Daily Discount Nightmare Compared to Monthly Discount!

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Most merchants get charged all their credit card processing fees at the first of the month following the month when the transactions took place. Credit Card deposits each day match their cash register daily credit card deposit summary. At the end of the month the deposits on their merchant account monthly statement match exactly their bank statement. This is called Monthly Discount. Sometimes a merchant … Read More

Fees on Refunds

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When a merchant runs a transaction, the amount is assessed a rate and a transaction fee. Generally the rate is an assessment of risk and the transaction fee is a cost for accessing the digital network. When the merchant refunds a transaction, only a transaction fee is charged. The rate is not charged a second time because there is no risk of default, but the … Read More

How to Compare One Processor’s Rates to Another!

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Not a simple question. Not a simple answer. There are two things you can do. At the beginning of a new card processing relationship, you may not think you will have a reconciliation problem. You don’t expect trouble with technology. You may naively think you won’t need help with PCI. In fact, things may click along for a year without a major hiccup. But when … Read More

Understanding “Pass Through” Fees on Your Merchant Statement

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Your processing salesman told you about rates and transactions fees. But what are all those other fees called assessments, acquirer fees, wats fees, FANF fees, Nabu Fees, etcetera, and etcetera and etcetera? The interchange rates and transaction fees are what the issuing bank receives for issuing your customer credit. On top of that are assessments which go to the brands, Visa, MasterCard, Discover and American … Read More

Merchant Scam Alert: Avoid Force or Offline Transactions, the Social Engineering Scam

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A scammer with a stolen or fake card attempts a transaction. The merchant receives a decline, but the scammer pretends to contact their issuing bank and tells the merchant they received an authentication code. The scammer instructs the merchant, per their bank, to use the code and force or create an “offline” transaction. The merchant enters the code, completing the false transaction. The scammer walks … Read More

Bonus Secret! – Inquire About the “Services” in Merchant Services

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Ask questions about the servicing of your account. Ask for the 24/7/365 help desk number. Dial it and see how long it takes someone to answer. If a time comes that your terminal is down and people are standing in line to pay you, the last thing you need is to be on hold for 30 minutes before your technical support answers their call. Ask … Read More

Secret #3 – The Myth about the Effective Rate

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The effective rate is the total monthly cost of credit card processing divided by the volume of processing. The effective rate usually varies from 1.5% to 4%+ depending on the merchant’s industry and type of transactions. If a merchant receives mostly debit cards which have a low risk and low interchange rate, the effective rate will be a lot lower than a merchant taking transactions … Read More

Secret #2 – The Secret of the So Called “Hidden Fees”!

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These are possible, extra surcharge fees for the processor. They are not usually included in a rate comparison, so look them over carefully on the processor’s application. Many times these fees are not listed on the credit card processing salesman’s comparison. They are only on the application. Many times they are denoted in very small print. So ask to review the application. Review every fee … Read More

Secret #1 – Are you being proposed Tiered Pricing or Cost Plus Pricing?

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There are three determinations of the fees for accepting credit cards: the interchange cost, the brand fees and the processor’s surcharge. This is the rate and transaction fee set by the bank associations to collect “interest” on the money “loaned” to the cardholder for 30 days until his credit card payment is due. The bank that issued the card to the customer, who is handling … Read More