October 21st, 2013 by Elma Jane
Retailers today collect email at every point of interaction. Collecting customer information in the store at the point of sale (POS) offers the greatest potential to build retailer’s email list quickly and to drive timely offers and communications that increase customer loyalty and retention.
The practice of collecting email addresses at the point of sale (POS) isn’t a new one. However, more companies are embracing the trend, and they’re doing so with increasing regularity.
E-Receipts
One popular technique among retailers is to ask shoppers if they would like a receipt emailed to them. It is important to note that an agreement to receive an e-receipt should not be necessarily interpreted as consent to be added to a commercial email list unless this intent is adequately communicated to the consumer and they consent. It always best practice to reference their consent to marketing emails at the same time as the e-receipt request.
It is possible to collect (PII) Personally Identifiable Information at the counter in a
careful and conscientious manner if you follow guidelines.
1. Be transparent about the commercial intent. A consumer who feels misled is more likely to complain and to seek redress under the consumer protection laws. If following different scripts is a challenge, apply the same disclosure/request script for both credit and cash transactions.
2. Consider using the credit card terminal or other touchpad device for customers to enter their email rather than using the sales associate. The device should first prompt the customer to consent to receiving an in-store e-receipt and/or marketing communications, ideally before proceeding with the transaction, it could be after as well.
3. Decouple PII collection from the credit card purchase. Ask customers for their email addresses before taking their credit cards or after they sign off on the purchase so it is clear that email is not required as part of the transaction.
4. Fulfill any incentives offered at the counter through email. Provide each consumer with a dynamic and unique link. A consumer will have less of a reason to give you a valid email address if you offer and fulfill the incentive at POS. Limiting the use of the incentive to email will help you avoid incentive abuse.
5. Send a welcome permission pass. Don’t assume that the customer wants anything more than an in-store e-receipt even if you can legally claim to have this right. Let the customer make an informed decision at the counter or in a subsequent email.
6. Validate submitted data. Ask customers to verify the accuracy of their PII before submitting. Use appropriate list management tools to prevent avoidable domain errors.
Clients that take the proper steps to overcome POS challenges and risks will reap the rewards of subscriber loyalty, a stronger reputation and better inbox performance in the long run.
Posted in Best Practices for Merchants, Credit card Processing, Electronic Payments, Gift & Loyalty Card Processing, Point of Sale Tagged with: associate, best practice, cash, commercial, communications, companies, consumer, credit, credit-card, customer, e-receipts, email, emailed, incentive, interaction, list, loyalty, offers, personally identifiable information, pii, point, point of sale, POS, retailers, rewards, sales, script, subscriber, timely, touchpad, transactions, transparent
October 14th, 2013 by Elma Jane
First what is a Merchant Account? It is a type of bank account that allows businesses to accept payments by payment cards, typically debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of payment card transactions. In some cases a payment processor, independent sales organization (ISO), or member service provider (MSP) is also a party to the merchant agreement. Whether a merchant enters into a merchant agreement directly with an acquiring bank or through an aggregator such as PayPal, the agreement contractually binds the merchant to obey the operating regulations established by the card associations.
Merchant Account comes in 2 Basic Types – Aggregated Accounts and Dedicated Accounts.
Aggregated Merchant Account – such as those provide by PayPal that use a single merchant account to provide credit card processing for an entire portfolio of companies.
Dedicated Merchant Account – are provisioned specifically for your business.
Each has its Advantages and Disadvantages.
4 Key Points to Consider when deciding which type is the most advantageous for your small business.
1. Creditworthiness: To obtain a dedicated credit card processing merchant account your business will need to go through comprehensive underwriting. If you’re in a difficult to underwrite industry or if your business is very new and if it has a less than stellar credit history then an aggregated merchant account is the best choice. You still need to provide information about your business, underwriting for aggregated accounts is typically far less rigorous than for dedicated merchant accounts.
2. Funds Control: With an aggregated merchant account, transaction proceeds go to the service provider and are then deposited to your bank account at the provider’s discretion. There are no industry standards or rules that govern how an aggregated merchant account provider handles or disburses your money. The provider makes the rules, and can change them at will, so if you choose an aggregated merchant pay very close attention to the contract terms and any changes made to them. With a dedicated merchant account, transaction proceeds, less processing fees, are deposited directly into your business account. While the merchant account provider can correct errors, react to potential fraud and debit your account for customer “chargeback” claims. This must all be done based on industry-standard credit card processing rules.
3. Neighborhood: With an aggregated account, you’ll have no idea about the other companies processing transactions. If a good number of them engage in fraudulent activity, it is possible that the service provider’s processing account will be terminated and even honorable businesses like yours will lose credit card processing ability. If you do go with an aggregated account, it is very important to make sure that your provider is large enough to absorb fraud generated by a few bad apples.
If you’re using a small provider, try to get a list of the other business using the service and check them out to see if you want to live in the same neighborhood. With a dedicated merchant account the only company processing credit card transactions through it will be yours. You are in full control of keeping the account in good standing.
4. Speed: Getting a dedicated merchant account can take time. While there are some providers automating the process and providing same-day decisions. A typical application will take 48 hours to approve and additional time to integrate into a POS or electronic payment processing environment. Signing up for a credit card processing under an aggregated account service provider can usually be done in minutes, and it often comes with an online system that can have you actively processing payment within the hour.
Offering your customers the option to pay with a credit card is a great way to enhance revenue for your small business. Customers want the points associated with rewards cards, and they want to manage their own cash flow by floating balances or financing their purchases. Allowing them to use credit cards accomplishes both. So, give the customers what they want. If you don’t accept credit cards yet, now is a great time to start. Having made that decision, the next step is to obtain a merchant account for credit card processing.
The actual credit card processing rates you’ll be charged are a critically important factor as well. But as with most things, you get what you pay for. So don’t choose a low rate without also considering how the provider you select will impact your overall business.
For Merchant Account Services Please call National Transaction at 888-996-2273 or visit our website www.nationaltransaction.com to know more about our services.
Posted in Credit card Processing, Merchant Services Account Tagged with: account, accounts, acquiring, aggregator, card, cards, chargeback, credit, debit, electronic, environment, fees, financing, fraud, ISO, merchant, msp, payment, PayPal, POS, Processing, provider, transaction, underwriting
October 10th, 2013 by Elma Jane
There are various payment processing rates that apply to credit and debit card transactions. Visa and MasterCard do not publish their rules and regulations or the payment processing standards required to get the lowest interchange rate. It’s up to credit card processing companies to understand and implement them to their merchants’ benefit. A high downgrade rate may indicate that your processor does not know the standards, or may be reluctant to implement best practices or new rules changes. The application of these rates is based on a variety of factors related to the particular circumstances of the sale and the way the payment is processed, as well as on the type of the card that was used. Typically payments processed in a card-not-present environment (e.g. online or over the phone) are assessed higher processing fees than payments processed in a face-to-face setting. Payments made with regular consumer types of cards are generally processed at lower rates than payments made with rewards, business-to-business or commercial cards. Debit cards are processed at lower interchange rates than credit cards. In order to simplify the pricing for their merchants, the majority of the processing companies have elected to use various tiered pricing models (two-tiered, three-tiered, six-tiered, etc.). There are three general classifications used in the various tiered pricing models:
Qualified Transaction (also referred to as the Swiped Rate) This is the rate charged per each transaction when the card is physically swiped through a credit card terminal. When a transaction is processed in accordance with the rules and standards established in the Payment Processing Agreement, signed by the merchant and the processing bank, and It involves a regular consumer credit card, It is processed at the most favorable rate. This rate is called a “Qualified Rate” and is set in the merchant’s Payment Processing Agreement. The Qualified Rate is set based on the way a merchant will be accepting a majority of their credit cards. For example, for an internet-based merchant, the internet interchange categories will be defined as Qualified, while for a physical retailer only transactions where cards are swiped through a terminal will be Qualified.
Mid-Qualified Transaction This is the rate charged when a transaction is manually keyed-in using AVS – Address Verification Service (card #, expiration date, address, zip code and CVV code all match). When a consumer credit card is keyed into a credit card terminal instead of being swiped or The cardholder uses a rewards card, business-to-business or another special type of card the transaction is charged a discount rate that is less favorable than the Qualified. This rate is called a “Mid-Qualified Rate.”
Non-Qualified Transaction This is the rate charged when manually keying-in a transaction without using AVS – Address Verification Service. When a special kind of credit card is used (like a rewards card or a business card), or a payment is not processed in accordance with the rules established in the Payment Processing Agreement, or It does not comply with some applicable security requirements.
Qualified Transaction Conditions
One electronic authorization request is made per transaction and the transaction/purchase date is equal to the authorization date. The authorization response data must also be included in the transaction settlement. The authorization transaction amount must match the settled (deposit) transaction amount. The card that is used is not a commercial (business) credit card The credit/debit card is present at the time of the transaction, the card’s full magnetic stripe is read by the terminal, and a signature is obtained from the cardholder at the time of the transaction.
The transaction must be authorized and settled under a standard retail industry code.
The transaction must be electronically deposited (batch transmitted) no later than 1 day from transaction/purchase/authorization date.
Mid-Qualified Transaction Conditions
One or more of the Qualified conditions were not met
Non-Qualified Transaction Conditions
One or more of the Qualified conditions were not met, or The card that was used was a commercial card without submitting the additional data or:
The transaction was electronically deposited (batch transmitted) greater than 1 day from the authorization date, or:
The transaction was not electronically authorized, or the authorization response data was not included in the transaction settlement.
Posted in Best Practices for Merchants, Credit card Processing, Electronic Payments, Financial Services, Merchant Services Account Tagged with: account, authorization, authorized, best, business, card, card-not-present, credit, cvv, debit, downgrade, interchange, keying, lowest, MasterCard, merchant, payment, processed, Processing, qualified, rate, rewards, standards, swiped, transaction, visa
October 3rd, 2013 by Elma Jane
Here’s how typical credit card transaction works:
When a consumer pays with a credit card, the merchant sends the details of the transaction along with the credit card information to the merchant’s bank. The merchant’s bank forwards the information to the cardholder’s bank for approval. If approved, the cardholder’s bank sends the required amount to the merchant’s bank, minus the merchant discount rate. The credit card companies don’t receive any revenue directly from interchange rates. Instead they make their money by charging the banks fees for networks, transactions and other kinds of services.
Up until April 2008, interchange rates were simple and inflexible. At that point, the company decided to move to a more dynamic system.
Interchange rates now vary from card to card, depending on the types of services and incentives offered. Typically, premium cards, which come with rewards for things like travel, cost merchants more to process. The rates also vary by type of transaction, and even by type of retailer. At times, the card companies have, for example, set special rates for grocery and gas retailers in a bid to boost credit-card use in locations where cash and debit traditionally dominated. The card companies have also introduced a growing number of premium and even super-premium cards that cost merchants more to process. The cards appeal to consumers because they contain a number of attractive incentives, such as travel and other rewards. The changes in the rate structure followed a change in the credit card companies’ business model in the mid 2000s.
Visa and MasterCard evolved from private associations owned mainly by the banks they serviced to publicly traded, profit-driven entities beholden to a wide range of shareholders. Merchants say the fees they pay to accept credit cards are rising as a result and have become increasingly unpredictable. Critics of the credit card companies say the merchant is a powerless middleman in a system that entices consumers to use their cards and banks to reap the benefits.
The credit card companies say the system benefits everyone, including merchants, by providing a rapid, secure form of payment.
Every time you use your credit card to make a purchase, the merchant pays what is called the “merchant discount fee.” The merchant discount fee is calculated as a percentage of the good or service purchased. It can range from 1.5 per cent to 3 per cent. On a $100 item, for example, the merchant could pay a fee of between $1.50 and $3.The merchant discount fee covers a number of things, such as terminal rentals, fraud protection and transaction slips. But the biggest component of it is based on the interchange rate, which is set by the credit card companies.
In a complicated twist, the credit card companies don’t make any money from the interchange rate. The banks do. The interchange rate is what makes the credit card system work. This rate ensures the banks have a financial incentive to issue and accept credit cards.
Posted in Credit card Processing, Electronic Payments, Merchant Services Account, Visa MasterCard American Express Tagged with: associations, bank, card, cardholder, charging, credit, credit-card, discount rate, dynamic, fees, financial, fraud, interchange, merchant, Merchant's, networks, payment, process, protection, Rates, rentals, secure, services, terminal, transaction, travel
August 19th, 2013 by Admin
1. Use newer POS systems to reduce credit card fees.
2. Find out what percentage of your gross sales go toward credit card rates.
3. Perform a statement review at least annually.
Any time a customer uses a credit card to purchase services and goods the merchant pays various rates and fees processing those transactions. Most of these fees go to the bank issuing the credit card as they take on the bulk of the risk in credit card transactions. Visa, American Express and Discover own the network on which these credit card transactions are processed on and they receive part of the fee and percentage rate as well as establish these rates and fees. Finally the bank that provides merchant account services gets part of these rates and fees.
To a small business 2, 3, or even 4% might not sound like much but when these fees are on the gross total of sales they can be significantly higher than originally thought. For this reason it’s a great idea to assess your merchant account statement to see if rates are in line and that your most frequently used cards and transaction types are getting the best rate possible. By going over your statement, you can see exactly what you pay per transaction and get details about your most common transaction types and credit card used to get the process going. Knowing how to untangle the various levels of pricing rates and fees can be daunting if you don’t know what they mean. If you are unfamiliar with what these rates and fees mean on your statement companies like National Transaction can perform the review for you. Free of charge.
Ultimately the best thing to have is a merchant account service provider that will take the time to go over your business with an eye lowering your rates and fees. The savings can be significant. As a business grows it changes and there should be an ongoing strategy at maintaining the best processing rates and fees possible. Today with so many different credit card types, like rewards cards, airline miles programs and more it can pay off to check once or twice a year.
Posted in Best Practices for Merchants, Credit card Processing, Electronic Payments, Merchant Services Account Tagged with: account, American Express, bank, card, credit, fees, MasterCard, merchant, process, Processing, Rates, services, Visa MasterCard American Express