The Authority For Merchant Services.

MERCHANT SERVICES

Merchant Services is the term used to define a broad category of financial services used by businesses. It usually refers to the service that enables businesses to accept payments from their customers by use of the customer’s credit or debit card. The term Merchant Services in a more general sense includes the following:

• Credit and debit cards payment processing
• Check guarantee and check conversion services
• Automated Clearing House check drafting services
• Gift and loyalty card programs
• Payment gateway
• Email Marketing
• Direct Mail Marketing
• Merchant Cash Advances
• Online Ordering Systems
• Point of Sales Systems (POS)

History of Merchant Services

Believe it or not, Merchant Services started back in the 1920′s. People started to use credit cards when hotels and oil companies issued the cards to their employees. Both employees and customers started using the cards to buy goods and services from the companies that issued the cards. The cards came personalized with the customers name on it. The first universal credit card (those like we use today) was introduced in the 1950s by Diners Club. With this system, the credit card company charged cardholders an annual fee and billed them either on a month or even yearly basis. Later came the bank credit card system. Under this method, the bank credits the account of the merchant as sales receipts are received. This process sped up the cycle and therefore the merchant was able to receive his funds much faster, than in the past. It also allowed them to assemble charges to be billed to the cardholder at the end of the billing period. The cardholder, in turn, pays the bank either the entire amount or in monthly installments with interest.

Merchant Services has evolved since its inception. Long gone are the days of the manual system, where business owners had to make a manual imprint of the card, fill out the sales draft, get the customer’s signature, and then physically “batch” them together and take them to the bank. While the Merchant Services industry evolved, improvements like voice authorization/ point of sale authorization came into being. The process that we use today is the Electronic Data Capture (EDC). By swiping the card the business owner gets the POS authorization; however the business owner does not have to make a physical bank deposit. At the end of the day, the business owner electronically batches the information held within the terminal and the deposits are made automatically to the merchant’s checking account within 2 business days.

Merchant Services – What to Expect?

Service is Critically Important: If you are looking to set up merchant services for your business, the most important criteria to consider is to check if the merchant service provider would provide local support or customer service. Imagine this, if you have a service requirement or faced with a defunct terminal, and you are desperately trying to reach the guys who set you up with the merchant services, while you have a line of customers waiting, you wouldn’t want your call to be received by a voice mail. Check with the merchant services provider’s existing clients regarding the level of field support they provide. A dedicated customer support representative who would answer your call 24×7 and service your needs quickly is the ideal type of service that you should be looking for.

Read the Small Print: When you set up merchant services for your business, it is recommended that you carefully read all applications, forms and contracts mailed; and of course the small print. Look for details regarding the fees quoted to you and make sure that the fees in your agreement is the same as what the sales representative told you. If there’s ever a dispute, the fee quoted on your printed agreement holds more value that what your agent quoted over the telephone. Also, check if you are entering into any sort of contract with the merchant services provider so that you are aware of the consequences of exiting the contract, if you consider doing so.

Avoid Leases: The equipment or software that you set up when you establish merchant services for small businesses can usually be purchased for as little as $100 to $400. But some sales agents will try to talk you into leasing the software or equipment. Don’t do it. The only one who benefits from this type of lease is the sales agent who gets a fee for selling you the lease. A lease on a $400 piece of equipment is usually non-cancellable and can wind up adding $1,000 or more to the actual price of what you leased. If you are currently under contract, find out if there is a cancellation fee for leaving your current processor.

Choosing the best merchant services provider for your business can be a tedious task At Interchange Minus, we recommend the best merchant services provider near you. Interchange Minus performs an unbiased comparison and review of all the merchant services providers in your city by focusing on those merchant services providers that are locally situated in you city so that you experience the local field support and customer services from a dedicated agent, rather than a national processor. Interchange Minus also reviews the customer satisfaction level of all the merchant services providers by check their claims with their existing clients. Interchange Minus knows that it may be time consuming, tedious and overwhelming for business owners to compare rates and fees among merchant services providers. So, Interchange Minus does all of the above and then recommends the best merchant services provider in your city so that you can start saving on your processing costs while enjoying quality merchant services and great customer services.

Merchant Services Fees – If You Can’t Avoid It, Minimize It!

Accepting credit cards from your customers at your POS has several benefits of increasing sales revenue and providing payment option flexibility to customers. However, merchant services comes at a cost. The most important factor in credit card processing cost is Interchange, which in layman’s terms is the fee charged by the card associations like Visa and MasterCard to carry out the processing. Most merchant services providers arrive at their discount rate by padding the interchange with a mark up. Interchange cannot be avoided, however you can partner with merchant services providers that provide competitive discount rates and low transaction fees.

In most situations, merchant services fees refer to more than 40 types of fees that can be charged to a business owner for credit card processing. Listed below are the most commonly charged fees.

• Discount Rate Per
• Transaction Fee
• Monthly Minimum Fee
• Statement / Service Fee
• Annual Fees
• Internet Monthly Fees
• Monthly Service Fee
• Debit Fee
• Authorization Fee
• Batch Header Fee
• Set Up Fee or Training Fee

However, it is recommended that you do not judge merchant services providers based on the discount rate and transaction fee solely as several merchant services providers tend to maintain just the discount rate and transaction fee low and pad several other fees to increase the “effective rate”.

Let’s be realistic – There is no such thing as zero Merchant Services fees. When you accept credit cards as a means of payment from your customers, it means that you are paying the following:

• Interchange to associations like Visa, MasterCard, AmEx etc.
• Credit Card Processors also have built in fees to actually “process” the payments.
• Merchant Services Providers / agents charge yet a third rate to generate a monthly commission for themselves.

While the 1st fees cannot be avoided, the 2nd fees can be negotiated with your processor and the 3rd fees can be totally done away with if you choose the right processor. As a business owner, it may be time consuming and tedious for you to find a good merchant services provider that would eliminate most of the processing fees while continuing to provide good customer service for your merchant services. Interchange Minus makes things easy for business owners by recommending the most cost effective merchant services provider near you after comparing and evaluating several merchant services providers in your city based on not just their rates, but their customer service too. There is a reason that Interchange Minus works the way it does. In a drive to facilitating the best for businesses, Interchange Minus understands the significance of having a local merchant services provider who can serve you with a smile and a handshake. The significance of having a merchant services provider who has a dedicated agent to service you goes a long way when you need help in understanding your merchant services statement, having your queries answered, getting high quality customer services, and receiving competitive rates for your processing.

Best Way to Accept Credit Cards – Save Big!

Once you set up Merchant Services, there are several ways that a business can accept credit cards. A good processing agent will be able to educate you about the best way to accept credit cards depending on your business and the industry that you operate in.

• Credit Card Terminal – Swiped or Keyed
• Mobile Phone

Credit Card Terminal – Swiped Transaction: This type of transaction is for business owners whose business is primarily face-to-face. This gives them the ability to swipe the card present through the credit card terminal. This method is the best way to accept credit cards as it is most secured and greatly reduces the risk for fraud. As the associated risk level is low, the business owner receives the lowest possible discount rate available for his type business. The best way to accept credit cards when the card is physically present is through a swiped transaction and this is characterized by the following:

• Proof that the card was present at the time of the transaction
• Signature on the sales draft
• Promised goods/ services must be delivered at the time of sale

Credit Card Terminal – Keyed Transaction: This type of transaction is for business owners whose business is conducted without having to be face to face with the customers; or the card is not present at the time of sale; or in some cases, the processing terminal is unable to read the card. In a keyed transaction, the business owner needs to key-in the credit card number, expiration date, the billing address and zip code. This may be the best way to accept credit cards for businesses that accept sales over the mail or telephone. However, due to the higher level of risk associated to a keyed transaction, the rates are higher to cover the increased risk of fraud.

Mobile Phone Transaction: Mobile phone credit card processing is the best way to accept credit cards anywhere you are with your current cell phone and an inexpensive mobile credit card processing app. The benefits of mobile phone credit card processing are plenty and as follows: Real-time validation and payment processing, Competitive per-transaction fees and low rates (both for keyed-in and swiped transactions), Compatibility with a variety of merchant accounts and payment gateways, Easy online management and integration with accounting software, Additional features like GPS location reporting, signature capturing and email/text receipts. Whether you’re business requires you to travel to your customer’s location – in the case of home delivery, in-home services; or if your business is conducted in a kiosk or in a mobile environment like taxi rides, the best way to accept credit cards is through your mobile phone using a card reader than can be connected to the audio jack.

Interchange Minus only recommends those merchant services providers that have dedicated agents who would be able to answer all your queries on processing. The recommended merchant services provider will also be able to give you tips regarding your processing that will help you save while you continue to enjoy quality merchant services.