What the Difference is Between an ISO and Bank Related Merchant Account?
August 16, 2010 by Admin · Comments Off
When considering where to obtain merchant services, there is no shortage of providers to choose from now a days that’s for sure! There is no doubt that processing has become a lucrative business. Over time, the service has been de-regulated, so merchant’s have much more choice as to who they want their provider to be. There are two major conglomerates to choose from. One can choose to have their Bank (member Bank – which means they are certified to process Visa and MC) process their transactions, or an ISO (Independent Sales Organization). Iso’s were developed after the de-regulation of merchant services.
There are some major differences between having an ISO process your transactions in comparison to the bank.
Direct Processing is a little bit faster from a bank hosted account, only because they have a direct link to the merchant’s banking info, where as with an ISO, the timing for deposits maybe anywhere from 24-48 hours after settlement. This difference exists because the branch would have a direct link to the deposit account, where the Iso’s deposit has to be cleared by Iso, then the member bank.
The Member Banks will also be more accepting of high risk merchant processing because of this link to the merchant’s account. Often times a merchant will have a business account with their bank, as well as other savings and credit accounts. Because of this “direct access” the branch has immediate security in the form of the entire merchant’s investments act to draw upon should there be any faulty transactions.
This high risk processing has advantages with Iso’s that the member banks cannot compete with at the same time….often times Iso’s are eager to obtain business, and, with the appropriated security in place, maybe more accepting of high risk accounts.
Service levels are another major difference. Banks are not as fast to provide comfortable “one stop” customer service in the same way that an Iso may be. Again Iso’s are more customer driven and as a result often provide better, faster more specific and personal customer service. As one may deduce, part of this improved service has allot to do with Hours of Service, Iso’s often have their own customer service and help desks working around the clock, where as a bank has very pre determined hours of operation, which are regulated and often not convenient for when a merchant may require additional services.
Pricing is a standard issue for any merchant seeking out services. This is where we see another major difference, in that, the Iso’s will compete and drive their prices down in order to obtain one’s business, the member banks are less competitive and often do not respond to competitive pricing quotes.
The best aspect of all of the differences mentioned here is that with the existence of both Bank’s and Iso’s being able to process merchant services, it offers a competitive edge to merchants. Just like any monopoly the more players on the board, the more fierce the competition which, in relation to merchant services, leads to the potential for better more competitive pricing and increase in the quality of service for merchants.
What are the different Mobile Credit Card Solutions?
August 10, 2010 by Admin · Comments Off
There are allot of different businesses out there. As the economy grows and business’ flourish, different ways of doing business are happening as well. We are a technologically advanced society and everything we do in our lives is more and more dependant on technology. The Merchant Services industry is no different, and has rapidly conformed to the changing needs of their potential merchants, being sure to offer processing in many different format’s as to keep up the standards. The biggest breakthrough has been the inception of Mobile business, and to follow suit, merchant processing is as well, available in what can be considered a mobile format.
There are five major solutions to mobile processing:
- ARU or Auditory Response Unit. This is referencing the methodology of over the phone processing. When a merchant is set up with an ARU solution, they are given a telephone number and merchant number so they can call in a transaction, from where ever they are doing business at the time. This solution however, is limited to only Visa and Mc or credit card transactions. There is currently no way to do Debit with an ARU solution.
- Virtual Merchant or Virtual Terminals. Very similar to an ARU set up again this product is only available for Visa and Mc or credit card transactions. Instead of a phone number, the merchant is issued access to a url, where they will enter their transactions online from anywhere they are, all you need is internet access and a virtual merchant is accessible!
- E Commerce. This is an ever growing solution and lined to Website processing. If a merchant is looking to do mobile transactions from their website, then E commerce is the solution. This is also mobile in that, customers can purchase online at any time.
- Virtual Merchant + Pin Pad Hybrids. This is Exactly like the Virtual Merchant as explained as option #2, however, there is an external pin pad that plugs into the computer, which allows a merchant the option to swipe a card and do Debit and Credit Card transactions. This is a fabulous mobile solution as you can take any payment type physically and still have the convenience of a Virtual merchant account for instances where you don’t have the pin pad with you.
- Cellular Terminals. Just like a cell phone, the cellular terminal is completely wireless, and offers the benefits of all 4 afore mentioned solutions. With a wireless terminal you can always swipe a transaction for Debit or any Credit cards. This is the best mobile solution as a merchant will always have the security of a physically swiped transaction.
There are constant changes and additions to these types of acceptance solutions as merchant services have to pave the way for new mobile options to keep in tune with the merchant’s ever changing demands. Pricing may vary, obviously with increase in convenience comes cost.
Applying For a Merchant Account? How To Help You Get Your Application Approved Quickly
July 18, 2010 by Admin · Leave a Comment
Supporting Documents Is KEY To A Quick Approval
Often merchants do not understand why they need so many supporting documents to apply for a merchant account and by being dis-organized about your supporting documents can cause the merchant account application process take longer and even cost you an approval. Applying for a merchant account is like applying for a short term loan.
Visa & Mastercard often settle up with a merchant within 2-3 business days after someone pays a merchant business via credit card and yet they wait 30 days before they collect from consumers and often don’t find out until that time whether the merchant fulfilled your services and/or products to the consumers. Because there is this huge risk of chargebacks to the credit card processing companies they are very specific on supporting documentation about your business to determine the risk factors involved in credit card processing. Therefore, they will require very specific information before they approve your account. In this article we will discuss those typically documents required and how to have them all in order to make your application process run quickly and smoothly.
Visa, Mastercard and everyone in between who provides their services is looking at your merchant application as if you are looking at a request to borrow money! So there are a few important documents we can provide right up front to make sure they receive the security they are looking for before opening this “lending” agreement. The same sort of documents one would provide for a bank loan would or can be applicable to a merchant services application. These documents fall into two Catagories:
- Business Information
- Personal Identification.
Business Information: The best sort of document to provide to solidify or confirm your Business info, should include your business name (Operating As) as well as your business’ Physical Address, such as any of the following:
- Master Business License
- Previous Processing Statements
- Gst or Business Registration Forms from the government
- Reputable online listings
- Utility bills are all great sources to help them validate your business information.
Personal Identification: The secondary type of i.d. one should provide in order to ensure a speedy approval for merchant services is related to the Personal info for merchant who is applying. Essentially, they are looking to confirm the home address so any of the following documents are great:
- Driver’s License
- Social Insurance Number
- Citizenship Number
- Age of Majority Card
- Permanent Residence card
More so than the documents themselves, what Visa and MC are really looking for is what I have coined “THE THREE C’S”.
- CLARITY
- CONSISTENCY
- COHESION
Clarity: Be sure they can see or read the entire document, copy quality is always important.
Consistency: make sure the support documents you are sending are valid, up to date and are true, in that they show the real current information for things like physical location, as you have presented it on your application.
Cohesion: it must flow, and make sense, for example, it is hard to believe one would have an industrial manufacturing business out of their home….so be sure what you are submitting is subject to common sense.
Now that you understand that applying for merchant account services is more like applying for a short term loan you can better understand their point of view. If you follow our recommended “THREE C’s” you will be more likely to receive an approval! If you would like to deal with a experienced merchant account broker who has proven track record of approvals by helping merchants organize their 3 C’s use our contact form here.
The Critical Payment Processing Guide for Canadian Merchants
March 30, 2010 by Admin · Leave a Comment
The Critical Payment Processing Guide for Canadian Merchants
Discover how this Guide has helped 100’s & 100’s of Canadian business owners cut their payment processing fees by 10-30% and sometimes much, much more. If you are brand new to merchant account services, then this is the perfect guide for you… it’s takes most people about 15-20 minutes to read.
In this guide you will learn…
- What a Merchant Account is & Why Essential You Know How Your Business Will Transact Before Applying for Merchant Services
- How Not to Be Fooled by Ethically Questionable Merchant Account Companies’ Marketing Tactics
- How to Avoid the 3 Most Common Mistakes Merchants Make When Choosing a Payment Processing Provider
- The 18 Essential Questions That Will Protect You from Costly Hidden Fees
- How to Become a Seasoned “Pro” at Understanding How Credit Card Processing Rates Work Through Real Life Case Studies
- How to Save On Merchant Processing Fees with These 3 Insider Tips
- Learn How to Find the Perfect Payment Processing Solution for Your Business Needs Without Having Any Remorse Buying
Ready to get started on the guide…? Click here to become a merchant service pro.
Where is the CVV # on Credit Cards?
July 8, 2009 by Admin · Leave a Comment
I have had a few merchants recently not understand what the CVV # is on credit cards and how they can use it to protect themselves from potential fraud and/or chargebacks. In the image (the left) shows you where to find the CVV number on credit cards.
It is a three or four digit security code on your credit card. If your customer is prompted to enter that and it matches the security code on file the transaction goes forward, if it doesn’t match it is flagged and the transaction is halted. It’s important to match this up on mail-order and telephone-order businesses. I’d also incorporate it into my e-commerce shopping cart too. It’s not a 100% fool-proof, but it is just one more measure that enables Merchants to protect them selves from credit card fraud.
Back-up Hardware
March 31, 2009 by Admin · Leave a Comment
Many Merchants today don’t have a manual credit card imprinter kicking around and that is not a good thing. Every Merchant should always have one those out-of-date “Knuckle Busters” handy with some carbon copy credit card slips.
The reason being is if your POS system is down you can quickly do a manual swipe on your customers credit card and let them proceed through the check-out without any hiccups. Doing this will enable you to still capture the card present rates and help protect you against potential chargebacks.
Now be sure to have your staff trained on these procedures of how to use this older equipment because I was a Winners the other day and their debit machine when down and the staff didn’t know how to manually process credit cards. I asked them to do it this way so I could be on my way. They said at this time they could only accept cash. I had 2 pairs of jeans in my hand and decided to leave even though a bank machine was two floors down.
I was not the only customer that did this. And most people would just leave.
If they had been trained right on the back-up procedures of how to process a credit card through a manual imprinter then they would made an additional $150 worth sales from me. Now I am sure that is hardly a blip on the sales volume of a Winners, but multiply that by how many times the POS system goes down in a year by lets say 10-15 customers by 100′s of locations and we are talking 100′s of thousands of dollars a year in missed sales all because staff was not trained correctly on how to process credit cards manually.
Technology is great, but only when its working. You can buy an inexpensive credit card swiper here.
Accept Credit Card Payment With Your iPhone!
March 2, 2009 by Admin · Leave a Comment
Ever since I purchased my iPhone about 6 months ago, my mind has really opened to where mobile payment processing is going. Just look at this awesome application for payment processing on the iPhone.
It is my personal opinion the future of merchant accounts and the payment processing industry is going to be very closely tied to our mobile phones.
Too bad it only works with US merchant account(s). I think I will try and get this iphone app to work with a Canadian Merchant Account service provider.
Does anyone know of an iPhone credit card processing application that works with a Canadian Merchant Account provider…? If so, please let me know in the comment section below.
Why do Different Payment Processors Have Different Rate Structures?
January 9, 2009 by Admin · Comments Off
Many different processors are out there who offer merchant services. Weather the services are provided through a Member Bank or ISO, every application is subject to a very similar adjudication from Visa and Mastercard. Different processors do however, have different rate structures. There are a few reasons as to why these differences exist.
Let’s look at two of North America’s top two providers of merchant services, Elavon and First Data Merchant Services.
Elavon broke through the industry by offering rates that are closer to interchange than any other provider. How were they able to do this?? Well, they came into the market through Costco, a very big business buyers club who deal exclusively with Business to Business retail. As Costco was already dealing with a customer base made up solely of business owner’s, they saw the potential for their entire customer base to utilize their own Merchant Services program. Costco was able to ensure Elavon a certain volume of processing annually, so in turn, Elavon was able to offer rates lower than competitors at the time. This is one of the factors that will cause a major difference in a rate structure: the very volume of customer’s the processor has, will allow them to be more competitive. When providers host these buying clubs, they can charge a different rate structure as again, the volume is guaranteed to make them money.
On the opposite side of the spectrum, some providers like, First Data Merchant Services, have higher rates. This is a result of a few different factors, the most prominent being the RISK involved in hosting an account. When the risk of loosing money on processing for a merchant is evident, the provider will charge a higher rate right at the point of transaction, to ensure that they cover any assumed losses. The riskier the business, the higher the rate; To protect the provider from loosing money right from the point of purchase. Allot of merchant services will not provide credit card processing at all for potentially high risk accounts and restricted business types, so merchant’s will pay the higher rate just to be able to offer the services.
The way in which the processors present their rate can sometimes be different as well. Right now in the industry, processors have Interchange, the basic “cost” handed down from Visa and Mc. Sometime, processors will have “tiered” transaction pricing, meaning that for qualified cards you pay one rate, and for specialty, club, corporate or points cards, there is additional rate structure. Other processor lump everything together, for one base rate. So depending on how the processor’s presentation of the rates, you will see a difference.
At the end of the day, the differences between what the processors provide are minimal. Every processor is victim of interchange and the rates will only differ depending on the processor’s customer base, the risk involved in boarding the account and the way in which they present the different levels of card processing costs. It is best to do research when looking for a provider and remember that the differences in the rate are subject to negotiation as well.
Canada Inches Closer to Mobile Payments
November 13, 2008 by Admin · Leave a Comment
It is my belief that all card processing will eventually be replaced by our mobile phones. With Near Field Communication passing more and more tests, this new technology may replace who we transact in Canada’s marketplace.
The was a very interesting post well worth a read over at ElectronicPaymentsInternational.com on this very subject matter that you may find an interesting read.
You also may want to read this post titled:
Mobile Shopping – Another Reason Why Small Business Owners MUST Get Online!
What are your thoughts on where the Canadian payment processing market place is going…?
Internet Merchant Accounts – What You Need to Know!
September 27, 2008 by Admin · Leave a Comment
There are three main components to make a E-commerce Payment Processing Solution work.
- Shopping Cart
- Payment Gateway
- Merchant Account
The Shopping Cart
The Shopping Cart is the Database that enables your customers to choose what products they would like to purchase on your website. When they are ready to purchase a item they will click on the shopping cart icon, which will lead them to your Secured Gateway Page. Most Web-hosting providers offer and shopping cart feature that can be provided for your website.
WARNING: Before choosing your shopping card service provider, make sure you know who your ‘Gateway’ and ‘Merchant Account’ providers will be and that they approve your shopping card service. I have seen many frustrated Small business owners design their sites and make their agreements with a shopping cart service only to later find out that the shopping cart service is not a approved vendor from the ‘gateway’ provider. Not usually an issue because most ‘gateway’ services approve many shopping cart service providers, but it is always better to work backwards before implementing into your website.
The Payment Gateway
The Payment Gateway is the component that provides the secure credit card processing. The Gateway will check to make sure the credit card information is correct and processing the order securely. Usually handled by the Merchant Account Provider depending on what Shopping Cart System you are using. Gateway services usually have a monthly fee of $20 – $60 a month depending on the service provider and sometimes a transaction fee too.
The Merchant Account
Merchant Accounts are your own specific account numbers that have been set-up to track and your processed payments for your credit cards, such as, Visa, Master Card, & American Express. Rates can vary on E-commerce Merchant Accounts from as low to below to 2% to as high as 4%. (High-risk accounts can be as high as 4-12%). Discount Rates are traditionally higher then their sister retail rates due to the fact that cards are not present for the transaction and it creates a higher risk for credit card fraud. In the industry this is called ‘Non-Qualified’ rates.
What You Must Have On Your Website Before A Payment Processor Will Accept Your Internet Merchant Account Application?
If your website is not built then there is no point in submitting an application for internet merchant accounts. You also need to have the following clearly listed on every page of your website particularly on the check-out pages:
- Privacy Policy
- Terms of Use
- Refund Policy (you don’t have to provide refunds, you must state what your policies are.)
- Shipping Policy and costs (it is not enough to simply state there are shipping costs – you must show exactly how much.)
- Your whois info must match the same information on your application
- Your contact numbers found on your website must match the same contact numbers as on your application
- Your business must not fall under the ‘restricted list‘ of business models
- a SSL Shopping cart
Now your site may not be ‘live’ yet, but you must provide a guest login so the merchant account underwriters can review your site for the above aspects. If your credit checks and you meet all the requirements above you have good chances at getting approval. Now you approval may be conditional on ‘going-live’. What this means is they will approve your account and give you all the goods to connect your merchant account to your gateway and shopping cart, but will not deposit any monies to your account until you show them this all ‘live’.
