I recently read an industry article written by another ISO. The article was written to other ISO and Mid Level Sales (MLS) agents and its aim was to give advice on how to sell effectively. Halfway through the article the author gives some tips, one of which is how to differentiate yourself from the competition. To my shock and amazement, the author claims that 1. The Best Price (lowest rate); 2. The Best Service; 3. Integrity in the Marketplace; and 4. Full Disclosure are not legitimate claims to separate yourself from the competition because everyone claims these. You see….this is the very problem with our industry. ISOs claim all the time to have these 4 qualities when in actuality, merchants laugh and then tell you it doesn’t exist in merchant services. Historically, the merchants are correct to think that. And when the author of this article states these 4 claims ARE NOT legitimate differentiators, they’ve in essence blown off these qualities (which are probably the 4 most important to a merchant). My take from this author was “since you can’t really be the best in these 4 areas, make up some other areas that no one else cares about but you, and make the merchant think they are important.” How lame! BestMerchantRates.com won’t ever back down from its aggressive goal to finish 1st in all these categories. We won’t just abandon the cause because the industry is trying to water-down these important qualities. The author may be right about one thing: ISO’s should make the claim if it’s not true. AGREED! So we’ll make the claim and let our growth speak for itself. Last time I checked, the 500 new merchants we boarded last month wanted all of these qualities and we delivered. That’s why they signed up with us.
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Archive for April, 2009
Lowest Rate Doesn’t Matter? Say What!??
Tuesday, April 21st, 2009Identity Verification
Tuesday, April 21st, 2009It is reassuring to me when a retailer asks to see photo identification when I pay with a credit card. It gives me peace of mind shopping knowing that if someone were to steal my credit card they would not be able to easily use it with this retailer.
For added protection, many consumers subscribe to an identity theft monitoring service that will place an alert on their credit report that requires any credit issuer to properly verify identity prior to issuing credit.
When applying for a credit card processing account, the bank will be required to verify identity if such an alert exists on an applicant’s credit report. The verification process is simple and can be completed by providing a copy of the Drivers License and a recent home utility bill.
Remember that should the bank request these documents it is for your own protection. The bank just wants to make sure that another person has not stolen your identity and is now trying to apply for a merchant processing account.
Requests by creditors to verify your identity are a sign that the identity theft protection measures you have put in place are working.
Keeping You Informed – Visa U.S. Acquirer Processing Fee
Tuesday, April 21st, 2009Coming off the heels of the 2009 Spring Interchange Report, Visa recently announced a new fee commencing July 1, 2009. The Visa U.S. Aquirer Processing Fee (APF) will be applied to transactions obtained in the U.S. regardless of the origin of the cardholder or issueer. The APF will be applied as a per transaction charge however it will not be assessed to the zero verification messages (when the merchant swipes the card to verify the card is valid without actually affecting the cardholder’s open-to-buy ) or authorization reversals (cancel the authorization on that card).
At this point, one can only expect that Discover/American Express may follow suit in the near future.
Merchant Account Application – Sales Volume
Tuesday, April 21st, 2009One of the most important figures on the merchant account application is the Annual Credit Card Sales. It is worth pointing out the difference between Annual Credit Card Sales and Total Annual Sales. Annual Credit Card Sales represents the annual Visa and MasterCard Sales, while Total Annual Sales represents the Total Annual amounts for all sales, including Cash + Credit + Debit + Check.
Some businesses, such as Internet merchants, may make very little (if any) cash or check sales. For this type of business, the Annual Credit Card Sales may be identical to the Total Annual Sales.
Other businesses, such as fast food restaurants, may have a large amount of cash sales.
It is important to provide an accurate estimate of the Annual Credit Card Sales when applying to accept credit cards. At times it can be difficult to estimate this figure, especially for a new business. If you are not completely certain about the figure than provide your best estimate.
Every bank in the merchant services industry routinely monitors the volume of your credit card sales as a fraud protection measure. To ensure seamless and uninterrupted service of your account, be sure that your initial estimate is as accurate as possible.
And remember that whether your Annual Credit Card Sales are $5,000 or $5,000,000, Best Merchant Rates offers Large Corporate Pricing to everyone. We are the first company in the payment processing industry to extend Large Corporate Pricing to everyone, regardless of how large or small.
Benefits vs Risks
Friday, April 3rd, 2009For those of you starter companies, you may be trying to decide whether or not to accept credit cards from your customers. What are the risks? How do you minimize these risks? What are the benefits? How do you maximize on these benefits? Well, although much can be written on these four questions alone, I will give you my quick two cents on some of the risks and benefits of credit card processing.
What is a risk?
Fraudulent Charges
How do you minimize this risk?
You may want to ask your customers for CVV codes when charging credit cards. You won’t need to do this with debit cards because debit cards require pin numbers. CVV codes are the numbers that appear on the back of the credit cards. Three digits long. They are card specific. If the CVV doesn’t match with the card…that’s a red light for you! You may also want to add the AVS feature to your credit card software or terminal. AVS stands for Address Verification Service. You can enter the street number or simply the zip code. If this information doesn’t match with the card…red light! These suggestions mostly apply to non-face-to-face transactions. If you have the customer right in front of you, just as for ID and have them sign the credit card receipt for documentation and support in case of a chargeback.
What is a benefit?
You are providing your customer with a convenience.
How do you maximize this benefit?
How many of you carry $100+ dollars in your wallet at any given time? Probably not many. Most individuals like the convenience of carrying around their debit or credit cards as opposed to cash and coins. So why not provide a service to your customers that will make them more likely to purchase a product from you for the sheer sake of convenience. If your competitor is “Cash Only” and you allow your customers the option of cash, credit, or debit who do you think they will go with? That’s right…you! You may not only want to accept MasterCard, but you may also want to accept credit cards such as Visa, American Express, or Discover to give your customer the maximum amount of options. Just make sure that when you open a merchant account, you go with a company that will take care of your needs. Merchant processing can get confusing, so go with a company who will make the process as transparent and as simple as possible.
Register Your Business Address
Friday, April 3rd, 2009Best Merchant Rates works with many new business owners who are accepting credit cards for the first time. Often new business owners initially register their Business License or “Doing Business As” Statement to their home address because they are still searching for a retail location.
Once a final retail location has been chosen, it is best to contact the authority that issued the Business License or “Doing Business As” Statement and provide the actual physical address for the retail location. Occasionally, every bank in the merchant services industry will make a routine check to verify a physical business address, and you want to be sure that your business is registered to the proper adresss.
If your business is home based, be sure that a home based business address makes sense for your industry.
Home based restaurant? Probably not, unless you do a lot of Catering!
Home based Internet Merchant? Absolutely - Very common.
Home based merchants have the option to use a Credit Card Terminal, Internet Processing, or Virtual Terminal. Best Merchant Rates offers Large Corporate Pricing to everyone, whether you are a home based business or brick and mortar retail location.
Best Merchant Rates is on Your Side
Friday, April 3rd, 2009Tami-Getting your credit card processing account set up correctly from the beginning is extremely important but it’s also just as important that you as the merchant understand the parameters of the account. I recently had a merchant placed in the Risk and Security department at the processing bank for running a $10,000 transaction when she was set up with a $1,500 high ticket. The processing bank approves your merchant processing account based on a number of factors, one of which is your ability to support such a high ticket financially in the case of a chargeback (disputed charge by the customer). This merchant could not back that $10,000 if that cardholder did a chargeback so the processing bank choose to hold the funds until they could confirm the sale was correct and there would be no chargeback.
The merchant was extremely upset and wrote a complaint to the Better Business Bureau before contacting us. Once she contacted us we worked diligently with the processing bank to get her funds to her. In working with her we were able to also educate her on the process of merchant services. She feels much more knowledgeable and has confidence that she can process credit cards risk free now that she understands her personal processing parameters.
We are on your side and will make every effort to support and educate you in the business of credit card processing! Your success is our success!
The Virtual Teminal. Who Needs It and Why Would You Choose It
Friday, April 3rd, 2009After having writers block for a good week and not coming up with anything to blog about, I started asking my fellow co-workers for ideas. My trusty tech-guy gave me the topic of VIRTUAL TERMINALS.
Now, for those of you who may not know what a virtual terminal is please allow me to define it for you. A virtual terminal allows the merchant to process a credit card transaction from any computer with an internet connection. Can you imagine using your home computer to process all of your credit card transactions? How great would that be? This is a fantastic payment processing solution for merchants who have a home business, merchants who sell products at trade shows, merchants with a website and merchants who have a shopping cart tied to their website. Here’s an example of an account that we recently set up. The merchant was opening their business in a couple weeks. She did not have a phone line however she had an internet connection. We set up her credit card processing account with a virtual terminal and she was able to open her doors without any delay.
Just also keep in mind that if you can provide a terminal for your customers to actually swipe their card, your transactions will qualify for lower categorized rates by the card companies like Visa and MasterCard. It doesn’t change BMR’s rate, but you qualify for lower wholesale rates on the cards. So it’s always better to provide a “card present” method whereby you can swipe the card and verify identity- this is why the rates are lower because it cuts down on fraud. But if you have no way of swiping the card at all, consider the virtual terminal.
The process is very straight foreward and easy to set up. You simply type in the URL, enter your username and password and start accepting credit card sales.
Merchant Account Application – Average Ticket
Friday, April 3rd, 2009One of the most important figures on the merchant account application is the Average Ticket. This represents the size of your average credit card sale.
It is important to provide an accurate estimate of the Average Ticket when applying to accept credit cards. At times it can be difficult to estimate this figure, especially for a new business. If you are not completely certain about the figure than provide your best estimate.
Every bank in the merchant services industry routinely monitors the size of ticket charges as a fraud protection measure. To ensure seamless and uninterrupted service of your account, be sure that your initial estimate is as accurate as possible.
When considering your average ticket, be sure that it makes sense for your industry.
For example, I have seen a furniture store that stated the average ticket at $15. There are some deep discount furniture stores out there, but I haven’t seen any furniture stores that discount quite this deep! It turns out that $15 was the low ticket for this furniture store, and not the average ticket.
I also once saw a restaurant with an average ticket of $1500. I like a nice meal as much as anyone, but $1500 is a bit much for an evening meal! In this particular case, it turns out this applicant was really a caterer for large parties, and with this new information it made perfect sense.
Set yourself up for success by providing an accurate estimate of your average ticket size.
And remember that whether your average ticket is $5 or $50,000, Best Merchant Rates offers Large Corporate Pricing to everyone. We are leading the payment processing industry to extend Large Corporate Pricing to everyone, regardless of how large or small.
MasterCard NABU Fee
Friday, April 3rd, 2009It’s Spring Interchange adjustment time again and for April 2009 the topic of discussion is the Mastercard NABU fee.
The NABU (Network Access and Brand Usage) fee is assessed to all sales and return transactions, processed at a US merchant, with a MasterCard Credit or Signature Debit card. Transactions from US merchants for NON US cardholders will not be accessed the NABU Fee.
Merchants should keep their eyes open from companies that may be passing this fee onto Visa and Discover transactions. Again, this fee only applies to MasterCard.