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.