In life, there are times when we experience “delayed gratification” where we do not immediately receive what we wish to come true.  Even our needs may not be met in a timely fashion and we feel that our level of comfort or even survival is consequently jeopardized. 

The waiting period to realize our wants and/or needs seems interminable.  I find it disconcerting, for example, to wait for a product that has been backordered for 21 days.  Therefore, I can understand the groundswell of criticism emanating from eBay merchants who may now have to wait 21 days to access funds secured from their online auctions.

The eBay merchant backlash is attributable to the recent “Seller Standards” policy, enacted by eBay.  The one stipulation that is drawing the most fire from opponents concerns the possibility that any given transaction may be held up to three weeks.  Critics aver that the initiative is arbitrary and capricious while eBay and PayPal representatives assert that they must find ways to reduce seller fraud.  They add that set criteria will be employed to determine which transactions need to be flagged, estimating that only 5% of transactions will be held. 

All transactions will be evaluated using the following criteria: The seller’s percentage of positive feedback and the detailed ratings calculated in the most recent 30 day period; the item’s final price, including the fee for shipping and handling; and the history of the member with an eye on the total number of feedback.  The weight of each individual criterion is unknown, but at least sellers will know the parameters and may be able to determine which of their transactions, if any, runs a risk of being labeled as suspect.  

Based on the aforementioned variables, new eBay merchants, particularly those who offer “hot” or popular items, deemed higher risk items, seem most likely to be affected by the new rule.  Even merchants who may accrue a modest transaction volume may find themselves patiently waiting for their money, especially if they receive a couple of negative feedback ratings.

PayPal asserts that eBay members who have at least 6 months tenure on the auction site and who have acquired a minimum feedback score of 100 (at least 100 buyers have provided a positive feedback rating) will be unaffected by the policy.  The only caveat: Such sellers must not receive more than a 5% negative feedback rating within the last 30 days.

In addition, PayPal notes that the 21 day hold may be preempted under the following conditions: The seller receives positive feedback from the buyer or three days after the seller proves item delivery.

But the possibility of a much longer funding time is palpable to too many eBay merchants, many who are now seeking alternative means of acquiring payment.  One domino effect of the policy is that it may spur greater interest among merchants to secure electronic check processing.  Here, the merchant does not receive the customer’s credit card information, but bank information instead.  Once the customer or merchant inputs the routing number, account number, check number, and amount of the transaction, funds are subsequently transferred electronically.  The process should not take longer than 4-5 business days.

The cacophony of rancor directed towards eBay and PayPal may also bold well for increased accounts shared by PayPal’s third party processing competitors.  Some third party processing competitors are tailor made for auctioneers, and some are even inclined to accept higher risk businesses.  Power Sellers Unite, a community of eBay’s power sellers and other merchants involved in online auctions, provides a wealth of information regarding these third party accounts.  The forums are active and many sellers will provide opinions regarding the available options.

Full merchant account providers may also note increased interest among disaffected PayPal users.  This may very well be a blessing in disguise as merchants will note a decrease in their total cost compared to PayPay, particularly as their transaction volume increases.  In addition, merchant account providers offer the following benefits when compared to third party processing counterparts: A decreased likelihood to receive chargebacks as the name of the merchant’s business will now appear on customers’ statements; a greater chance to win chargebacks; a more professional appearance when customers offer payment; more expansive processing limits; and, of course, a reduction in the time to get funded.

Waiting is never easy and it may be time to research other – yes, better – options to accept credit cards for your online auctions.  Again, one viable, advisable option is to open a merchant account, particularly if you have your own website. 

Any company considered must be affordable, responsive and responsible, manifesting the credo that the “buck stops here” – but only in the figurative sense!  

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Last weekend, I was visiting relatives who reside in New York City, and decided to take a taxicab instead of waiting for the bus.  (I'm more apt to follow the precept that money is no object when I'm cold.)  I hailed the first cab that I detected, and within seconds, found comfort and safety in the interior of an infamous yellow medallion cab. 

These public cabs now come equipped with credit card processing terminals.  It had been years since my last cab ride and, at the time, customers were unable to pay by credit card.  I did not have enough money with me to pay the fee, and the poor driver had to wait for his poor passenger to retrieve the difference upon reaching the destination.  If only I could have used my credit card then!     

En route, I was relating this story to the driver who was not amused by my past recounting of events.  "I sure hope you have enough money now because the credit card terminal is not working."  I wanted to allay my initial suspicions that the driver was being deceitful -- to no avail.  I am usually able to filter myself, but alas, was unable to do so in this circumstance: "Are you sure that you're not just saying that to avoid credit card processing costs,?" I openly declared.  Subsequently, the driver unleashed vitriol that would have made a sailor blush.  I suppose that his "machine not working" mantra was questioned by others, too.

Perhaps my thinking was tainted by a series of Post and Daily News' articles providing reports that many cab drivers in NYC are averse to accepting credit cards as related processing expenses would trim profit margins.  Moreover, some drivers contend that there exists the possibility of lost fares should the terminal malfunction.   This reluctance to accept credit cards has initiated many fights (physical and/or verbal) between driver and passenger, and the lines demarcating both sides are clearly drawn.

The Taxi and Limousine Commission mandates that all New York taxicabs must accept credit cards.  This mandate does not affect owners of independent cab services.  Still, what stipulations are on the books and their practical application may not always mesh. 

Owners of medallion cabs/drivers may use a plethora of excuses not to accept plastic: The machine is not operational; the device does not have to be activated; the ride is not long enough; the fee is not great enough; and a number of other creative excuses.  Some drivers may be amenable to accepting credit cards but creatively add a surcharge.  (This is even prohibited by Visa and MasterCard regulations.)

Unlike other business owners, public city cab drivers have no choice but to process credit cards at their customers' request.  Compliance with these regulations must be unequivocal, and only generate good will among the customer base.  Although not compelled to do so, owners of independent cab services should seriously consider accepting credit cards to ensure increased ridership and contributing to greater customer convenience.

 
If processing costs seem overwhelming, there exists a number of affordable merchant account providers who will bend over backwards to ensure that cab businesses will not be taken for a ride.  I know of one extraordinary merchant account provider whose rates are engineered to ensure the lowest possible processing expense.  

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

To expound on my previous blog entry, it is probable that applying for a merchant account necessitates a "hard pull" inquiry -- one that typically reduces your overall credit score by about five points.  When an underwriter reviews your application, more than a snippet of your personal financial data is usually taken.  The more information that is gleaned from an inquiry, the greater the probability that a dip in score will materialize.

Speaking to several merchant account representatives on this matter (i.e., whether a merchant account application generates a hard pull), there seems to be conflicting views.  One representative emphatically told me that his company's inquiry was soft, analogous to an employer's credit background check.  Another employee, working at a different firm, asserted that it depended on whether they had the merchant's social security number.  If they had this information, their pull would be soft.  Conversely, if they had to do a reverse look-up to obtain the social security number, the inquiry would be treated as a hard one.  Another company spokesperson did not even wish to categorize the inquiry, preferring to declare that the merchant's credit score would only affected to a "negible degree."

Dave Datsko, who has worked in the capacity as an underwriter for Merchant Service Center (MSC) voiced an uneqivocal opinion on those who declare that a merchant account application only generates a soft pull: "I think they're lying.  He adds, "The merchant is opening what can be considered a credit trade.  This is a service that incurs monthly fees that require monthly on-time payments, just like a credit card."

If you have just opened a merchant account, you can soon find out the impact, if any, on your credit score.  It takes approximately three weeks after the lender (the merchant account provider in this scenario) has initiated the inquiry for it to reflect on your credit score. 

But you may ask, "How do I know my credit score?"  You can simply inquire with any and/or all of the three major credit bureaus, Equifax, Experian, and Trans Union -- a process that can even be initiated online!  These companies will need to know your basic information (e.g., name, address, social security number, etc.,) in order to properly identify you and provide you with a report.  Unbeknownst to many, this report does NOT contain your score.

Ms. Bonnie Souza who is an expert in the credit rating field and owns Credit Score Rebuilders, declares, "If you want to see what creditors see (your scores) you need to pay for it.  Whatever site you decide on to order your credit report be sure that you are ordering a tri-merged report with all 3 FICO scores  if you don't verify wording, you will receive less than what you wanted."
      

It is a prudent idea to periodically check your credit score -- at least on an annual basis.  Some companies assert that half of the information contained on credit reports is either blatantly wrong or outdated!  Of course, you have the right to dispute such errors and the credit bureaus must investigate and respond.  Indeed, they are required by law to report accurate information.

Your initative to pull your own credit will not result in a overall lower credit card score.  Find our where you stand on the spectrum and understand that this rating has a bearing on your financial future.

So in the future, try to discern whether any inquiries will be hard or soft and contain, if possible, the hard ones.  Although it is probable that a merchant account application generates a hard pull, obtaining credit card processing is more than worth the deducted points.  Just ask our clients!  

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