Qualified vs Non-Qualified Credit Card Rates

Qualified vs Non-Qualified credit card rates

The most common forms of rate structures for credit card rates are: 

2-Tiered: Qualified and Non-Qualified

3-Tiered: Qualified, Mid-qualified, or Non-qualified

Each and every transaction you accept is classified into one of the above and is the basis for the credit card rate you see on your statement.

As a general rule, qualified transactions are going to be “standard” cards;  without any consumer or corporate rewards associated with them. Accepted in the “standard” method expressed in your merchant processing agreement, this is where Card-Not-Present (CNP) setup comes into play.

Mid and Non-Qualified transactions include:

Rewards cards, keyed-in payments (for swipe accounts), AVS (Address Verification Service) does not match or is not performed, not all required fields are entered, or the payment was entered in a late batch. Ex. the payment was sent to the processor 48 hours or more past the time of the authorization.

Posted in Uncategorized Tagged with: card-not-present, consumer, credit card, merchant, payment, processor, transaction

Card-Present vs Card-Not-Present

Card-Present vs Card-Not-Present – It’s important for a merchant to know what types of credit card payments their business will be taking.

If you rely on mailed, over-the-phone, or online payments a Card-Not-Present merchant account is what you need.

With this type of account, you don’t need the physical card. You are set up to accept credit cards where card information is being keyed into a credit card terminal or online.

A card-not-present merchant accounts base rate is higher than if you signed up for a Card-Present or swipe merchant account.

Why are card-not-present rates higher? There is less risk associated with a business swiping a credit card than keying it in. Why? When a card is swiped, a person is present; where the merchant can check ID and signature. When a person is not present, it’s open for consumer fraud.

However, when you’re setting up a Card-Not-Present merchant account, these factors are taken into consideration during the underwriting process, which leads to a lower base rate for keyed-in payments

Posted in Best Practices for Merchants, Travel Agency Agents Tagged with: card present, card-not-present, credit card, merchant, online, payments, terminal

THE TRAVEL INDUSTRY PAYMENT EXPERTS!

The Travel industry payment experts! Why NTC? 

NTC is the preferred payment processor for over 3,000 Travel Related Agencies.

High application approval rates while striving to eliminate holds & reserves is a big part of our Travel Merchant’s success.

Posted in Best Practices for Merchants, Travel Agency Agents Tagged with: merchant, online, payment, payment processing, payment processor, travel, travel industry, Travel Merchant

What is Merchant Aggregator?

Merchant aggregator is an entity that can run many transactions through a single merchant account, an opposite to the traditional merchant account since you’re the sole owner.

Preferred for a smaller business because its not intended as a long term scalable solution to accepting payments.

For businesses that want to expand their processing needs, traditional merchant account will outgrow an aggregator, since the goal is for a business to grow, but it will always come to what’s best for individual business.

While you have the pros of quick application process and instant approval there are a lot of cons to check before getting an aggregator account.

CONS of an aggregator account:

CUSTOMER SERVICE – aggregators are hard to get hold of.

FEES – fixed fees .

FREQUENT HOLDS and DELAY OF FUNDS – aggregators hold funds 24-48 hours before depositing, while longer holds occur 30 days. (A client of ours who signed up with an aggregator came back in tears and wants to open her merchant account with us again because her funds was held with the merchant aggregator. She then promised will not leave and stay for life with NTC).

LOWER LIMITS – processing limits lower, annual limit of $100k.

PROS of a Traditional Account:

CUSTOMER SERVICE –  24/7 technical support.

FUNDS – next day funding, no frequent account holds.

FEES – tailored to your business needs.

LIMITS – varies by financial strength and business

Setting up a Merchant Account? Call us now! 888-996-2273 or go to www.nationaltransaction.com  

Posted in Best Practices for Merchants, Travel Agency Agents Tagged with: customer, fees, funds, merchant, merchant account, payments, transactions

Surcharges and Convenience Fees

Surcharges and Convenience Fees:

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 service charge.

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 fee is 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.

Posted in Best Practices for Merchants, e-commerce & m-commerce, Mail Order Telephone Order Tagged with: card-not-present, Convenience Fees, credit card, debit, ecommerce, merchant, moto, payment, prepaid card, Surcharges, transaction

GET THE LOWEST TRANSACTION RATES & FEES

GET THE LOWEST CREDIT CARD TRANSACTION RATES & FEES BY DOING THE FOLLOWING: 

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.

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.

For FREE Rate Review give us 888-996-2273

Posted in Best Practices for Merchants, Travel Agency Agents Tagged with: bank, credit card, customer, merchant, merchant account, POS, rewards cards, service provider, transaction

What Makes Travel Merchant High Risk?

What makes travel merchant high risk?

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!

Dial 888-996-2273

Posted in Best Practices for Merchants, Travel Agency Agents Tagged with: bank, card, chargebacks, financial, loan, merchant, payment, processors, transactions, travel, travel agent, Travel Merchant

MERCHANT ACCOUNT IS A LOAN!

Merchant Account is a LOAN! 

Merchant accounts are not depository accounts like checking and savings accounts; they are considered a line of credit. Therefore, when a customer pays with a credit card; a bank is extending credit to that customer and also making the payment on his/her behalf. As for processors or payment providers; they pay merchants before the banks collect from customers and are therefore extending credit to the merchant, that’s why Merchant account is considered as a LOAN.

Posted in Best Practices for Merchants, Financial Services, Travel Agency Agents Tagged with: bank, credit, credit card, customer, loan, merchant, merchant account, payment, payment providers, processors

BUSINESS LOAN TERMS

Business Lines of Credit – is for businesses with an inconsistent cash flow. Either businesses that needs to borrow a small amount of capital, and businesses that use invoices.

Different types of lines of credit:

Cash Account, the most basic line of credit – which you can access when you’re in need of capital; whether you’re making a large purchase or covering a temporary gap in cash flow. You only have to pay the interest on the amount that you borrow; with this form of financing, the money is always available when it’s needed.

Inventory Line of Credit – specifically intended for purchasing inventory.

This kind of loans give the merchant, two advantages: 

•  First of all, you can purchase inventory wholesale.
• Second, purchasing inventory won’t take a large amount out of your cash flow because you’ll be paying in increments instead of one lump sum.

Invoice Financing – basically, this is a line of credit where invoices are the collateral.

Personal Loans Used for Business: Startups and young businesses, merchants who have excellent personal credit. Furthermore, personal loans are term loans that can be used for a number of purposes.

If your business is new to qualify for a business loan, consider using a personal loan.

Short Term Financing: Is for young businesses experiencing rapid growth.
Short term financing covers merchant cash advances and short term loans.

Term Loans: Is for Businesses that need cash to fund one-time expenses like equipment purchase/real estate or expanding a business. Term loans are basic, everyday loans. The merchant receives the capital in one lump sum and repayments are almost always monthly.

For more information about Loans/Financing call us at 888-996-2273

Posted in Best Practices for Merchants, Merchant Cash Advance, Small Business Improvement Tagged with: cash advances, credit, financing, loans, merchant

PCI COMPLIANCE (PCI DSS)

PCI compliance applies to any company, organization or merchant of any size or transaction volume that either accepts, stores or transmits cardholder data.

Any merchant accepting payments directly from the customer via credit or debit card must be Compliant. The merchant themselves are therefore responsible for becoming Compliant, as the deadline for the merchant becomes overdue.

Understanding and knowing the details of Payment Card Industry Compliance can help you better prepare your business. Because failing and waiting to become compliant or ignoring them, could end up being an expensive mistake.

The VISA regulations have to adhere to the PCI standard forms as part of the operating regulations. The regulations signed when you open an account at the bank. The rules under which merchants are allowed to operate merchant accounts.

The Payment Card Industry Data Security Standard (PCI DSS) is a proprietary information security standard for organizations that handle branded credit cards from the major card schemes including Visa, MasterCard, American Express, Discover, and JCB.

Posted in Best Practices for Merchants, Credit Card Security, Payment Card Industry PCI Security, Visa MasterCard American Express Tagged with: American Express, cardholder, compliance, credit, customer, data, debit card, Discover, jcb, MasterCard, merchant, Payment Card Industry, payments, PCI, transaction, visa