A surcharge is a fee that is added to a card transaction, either as a set amount or a percentage of a transaction. Typically, used to cover the cost of the merchant account charges.
There are rules, exceptions and state laws to observe to ensure you are compliant.
At present there are surcharge bans in the following states:
California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. (Appeals are pending for California and Florida)
Surcharge Rules:
Applicable only to credit card transactions, not debit or prepaid card transactions.
The surcharge cannot be greater than the merchant’s average discount rate for that brand’s credit card transactions.
Maximum surcharge allowed is 4%.
Cardholder must be notified of the surcharge.
Surcharge must be listed on the receipt as a line item and the primary payment amount must be processed together as one transaction.
A convenience feeis a fee charged for the “convenience”of being able to pay using an alternative payment channel outside the merchant’s customary payment channel.
Any merchant can charge a convenience fee IF the fee charged is for the legitimate convenience of being able to pay using a different payment channel than the merchant’s usual payment channel.
Example: Your business customary payment channel is face-to-face or card present and you provide an alternative payment channel, such as the option to pay by phone using a credit card, that could then charge a convenience fee along with the payment.
Mail Order/Telephone Order (MOTO) merchants and ecommerce merchants, whose customary payment channel is exclusively non face-to-face or card-not-present, are NOT permitted to charge convenience fees.
Convenience Fee Rules:
Customer must be notified of the convenience fee prior to finalizing payment and given the opportunity to cancel.
Payment must take place through an alternative payment channel.
The fee can only be added to a non face-to-face transaction. Must be flat or fixed, regardless of the value of the payment due.
The fee must be applied to all means of payment accepted through the alternative payment channel. Must be included in the total transaction amount.
Travel environments are unique and transactions are usually keyed in. There’s almost always a delayed delivery period, and large ticket transactions.
One card holder may be paying for multiple tickets and they tend to be seasonal; with peak season months generating an unusual spike in their “average” monthly volume and chargebacks, pose a potential threat by travelers who are unable to complete their trip.
These factors can cause for either a reserve or account termination. Therefore travel merchant accounts are considered high risk.
Most merchants do not realize that merchant processors carry a financial risk on merchant accounts, and normally fund merchants prior to receiving payment from the client’s bank. Therefore, a merchant account is an unsecured loan.
The merchant runs a transaction and at the end of the day they settle their batch. The merchant will receive the funds for that batch in their bank account within 2 business days, even though the travel arrangements the client paid for do not take place right away.
Here at National Transaction Corp, we specialize in understanding what makes your transactions as a travel agent unique and how they affect your merchant account.
Educating the merchant and ensuring they have a good understanding of what makes travel merchant account high risk, is one of our specialties.
Call NTC to speak with a Travel Merchant Account Specialist today!
This is a question we encounter on a daily basis. Travel environments are unique in that your transactions are usually keyed, there is almost always a delayed delivery period, large ticket transactions are not uncommon since one cardholder may be paying for multiple tickets, they tend to be seasonal, with peak season months generating an unusual spike in their “average” monthly volume, and chargeback’s pose a potential threat by travelers who are unable to complete their trip. Combine even a few of these factors together and you have cause for a reserve, or even account termination.
Being a part of a MO/TO (Mail Order/Telephone Order) or Keyed environment carries an increased risk of potential fraud or unauthorized use of a credit card. Since the credit card and cardholder are not present at the time of the transaction, the merchant has a limited ability to ensure the card is not being misused or that the proper AVS (address Verification Service) information is provided. NTC stresses the use of Credit Card authorization forms in order to obtain the correct credit card number, expiration date, billing address, and signature of the cardholder.
Travel merchants tend to have periods of increased volume based on peak travel seasons, whereas most other industries tend to have the same average monthly volume every month. This can generate spikes in volume on the merchant account that can trigger security concerns with the processor. Helping the merchant to analyze their volume trends and reporting the trends to the underwriters helps eliminate the security concerns when these spikes occur.
Large transactions which exceed the average sale amount for the merchant account can also trigger security concerns. Merchants who do not inform their merchant processor of large transactions prior to charging the credit cards can trigger security concerns and cause funding delays and reserve holds. Educating and clearly communicating with the merchant how to handle large tickets, volume spikes, and group bookings, prevents reserves, funding delays and/or other merchant account issues.
Another concern from the underwriters is the delayed delivery time frame. Delayed Delivery refers to the amount of time between accepting a credit card payment (whether a deposit or full purchase) and the time the cardholder travels. The client’s credit card is billed and the travel agent is paid however, the trip the travel agent was paid for doesn’t generally take place for 2 to 3 months. This leaves a lot of time for things to change, and should the client not travel for some reason, the first thing they do if the travel agent does not issue a refund, is claim a chargeback. NTC offers quite a few tips that can help protect the travel agent from chargeback situations.
Most merchants do not realize that merchant processors carry a financial risk on merchant accounts, and normally fund merchants prior to receiving payment from the client’s bank. Essentially, a merchant account is an unsecured loan. The merchant runs a transaction and at the end of the day they settle their batch. Generally the merchant will receive the funds for that batch in their bank account within 2 business days even though the travel arrangements the client paid for do not take place right away.
Here at National Transaction Corp, we specialize in understanding what makes your transactions, as a travel agent, unique in how they affect your merchant account. Educating the merchant and ensuring they have a good understanding of what makes travel merchant account high risk, is one of our specialties. We have established a special relationship with our underwriting department which facilitates our ability to approve your high risk travel merchant account.
It’s true that the travel agencies are high risk. This is because of the high chargebacks by travelers who fail to complete their trips or stays due to a variety of reasons. It also has to do with the nature of delayed delivery where items or services are sold today but not used/consumed for a delayed period of time. Using the right merchant solutions can make a difference.
You want merchant solutions that help you to manage chargebacks, errant transactions, and terminal messages. Additionally, you should be able to integrate your software with services such as Sabre Red, Sabre, Trams or other accounting programs such as QuickBooks and Peachtree.
With NTCePay, simply create a pay button for any dollar amount. Then send this digital link to your customers via email. The customer reviews the invoice details and enters their payment information to complete payment. You can also create custom links that can be added to your web site or posted to your social media accounts for payment collection. With advanced invoices, you can easily break down payments into installments.
With this service, you avoid the complexities of integrating the software with your shopping cart, point of sale, or accounting system yet still collect your travel payments in a seamless manner.
For Electronic Payment Set Up Call Now! 888-996-227
Running an e-commerce website, travel agency, retail store or any other business that requires payment processing can be overwhelming.
You’ve got to monitor your transactions, ensure security to your customers, and generate reports. That’s a lot of work. However, with NTC payment solutions, you can streamline the whole payment process and stay on top of your operations.
With the right service, it allows you to get paid faster, offer loyalty programs, and process payments on the go. Depending on your business, you want to pick the right solution that best suit your needs.
Let’s explore some of the options you can consider.
With the right software, you can gain control of your business from inventory and order management to refunds and returns. No matter how you have set up your point of sale system, having the right software can make a great difference.
You want a software that lets you add other functionality, such as loyalty cards, sales exchanges, layaways, discounts, etc. This allows you to experience seamless customer management, inventory management, and retail accounting.
With the advancement in technology, you can access your point of sale system right on your iOS or Android device. This technology can replace your bar code scanners and cash registers to improve your in-store payment processing. There are also card readers that you can connect to your phone to start processing payments.
National Transaction can provide hardware, software, and support for any point of sale and other merchant solutions that your business needs.
To speak with our Payment Consultant Call Now 888-996-2273
Merchant Aggregators, Merchants of Records and Payment Service Provider what’s the difference?
Payment Service Provider – is a company, which provides payment gateway and related services (like antifraud tools) to merchants. PSP is a representative of one or several acquiring banks. The merchant signs an agreement with the acquiring bank and PSP. The acquiring bank provides a merchant account and secures settlements for merchant’s transactions directly to the merchant’s bank account. Payment Service Provider secures delivery of the merchant’s transactions to the acquiring bank and some related services like fraud scrubbing and recurring transactions. The merchant has an own merchant account with this model.
Merchant Aggregator – is a company, which uses one merchant account to process transactions from many merchants. Merchants don’t have any agreements with an acquiring bank, but with the merchant aggregator. You get quick setup and get shut down quickly. Most aggregators are hard to get hold of, they don’t have human customer support. The problem with this model is, it’s not intended as a long-term, scalable solution to accepting payments and they can freeze your account or hold your money if anything unusual happens.
Merchants of Record – are a merchant, who use services of payment service provider (PSP) or merchant aggregators to accept payments on their websites for goods or services they sell. Merchant of record role requires an array of administrative responsibilities, such as managing a merchant account with a payment processor, paying associated credit card rates & fees for the transactions and other responsibilities like complying with PCI DSS Standards.
Credit card transaction types are categorized based on the level of risk and processing cost associated with them. Here’s a breakdown of the common types:
1. Qualified
Definition: These are considered the “safest” and least expensive transactions for processors to handle.They typically involve traditional credit or debit cards processed in person with a physical card swipe or chip insertion.
Characteristics:
Card is present during the transaction
Cardholder’s signature is captured (if required)
AVS (Address Verification Service) matches the billing address on file
CVV (Card Verification Value) is provided and matches
Transaction meets all security protocols and risk assessment criteria set by the card issuer and processor.
Examples:Swiping a standard Visa or Mastercard credit card at a retail store.
2. Mid-Qualified
Definition: These transactions fall in between qualified and non-qualified in terms of risk and processing cost. They often involve card-not-present transactions or cards with higher reward structures.
Characteristics:
Manually keyed-in transactions (online, over the phone, or mail order)
Rewards cards with higher cashback or points benefits
Business or corporate cards
Transactions where AVS or CVV information is not provided or doesn’t match
Examples: Entering your credit card details online to purchase something, using a rewards card with travel benefits.
3. Non-Qualified
Definition: These transactions are considered the riskiest and most expensive to process.They often involve international cards, manually keyed transactions without proper security measures, or cards with very high reward programs.
Characteristics:
International credit cards
Manually keyed transactions without AVS or CVV verification
High-risk businesses like online gambling or adult entertainment
Keyed transactions for business or corporate cards
Examples: Using a foreign-issued credit card, manually processing a transaction without verifying the cardholder’s address.
Why does this matter?
Processing Fees: Merchants are charged different fees for each transaction type.Qualified transactions have the lowest fees, while non-qualified transactions have the highest.
Tiered Pricing: Many payment processors use tiered pricing models, categorizing transactions into these types and charging accordingly. This can sometimes be confusing or lead to unexpected costs for merchants.
Interchange Fees: The card networks (Visa, Mastercard, etc.) also charge interchange fees for each transaction, which vary based on factors similar to those used for transaction type categorization.
Understanding these transaction types is crucial for merchants to:
Negotiate better processing rates: By understanding the factors that influence transaction categorization, merchants can negotiate better fees with their processors.
Optimize payment processing: Merchants can take steps to minimize the number of mid-qualified and non-qualified transactions, such as encouraging in-person payments or using address verification systems.
Control costs: By being aware of the different transaction types and their associated costs, merchants can better manage their payment processing expenses.
Remember: The specific criteria for each transaction type can vary depending on the payment processor, card network, and individual merchant account. It’s always best to clarify with your payment processor to understand their specific categorization rules and fee structures.
To establish a merchant account for your business call now 888-996-2273 or click here NationalTransaction.Com
Tokenization is a powerful security feature that allows a merchant to support all of their existing business processes that require card data without the risk of holding card data and without any security implications, because tokens are useless to criminals, they can be saved by the merchant as they do not represent any threat.
The liability and costs associated with PCI compliance is substantially reduced and the risk of storing sensitive data is eliminated.
Tokenization applies to credit card and gift card transactions.
Imagine a world where you could accept credit card payments without actually storing any sensitive cardholder data. No more worrying about data breaches, PCI compliance headaches, or the crippling costs of a security breach. That’s the power of tokenization.
Here’s how it works:
Instead of storing sensitive credit card information on your systems, each card number is replaced with a unique, randomly generated “token.” This token is useless to hackers, but it can be used to process payments securely on the merchant account that created the token.
Think of it like a valet ticket:
You hand over your car (the sensitive data) to the valet (the tokenization provider), who gives you a unique ticket (the token). The valet keeps your car safe, and you can use the ticket to retrieve it when needed.
The benefits are immense:
Ironclad Security: Reduce your PCI DSS scope and minimize the risk of costly data breaches. With tokenization, even if your system is compromised, the actual card data remains safe.
Effortless Compliance: Simplify PCI compliance and avoid hefty fines. Tokenization helps you meet the stringent security requirements for handling sensitive cardholder data.
Recurring Billing Made Easy: Securely store tokens for recurring billing or future transactions. This allows you to charge customers later without having to store their sensitive information.
Improved Customer Trust: Demonstrate your commitment to data security and build customer trust. Knowing their information is protected encourages repeat business and loyalty.
Streamlined Checkout: Offer a frictionless checkout experience with saved payment information. Tokenization enables faster and more convenient payments for your customers.
Tokenization is not just a security measure, it’s a strategic advantage:
Reduce costs: Minimize the expenses associated with data breaches and PCI compliance audits.
Boost efficiency: Streamline your payment processes and reduce administrative overhead.
Enhance your reputation: Position your business as a leader in data security and customer trust.
In conclusion:
Tokenization is a game-changer for businesses that accept credit cards. It offers unparalleled security, simplifies compliance, and unlocks new opportunities for growth. Embrace the future of secure payments with tokenization and watch your business thrive.
For Electronic Payments with Tokenization call now 888-996-2273 or click here NationalTransaction.Com
Visa 3-D Secure (3DS) is a security protocol designed to add an extra layer of protection to online credit card transactions.It aims to reduce fraud by verifying the cardholder’s identity before the transaction is authorized.Visa’s implementation of 3DS is called “Visa Secure.”
Here’s how it works:
Transaction Initiation: When a customer makes an online purchase with their Visa card, the merchant’s website communicates with the Visa network to initiate the 3DS process.
Risk Assessment: The issuer (the cardholder’s bank) performs a risk assessment based on various factors, such as the cardholder’s history, the transaction amount, and the merchant’s risk profile.
Authentication: If deemed necessary, the issuer challenges the cardholder to authenticate their identity. This usually involves a step-up authentication method, such as:
One-time password (OTP): Sent to the cardholder’s registered mobile phone or email.
Biometric authentication: Fingerprint scan or facial recognition.
Knowledge-based authentication: Security questions or personal information.
Verification: Once the cardholder successfully authenticates, the issuer confirms their identity to the merchant.
Transaction Completion: The merchant can then proceed to process the transaction with increased confidence that the cardholder is legitimate.
Integration and Implementation:
Merchants need to integrate 3DS into their online payment systems.This typically involves working with their payment gateway provider or acquiring bank to implement the necessary APIs and protocols.Visa provides detailed documentation and support for merchants to integrate Visa Secure.
Benefits and Features of 3DS:
Reduced Fraud: By verifying the cardholder’s identity, 3DS significantly reduces the risk of unauthorized transactions and chargebacks.
Improved Security: Adds an extra layer of security to online payments, protecting both merchants and customers from fraud.
Shift in Liability: In many cases, if a fraudulent transaction occurs after successful 3DS authentication, the liability shifts from the merchant to the issuer.This can save merchants significant costs associated with chargebacks and fraud disputes.
Increased Customer Confidence: Demonstrates a commitment to security and builds trust with customers, encouraging them to complete their purchases.
Enhanced User Experience: The latest version of 3DS (EMV 3DS 2.0) offers a smoother and more user-friendly authentication experience, minimizing friction during checkout.
Support for Mobile and Digital Wallets: 3DS is compatible with various payment channels, including mobile devices and digital wallets, providing a consistent and secure experience across all platforms.
In conclusion: Visa 3-D Secure is a powerful tool for merchants to enhance the security of their online transactions, reduce fraud, and improve customer confidence.
By implementing Visa Secure, merchants can protect themselves from financial losses and provide a safer and more trustworthy shopping experience for their customers.
For e-Commerce Electronic Payments set up with 3D Secure
NTC ePay is for any merchant who wants to avoid the complexities of a shopping cart or integration into an accounting system or point-of-sale. When custom pricing becomes an issue, shopping carts, POS systems, and booking engines tend to get immensely complicated.
NTC ePay does away with those complications by allowing merchants to simply email a payment request that can be paid in 2 simple steps.
When you call National Transaction, we pick up the phone ready to assist your business. Our dedication to supporting our merchants is unparalleled, from the point of sale and beyond.
Our commitment to our merchants extends to their interests with NTC Gives.Com, a program designed to give back to a charity of their choice. Call today and let National Transaction Corporation earn your business.
Contact National Transaction Corporation today at 888-996-2273, or visit us online
