Blog Posts

23 Apr, 2015

The benefits of interchange pricing versus tired pricing in merchant credit card processing and acceptance.

By: admin
Category: General

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.

22 Apr, 2015

What are the most important factors to consider when selecting a credit card processing company; to process credit cards for your business?

By: admin
Category: General

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.    

21 Apr, 2015

“Chip-Card Rollout Has Banks, Retailers Scrambling To cut credit-card fraud, issuers are embedding chips; merchants say they can’t get card readers fast enough”

By: admin
Category: General

Chip card in credit card processing Article Re-posted by Centurion Payment Services. By Robin Sidel (All content is 100% written by Robin Sidel, re-posted by CPS) EXTON, Pa.—Inside a one-story brick factory surrounded by a locked chain fence, more than a thousand workers toil in a plant that operates around the clock to help U.S. banks catch up to the rest of the world in credit-card security. The owner of the plant, Oberthur Technologies, is racing to meet the banking industry’s demand for new cards embedded with a computer chip in addition to a traditional magnetic strip. The goal: to reduce card fraud by making it harder for thieves to create counterfeit cards. Some 575 million of the new cards—representing about three-quarters of U.S. credit cards and about 40% of debit cards—are expected to be in the wallets of American consumers by year-end, making it the biggest rollout of new cards in decades. Total Return A Chip Card Doesn’t Guarantee Greater Security Why New Credit Cards May Fall Short on Fraud Control (Jan. 4, 2015) Chip card, which have been used throughout Europe, Asia and Canada for years, are coming to the U.S. after delays from banks that issue cards and the merchants who accept them. But challenges remain: Even though tens of millions of new cards have already been shipped to customers, only Wal-Mart Stores Inc. and a few other large retailers so far have upgraded their payment terminals to accept the new plastic. Target Corp. , which had a massive breach in late 2013, has upgraded its terminals and plans to start accepting chip card in the late spring, according to a spokesman. ENLARGE Many merchants are also griping that they won’t meet an October deadline, when the liability for fraudulent transactions will under certain circumstances shift from card-issuing banks. Advertisement   Chip card are great A trade group representing tens of thousands of grocers and pharmacies last month asked Visa Inc., MasterCard Inc., American Express Co. and Discover Financial Services to delay the October deadline until 2016, citing backlogged orders for new equipment. It also expressed concern about potential delays in the checkout line during the holiday shopping season because consumers may be confused about how to use the cards, which must be dipped into a reader rather than swiped. So far, the card networks haven’t given any indication they will delay the plan. As an additional complication, some small banks are saying they won’t start issuing the more secure cards until next year at the earliest. Previously MasterCard’s Carolyn Balfany discusses chip-and-PIN technology with Paul Vigna on MoneyBeat. (June 2014) Credit-Card Industry Ramps Up Security Efforts (Sept. 4, 2014) “Some of [the small banks] are struggling with the complexity of it, and the cost is a factor,” said Jamie Topolski, director of alternative payment strategies at Fiserv Inc., which is helping small banks navigate the transition to chip cards. The cards are as much as five times more expensive to make than traditional cards, costing roughly $1 each. Even for small banks, that could be an added expense of tens of millions of dollars, a big tab at a time when they are being squeezed by low interest rates and heightened regulatory requirements. Card-issuing banks hope that the extra expense will be offset by a decline in fraud costs. “We want them, and we hope the benefits outweigh the costs,” said Doug Gulling, chief financial officer of West Bancorp. Inc., which has $1.5 billion in assets. The Des Moines-based bank, which operates 12 branches in Iowa and Minnesota, will start introducing chips on its debit cards next year. The new cards are considered more secure because the chip creates a unique code for each transaction, making it more difficult for thieves to replicate the cards with stolen data. Traditional cards with a magnetic strip contain static data that can be duplicated, including account numbers and expiration dates. Card manufacturers say that they are having a hard time convincing some financial institutions that the cards take longer to make than traditional cards, especially if designs need to be altered to make room for the computer chip that is embedded on the front. “The large issuers are very sophisticated and have been working on this for years, but there are some people that are just scratching the surface,” said Steve Montross, chief executive officer of CPI Card Group, a manufacturer that shipped about 70 million chip cards to U.S. issuers last year. ENLARGE Chip card representation   Chip cards represent about 80% of the cards being made these days at the Oberthur plant, which has a capacity to produce 20 million cards a month and is located about 30 miles west of Philadelphia. The company bought the Exton plant in 1999 as part of a plan to gear up for chip-cards production, thinking they were around the corner. “It took a very, very long time, and now it’s happening on an accelerated basis,” said Martin Ferenczi, president of North American operations for Paris-based Oberthur, a printing firm founded in 19th-century Paris that has morphed into one of the world’s leading manufacturers of credit and debit cards. The plant now employs 1,080 workers, up 68% since 2013, and it recently shifted to round-the-clock operations. Security at the plant is tight. Workers who move through different sections of the facility must pass separately through multiple sets of locked doors that can only be accessed electronically with an identification card. The plant was humming on a recent morning as nine rows of cages filled with hundreds of thousands of half-finished credit and debit cards waited for their chips. The nation’s largest financial institutions are ahead of smaller banks in getting the new cards to their customers. J.P. Morgan Chase & Co., the nation’s largest credit-card issuer, has issued more than 19 million chip cards so far and expects to have more than 70% of its credit-card portfolio converted by year-end, a spokesman said. The company has started issuing debit cards with chips in Arizona and Illinois and will be rolling them out nationally over the next few months. Citigroup Inc. has issued more than 12 million chip cards in the U.S., representing more than half of its portfolio. The big bank plans to start issuing chip-enabled debit cards this year, a spokeswoman said.