Merchant Account Basics

 

What is "real time" and how does it work?
Real time simply means your website is configured to operate without any interaction on your part 24 hours a day, 7 days a week, 365 days a year. Your customer visits your website, completes your order form or shopping cart and inputs their credit card number to complete their order. You are notified via email that a customer has ordered from your site. All you have to do is fill the orders!

What is a merchant processor?
The merchant processor (such as First Data, NAB, CardService Int'l, etc.) is an intermediary between the respective companies when performing transaction authentication (such as Visa, MasterCard, Amex, Discover, etc.). . In most cases these, companies do not work directly with the merchant. They simply are the focal point between all parties involved in the transaction process. Credit card companies, banks, and payment gateways all move data through these companies.

Why is the discount rate (%) and transaction fee lower for retail merchants?
Retail credit card sales require a signature at the time of sale, and the customer usually receives the product or service at that time. Merchants who conduct this type of business will generally qualify for the lowest discount from the bank. When you see low rates advertised, it is usually for face-to-face retail sales. Telephone, internet and mail order businesses are charged a higher discount rate because of the increased risk associated with this type of business transaction. If a card is not present at the time of the sale, the likelihood of fraud increases. Moreover, there is an increased chance that a customer will claim to have never received the product.

Discount rates can vary from 2.35% up to 6%. Some businesses will pay a higher discount fee than others. Businesses such as adult, telemarketing, gaming and travel will be assessed a higher discount rate than standard business rates. Please inquire for the current rates for your business type.

Is there a merchant service telephone number I can call if I need help?
All merchants will have toll free technical and customer support to help you handle any problems or questions.

What credit cards can I accept?
When your merchant account is approved, it will provide you with the ability to accept MasterCard and Visa. American Express & Discover applications can also be submitted for you if you wish to apply for these cards. All other major credit cards to include Diners and JCB can be added to your merchant account free of charge at any time. Simply contact your account representative and they can assist you in applying for these other card types.

Are there any hidden fees?
You will receive full rate, fees, terms and conditions information with your application. There are no hidden fees. The only time there could be a fee variance is if the bank may not approve you under the standard rate. This could occur if the bank feels that your business type or products are high risk or your personal credit does not warrant the standard rate. At that time, however, you will be notified that the bank has approved you under the "non-standard" rate, you will receive a new Schedule of Fees and have the option of accepting or declining the approval.


Are there any monthly minimums?
Yes. The monthly minimum discount required by the bank is $25.00.

Nearly every bank requires a monthly minimum business volume to merchants that accept credit cards. Minimum volume may vary from bank to bank. The monthly minimum business volume is based on the percentage and transaction fee charged by the bank for each credit card transaction processed by the processing company.

To calculate your monthly minimum business volume, use the following formula:

Total credit card sale x discount rate = $$$.xx + transaction fee = $xx.xx. This is the amount applied towards the monthly minimum for this credit card sale.

Using real numbers, let's assign a dollar value to the credit card sale. Your total credit card sale was $1,000.00 x 2.39 (discount rate) = $23.90 + .35 cents (transaction fee) = $24.25. $24.25 is the amount that has been applied towards your monthly minimum. If you had no other sales for the month you would owe the bank .75 cents ($25.00 - $24.25 = $0.75) to get you to the monthly minimum. This would be deducted from your bank account.

If you had no sales for the month, you would owe the bank $25 plus any other monthly fees such as your bank statement fee.


How do I get my money?
Funds are electronically deposited directly into your checking account. The money from your credit card sales will be deposited and available in most instances within two to three business days

Do you charge a setup or application fee?
Yes, there is a setup fee. We do require that you provide a credit card number for payment of your account at the time your application is submitted. You will not be charged until your account is approved and ready for use.

Why am I asked my average sale price?
Banks have implemented procedures to evaluate a merchant's processing. For security and fraud control purposes, if a sale is well over the stated average ticket size, the Security Department may call the merchant or credit card customer to verify the sale's legitimacy.


Do I have to get an account with your bank in order to apply for a merchant account with you?
No. You do not have to obtain a bank account with us in order to apply for a merchant account. Our processor does not provide these types of services. They deal only with credit card processing. You will need to obtain a business checking account with a local bank. Sole proprietorships may use a personal checking account.


Can you explain "Qualified", "Partially Qualified" and "Non-Qualified" transactions for Internet or Mail Order/Telephone Order accounts?
QUALIFIED TRANSACTION CONDITIONS FOR INTERNET ACCOUNTS
- One electronic authorization request is made per transaction and the transaction/purchase date is the same as the shipping date. The authorization code must be included in settled transaction.
- The authorization request message must include Address Verification Service (AVS).
- The transaction/shipping date must be within 7 calendar days of the authorization date.
- The authorized transaction amount must match the settled transaction amount.
- The settled transaction data must include the merchant's customer service telephone number, the order or invoice number, and the total authorized amount.
- Additional data is required in the settled transaction on all Purchasing and Commercial cards at non-T&E locations (Purchasing card - customer code and sales tax; Commercial card - sales tax)
- The transaction must be electronically deposited no later than 1 day from transaction date.

PARTIALLY QUALIFIED (PQ) TRANSACTION CONDITIONS FOR INTERNET ACCOUNTS
- One or more of the Qualified conditions were not met. OR
- The transaction was electronically deposited more than 1 day but within 2 days of the transaction/shipping date.

NON-QUALIFIED (NQ) TRANSACTION CONDITIONS FOR INTERNET ACCOUNTS
- One or more of the Qualified or Partially Qualified conditions were not met. OR
- The transaction was electronically settled more than 2 days from the authorization date. OR
- Commercial card, World MasterCard, or Visa Signature card accepted at a T&E location. OR
- No additional data in the settled transaction on Purchasing and Commercial card at non-T&E locations. (Purchasing Card - customer code and sales tax; Commercial Card - sales tax). OR
- Visa Infinite card accepted. OR
- Transaction was not electronically authorized (voice authorization) or the authorization code was not included in the settled transaction.
- The customer is using a Corporate or Government-issued credit card.
- The customer is using a credit card issued by a Foreign Bank

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