Credit Card Processing | Merchant Account Blog

Pay the Lowest Credit Card Processing Rates with Interchange Pass Through

Starting your own business can be stressful. Setting up the licenses and understanding credit card processing technicalities is only the beginning of the struggle. The best way to work through these matters is getting educated on particular business services and lingo in order to avoid scams and disadvantageous deals. Here are the basics that you should know:

Credit Card Processing Fees

Accepting credit cards is mandatory for 99% of all businesses today. Understanding and managing your fees for service and technical issues of credit card processing will help you keep your business on the road to success. To start off, your business needs a credit card machine to electronically process the transactions, because if you don’t process them electronically, it will cost you twice as much and delay your cash flow significantly. The most expensive way to acquire a credit card machine is the “free equipment” programs, while the lowest cost solution is to simply buy the terminal outright, and own it. Merchant service providers will assist in setting up credit card machines in your store, but it is your responsibility to avoid getting trapped under expensive deals with long-term monthly minimum and annual fees payable, never mind the onerous early termination “hook” fees.

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MerchantService.com Debuts New Merchant Services Credit Card Processing Video

Sarasota, FL – July 1st, 2011 – MerchantService.com, a leading provider of low-rate merchant services and credit card processing, is pleased to debut a new video on YouTube demonstrating the multitude of benefits that merchants receive when they choose MerchantService.com for their credit card processing needs.

Brief and to the point, the video explains everything a merchant needs to know about signing up for merchant services and receiving the lowest possible rates when accepting electronic payments via credit card machine in just one minute and twelve seconds.

“Nobody wants to sit around watching a ten minute video online. Just like Merchantservice.com provides the fastest and easiest way to start processing credit card transactions in your business or on your website, we provide a fast and easy way to learn more information on YouTube,” said Gino Kauzlarich, co-founder and owner of merchant services provider, MerchantService.com.
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How To Get The Best Credit Card Processing Program For A New Business

There are many options to consider when looking for a credit card processing program for a new business. For many business owners, the sheer amount of merchant account providers available and all the different options can be overwhelming. In this article, we’ll help you navigate through some of the most common issues you’ll face as you think about acquiring the best credit processing merchant account program possible for your new business.

How Much Will My Credit Card Machine Program Cost?

If you end up with a merchant account provider who is not upfront about fees or
other important contract-related monetary considerations, run, very, very, far away! Take a careful look at the full rate and fee schedule. You may find the lowest rates available with a super-low percentage rate on transactions, but then get slammed with exorbitant fees in other areas. Always exercise due diligence when evaluating these programs, especially when taking a look at free merchant account programs. There is usually no such thing as a “free lunch,” so be careful. There is always a catch!

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Credit Card Processing to maximize bottom line profits

Whether at a brick and mortar big-box retailer, or at an online-only web store, credit cards are the fastest and most convenient way for consumers to make purchases of goods and services. With so many consumers preferring the convenience of credit and debit cards, it makes sense for sellers of goods and services to have their own merchant account where they are able to process credit and debit card payments.

Cash and Checks are Slow, Credit and Debit are the Way to Go

Credit and debit card transactions are rapidly growing in today’s marketplace. Nearly one in every three consumer purchases in the United States is made with some sort of payment card, and each transaction requires a merchant account. One often notices the inconvenience of having to count out currency and change and the extra time it costs everyone in line at the grocery store. Customers want to use their credit and debit cards!

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How to Avoid paying too much in Credit Card Processing Fees

I’m sure as a business owner you have enough to do without having to figure out how Credit Card Interchange Fees work. The good news is it’s not that complicated. There are hundreds of different interchange fees, what is important is to understand that interchange is essentially the wholesale rate that banks charge each other in order to process a credit card or debit card transaction. It is the cost of doing business, usually around two percent of the transaction amount.
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Although the card companies set interchange rates there are things you can do to help avoid paying too much.
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Review Your Charges Annually
At least twice a year (generally every April and October), Visa and MasterCard re-assess their processes, regulations and fees then announce rate changes and new fees. Many times your existing provider will layer on additional rate increases above the Interchange adjustments. Call another provider, fax in your merchant statement and have your account analyzed to “catch” these hidden rate increases.
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Use an Interchange Pass Through Program
In order to pay the lowest fees when processing credit cards, a merchant’s goal is to pay as close to interchange as possible. A merchant account that uses an Interchange Pass Through pricing method applies processing fees by adding a small percentage to the actual Interchange Rate for every transaction and all dues and assessments are passed through directly at cost. This ensures that you only pay the true interchange rate in addition to a small mark-up that goes to their merchant service provider. Many times your existing provider will layer on additional rate increases above the Interchange adjustments. Call another provider, fax in your merchant statement and have your account analyzed to “catch” these hidden rate increases.
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Avoid Downgrades Whenever Possible
A downgrade occurs when a transaction falls to a higher rate then what your business may qualify for. Whenever possible swipe the card at the point of sale device in order to reduce fraud and qualify for your lowest rate. For those of you that own some sort of on-site service or repair business, invest in either a wireless credit card processing terminal or look at some of the newer solutions such as RoamPay or PayWare mobile which allow you to use your mobile phone as a point of sale device.
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Obtain the Correct Billing Information
In order to avoid downgrades for Card Not Present Transactions always obtain the correct billing information for the card being used. Credit Card Companies use an Address Verification Service (AVS) for Domestic Cards to determine if the billing information you enter matches the Card you are keying in. Always collect the Billing Address of the Card including the Postal Code as well as the Card Verification Code. The Card Code is the 3 Digit Number at the end of the Signature Panel on the back of the card for Visa, MasterCard and Discover. For American Express it is the 4 digit number on the front right hand side of the card above the last 5 digits of the card number.
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Make Sure your Point of Sale Device is Programmed Properly
If your Point of Sale Device is not prompting you for Billing Address information as well as the Card Code, contact your Merchant Service Provider right away to get your device updated in order to pass that information to the Credit Card Companies. Another way transactions can downgrade is if you do not Settle or Batch your transactions within 24 Hours of obtaining an Authorization. Virtually all point of sale devices have the ability to Auto-Settle or Auto-Close at a specified time on a daily basis. If your device does not have that option enabled, contact your Merchant Service Provider right away to get your program updated.
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Train Your Staff
If you are not the person directly responsible for processing credit cards at your company it is important that you properly train your staff to avoid downgrades. Routinely observe your cashiers, monitor transactions and carefully review your month end processing statements.
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Adam Johanningmeier is the author of this article for Merchant Services. Find more information about Credit Card Processing here.