No matter if you’re a new business or an old one, payment processing can seem like an ultra-complicated service.
At Bank of Merchant we’re here to keep it simple. Our goal is to offer straightforward and easy answers to all payment processing FAQ!
On the surface the ins and outs of payment processing can seem complex. Whether it’s fees or the banks involved, it can be hard to track both the charges being levied and roles of all the actors and institutions. Nevertheless, once you get a basic understanding of the concepts and players associated with it, you’ll be able to confidently navigate the payment processing system. Bank of Merchant is here to arm you with all the necessary information and clear up any confusion.
If you want your business to be able to accept credit card payments, you’ll need to set up a merchant account. A merchant account allows for credit card payments made by your customers to be transferred into the acquiring bank’s account. Keep in mind that you will also need a way to process these card payments.
There are three steps involved in credit card processing: Authorization (the merchant requests approval from the issuing bank), Authentication (the issuing bank uses fraud protection tools to verify the credit card), and Clearing and Settlement (the transaction is posted to the credit card owner’s billing statement as well as the merchant’s statement).
A merchant service provider facilitates credit card processing for your business, in addition to providing other vital services. These services include accepting card and electronic payments from your customers, processing and storing payment information in a secure and PCI-compliant manner, and tracking payments through the proper technological resources.
It mostly comes down to finding a provider that best suits the needs of your business. Still, you should look for a provider that’s established and proven in the field. Check the rates they’re offering to make sure they align with your budget.
You can always contact us to learn more about our rates, so you can compare them to your current policy. Also, you can upload your current statement and we can contact you. Once you submit your statement for our review, we will respond in short order to provide a detailed breakdown of your charges. We will detail the ways in which we can save you money.
The fees your business will pay depends on a number of factors. The type of card used will make a difference as the charges for Visa and Mastercard differ. For instance, Visa charges a debit assessment of 0.13 percent and 0.14 for credit. Amex and Discover are calculated differently and you can read more in-depth about them here. Also, the POS terminal type, and whether you take PIN or signature debit are other examples of ways fees can either increase or be lower. Plus, for card-not-present transactions, the costs vary depending on a range of factors. More specifically, these transactions are inherently more risky, and consequently, often spike the rates.
Processors can charge in a number of ways. These include a transaction fee which is levied every time the business processes a credit or debit transaction. There’s also interchange rates, processing markup, etcetera. Interchange rates are set always by the card networks and are not negotiable. However, discount rates are variable and this is where you can work with the processor.
Yes. First, it’s important to know that Interchange Fees and Assessment fees are established by the networks and are non-negotiable. Discount rates, however, are variable and the markup is also negotiable. The markup fee is the charge a processor assesses every time a transaction is made. It’s essentially the cost for getting to use the service. But this isn’t all, a processor can enforce other fees, like batch fees, statement fees, etcetera. All the other processing fees are fixed. Consquently, this means that if you want to negotiate processing fees, your best bet is to zero in on discount rates.
This depends on what you’re looking for, and what your company’s unique needs are. It’s best to take the time to research and see which company is most affordable for you. At Bank of Merchant we aim to beat all of our competitor’s rates.
A merchant account is a type of business bank account that enables your business to accept different types of payment, usually debit, credit card, and ACH payments. A payment gateway is a form of software solution that facilitates the transaction process online. It’s hosted by your payment processor. The gateway basically operates like a credit card machine, allowing a business to accept payments via the internet.
A payment gateway facilitates the secure transfer of information between your website and your merchant account. Your payment gateway will transmit your customers’ billing information to your merchant bank so that payments can be deposited into your internet merchant account each month. Furthermore, the gateway is needed to funnel information between the terminal and the card network.
A merchant account is a type of business bank account that enables your business to accept different types of payment, usually debit and credit card payments. Essentially, the merchant account serves as an agreement between a retailer, a merchant bank, and a payment processor for the settling up of credit card and debit transactions. In other words, possessing a merchant account authorizes you to conduct business with credit cards.
There aren’t any hard and fast criteria to get a merchant account. However, certain businesses can be viewed as high risk so it’s important to make your business as attractive as possible. Consequently, make sure you have a positive credit score, are honest about your merchant account and overall financial history, be open to accepting higher fees to start, and talk to several payment processors before deciding. It should be noted that bad credit won’t disqualify you from landing a merchant account, and anyone who does apply will need to offer basic information like what’s an average ticket and what represents an average amount of transactions per month.
This process typically takes around 2 to 3 business days, but can last as long as 10 business days. This means from setting up the account to getting the terminals. The factors that determine the expediency of account set-up include: type of business, industry of the business, status of financials, and the anticipated account volume. To further explain, retail establishments get quicker acceptance as they are more apt to last than online businesses. Also, the industry can slow things down if it’s considered ‘high risk.’ Finally, account volume if listed as high will require more study before making a determination.
Businesses can use a payment facilitator. However, having a merchant account makes the process much easier, cuts out the middle man, and streamlines the process which is always advantageous to a new business. Additionally, by not using a merchant account, you’re locking yourself into group fixed rate fees. These can’t be negotiated and can prove costly depending on the volume of business you do. In fact, in some instances they place limits on business volume. Also, not having a merchant account tends to limit your customer support access as these payment facilitators don’t offer extensive tech support.
It’s easier to get approved for a merchant account with good credit. However, even if you do have bad credit you may still be approved, but you’ll have to pay a higher rate.
Merchant accounts are contracts between a business and a bank. The merchant account acts as a link between the processor and individual credit card sponsoring banks.
Once you set up your merchant account, you can easily transfer funds to your personal bank account if you’d like. It’s recommended that you keep enough money in the merchant account to protect against accidental overdraft fees.
The authorization process takes mere seconds. In this time, information is passed from the terminal to the network then to the issuing bank, back through the network to the terminal. Once approval is given the transaction is complete although it might not be reflected in your account for up to 3 days.
A payment can take from 24 hours to three days to process. This is because stores submit their transactions at the end of the day in batches. Then the money is sent between banks. This process sometimes can take a few days so while the transaction has already been approved, the system it must go through (batch processing) requires additional time for settling up.
Typically, reversed transactions made originally with a credit or debit card take 24 to 48 hours to show on your bank statement. This process can also take as long as 5 days depending on your bank.
Processing fees can be taken every time a merchant submits a batch to be processed or simply at the end of each given month.
Yes, merchants can charge their customers a convenience fee for accepting credit cards. Though some states have limits on the amount of these fees, so double-check.
Convenience fees are legal. However, ten states do not allow a convenience fee over 4% of the purchase price: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
A chargeback is a transaction reversal. It occurs when a credit card owner disputes a charge for any reason. For merchants, chargebacks can be a real threat to their business as often they are overused and funds are directly removed from the merchant’s account. Merchants can dispute these charges so they don’t lose out on merchandise and suffer fees.
Maintaining accurate records is a key aspect of being able to fight chargebacks successfully. Check the reason code, and act quickly to successfully fight the chargeback.
The customer will fill out a form with the issuing bank naming the merchant and describing the dispute. Once this is filed, the merchant can fight the chargeback and provide as much supporting documentation as necessary. It’s important to be aggressive with supporting materials. Also, payment processors can be ultra helpful in disputing the charges as they have advanced resources. At any rate, once you’ve made your case, it’s simply about waiting on a ruling from the bank.
Batch credit card processing is the practice of the merchant processing all of its authorized credit card transactions for a day at the close of business or at a time determined by the payment processor.
You can manually or automatically settle a batch and your merchant processor is able to handle this task for you. This is easily set up with your merchant account.
There are a few simple steps you can take to protect against fraud. Check customer I.D. at every transaction, use address verification service, accept EMV chip cards, and report fraud as soon as it occurs.
You will get your merchant statement on the first day of every month though the approximate date may vary depending on the processor or in general.
Using a mobile card reader is the best way to accept payments from your phone. These devices easily attach to your phone or tablet.
This really depends on which services you need, and how many fees your business might be charged. For instance, the price of payment processing might increase if your business is high risk.
Different mobile processing companies offer different strengths – it’s really about finding the company that works best for your business’s needs. Bank of Merchant’s services are cutting edge and super affordable and highly compatible with any type of business.
The cost of wireless processing depends on your business’s monthly volume and a number of factors unique to how each individual business operates. Bank of Merchant is happy to discuss how this works in detail for your specific account.
This is essentially a web or online version of a credit card processing terminal or POS machine found in stores. A virtual terminal allows for websites to accept credit card payments and process online transactions through an online form or portal where the customers enter their credit card information and their address, etcetera.
Typically, an online payment takes 1-3 business days. This allows for the batch system to kick in and all the banks to settle up and exchange payment.
ACH is an electronic funds-transfer system which facilitates payroll, direct deposit, tax refunds, consumer bills, tax payments, and more.
This is a system allowing the state government to provide financial benefits onto a magnetically encoded payment card. It operates like a debit card and can only be used at stores authorized to accept SNAP benefits (which are households outfitted with an EBT Card). These cards are safe and easy to use as long as your store is equipped with the appropriate POS equipment. Plus, all transaction data is transmitted directly to the U.S. Department of Agriculture.
This is a detailed set of security standards. It’s meant to ensure that every company that processes, transmits, or stores credit card information does so in a secure environment. Merchants must meet these security standards which include things like maintaining a firewall to protect consumer data and encrypting card holder data across public networks, etcetera. You can read more about the encryption process here.
Leasing credit card terminals is generally considered a bad idea, mostly because it is actually more expensive to lease than to buy in the long run. Nevertheless, Bank of Merchant is happy to accomodate whichever approach you prefer, purchasing or leasing.
The answer to this varies based on the specific needs of your business. Readers provide certain strengths that may or may not fit with the demands of your day to day. Bank of Merchant offers an array of cutting edge choices that are well-suited for a variety of needs.
The cost of the hardware can range from $200 to $1000. At the very least, you need to purchase a machine that contains a keypad, a display screen, a magnetic strip, and chip card reading capability.
Yes you can. You just need to purchase a mobile reader that’s compatible with your device.
Yes, as long as you have the mobile apps reader. It’s as easy as simply scanning the mobile wallet.
A POS machine is a Point of Sale terminal. This is an electronic device businesses use to process credit card payments within their stores.
There are multiple POS systems a restaurant could use. Bank of Merchant provides many choices we recommend for the restaurant industry.
This depends on which system works best for the individual company. Bank of Merchant offers a number of options that are fitted to the demands of your business. We don’t ever take a one-size fits all approach to outfitting a business.
There are a number of good ones. Bank of Merchant provides an array of excellent choices that enhance efficiency and offer account management functionality.
EMV chip technology is a combined initiative between Europay, Mastercard and Visa Card to guarantee both security and global acceptance so that Mastercard and Visa cards can continue to be used anywhere in the world. Essentially, EMV technology is the global standard for authenticating debit and credit card transactions that involve chip/EMV cards and POS terminals.
If you have any further questions regarding payment processing please feel free to contact us.