Merchants unaware of Chip Card Requirements by Visa and Mastercard, a big issue for liability if not addressed. Merchant loses chargeback rights With turnaround being rapid in the merchant processing world of sales, we know that customer service is lacking. This doesn’t only affect merchants waiting on long hold times for customer service through their processor, but it means that they are uneducated about major changes going on in the credit card processing industry. The biggest change impacting merchants is happening this year. It requires a complete terminal replacement because credit card processing is going to be done differently. Currently in Europe, all merchants use a chip/EMV credit card processing solution; thus not using the swiper on a credit card for transactions. What does this mean? Well, it means that merchants have more secure transactions; due to chip cards assigning a random code to each transaction. This random code in the chip card technology (EMV chip cards) allows for merchants to be able to have less of a risk of a data breach of credit card numbers and personal data. This is a requirement by Visa and Mastercard, and yet most merchants do not have a clue. Merchant loses chargeback rights if this isn’t handled The purpose of this blog post is to educate merchants on this change and give them the options they need, and knowledge to reduce liability by the October 2015 deadline. Why is this important? Well, if you do not have a credit card processing machine that is working through the chip system by October 2015, you will be liable for your chargebacks. An example is if a merchant sells a wedding ring to a customer and the customer has the merchant swipe the credit card transaction rather then EMV chip card run the transaction, the transaction is 100% liable to the merchant, regardless of proof due to not having a chip-card reader. If the ring was $20,000 and a customer swipes there credit card (Visa and Mastercard), this transaction could 100% be disputed, and in addition, will give the customer 100% chargeback rights and allow the customer to even keep the ring. This is a terrible and horrible risk that is not necessary, and can be avoided by getting a new credit card machine, such as a $150.00 ICT220 by Ingenico. We must make sure all merchants know this so that they can avoid being scammed by customers who know this, and Merchant loses chargeback rights I’d like to see every merchant have this machine before October 2015, so we can make sure transactions are not liable on the merchant’s side because they were not aware. This will be a costly mistake for merchants who aren’t educated, and we must change this immediately. If we do not promote this and educate all merchants, whether they are processing with our credit card processing company or not, we will see a huge issue with chargebacks and fraud. We want to avoid Merchant loses chargeback rights.
The benefits of interchange pricing versus tired pricing in merchant credit card processing and acceptance. Merchants tend to fall victim to not knowing what rates merchant processing companies are charging and tend to be uneducated in the process of learning about good deals versus bad deals when it comes to credit card processing. The purpose of this article is going outline and discuss the benefits of interchange pricing models versus tired pricing models when speaking in terms of merchant credit card processing and acceptance. The two pricing categories both have advantages and disadvantages depending on how many basis points you are paying, and how you are taking your credit cards in your online business or retail brick and mortar location. Merchant credit card processing and acceptance. Merchant credit card processing and acceptance. Interchange pricing is defined as “Merchant accounts that operate on an interchange plus pricing structure may sound more intimidating, but they’re much more transparent and less expensive than tiered accounts. On an interchange plus pricing structure, the merchant pays the exact interchange fee in addition to a flat markup to their merchant service provider. This eliminates inconsistent buckets and overpaying for inflated rates.” As a result in interchange pricing, you pay less than you typically would in a tiered model because you are not exposed to inconsistent fees and understand that you only pay above the cost of the credit card transaction ran by Visa and Mastercard (TM). The interchange fees are always set by Visa and Mastercard (TM), thus paying “above interchange pricing” is cut and dry, versus having to understand bucket rates, and why and how they fall where they do. For example, if you are a merchant that owns a bakery and are processing credit cards to sell a cookie, you would run the sale on your point of sale credit card terminal. After running a sale on the credit card terminal, anticipating you swiped the card, you’ll pay a fee above the charge of the card. What is the charge of the card? You can refer to the interchange tables (updated twice a year in April and October). Since we’re in April now, interchange fees will be rising, and its important to know them. Where do you find them? Simply look here: Visa and Mastercard to get all the interchange fees for credit card processing. Merchant credit card processing and acceptance. Tiered rates are those in which are buckets together, and less beneficial for the merchant processing credit cards. The reason that tiered rates are unfavorable versus though of interchange is because they are grouped together and are dependent not only on card type, but how you run a sale, and other conditions such as batching out transactions the bank timely, etc. These circumstances are the fundamental problem with tiered rates, not to mention you get a higher interchange charge assessed. So, you may be wondering what does it mean per card type? Well on tired rates, you are dealing with 3-6 rates, typically 3, which go from 1.69% on a retail account up to 5% in some cases. What is the factor causing the higher rates to be charged? Its if the card is swiped or keyed in as well as if the card is a debit card, credit card, rewards card, etc. These circumstances cause the card type typically to bump to the higher rate, and thus, you the merchant pays more to process the card. If you are on a straight interchange method, you will not be penalized for the downgrades. Merchant credit card processing and acceptance In conclusion, you can see there are two ways to be set up as a merchant who accepts credit card processing. These ways are important to understand, so you can understand how you are priced, and what your rates are. If you have any concerns and questions regarding how to set up credit card processing and what the best way is, Centurion Payment Services will be happy to help. Merchant credit card processing and acceptance.
What are the most important factors to consider when selecting a credit card processing company; to process credit cards for your business? When selecting a company to facilitate your credit card transactions is not a small task. Many merchants are confused by the complicated statements, contract terms, misconceptions, and fears. We hope by reading this, you can discern the differences between a credit card processor who has your best interest at hand, or a processor who has their best interest at hands. Statements in the credit card processing world are very tricky and not easy to understand. They are almost like a jig-saw puzzle that must be solved. Sometimes you may have a enhanced bill-back statement, which won’t even show current charges. Its important to know what is coming out of your bank account each month, and how to match it up with your bank card merchant services and processing history. How to select credit card processing Contract terms are very lengthy in merchant services, and also auto-renew most of the times. This is particularly bad for the merchant if he is in a “bad deal;” because he cannot get out of the contract once signed. Make sure you know contract terms and agreements. Don’t always take your credit card processing sales rep’s word for i;, as 9 out of 10 times the sales rep in the credit card processing business for Visa and Mastercard are lying and not accurately telling the right information. The reason they do this is in order to have a personal gain of the commission. Misconceptions in credit card processing is a very common thing. Most people think that machines are very costly, rates are very high, and fees should be charged for all sorts of conditions. This is not the case, in fact, credit card processing should be made simple, clear, and easy to understand. If it sounds too complicated, ask questions to your credit card processing and merchant services account rep. Do not allow a merchant services and credit card processing account rep confuse you without understand what it is they can offer you, so you do not have any misconceptions. Is credit card processing for you? Fears are a driving factor behind merchants who select a credit card processor. The reason is, mostly everyone has been lied to. Like I said previously, 9 out of 10 merchants are mainly lied to in order to be closed so I rep may earn his weekly commission. This thought process is very dangerous to yourself as a merchant when selecting a credit card processor, because you may turn a good deal down based upon fear of being exploited when, in fact, a deal is actually good or better than you are in; it comes down to knowing the facts. So if you need credit card processing, we hope you found this useful.