FAQ's on the Payments Industry
Most chargebacks can be prevented by clearly communicating to your customers and by following best practices for processing transactions. Here are some tips for how you can help avoid chargebacks and prevent them from negatively impacting your business:
Obtain a valid authorization on every transaction.
Do not complete a transaction if the authorization request was declined.
If you receive a “Call” response for an authorization, call the authorization center.
Swipe the card whenever possible.
If you must manually key the card number, make a manual imprint of the card using a manual imprinter with your merchant plate.
Clearly communicate your return and refund policies to your customers.
If a customer order is delayed, communicate the status to the cardholder.
For card not present transactions, verify the cardholder’s address using the Address Verification Service.
For card not present transactions with large ticket sizes, only ship merchandise to the billing address.
Ship merchandise to the customer before you charge the card.
Respond to all retrieval requests and chargebacks immediately upon receipt.
A surcharge, sometimes called a checkout fee, is an additional fee that a merchant adds to a consumer’s bill when he or she uses a card for payment. Can U.S. Merchants add a surcharge transaction?
Under the settlement, U.S. merchants have the option of adding a surcharge to credit card transactions. However, merchants must decide if they want to surcharge at the “brand level” or the “product level,” but not both. A brand level surcharge applies the same surcharge to all credit card transactions for a particular brand (Visa or MasterCard). A product level surcharge applies to a particular type of Visa or MasterCard credit card (e.g., Visa Signature, Visa Signature Preferred, World Elite MasterCard).
Is surcharging limited to credit cards?
Yes, surcharging continues to be prohibited on debit and prepaid card transactions.
Click here for more information on Surcharging
We all know merchants who have signs taped to their registers with minimum amounts for using a credit and/or debit card. You may have seen more of these pop up at small ticket merchants since regulated debit interchange took effect in the Fall of 2011.
Apparently cardholders have taken notice as well. We have experienced an increase in notices from Visa about merchants who violate the rules regarding minimum transaction amounts. As a reminder, Visa and MasterCard established the following rules for setting minimums:
Merchants may impose minimums on credit card transactions.
Merchants may not impose minimums on debit card transactions.
Minimums on credit card transactions must not be greater than $10.
Minimums cannot differentiate between payment card brands.
When it comes to transaction maximums, only the following merchant types can set a maximum transaction amount on credit card purchases:
An agency of the U.S. Federal Government
Merchants that fit into one of the following Merchant Category Codes (MCCs):
MCC 8220 – Colleges, Universities, Professional Schools, and Junior Colleges
MCC 8244 – Business and Secretarial Schools
MCC 8249 – Trade and Vocational Schools
When a customer (cardholder) makes a purchase with a credit card, such as a $100 pair of shoes at a shoe store, the bank that issued the credit card (the issuing bank) funds $100 to the shoe store before they collect that money from the customer.
Interchange refers to fees paid by the merchant’s bank to the issuing bank for this service. Interchange covers the cost to convert a charge on an accountholder’s card to a cash deposit at the merchant’s bank account, including billing services, credit risk, fraud risk, and float.
Interchange accounts for the vast majority of merchants’ costs for accepting card-based payments, regardless of how the merchant is priced.
Starting with the 2011 tax year, the Internal Revenue Service (IRS) implemented a change to the tax code requiring all merchant acquiring entities, such as Clearent, to file a Form 1099-K each year to report their merchants’ payment card transactions.
Since these regulations can be confusing, we’ve compiled a list of common questions to help you understand the ins and outs of the 1099-K and backup withholding.
Have questions about your 1099-K?
EMV stands for Europay International, MasterCard, and Visa and helps stop counterfeiting and fraudulent payments.
Rather than a magnetic stripe, EMV uses a microprocessor chip embedded in the card.
EMV cards can be either debit cards or credit cards and are often referred to as chip cards or smart cards.
What does EMV chip provide?
Offers enhanced cardholder verification
Makes it virtually impossible for criminals to counterfeit cards
Validates the authenticity of each transaction with a unique digital signature
Other EMV benefits?
Lower stolen card fraud (when verified by a PIN)
Fewer chargebacks because EMV verifies that the cardholder was present
More satisfied customers because cardholders know their card will work; this is especially important for travelers from other countries where EMV cards are prevalent
Are All Payment Providers equal? Yes and No
Yes, in the sense that we all operate within the discount and interchange pricing models. We all offer different or similar products and services which help Businesses .
No, in the sense that not all Payment Processors, ISO's and Agents care about their merchants needs. No, in the sense that some of us aren't more concerned about our merchants ability to grow, thrive, stay on the cutting edge of technology to continue their efforts in providing the best for their success.
Settlement and Batching
Next Day Deposit- The majority of processors have an early cut off time if the Merchant would like their funds within the account the very next day. Note: Friday, Saturday and Sunday's deposits normally arrive Monday morning. This is due to the Banks not being open or having a settlement team to manually complete the transfer process.
Cut Off Times - The majority of processors will need the Merchant to batch/settle the transactions by 3 or 4pm pacific time in the terminal if they want the funds in the Bank account in the morning. Normal batch/settlement deposits typically will occur within 24-48 hours.
Holidays - Banks do not make batch/settlement transfers when closed on Holidays or after Business hours unless they employ a settlment team to do so. We have a settlement team which is open until 11pm est.
Merchants manual batch/settlement - If a merchant decides to settle manually they need to be aware to batch/settle the terminal/POS no later than 72 hours or 3 days . There may be penalties/fees added after this time frame dependent on the provider. My suggestion is once daily or every 2 days at the latest.
Disputes - If a merchant has a dispute with the deposit amount they can address it with their processor, agent or ISO.
This can be due to daily fee withdraws, undisclosed fees which the merchant may not have been aware of. These disputes are normally cleared up quickly.
Gift & Loyalty Card Programs
Gift Cards - Merchants offer gift cards in hopes of having customers refer others to the store or franchise locations.
Some gift cards have use by dates. Others have 90 days then the amount on the gifted card goes back to the original issued customer.
Loyalty Cards - Merchants offer customers incentives like loyalty programs to encourage revisits through points and other ways which offer free or discounted items.
Business Lending Programs
Merchant Cash Advance - Business' or Merchants as I call them can get a loan based on their monthly volume in Credit Card Sales. Normally this type of laon ranges from 6 - 15 months. Factor of 1.15 - 1.45% on this type of loan. Payback is usually through a daily % of the processing volume and is normally 25% or so but can very.
Traditional Term - Most Term loans are from 6 - 24 months and up to 60 months depending on the deal, lender, etc...This loan can be a monthly fixed payback, daily flat, daily %, weekly and more.
Lock Box Accounts - This type of loan can be based off an MCA, Term loans but are placed with a third party processor and bank in which the funds clear in this separate account first. Once cleared the daily, weekly, monthly payback is taken out first then the balance is released to the merchants account. This delay is normally 24 hours.
NO FICO / NO SIC Loan - We can offer a loan that is not based on the Merchants Fico nor its SIC code. This is a little pricier type of loan but is available and normally has 12 - 24 month terms. Great for High Risk Merchants, Specialty Merchants, Poor Fico score, etc....
Customer Marketing Programs
SEO Marketing - In short Search Engine Optimization involves Directory listings, Back Links, Tagging, and much more. There is a lot that goes into selecting how to list, using the right words on the website and listings for it to be effective.
SMS Text Marketing - This Technology will allow Businesses to communicate to their customers orpurchased lists, etc much faster than mailers, email and other methods. SMS Texting has a 97% open ratio making the revisit ratio 2x more likely.
Mobile Application - Mobile App development may be a good idea if you dont have a site or a website which is not already Web Responsive.
There are companies which use Mobile Apps for Transportation like Uber or Lyft, A way to locate Hotels, Parks, Tourist Attractions, Gaming, etc. Many different Applications for Mobile Application Technology.
Social Media - Harness Technology which can help increase sales through Blogging on your site or another Blogging spot like Blogger. Or Post pictures on Pintrest or Instagram. Maybe you want to share pictures and thoughts and pay for more reach like on FaceBook, Myspace, Twitter.
Digital Mobile Marketing in all these areas are powerful methods.
WI-FI Data - Ever thought of capturing Data from all visitors in and around your Business? We have Technology which can retrieve customers data like Name, Cell Number, Email and other Contacts on the phone. How? Through Wi-fi access permission. Simply put the customer or pass by sees the ability ot use your Wi-fi spot for free but need to accept sharing their contacts/data. Powerful combined with Social Media and Sms Texting.
Automated Transaction Machine (ATM) - Lets look at the basic functions, etc of ATM's.
ATM's are used in withdrawing cash from Bank Accounts, Credit Cards, Pre-paid cards, or Gift Cards.
Customers pay a fee to access their money. This is a convenience fee and can be a huge profit making machine for locations with heavy foot traffic.
Customers can pay bills from some ATM's which are enabled to do so. Most ATM machines have fees between $1.50 as high as $9.00 in areas like Sporting events, Casinos and more.
What separates us from other Payment Solution providers!
We separate ourselves through very competitive pricing programs, new technologies, free pci compliance, true next day funding with the latest cut off time at 11:00pm est., Combined billing/statement with Amex Opt Blue giving you lower pricing, Personal Support and 24/7/365 Technical Support, T-Mobile discount pricing, A Sales force who cares about your success.
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