Welcome! Thanks for stopping by


During my two decades in this industry, I have heard many complaints from merchants relative to their merchant accounts. The most common one, however, seems to be that they simply don’t fully understand all that they are being charged.  Have you ever felt this way yourself?  Don’t feel bad since you are like the majority of merchants I come in contact with.  Unfortunately, it’s quite often by design that you are pretty much kept in the dark about your merchant services.  Hopefully, this site, my email course and frequently posted articles, will help bring clarity and enlightenment.

I’m assuming that since you are on my site, that you are either a merchant, or accountant  that has a desire to learn more about credit card processing.  Hopefully, your visit today won’t be disappointing.  Take some time to read a few articles but, most importantly, fill in the form at the right and subscribe to my FREE email course entitled “Understanding Credit Card Processing”.  It has recently been updated to include information on EMV and NFC technology which is a MUST READ.  This course was originally being sold nationally, on this site, for $47.  It received great acclaim from merchants for its thoroughness and great displeasure from those in the industry…for its, well, thoroughness.  I felt that offering it for FREE would open up the opportunity for more hard working business owners to expand their knowledge.  By the time you’re done with the course, you’ll know more than probably 80% of the reps contacting you.  The easily digestible lessons are spread out over approximately a month so as to not be overwhelming.  I’m confident you will find the knowledge gathered to be extremely helpful so why not take it for a spin.  And, of course, rest assured, your name and email address are safe with me.

It’s unfortunate that in the world of credit card processing, there are numerous reps that are….well, let me just say, less than ethical.  Typically, it’s not their fault as they have had less than stellar training.  The bottom line is this….all processors have the same cost so, consequently, every one of them could, theoretically offer the same pricing to you.  But, what happens when a rep walks thru your door….”I’ll bet I can offer you better rates than you’re currently paying“.  They mostly focus on rates, don’t they?  Sound familiar?  Well, honestly, it’s not just about rates and, as a merchant, that shouldn’t be your focus either.  Ask lot’s of questions (you’ll find some good ideas in the course) of those trying to sell you and, in addition, be cognizant of how many questions they are asking you about your business and how you transact business.  Are they truly interested in offering and providing “solutions” or are they primarily interested in just “selling” you?  My success in this business has always been by developing, and maintaining, mutually rewarding relationships.  That’s what you should be looking for and hopefully, you’ll discover information here that will be beneficial in that endeavor.  Remember, Benjamin Franklin once said…”An investment in knowledge, pays the best interest“.

Keep in mind that while I will never actively solicit your processing business here. I am, however, available to answer any questions that you may have regarding your current relationship.  And, if after spending some time here, you desire my assistance with your credit card processing needs, I would welcome the opportunity.

I have relationships with several merchant services providers and will place your business with the most appropriate entity that will provide exactly what your needs require and do so in a totally transparent manner.  I can offer truly FREE EQUIPMENT along with no long-term contract like most processors insist on.  I believe we need to “earn” your business daily with superb customer service and great rates rather than simply keep your business because you’re tied to a contract.  Additionally, I can help by providing other business solutions for increasing your sales and, subsequently, your bottom line.

While this site is primarily about merchant services, you will sometimes see articles posted discussing other marketing and business ideas that I have found to be beneficial to business owners.

So, with that said, welcome and thanks for coming by.   If you have any specific questions or comments, please post them here.  If there’s a business related type topic that you’d like to see covered, please let me know.

To Your Continued Success

P.S.  If you’ve found the content on this site, or in my e-course, to be helpful or enlightening, please share it with others utilizing the helpful buttons at the bottom of each article.  You may also subscribe to the RSS button below and add us to your feed burner, so that you will automatically be notified when new content is posted.  Thank You!

Posted in business services, credit card processing, marketing, merchant accounts, merchant services, Visa and MasterCard | Tagged , , , , | 7 Comments

HOW TO READ YOUR MERCHANT SERVICES STATEMENT


For more than two decades that I have been in the merchant services business. I have frequently been shocked by how many merchants hand me unopened merchant statements, for review.  They often tell me that they are just too complicated to understand.  Unfortunately, many merchant service providers do this by design so that merchants don’t know too much.  Obviously, if you’re in any kind of business you need to accept plastic as a form of payment.  Many merchants are simply resigned to the fact that it is going to cost them something and it is just accepted.  What I want to try and do here is give you some things that will hopefully help you in your understanding of your own merchant statement.

Before I get started, let me just say, there are numerous types of statements that would encompass the numerous types of pricing models.  There is Three Tier, Four Tier and Cost-Plus or Interchange-Plus pricing models, each with their own form of jargon.  First let’s talk about some basics of the differences.

THREE TIER PRICING

In this form of pricing model you would likely see these “bundled” type listings:

QUALIFIED:  This would be one rate listed such as 1.85% + $.15.  This “qualified” rate would include swiped debit cards and generic, no perk type credit cards

MID-QUALIFIED:  Again, one rate listed such as 2.25% + $.15.  These types of transactions would typically be hand-keyed, card-not-present or some form of Visa/MC “perk” card that pays the cardholder points or frequent flyer miles.

NON-QUALIFIED:  Rates listed would be the highest of the three and would typically represent business cards, for example.

The problem with this form of pricing is it is at the processors discretion which category they place the various card/transaction types.  So, consequently, you may be paying more that is necessary on some.

FOUR TIER PRICING 

This form of pricing came along when debit cards became more prevalent in the marketplace.  Better than Three Tier because it provides for a lower rate for debit cards.

TIER ONE:  This level would be for swiped debit cards (not pinned debit cards) and would represent your lowest rate.  Debit cards, of course, have less risk to you, the merchant, and therefore have a lower rate structure.

TIER TWO:  This would be mostly equivalent to what is shown above for Qualified transactions

TIER THREE:  Here again, this would be similar to Mid-Qualifed transactions in the Three-Tier model

TIER FOUR:  Transactions that would mostly mirror the Non-Qualified transactions above.

Again, as with Three Tier pricing, the processor places card/transaction types if the categories that they best deem appropriate.  This is not necessarily the “best” from a financial for the merchant.

COST-PLUS/INTERCHANGE-PLUS PRICING 

This form of pricing is, by far, the most transparent and most desirable form of pricing.  That is, as long as the processor utilizes a format on their statements that are easy to read and understand.  As an overview, here’s how this pricing differs from the two previously discussed.  Keep in mind that not all statements will look alike but these are the types of categories you would typically see:

DEPOSITS:  This would be a daily listing of your batch totals for the day.  It would give a reference number, total number of items, the dollar volume, number of items and the Net Deposit.

DEPOSITS ITEM SUMMARY:  This section would be totals as far as your total number of transactions and the amount along with any credits.

CARD SUMMARY:  On some statements, you may see this category which just breaks down how many different card types you received, i.e. Visa, MasterCard, Discover, Amex, Diners or Others.  Really nothing here to be concerned with and is mostly offered for information.

SETTLEMENT/DISCOUNT:  This is where we get into the section where you really need to be paying attention. It may be quite lengthy based on the specific card and transaction types that you see in your business.  As mentioned earlier, this Cost-Plus/Interchange-Plus pricing is the most transparent pricing model.  And, here is where you can determine what you are really paying.  It can, at first glance, seem complicated and intimidating but it doesn’t need to be.  So, here’s an example of what you might see and I have taken this from a recent merchant statement that I analyzed.  The numbers you want to focus on here are the Amount, Discount Rate, Item Rate and Fee Amount.  Here’s an example of 21 MasterCard transactions:

ITEMS AMOUNT DISC RATE ITEM RATE FEE AMOUNT
21 $2,968.31 0.1700 0.0000 $5.04
Interchange $50.64

So now let’s apply the math to see what we are being charged.  The processor, in this instance is charging, as a “Plus” factor, 0.1700 Discount Rate.  Take this figure and divide by 100 and you will get the number of basis points, or percentage and you come up with .0017.  $2,968.31 x .0017=$5.04.  This amount represents a portion of what the processor is making on this $2,968.31 in volume.  Next, we have the Interchange charge which is a direct pass thru on these MasterCard transactions.  In other words, these fees get paid back directly to the card issuing entity.  So, take the $50.64 and divide by $2,968.31 and you get 1.71%.  So, if you add the two together, this merchant is paying 1.88% on these MasterCard transactions.  Furthermore, if you wanted to take it to the next level in analyzing your statements, you could go online and find the MasterCard and Visa Interchange rates and compare all your transactions for yourself.  However, there are hundreds of different Interchange Rates for Visa/MasterCard transactions based on the type of card or transaction type that you would need to fully understand.  Or, you need a rep that truly cares about your business and is willing to walk thru your statement with you for greater understanding.  This section of your statement is where the majority of your fees are represented.

OTHER FEES:  Now let’s move on to what is typically called “Other Fees” or something similar.  Here, you will likely see something referred to as Wats or Per Item fees.  These are typically Authorization fees being charged by the processor.  So, in the above example, the processor is charging 0.17% above Interchange and in this section you might see something like $.10 per item.  So, using these numbers, this merchant is on a Cost-Plus pricing of Cost-“Plus” 0.17% plus $.10.  So, in other words, the processor is making $.27 on a $100 transaction.

Additionally, under this category, you will find numerous “pass-thru” fees that are assessed by the card brands or networks and are the same for all providers and are not negotiable.  Make certain that you look for any fees that you understand and seek clarification from your rep or their Customer Care department.  There may be fees you can have removed and/or reduced simply by asking.

MESSAGE:  I find it interesting how few merchants ever pay attention to this section.  There could be some important pricing or fee information referenced there that needs attention.  For example, a recent statement I looked at showed that the merchant was in non-compliance regarding their PCI/DSS (Payment Card Industry/Data Security Standards).  This is an annual thing that all merchants need to take care of to ensure that you are protecting yourself and your customers when processing and handling credit card transactions.  This merchant statement I looked at indicated the merchant was being charged $19.95 per month for non-compliance.  All they needed to do was go online to do a self-assessment questionnaire (SAQ) or call their Customer Care number for assistance.  It takes about five minutes and the monthly fee was then waived.  Please be sure and READ ALL NOTES IN THE MESSAGE SECTION.

Well, I suppose this article is long enough and hopefully has provided some insight.  Thanks for taking the time to read and I wish you much success, lower costs and increased profitability in your business.

Posted in business services, credit card processing, Interchange Rates, merchant accounts, merchant services, merchant services statement | Tagged , , , , | Leave a comment

Reverse Credit Card Processing….Process Credit Cards for FREE


Well, not really but that is the kind of lead in a sales rep for “reverse processing” would likely lead with.  If they can get your attention when they come in the door or call on the phone, they may ask a question like this…”how would you like to process your credit card transactions for FREE.  Sounds pretty appealing, doesn’t it?   Let’s face it; if you’re like most merchants, they usually aren’t real thrilled with the fees involved with accepting credit/debit cards.  But hey, it’s the times we live in.  You have to take plastic for payment of your goods or services or you are missing out on sales.

So, let’s break this down and see what this really is and then at least, you can make an informed decision whether or not it is for you.  Let’s first of all take a look at what current rates are for processing, as an example, a generic/no perks type Visa credit card.  This will give us a basis point for the purpose of this discussion.  Currently, the Visa Interchange rate (remember, Interchange is a Pass-Thru fee that is paid directly to the card issuing entities) for this type of card is 1.65% + $.10 (that may change slightly in April which is typically when Visa and MasterCard make interchange adjustments). Realize, of course, that other card or transaction types have their own Interchange Rates, mostly higher with a few lower.  I’m using this Visa Interchange Rate solely for illustration purposes.   So, if you’re  processor has you set up on Cost Plus or Interchange Plus pricing (and you should be since this is the most transparent form of processing) and the “plus” portion is .25% + $.10 for example, your total cost would be 1.90% + $.20.  So, in other words, for ease of illustration, your total fees on a $100 transaction would be $2.10.  Keeping in mind, of course, that the Interchange Fee, or $1.75 of this total goes directly to the card issuing entity.  The processor is making the $.35 difference.

Now that we have that baseline let’s get a better understanding of what is being offered with Reverse Processing.  What these reps tell you is that there is some “new legislation” than enables you to do this.  I started in this industry over two decades ago and have searched and have yet to find this “new legislation” they are referring to.  Apparently, they either provide you with signs or say you are now able to put signs up in your establishment that say something like “all prices marked are for CASH transactions”.  Now, I have seen merchants, while trying to reduce their overall costs of processing cards, say something like “discounts for cash” (typically they will give about 2% off when paying for cash which subsequently ends up netting about the same amount if paid for with a credit card, less fees)  but this is a new spin.  Let’s face it, when you look at the total number of transactions that you do in a day, what percentage of that is cash?  Very little, am I right?  That’s just the way it is today.  People tend to carry very little cash and prefer paying with plastic or thru some app on their phone.  The reasons vary from “it’s simpler” or “I get perks for using my plastic”.

Okay so let’s move on with this analysis.  The next part of this “deal” they tell you about is that they offer  “unique equipment” that when a customer insists on paying with plastic, it will automatically add 3.95% to the transaction.  Now let me ask you this…how many of your customers would be pleased with you for doing that?  Do you want to alienate them from doing future business with you?  Probably not!  Additionally, if you did decide to go with this program, they charge $35 monthly fee and you need to purchase or lease equipment from them.  They are talking a purchase of a terminal with the appropriate software of in the neighborhood of $2,500.  Or, a three year monthly lease amount that varies based on what your current typical monthly fees are.  In other words, the higher your volume of sales, the higher your lease rate will be….RIDICULOUS!!!   As I mentioned earlier, I have been in this business for a very long time and I have only leased one piece of equipment in that time and it was at the merchant’s insistence.  Quite honestly, I prefer giving away equipment for FREE and offer no contract term.

So, be aware and, as always, do your due diligence when they come calling.  And, please be aware that springtime is when you will typically be bombarded with new reps contacting you.  They get maybe a day (if that) of training (and I use that term loosely) and then they are sent to the streets.  The failure rate is high for these people because they are ill-equipped and merchants send them packing often simply because of the sheer quantity of them that call.  It gets quite irritating and, let’s face it, you’ve got a business to run and don’t have time for every Tom, Dick and Harry that comes calling….who are those guys anyway?

To wrap this up, let me just say that as a long-term professional in this industry, I would steer clear of this new “game”.  There are plenty of processors out there that can provide you with this valuable service and those of us that truly care about you, your business, and building long-term relationships.  Until next time, thanks for reading.

Posted in Business Management, business services, credit card processing, FREE POS Systems, merchant accounts, merchant services | Tagged , , , , , | Leave a comment

FREE EQUIPMENT, NO CONTRACT, TRANSPARENT PRICING


It almost sounds too good to be true, doesn’t it?  However, I want you to understand that this is a NO GIMMICK, NO HIDDEN FEES, offer.  Actually, this is the way it should be but, most often, it isn’t.  Technology is constantly, and more rapidly, changing in the POS (Point of Sale) marketplace so why would you want to buy equipment.  We place state-of-the-art, swipe, EMV/NFC enabled equipment for FREE.  And, what’s more, we don’t tie you to a three year contract like so many others.  We believe in earning your business every day.  If at any time, you are dissatisfied with how we care for you, simply give us a call, tell us what the issue is and if we can’t resolve it to your satisfaction, just say goodbye.  All we ask is that you return our equipment.  Simple as that!  Additionally, we offer you fully transparent Interchange Plus pricing so you will be fully confident that there is no hidden fees and you will be fully educated on what all the fees on your statement are for.

First of all, let me introduce you to our POS Flex System.  I could describe it to you here in print, but as they say, a picture is worth a thousand words.  Even better is a video demonstration.  This is a very versatile piece of gear and you can check it out by clicking HERE .

Maybe what you need is something a bit more robust with inventory management, cash drawer, built in printer and much more.  Check out our All in One solution by watching a short video right HERE .  After checking this out, I’m sure you’ll agree this is the real deal in cutting edge technology and can you believe, it’s FREE?

Possibly your business is on-the-go and you are more in need of a mobile solution.  Don’t get hooked on one of those phone type applications and continue paying too much for your processing.  We offer mPOS which is our mobile hand-held equipment.  It’s our FREE EMV/NFC payment device for in-person payments and a full suite of “card not present” capabilities, enabling merchants to get paid anytime and anywhere.

Accept All Payment Types
Take swipe and chip cards + NFC transactions.
Accept Payments Anywhere
Accept payments on-site and via virtual terminal.
Online Payments Portal
Manage all transactions through one interface.
Recurring Billing & Invoicing
Email invoices and schedule payments
Inventory Management
Sync inventory and track order history
Data Security
Meets EMV compliance and online standards
Maybe your needs dictate the simplicity of a regular stand alone credit card terminal.  Well, we’ve got you covered there as well with cutting-edge terminals, again, offered totally FREE.
So, if any of what you’ve seen here today, is of interest to you, all my contact info is available here so just hit me up.  Thanks for reading and have a blessed day.
Posted in business services, credit card processing, EMV Technology, FREE POS Systems, merchant accounts, merchant services, Technology, Visa and MasterCard | Leave a comment

It’s been a while


As you can see from the date of my last post, April of 2016, it’s been a while since I’ve written anything on my site.  Well, let me explain!  You see I often write articles relative to business in general and submit them to Ezines.  This is a website that other website owners go to in order to pick up content for their sites.  It saves them quite a bit of time instead of constantly generating on their own.  Consequently, my exposure becomes greater and oftentimes, people that read my articles either subscribe to my FREE email course, or contact me directly for processing needs.  It has kept me quite busy.

Additionally, about two years ago, my wife and I began Transitional Foster Care in our home.  We care for kids that have come across the border, en-route to family members here in the states.  Transitional, meaning, we get them for short periods of time while they go thru the “process” insuring they are going where they are supposed to go and there is no child trafficking going on.  In the two years we have been doing this, we have had 42 kids come thru our doors.  Needless to say, this has also required a bunch of my time.

And, to add to the mix of the above, three of our kids decided to get married last year.  So, as you might imagine, I’ve been quite a busy guy.  I was finally able to get a break and take my wife to Maui for two weeks in late January thru early February.  I am now finally starting to breathe and get back to more active work.  However, with all that said, I still maintain a very active clientele and am constantly up to date on what’s going on in this industry.  It is this dedication and customer service that enables me to continue to handle processing needs for clients that have been with me for a very long time.  They know I take care of them by keeping them informed of the newest of cutting edge technology and ways to generate more business and reduce costs.

So, keep an eye out for my next article entitled “Credit Card Processing for FREE“.  And, as always, if you have any specific questions that I may address for you, don’t hesitate to hit me up

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EMV TRANSACTION CONFUSION


As you may recall, October 2015 ushered in a new era in the credit/debit card acceptance and   processing world.  This date was supposedly when credit card transactions in the U.S. were going to become considerably more secure.  This “deadline” was for merchants and card-issuing entities to be ready to process so-called “chip-and-PIN” cards instead of the legacy “swipe-and-signature” kind.  While last October’s deadline for the shift to occur was not a legal mandate, it, unfortunately, encouraged many in the merchant services industry to utilize it as a total money grab.  One of the most significant changes that took place in October was the liability shift from issuers to merchants for fraudulent transactions.  However, there are details that weren’t discussed with merchants and instead, fear motivation was being utilized to get merchants to make the move to new terminals at a cost.

Even still, recent estimates indicate that the percentage of merchants now equipped with these new terminals range from 17 to 37 percent.  U.S. consumers currently can expect to find chip cards accepted in checkout lines at fewer than one in five brick-and-mortar merchants.  And many merchants even if they “dip the chip” are still having the customer sign the receipt rather than validate it with a PIN.  Primarily, that’s because the issuing entities haven’t associated PIN’s with the majority of chip cards issued.  If a customer presents a chip-enabled card, but the merchant processes it as a swipe and signature, the merchant, not the issuing bank, is responsible for the cost of any resulting fraud. Even facing that risk, merchants seem to be slow in adapting to the new technology.  While it’s understandable, small merchants that aren’t making this adjustment in how they transact sales are increasingly becoming targets for the fraudsters.

So here’s how this works.  When you accept an EMV card in your business and the card turns out to be a cloned card, the issuing bank assumes the liability of that fraudulent transaction.  However, if a chip enabled card is presented and your POS terminal does not support chip enabled cards, and that card is cloned, you, the merchant bear the burden of the liability.  This could, quite obviously, be devastating to your business and livelihood.

There are really two forms of EMV transactions.  They can take the form of chip and pin or chip and signature.  Chip and pin is the more secure of the two, however, here in the U.S. we are still seeing predominantly chip and signature.  Big box retailers are advocating for the use of PIN-based cardholder verification because it affords an added, and critical, layer of protection against lost and stolen cards.  This is the next logical step but it will certainly take a while for full implementation.

Merchants will find that some, while very few, EMV cards, already have a PIN associated with them and the terminal will prompt and ask for one.  However, the majority of these chip enabled cards are currently still signature based.  In the meantime, for those signature based transactions, take precautions to help minimize the risk of accepting a fraudulent card.  Check the signature on the card to make sure it matches what is on the card.  And, ask customers for further identification especially on large transactions.  It’s going to take years for a total migration to take place so, in the meantime, be cautious for your own protection.

So, in summary, what do you need to know in today’s new environment?  First and foremost, you need to upgrade to the chip enabled technology.  However, don’t be talked into spending hundreds of dollars or signing a lease on a new terminal.  There are no cost alternatives that I can provide for you.  Once you have the new technology in place, utilize it.  When you accept a card that is chip enabled, plug it in rather than swipe it. The sooner you adapt to this new procedure, the more comfortable you and your customers will become with it.  If you’re still not comfortable with the process, call the Customer Service line for your provider and get some training.

Posted in credit card processing, EMV Technology, merchant services, Security Risk, Technology | Tagged , , , , , | Leave a comment