Credit cards have been a boon to businesses.  They allow instant verification of available funds, so merchants no longer need to worry about trying to collect on bounced checks.  From the customers’ point of view, credit cards provide a quick and easy payment option, even if they are running short on cash during a particular month.  And, as business owners know, credit cards tend to increase sales, because customers are more likely to make impulse purchases when they simply have to swipe a little piece of plastic.

However, as with anything else in life, credit cards have advantages and disadvantages.  The very same convenience that makes credit cards so attractive to customers also makes them attractive to thieves.  Credit card fraud is a growing concern for customers and businesses alike. The major credit card companies have responded by establishing regulations designed to protect consumers against credit card fraud.

Payment card industry (PCI) compliance standards are intended to protect customers from fraud, particularly illegal actions perpetrated by unscrupulous sales clerks who choose to misuse customers’ credit card information.  PCI regulations require that businesses be careful not to store their customers’ sensitive credit card information.  As stated in the title of this article, if you don’t need it (customers’ credit card information), don’t store it.

Any business that accepts or processes credit card transactions is required to follow the 12 requirements that comprise the PCI compliance standards.  Simply put, however, these requirements state the businesses should not store credit card information as a general rule.  If such information is nevertheless stored, as is the case for businesses that retain customers’ credit card information for recurring billing, then the data storage has to meet certain security standards.

The following provides a quick overview of the PCI compliance stipulations:

1. An appropriate firewall must be constructed and maintained  – one that serves the primary purpose to protect the cardholder’s credit card information;

2. Security parameters, such as password identification, must be defined by the merchant and not rely on vendor-supplied defaults;

3. Stored data has to be safeguarded;

4. Information must be encrypted and safely passed across public networks;

5. Anti-virus software needs to be employed;

6. Other systems and applications must be designed and maintained to foster greater security;

7. Access to data is limited to only those employees who need to know;

8. Each employee with computer access has to be assigned unique identification user name and password;

9. Cardholder data cannot be physically accessible to all.  Areas that contain cardholder data must be restricted;

10. Access to data and network resources must be consistently monitored;

11. Security protocols must be regularly tested; and

12. Policies to ensure information safety should be reviewed and implemented, when necessary.

Businesses should ensure that a selected merchant account provider, and the concomitant tools provided (e.g., credit card terminal, gateway, etc.) are all PCI compliant.  If a credit card machine, for example, violates any of the aforementioned regulations, a merchant is placing himself/herself at risk for potential losses and/or liabilities.  As criminals become more clever and sophisticated in their quest to steal credit card information, merchants must be more vigilant and exercise more caution.

In recent years, prominent national and international companies have announced that customers’ credit card information has been lost, stolen, or leaked.  Each time one of these stories breaks in the news, customers become increasingly aware of the risk that credit card breaches pose to their security.  It seems that most people have either been victims of identity theft or know someone else who has.

Businesses that do not comply with the PCI security standards are subject to fines of up to half a million dollars for each occurrence.  In extreme cases, merchants may be prohibited from accepting credit cards altogether.  Of course, these businesses are also likely to face customer lawsuits, damaged PR, and a negative brand image as a result of those same data security breaches.

Fortunately, businesses that do comply with PCI standards can receive some rewards for their good behavior.  For example, if a business has a breach of credit card information, yet can demonstrate that it was in full compliance with the required data storage security measures, then all such fines and other punishments are waived in recognition of the fact that it is impossible to guarantee absolute data security in today’s information economy.

Your business’s specific compliance requirements will depend on your annual volume of credit card transactions.  As one would expect, large businesses are held accountable to stricter standards than are small businesses.  Your business may have to complete self-assessment questionnaires or it may be subject to on-site security audits, among other requirements.  No business, no matter how small, has the liberty of ignoring the PCI compliance standards.

To make sure that your business is in full compliance with the PCI standards, it is important to centralize your compliance efforts.  Identify one or a few individuals (depending on the size of your business) who will be responsible for PCI compliance.  Make sure that they have the knowledge and skills needed to fulfill this responsibility, as well as access to ongoing training and educational opportunities to keep abreast of the most recent changes to the standards.

Next, the individuals you have chosen to lead compliance will need to review the current regulations and determine what merchant level your business falls into.  Primarily based on your credit card transaction volume, your merchant level indicates which regulations apply to your business.

Your business’s next step should be to find a certified PCI compliance provider who can walk you through each and every step of compliance.  Make sure that you are comfortable sharing proprietary information with that provider, because you will need to collaborate closely in order to facilitate full PCI compliance.

Internally, you will want to create, implement, and enforce a policy regarding information security. It should address who has access to what types of information under specific sets of circumstances, as well as whether and how that information can be shared.  It should also establish clear penalties for non-compliance.

At this point, your business should conduct a thorough self-assessment.  A network scan can also help to identify your security system’s areas of strengths and weaknesses.  Evaluate the results of the self-assessment and scan and then create a plan to address and correct any weaknesses or deficiencies that were uncovered as quickly as possible.  Keep copies of your internal assessments and your post-assessment action plans, because these documents may be requested later should a security breach occur.

If you have taken all of these steps and perform regular self-assessments, then your business is well positioned to fully comply with the PCI guidelines and you probably won’t have any problems. Unfortunately, unscrupulous individual are ingenious when it comes to finding ways to steal credit card information and commit fraud for individual profit.  Therefore, you could experience a security breach even if you have followed all the security regulations and requirements.

If you discover that there has been as security breach in your business’s data storage and one or more of your customers’ credit card information has been lost, stolen, or otherwise compromised, you must take immediate action.  First and foremost, try to contain the breach, preventing additional private information from being compromised.  Then alert all the proper authorities. These include the U.S. FBI and/or Secret Service, the Visa Fraud Control Group, and your merchant account provider.  Of course, you’ll also want to inform the customer(s) whose data has been stolen.  This is a delicate situation and you will need to handle it with tact and sensitivity to avoid permanent damage to your business’s image in the public’s eye.

But let’s not end on a negative note.  Chances are that if you follow the tips in this article and truly aim for full compliance with the PCI security guidelines, your customers’ credit card data will be perfectly safe.  Complying with the PCI security guidelines is not only the right thing to do, but also a sound business practice in an age of increasing identity theft and credit card fraud.

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

An estimated 60 per cent of credit cards issued in the United States today are reward cards or at least contain some reward component.  As cardholders learn that they can get more from their cards the market is becoming increasingly competitive. 

Reward cards offer all manner of attractive perks for consumers.  Credit card holders can get cash back or discounts on purchases, get small 'treats' such as free iTunes downloads or, if they are willing to save up enough points, major giveaways such as free flights.  As credit card issuing banks get more competitive, the rewards offered by these cards are getting ever more attractive and sophisticated.

All of this is good news for credit card issuing banks who can boost customer numbers by providing enticing incentives.  It is also good news for certain stores and businesses who are involved in these rewards programs.  For example, if Seven Eleven customers are rewarded for shopping there then, of course, Seven Eleven will attract more customers.

However, more and more merchants are paying the price for reward credit cards.  What is more, the first reward debit cards recently came on stream so merchants will have to accept reward cards as a fact of business life. 

Merchants are helping to fund the cost of these reward schemes as transactions involving these cards are expensive to process.  The fact is that most merchants will have to process transactions at a mid-qualified or non-qualified rate, both of which are significantly more expensive than the qualified rate paid on standard credit cards.

To give a brief explanation of the rates involved, the qualified rate applies to all standard consumer credit card transactions and are generally the cheapest.  To qualify for this rate, the transaction will need to have taken place with a 'standard' credit card using an approved processing solution.  Retail merchants, for example, usually pay about 1.70 - 2 per cent per transaction plus a transaction fee, usually about 25c.

However, rates on transactions involving reward cards must often be paid at the much higher mid-qualified or non-qualified rate. Mid-qualified rates can be up to 1 – 1.5 per cent higher than qualified rates and are usually applied when a reward card is swiped at a retail outlet.  Non-qualified rates can be even higher again and are usually applied when a reward card number is keyed in at the point of sale.  (Certain reward cards, even when swiped, can be assessed at the non-qualified rate.)  These higher rates can be a significant tax on merchants for accepting reward cards, which are now even more common than standard credit cards.

In general, the best rate a reward card transaction will get is the mid-qualified rate.  With reward cards growing in popularity, almost every merchant will see these rates appearing on their monthly merchant account statement.  Effectively, reward card issuers are passing at least some of the cost onto merchants.

Are there any benefits for merchants from reward cards?  Well, the benefits for merchants directly involved in reward programs can be significant.  If a reward card rewards a cardholder for shopping at a certain business, then that business will benefit from the extra patronage.

However, there may be benefits for merchants in general.  Reward cards are becoming more sophisticated as the competition between lenders heats up.  Some cards offer rewards on a number of fronts, no matter where the card is used.  Because of this, it is estimated that some reward card holders spend more than 30 per cent on their cards in a bid to build up rewards.

While higher fees may be payable by merchants for these transactions, more and more purchases are likely to be made using reward cards which equates to more business for merchants that accept cards.

Because of this, it is now more important than ever to accept credit card and even reward card payments if you are a merchant.

It could be argued that the higher transaction charges for reward cards is an unfair tax on merchants.  However, some experts in the merchant account field contend, that in the long run, it is likely to bring more business to a given business helping to defray the extra processing charge.  By selecting an affordable merchant provider – one that offers very reasonable mid and non-qualified fees – a merchant can assuage the burden of paying more for their customers’ use of reward cards

So, if you are a merchant, the number of mid-qualified or non-qualified transactions you process is likely to go up.  Check what your current merchant account charges for these transactions and look at some alternative programs to see if you can get a better deal.

To take it one step further, it is getting easier and easier for merchants to get involved in credit card reward programs.  These programs are becoming more and more targeted and smaller merchants are finding it easier to get involved, thus attracting new customers and increasing sales.

In essence, reward cards can be both a bane and a boon for merchants.  Although I have been accused of looking at the glass half empty, I assert that the proliferation of reward cards primarily impinges on the profit of businesses.  Consequently, it is prudent to shop around for the best merchant account deal – one that does not inflate their rates, including the all-important mid and non-qualified fees.  No doubt, finding the right merchant account will prove to be a rewarding experience.

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

With the holiday season in full swing, online retailers are poised to see some of their biggest sales of the year.  Yet this results in another bigger number – e-commerce fraudulent incidents.  From the biggest retailers like Wal-Mart and Toys’R’Us to the small businesses that sell a fraction of their bigger competitors’ sales volume, fraudulent purchases rise steeply at this time of year.

E-Commerce Fraud Rears Its Ugly Head

However, e-commerce fraud may pose more of a threat for the smallerretailer or online store.  Although still a problem for the likes of Wal-Mart, they can afford fraud a little more than a one-man shop operating from a tiny office.  They can also afford to implement the highest security systems as well as pay for the fees to track and prosecute guilty parties.  Small retailers are unlikely to afford such “luxuries” (or perhaps, necessities).

Although companies and online retailers have certainly managed to keep up with the continued threat of e-commerce fraud, it’s an ongoing battle.  Figures released by payment processing and security
company, CyberSource, indicate that e-commerce fraud as a percentage of revenue for large, established companies has dropped from 2.9% to 1.4%.  However, that 1.4% still equates to almost $3 billion worth of fraudulent fraudulent sales.

This figure is expected to be even higher with the explosion in sales that the holiday season always brings.  Some of the methods used to commit fraud include the use of stolen cards, or the implementation of email scams from fake sites pretending to be eBay or PayPal.  Despite ongoing warnings from established companies regarding these fake email messages, thousands of people are still not heeding this information.

Fortunately, consumers are only responsible for up to $50 for unauthorized purchases.  However, business owners do not have such a cap, and may become financially victimized for thousands of dollars – even if a given fraudulent act was seemingly beyond their control.

Merchants not only have to pay back the amount of the goods bought with the unauthorized credit card and pay related chargeback fees, but they can also find that future sales may spiral downward.  After all, how many customers are going to trust a website that seems to be an easy target for e-commerce fraud?

It is interesting to note that while large retailers incur 1.4% ratio of fraud to revenue, smaller online retailers incur double that amount at 3%.  This figure is so much higher primarily due to the inadequate security measures in place on smaller websites.  Moreover, a small business merchant may not even know or understand the gravity of this potential danger.  And at this time of year especially, the problem is exacerbated.

Small Business = Easy Target

Because so many small business owners either survive or fail by their peak season sales, busy periods like Christmas can be a Godsend, with a large increase in orders.  However, this is a double-edge sword, since this is the time that e-commerce fraud affects so many smaller retailers and online businesses.

It’s easy to see why the amount of e-commerce fraud increases at this time of year, and why smaller businesses are so open to it.  Often the owners are too busy with the extra demand for products or services that by the time they realize there has been a fraudulent instance, it’s too late.  

Once the euphoria of the extra burst of sales has worn off and you’re faced with the cost of chargebacks, it shows the damage and cost of e-commerce fraud perfectly.  Again, as well as having to return the amount of the fraudulent sale to the credit card company, there’s a strong possibility that you’ll also have to pay up to $60 for the cost of the reimbursement.  If you’re suddenly faced with 10 fraudulent sales, you can see where any profit you’ve made will soon disappear.

Although it’s slightly good news for those retailers that aren’t in this market, it seems that the most popular form of e-commerce fraud is gift vouchers and youth products. Because gift vouchers are individually numbered, they can easily be used to purchase goods online.

For instance, consider a music store that decides to display their cards near the cash register.  All a criminal needs to do is make a note of the number, and then log onto the company’s website to see if it’s been activated.  Because people usually activate the cards before giving them as a gift, they can then be used to buy something long before the proper recipient has received the card in question.  And because gift cards or vouchers don’t need to be registered to an address, it’s particularly difficult to track down the culprits.

How to Protect Yourself

Although not 100% foolproof, there are ways that you can protect yourself against e-commerce fraud. At the very least, even if you still fall victim to it, you can make the after-effects easier to deal with.

If you’re a website owner that has anything for sale on it, buy the most secure payment gateway you can afford.  As prior posts have indicated, use AVS and CVV checks to help prevent the use of unauthorized credit cards.  Call or contact a customer if you have any inkling that a sale may not be genuine.  Be particularly cautious of International sales, if applicable.  Also, use a merchant account for your e-commerce needs.  Third party providers offer little protection against chargebacks.

Unfortunately, e-commerce fraud doesn’t look like it’s going to go away anytime soon.  However, you can reduce your chances that you will be victimized of it, and by doing so, show your customers they can shop with you with confidence.

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

If you run an individual law practice or a small law firm, but profits aren’t quite what you had hoped they would be, you may be surprised to learn that accepting credit cards can be the solution you’ve been waiting for.  Credit card processing for attorneys can help improve your ability to collect accounts receivable and thereby improve your cash flow and profits.  Credit card processing for attorneys isn’t as complicated or expensive as many people think it is, and it has many surprising benefits.  

Many attorneys wait until they have finished their work to bill the client, but this opens the door for clients to receive services without paying for them.  It is much better to request retainer fees and other advance payments upront.  When these payments can be made via credit card, clients are surprisingly receptive to the idea.  In part, this is because they know that if for some reason you don’t deliver those services, they can always initiate a chargeback (disputing a charge) through their credit card company.  It also helps that for many people credit cards don’t feel like “real” money, so they are more willing to make advance payments before having received your services. 

Small law firms or individual law practices that bill their clients only after they have provided services are often stymied by the need to be their client’s advocate while simultaneously being a creditor. These two roles place opposing demands on the attorney.  It is difficult to passionately argue in your client’s best interest when there are outstanding bills to be paid.  Both the lawyer and the client feel uncomfortable in that situation.  Fortunately, credit card processing for attorneys provides an easy solution. 

When you let your clients pay by credit card, you free yourself of the role of creditor, instead allowing the credit card company to play that role.  In this way, you can focus on your primary role of advocate, ensuring that you act in the client’s best interest at all times.  As described above, this is especially true when you accept the credit the credit card payment as an upfront retainer fee, so that you receive the funds in advance.  After all, you can always refund money to your client later, but it’s much better to have the money before the work is done than to request payment (perhaps in vain) after you have finished all the work. 

Many attorneys are leery of letting their clients use credit cards as a payment method, because they believe that their practices are too small to justify the expense of credit card processing, as it will negatively impact their bottom line line.  They have heard horror stories about the hidden fees and misleading policies associated with traditional credit card processing services, and therefore prefer to rely on cash and check payments.  Yet credit cards are often the simplest, most direct way for your clients to pay you, and the process isn’t as expensive as you may fear. 

Traditionally, attorneys and other professionals working individually had to secure an expensive, traditional merchant account and then buy or lease a credit-card-swiping terminal.  Then, each time they wanted to process a payment from a client, they had to make a carbon copy of the card and call to request authorization.  This was not only expensive, but also time-consuming and a distraction from the professional’s main line of work.  Fortunately, today there are better options – specifically mobile credit card processing for attorneys. 

Small business owners and professionals, including many attorneys, find that mobile credit card processing is an excellent option for their work environment.  It allows them to accept credit or debit card payments from their clients wherever the work is done, without being tied to a fixed office. If you have a telephone, cell phone, or PDA (and who doesn’t?), then you already have all the equipment you need for mobile credit card processing.  With this technology, you can easily request advance payment of all the anticipated fees, accepting your clients' payment information on the spot. 

Mobile credit card processing for attorneys is quick and simple to get started.  First, you will need to get a merchant account, enabling your clients’ credit card payments to be deposited into your bank account.  You may be able to apply for one through your regular bank, but this may be time-consuming and difficult, especially if you don’t have an excellent credit history.  A much simpler and more straightforward process is to use the services of a merchant account provider that will help you open a merchant account with minimal fees as quickly as possible.  The pragmatic “Dial Pay” or  “Accept by Phone” program is an affordable, easy-to-setup progrram, offering you the convenience of using any phone to dial a toll-free number. 

At the voice prompt, you enter the following information: your merchant identification number (provided by the merchant account processor), the client's credit card number with expiration date and the sale amount of the transaction.  Other optional key-in codes exist such as the merchant processor’s bank ID (again provided by the merchant account processor), the customer code of the cardholder and the sales tax.  It is advisable, although not required, to expand the dial pay program and key in the customer’s address (so that you can perform an address verification match) and the CVV2 code.  The CVV2 is a security feature of the credit card, found in the signature panel on the back of Visa, MasterCard and Discover cards, three digits long; American Express cards reveal the CVV2 code on the upper right hand side of the card, above the credit card number, and contains four digits.  Inputting the CVV2 code ensures that the client has the credit card in his/her possession. 

While keying in more information will lengthen the time to complete the transaction, it is better to include more information than less so that a given transaction will not downgrade to a non-qualified status, the highest discount (percentage) rate that can be assessed. 

Dial pay offers inherent advantages, including the following: - It is relatively inexpensive to setup and use.  While the discount and transaction fees are typically higher per transaction than those offered through other credit card programs, the monthly fee is lower than just about any other method to accept credit cards.  In addition, many merchant account providers waive standard credit card fees for their dial pay program, such as the batch fee, monthly minimum fee, etc.;    

- The learning curve to use dial pay is not steep and attorneys can figure out the process within a couple of minutes.  (I advise all lawyers to test the dial pay system with their own credit card first so that they can become comfortable with the dial pay process.); 

- It can be employed just about anywhere you are – as long as you have a working phone; - Record keeping is relatively easy.  Monthly statements will be mailed to the merchant, listing all dial pay transactions for the month; 

- Transaction information is easily accessible.  You can track batch totals and daily activity by dialing the dial pay authorization number and getting back into the system.  Online reporting may also be available.  Of course, any merchant account provider will have a history of your transactions, too; and finally, 

- Dial pay offers credit card processing capability to attorneys who do not operate their practice out of a physical location and/or those without an Internet presence. 

Expounding on the inherent benefits of a dial pay program is not meant to negate exploring the option of accepting credit cards via a wireless or stationary credit card terminal.  Depending on the nature of the lawyer's circumstances, either payment vehicle may prove useful.  Alternatively, a virtual terminal – a web-based interface where the clients’ credit card information is securely entered manually – may easily fulfill processing needs.  (Please note that the discount and transaction fees associated to swipe a card are also less than the rates assessed to key in a transaction.  However, it is imperative to examine all of a program’s relevant rates, including any startup and/or possible termination fees, to make an informed decision as to which service to utilize.) 

In order to take your law firm’s profitability to the next level, lawyers need to investigate credit card processing options as a means to more effectively collect fees from clients for present, future, and even past, services rendered.  In turn, clients will appreciate the ease and convenience of making payments using their debit and credit cards. 

Once in place, your merchant account should run on automatic mode, causing little, if any disruption in your accounts receivable process.  Attorneys can then concentrate on their core competency – feeling unburdened – knowing that they will be compensated for their efforts! 

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

If you have an online business offering an option to buy services or goods, you’ll be using a merchant account for your transactions.  Depending on your actual business needs, you’ll probably be using one of four specific credit card processing programs.  Even if you’re not using a merchant account at present but plan to in the near future, it’s useful to know what these programs are and what the difference is between each one.

The four different merchant accounts are retail, wireless, MOTO (Mail Order – Telephone Order), and Internet.  Although you can actually have all four accounts in use at the same time, this largely depends on the size of your business and the specific needs of your business.  For example, it’s unlikely that a small, one-person business with very little online presence will use a retail merchant account.  So what exactly are these different credit card processing programs, and which one will be best suited to you?

Retail Merchant Account

This is an ideal credit card processing program in the sense that it is the least expensive merchant account.  Because the card owner has to be present when the transaction is carried out, there is less chance of fraud occurring.  Due to the decreased risk entailed, the merchant is eligible for lower swiped discount credit card rates.

Although online transactions are becoming a lot more popular, there is still a huge market for this type of merchant account.  The most likely businesses that use this type of credit card processing program are grocery stores, supermarkets, restaurants, bars and hotels – anywhere where you have a physical service location.

Wireless Merchant Account

Many mobile merchants who have face-to-face interaction with their clients employ the use of wireless credit card processing terminals.  Although these machines are more expensive than stationary physical credit card terminals, they still are lightweight and portable, and work without the need of a second phone line.

A wireless merchant account is less risky than a MOTO or Internet account because the customer’s credit card is present at the time of transaction, reducing the risk that a stolen card is being used.  As an added benefit, any swiped transaction will be assessed a lower credit card processing rate than its MOTO or Internet transaction counterpart.

The advantages of wireless processing include mobility, and secure and fast transactions with instant approval and decline codes.  Of course, merchants must ensure that coverage is relatively good for the geographic areas that they intend to use the machine.  Generally, wireless networks provide very good to excellent coverage, but certain networks provide better coverage for certain areas.

Wireless merchant accounts appeal to those who conduct trade shows, flea markets, own repair businesses, market delivery services, perform contracting work, etc.  If you are on the go, a wireless merchant account may be the way to go.  (For those who plan on accepting credit cards intermittently, it may be worthwhile to investigate a Dial Pay program with its lower monthly fees.)  

MOTO

Short for mail order - telephone order merchant accounts, this type of transaction may be extremely versatile, but the discount processing rate will be higher than the one offered by the retail or wireless account.  This is due to the fact that the credit card payment is made over the telephone – without the actual cardholder standing in front of you, and the concomitant risks are greater.

Although initially set up to help mail order companies accept payments for goods in their catalogue, this type of credit card processing program is now available in a myriad of ways.  For example, you can call up and make a purchase from an online store or retailer, as well as book concert tickets and airline flights.  The amount of potential for fraud with this type of merchant account is relatively high; therefore any providers of this service will charge higher discount rate to cover the risk factor.

Internet Merchant Accounts

This is what could be classified as a “faceless” type of account, since all the purchasing, payment and order details are conducted online.  To reduce potential fraud, there are a few extra security measures in place when it comes to using it.

For example, merchants can employ an AVS (address verification service) check to ensure that the customer’s billing address matches the address with the information that the card-issuing bank has on record.  Moreover, a CVV2 code check can be initiated, and all transactions can be directed to decline in the presence of a mismatch.  (The CVV code is a security code indicated on credit cards – 3 or 4 digits long, depending on the card.).  

With these aforementioned fraud preventative mechanisms, an online purchase does not particularly mean that it’s not a safe option.  The credit card processing programs used for online purchasing use SSL software, a highly secure and encrypted network tool that is designed to keep customers’ information protected.

As well as this, any computer that is connected to the Internet has a computer user number, or ISP.  This is a code that shows exactly where the computer is plugged in, what home and area it is located – it’s pretty much like having a little transmitter that tells you someone’s location (think police trackers).   So, if any type of fraudulent activity is carried out, the merchant account can track the details back to the originating computer.

Of course, this isn’t a failsafe method, and because of this the rates for this type of merchant account are closer to a MOTO account than a retail one.

Another aspect of Internet merchant accounts is that they normally come with extensive services, such as a payment gateway for accepting credit cards, and a shopping cart for the all-important purchases to be made.  There are many other features as well, like front-end design and backroom support, so although a little more expensive, an Internet merchant account is fast becoming one of the most popular types of credit card processing programs around.

Choosing the Right Merchant Account

Typically, your circumstances will dictate the type of merchant account that you need to set up.  For instance, if you’re a one-man band and you’re virtually working from home, then an Internet merchant account or MOTO would probably be best.  Obviously, if you have a physical storefront, then a retail merchant account should be the best, if not the only, option.

Taking the time to look at all the options available, and the features that will be applicable to YOUR business is the best way forward.  By doing this, you will ensure that not only do you have a credit card processing program in place that’s right for you – it’ll also be right for your customers.  And with the extra sales that will bring, any additional cost for the right merchant account will be more than worth it.

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

You’ve started your business, and now feel the time is right to begin accepting credit cards.  While this is the inevitable next step for successful business operation, approval of your merchant account application will not be automatic.  You will not be approved solely on the basis of your need, and should keep the following things in mind before submitting your merchant account application.

What is your personal credit rating?:  First of all, whether it seems fair, or even relevant, to you, your personal credit history will be closely examined before your merchant account application can be approved.  It is helpful to note that approving a credit card processing application is roughly the same thing as extending a short-term loan.  Obviously, if a business owner’s credit is unfavorable, a red flag will be raised over whether or not their application should be approved.

What type of business is being reviewed?: The type of business for which you are submitting a merchant account application will greatly affect your chance of approval. Most merchant account companies are averse to granting application approval to certain industries, such as adult entertainment, check cashing services, collection agencies and debt collection services, credit restoration and/or repair services, dating services, and just about any business that is deemed too high risk where the possibility of chargebacks becomes greater.  For example, an attorney who works with clients who have declared bankruptcy may find it difficult to secure a merchant account simply because such clients may be more likely to initiate chargebacks.

In addition, merchant account providers are more likely to approve an application from businesses which do not operate solely online.  This is partly because a business operating from a building poses a lesser risk of being fraudulent or incur fraud.  Of course, there are many very valid online businesses, and lenders are eager to approve merchant account applications from online business owners, but a small, yet perceptible red flag is raised by merchant account applications from online businesses, simply because online businesses are more "risky" than their retail counterparts.

How do you run your business?: Your merchant account application may cause you to rethink the way you conduct business.  For example: How often do you plan to bill your customers?  If you choose to bill on a monthly basis, the company reviewing your merchant account application will probably feel much more comfortable.  This way, if your customers request chargebacks, a much lesser sum will be required.  If you were planning to bill only once every six months, you may want to rethink this decision before submitting your application.  Also, if you have the option of selling a product as a download, or sending it through the mail, you may think that “downloadable” is the way to go.  When considering your application, however, this may not be the case.  Sending a product through the mail makes the possibility of returns, and chargebacks, far less likely.

What specified limits are you seeking?: If you have yet to fill out a merchant account application, know that you will be asked to estimate your monthly revenue, your average sale (ticket), and your high ticket.  Do you have the clout, in history, or in the bank, to set a high ticket limit?  Do not fill out your application form requesting a limit that you are unable to back up by your financials.  Do not fill out your form requesting a credit limit that is unnecessarily high.  It will likely seem unnecessary to the merchant company as well.  If a high dollar amount, say, over $50,000, is needed, you will likely need to have perfect credit, and have bank statements revealing a robust personal account.  You may even be requested to set up a reserve account with the merchant account provider's acquiring bank before your merchant account application will be approved.

How long have you been in business?: When submitting a application for a relatively new business, do not be surprised if you are not automatically approved by the credit card processing company.  Merchant account providers will look much more favorably on an established business owner, if he/she has a good credit history.  In the same way, it will make the underwriter feel much more comfortable if you have been approved to take credit cards in the past.

In review, before submitting your application, or certainly before expecting its approval,  a business owner must keep in mind their own credit history, and how much of a risk they might appear from an underwriter' perspective.  Also important to the merchant account underwriter is the amount of credit anticipated, the type of business, the age and reputation of the business, and the methods employed in order to supply customers with products.  If you do not seem like a good candidate for merchant account application  approval, there are ways to set your merchant company’s mind at ease.  But remember, because of hidden fees, and unforeseen problems, it is just as important to choose the right merchant company as it is for them to approve your application.  One final word of caution: The red flags are raised for a reason, so beware of companies who seem to, at least initially, ignore them. 

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