always holds true to some extent, modern society expects a certain level of ethical responsibility from businesses.

However, there are always a few that will use underhand tactics, and the merchant accounts sector is no different. Unfortunately, these will continue to dupe customers and take business away from the good guys in the merchant accounts business.

However, this can be combatted with a combination of customer savvy, and an honest approach from merchant account companies. Providers can gain the trust of would-be customers by clearly publishing all merchant account rates, thus undermining their less ethical competitors.

If you are a merchant looking for a merchant account, do your research. Make sure you know the rates and fees you will most likely pay for your transactions and compare the relevant rates of a few different merchant accounts. In this article we will give you a quick description of the rates you are most likely to be paying to get you started.

There are many kinds of merchant account rates and fees. Some of these are charged periodically every month or every year, but the most costly aspect of these accounts for most merchants are the fees that are charged per transaction on a percentage basis.

Most merchant accounts use discount rates, a combination of interchange fee and other fees and charges, and most commonly offer a three-tier pricing system. Merchant accounts are available with up to six tiers but for the purposes of this article we will look at the three tier system. The three tiers are as follows:

Qualified rate

Qualified rates apply to all standard consumer credit card transactions and are generally the cheapest. This rate is charged when credit cards are swiped and the transaction is settled within 24 hours. To qualify for this rate, the transaction will need to have taken place with a 'standard' credit card, such as Mastercard or Visa, using an approved processing solution. If you are a merchant this is the rate you will most commonly be quoted when you enquire about prices. Expect to pay in the region of 1.75% for this.

Mid-qualified rate

Mid-qualified rates can be charged for certain transactions and usually attract higher rates.  Reasons for a mid-qualified rate being charged could be if a business card or reward card is used for the transaction, or when a standard credit card number is keyed in instead of being swiped. Mid-qualified merchant account rates can be as much as 1.5% to 2.5% higher than qualified rates.

Non-qualified rate

The most expensive rate in the standard three tier merchant account is the non-qualified rate. Non-qualified rates are usually charged when consumer credit card, business card or reward card transaction is processed but certain information is missing or not verified. Also, if a qualified rate transaction is not settled within 24 hours the non-qualified rate may be charged instead.

We briefly touched on the fact that there are now six tier merchant accounts available. These facilitate the acceptance of debit card payments. Rates for debit card payments can be relatively low.

Of course, most merchants will now also want to accept credit card payments online. These transactions usually range from about 2% to 3.4%.

In addition, there are a whole other range of fees and charges, so be sure to ask about these when considering a merchant account. The most common fees to look out for are:

Authorization fees - This fee is charged every time a transaction is sent to the bank that issued the card and is charged even if the transaction is rejected. Authorization fees usually cost 20c per transaction.

AVS fee – AVS, the acronym for address verification service, is a fraud preventative mechanism that checks the customer’s billing address to the address listed on the customer’s credit card.  Online merchants have the option of denying a transaction request from a customer when AVS does not match.  A separate AVS is usually 5 to 10 cents per transaction.

Batch fee – Generally performed at the end of a business day, a merchant must “batch out” the transactions that have transpired to the acquiring bank for eventual payment.  While some merchant account providers waive this fee, most charge 10 to 35 cents per batch.  It is only accessed when a batch out or settlement is performed so think of this rate as a once-per-day fee. 

Monthly and annual fees - Again, these are flat fees charged each month or year, or both, for a merchant account. You may also be charged a start up fee when you set up the account.

Monthly minimum fee - If you are a merchant and only receive a few credit card payments each month, be aware of monthly minimum fees. These require that you pay the merchant account company a minimum amount each month, commonly $25, even if transaction fees do not amount to this.

Statement fee - Your merchant account will most likely send you a monthly statement outlining all transactions and charge you a flat fee, commonly $5 or $10.

Cancellation or Termination fee – Too many merchants have decried this fee, particularly by those who never knew of its existence.  Most credit card processing companies assess this fee, regardless of the reasons why a given merchant may terminate the contract.  Some companies charge a flat termination fee, ranging from $100 to $400 and particularly dependent on the number of years a merchant has utilized the service.  On a more ominous note, other companies charge a variable cancellation fee where the rate is calculated as follows: The number of months left on the contract (most contracts run a 36 month course) x the merchant’s monthly average fee of payment.  The total can run into the thousands – an anxiety provoking, heart palpatating result for an unsuspecting merchant.

This should cover the most common merchant account rates and fees that you have to look out for when choosing the best merchant account for you. Any company you approach should be totally transparent about its merchant account fees. If it is not, you should look elsewhere.

To learn more about our merchant account services, please visit us at  http://www.intelli-collect.com.

With the exponential growth of people looking at ways to earn extra money, one of the most popular has been the rise of home-based businesses.  Part of this reason is the ability to set your own hours and work for yourself; another part is the substantial income that a home-based business can bring you.  Yet not all the options offer the opportunity to actually quit your day job, and work full-time from home.

However, there are certain ones that you should definitely look at if you’re looking to become your own boss, and the following are the Top 10 home-based businesses for this very reason:

• Home Improvement Services.  If you enjoy DIY (do-it-yourself) projects and actually have a particular skill for it, setting up your own home improvement business could see you become very successful.  After all, look at the most popular shows on television at the minute, and you’ll see the reality shows based on home improvement and renovations topping the list.  With rates starting at $40 per hour for a bathroom installer, this is one of the best Top 10 home-based business opportunities.

• Virtual Assistant. This is particularly popular with many people, since it requires very little cost to start up with.  All you need is a computer and an Internet connection, and some decent organizational skills.  A virtual assistant offers back office support to the likes of small businesses and even corporate companies, and organizes everyday things like meetings, reports, and often emails to company clients.  Being a virtual assistant for more than one client is possible, and lucrative.

• Affiliate Marketing.  Possibly one of the most common of the Top 10 home-based businesses, affiliate marketing is also the one that most people probably misunderstand.  Due to the negative publicity of Internet marketing scams and spam emails, affiliate marketing often finds itself less likely to be looked at by people looking for a home-based business.  However, there are reputable companies out there, and with a little research you can find one that’s right for you, and the potential for earnings through affiliate marketing are limitless.

• Online Selling.  Almost everyone uses eBay, or has used the popular online auction site at least once, whether it’s to sell or buy something.  Taking it one step further and becoming a Power Seller can lead to a very profitable home-based business indeed.  Some of the most successful Power Sellers on eBay make over $100,000 a year, from simply buying collections and then selling items individually for greater profit, making this one of the easiest of the Top 10 home-based businesses to start.

• Dog Walking service. Although this may not sound particularly profitable, many dog owners are now using the services of professional dog walkers.  This stems from the owners being too tired from today’s fast-paced workplace demands.  This has in turn led to the rise in popularity of dog walkers, who can charge up to $15 per hour.  If you combine that with walking 3 dogs at a time, you can see why this is a great opportunity for anyone wishing to start a home-based business.

• Medical transcriber.  Similar to a virtual assistant, a medical transcriber is definitely among the Top 10 home-based businesses.  If you have excellent keyboard skills and a strong grasp of the English language, you’re ideal for doctors who prefer to outsource their transcription services.  It saves them overhead costs, so they can afford to pay you a decent wage as well.

• Childcare.  If you already have children, what could be better than having a home based business that allows you to look after not only your children, but those of friends and family as well?  You’ll have to get a police background check and a special childcare license, but apart from that, this is a very simple way to start your home-based business.

• Craft making and selling.  This can cover a whole rang of products, such as bracelets, candles, jewelry, greeting cards – basically, anything that can be given as a unique gift can offer the opportunity for a home based business. And if you combine it with an eBay Store, you could have two of the Top 10 home based businesses working for you at the same time for extra income that will far surpass your expectations. 

• Freelance writing or typing.  This is a particularly rich market to get into, as there is always the need for good content on websites.  Whether you’re someone with strong writing skills yourself, or prefer to transcribe someone else’s audio recording, a freelance writer or typist can offer an excellent income for those that possess proficiency in these areas.

• Catering.  Again, this is one of the easiest of all the Top 10 home-based businesses to get into, from the sheer fact that you have some of the equipment in your home already.  Whether you use this as a part-time opportunity, or begin assuming the role of a full-time caterer to offices and companies in your local area and beyond, being a caterer is an enjoyable and rewarding home based business.

Whatever you decide to try your hand at, one of the key factors in any of the Top 10 home based businesses is knowing your market.  The quickest way to fail is to expect to make a lot of money without much in the way of knowledge or expertise.  So, if you’re going to become an eBay Power Seller for example, buy and sell the things you know about, since this will allow you to know their true value.

At the end of the day, any kind of venture is a risk, whether it’s one of the Top 10 home based businesses or not.  As long as you begin with a plan and are in it for the long run, there’s no reason why you can’t join the hundreds of thousands of like-minded people enjoying their own success right now.  

          _________________________________________________________

To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.

In the early days of auto repair, making and receiving payments was pretty straightforward – you quote, you repair, and the customer would pay you, usually by cash or check.  However, over the years, the automotive repair industry has found what other businesses have realized – that the day of the cash transaction is more or less gone, with credit and debit cards the new norm.

This is why it’s important for you, as an automotive repair specialist or mechanic garage owner, to have a credit card merchant account, or at the very least, the facilities in place to handle credit card processing.  Without it, you could seriously be jeopardizing your business, to the extent that you may not even survive long enough to take the small cash-paying jobs that may appear now and again.

Merchant Accounts and Credit Card Processing Explained

Depending on how large your business is, you may already have some kind of merchant account in place, and not even realize it.  Say you have a deal with suppliers, where you pay your accounts at the end of each given month, and they’re happy for you to do so – this is a merchant account.  Even if you currently clear your accounts by cash, it’s still the basis of a merchant account.

However, with a merchant credit card account, you can reap the benefits not only when it comes to paying your own bills, but also when it comes down to getting paid for the work you carry out for your customers.  With so many people preferring to use plastic over cash these days, the easier it is for them to use their cards when paying for something, the more inclined they’ll be to use a business that has this facility.

With a merchant credit card account, you can quickly and easily set this up.  All you need to do is apply for a merchant account – this is the same process as applying for a finance deal and going through a credit check.  Once you’re approved, you can then set up your merchant credit card account, and the ability to take credit card payments is now yours.  However, there’s much more than simply being able to accept credit card payments available to you:

• The ability to accept credit card payment in person or electronically.  Now your customer doesn’t even have to be there to pay for something, opening up a new avenue of business to you.

• MOTO features.  Short for Mail or Telephone Order, this will grow your business even more.  If a customer has seen one of your adverts in a mail flyer, for instance, and they need something small and simple like headlight bulbs, they can order and pay over the phone, all from the comfort of their home.
• Internet account. This is a real boon in today’s business world – with the Internet having replaced many traditional business practices, this is almost a necessity.  By combining even the most basic of websites for your business with a merchant account, you can now become a lot more autonomous when it comes to getting new business.
• Mobile or wireless account. This will be of particular use to those auto repair businesses where a lot of their trade comes from breakdowns.  Imagine having the option to carry a portable payment system with you, so you can immediately bill customers when on-site?  No more worries about overdue bills, and the customer will be happy since they know what the costs are upfront, and can pay immediately.

(Please note that mobile merchants can alternatively use a Dial Pay system where they call an 800 toll-free number to facilitate the transfer of funds.  The Dial Pay program is cheaper per month than a wireless program, and no terminal is necessary, but the processing charge will be greater per transaction than its wireless counterpart.)   

Why a merchant credit card account offers the flexibility you need

Where the benefits of having a credit card processing option for your automotive repair business really comes into its own, however, is the flexibility it offers you.  Instead of being tied down to one particular way of doing business, a merchant credit card account allows you to be flexible with your transactions and the cost to your business.  And the best part is that it’s not as expensive as you think!

Many merchant account providers now waive set-up fees so there is no upfront cost.  Monthly fees may be modest (generally ranging from $5 to $35 based on the provider selected and the type of account that’s needed).  Of course, the automotive merchant must perform his/her due diligence and investigate all rates (e.g., batch, monthly minimum, termination fees, etc.), but again, credit card processing companies may opt to eliminate many of these expenses to secure your business.

One of the most important fees is the discount rate – the percentage charged per transaction.  The vast majority of merchant account providers offer a tiered discount fee structure, outlined below:    

-         Qualified fee or rate.  This is pretty much your standard fee that is charged when a credit card is used.  So, for example, a customer has a service done and wants to pay by credit card.  If you’re swiping the card, the cost for doing this is the qualified rate as agreed between you and your merchant account supplier.

-         Mid-qualified fee.  If you’re keying in the credit card details, or your customer has bought or paid for something via your website, then this is the charge for accepting this kind of payment.

-         Non-qualified fee or rate.  This is the highest amount you’ll be charged, but this is only applicable when you don’t have all the card details, or there is a sale or transaction from abroad.  It may also be assessed if you accept government, corporate or certain rewards cards.

Regardless of the tier charge assessed, you can see why you would benefit from having a credit card merchant account. For example, a straightforward, swiped payment will allow you the cheapest option, and the ease of use that a potential customer would like – to quickly pay with their credit card.

If your customer has brought their car in for a service, then the second option could come into use.  Say they call you up for a quote on how much work is needed – if they’re happy with that, they can pay you immediately over the phone. This saves time for you, and again offers convenience for the customer.  And when someone sees how convenient it is to use your services, there would be absolutely no reason for them to go to a garage or repair shop elsewhere.

So, whether you're a small one-man business running repairs, or a more mid-sized business offering service checks and retail purchases, opening up a merchant account with credit card processing will keep you in the driver's seat, and put you one step ahead of your competition.

          _____________________________________________________________  

To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.