How to Stay Off the MATCH File

Even if you’ve never been on the dreaded Terminated Merchant File (also known as MATCH) list, you need to take measures to ensure that you don’t end up on it. Lowest Merchant Account Fees

How? For starters, rethink whom you do business with. Signing up with the wrong processor greatly increases your chance of landing on the MATCH file, especially for incidental reasons like fee discrepancies.

Sign up with reputable processors and have a thorough understanding of the provisions in the merchant account application, particularly the contract period and any associated termination fees. Also, it’s a good idea to understand the rules of Visa and MasterCard. Knowing about the MATCH file and the general regulations of Visa and MasterCard can help when trying to get off of it – or stay off.

Preventative measures can help you to stay off the TMF – measures such as fraud detection and an effective transaction management system that prevents mistakes like authorizing transactions multiple times, charging canceled cards and other oversights.

Tips for staying off the TMF list:

• Don’t go over your officially authorized maximum sales without permission from your merchant processor.
• Provide your customers with up-to-date information about how and when you will debit funds from their accounts. Give them easy access to contact methods for them to reach you with any of their questions, concerns or complaints. Respond to all inquires in a timely fashion.
• List your customer support phone number on your customers’ monthly statements. If they don’t recognize your debit they should call you first before hastily-and mistakenly-disputing the charge.
• Provide excellent customer service and stay in touch with your customers. Send emails, call them to confirm higher-than-normal charges or to solicit customer feedback, and send newsletters. The more they know you the better the more they will feel comfortable with and trust you.
• Monitor transactions closely with a transaction management system, so that you can protect your business from an expensive interruption of service.

MSIQ is dedicated to saving merchants money on what they already have to pay. We believe that educating our merchants about the industry is the best way to earn and keep your business.

We perform custom rate analysis free of charge no obligation to any merchant who asks.

Where are Some Types of Online Fraud Coming From?

According to the U.S Internet Crime Complaint Center in 2004, there were more than 207,000 internet fraud reports in the United States alone. One type of online fraud that most people are familiar with is a scam run on Craigslist where the seller receives an email from a prospective buyer offering to send a cashier’s check to purchase the advertised item. By the time you find out the check is not valid, they have already picked up your product. In addition, they often over pay you for your item in the cashier’s check and ask for money to be sent back to them. Lowest Merchant Account Fees

Online fraud has evolved and is no longer limited to strangers and stolen cards. Fraud can even come directly from the people you hire to market your products. A type of this kind of fraud is called affiliate fraud and involves affiliate networks. An affiliate network acts as an intermediary between publishers (affiliates) and merchant affiliate programs. They are the people that you hire to drive customers to your site and manage your affiliate activity.

Affiliate fraud comes in many different forms, one of which is deceiving marketing emails that are often considered spam and can give your company a bad name. It is important to market your product or service and use email campaigns strategically. Beware of the many affiliates that may create masked domains of your web site, capturing customers who may not know they have purchased your product and causing a large number of chargebacks.

A large indicator that there is possible affiliate fraud is looking for a large amount of customers coming from the same IP address or that are using similar emails. Many times the affiliate will use a gift card or prepaid card to make purchases and when these cards get close to their next billing cycle they get declined.

There are things you can do to protect yourself against online affiliate fraud. Having a stable and reliable third party reporting system will help minimize your risk. Your software should show how many of the affiliate transactions actually continue to the next billing cycle. It is also important to have a system that has the ability to block affiliates and can provide your business with data that can be analyzed. Solid reporting systems can let you know exactly what affiliate network is sending traffic back to your website.

Affiliates still remain an excellent source of traffic for people who are looking to promote their website or products online, but caution and research should be taken when selecting and monitoring what affiliate network is best for you.

MSIQ is dedicated to saving merchants money on what they already have to pay. We believe that educating our merchants about the industry is the best way to earn and keep your business

TMF MATCH List or Terminated Merchant File (TMF) List

Some lists you want to be on-like the VIP list. But the TMF is one list you don’t want to be on. We’ll talk about what this means for your business, how to avoid getting on the TMF list and what to do if you end up on it.

What is the TMF Match List?

When you apply for a merchant account, the bank will check to see if you are on the Terminated Merchant File (TMF). If you’re on it, this means that another bank has terminated a merchant account with you, and sends up a red flag to banks that you’re a credit risk. The chances are slim to none of getting approved once your name hits the list. Getting on the TMF list is the equivalent of getting blacklisted.

How do you get on the TMF List?

Unfortunately, it’s not that difficult to get on the list but it is a challenge to get removed-even if you didn’t deserve to get on the list in the first place.

All it takes is one accounting mistake (yes, even on the bank’s end), technical glitch or dispute over billing practices and your business is in jeopardy.

So how do you get on the Match File? The most common ways include:

• Credit card fraud. If your fraud detection controls aren’t strong enough you could end up with too many chargebacks.
• Friendly fraud. This is when a consumer disputes a legitimate charge such as from an adult website.
• Factoring. Factoring is when a merchant deposits transactions for sales generated by another business.
• Excessive chargebacks-approximately 1-2% of sales.
• Fraud. Types of fraud include not delivering products or misrepresenting products or services.
• Violating the merchant agreement
• Owing money to a bank or processor

One of the fastest ways to get on the Match list is to close your merchant account and not pay your last statement. It’s a simple oversight with costly consequences. Even a matter of a couple of dollars can land you on the dreaded list. Fortunately, this is one of the easiest fixes. Read on for tips on getting off the TMF list.

If you have an unscrupulous merchant account provider, you could wind up on the TMF if your provider counts chargebacks in the month it comes in instead of the month the original transaction occurred. If you do fewer sales in the month the chargeback is processed, your chargeback percentage could skyrocket.

How to get off the TMF list

Bad things happen to good people all the time-but that doesn’t mean you can’t do anything about it. If you find out that you’re on the TMF list, there is hope-but it will take some work. If you’re thinking that you can get a new merchant account by changing your business name or having a spouse or relative sign up for you, be weary; banks are savvy to this scheme. Banks have ways of finding you out through social security numbers, ISP addresses, and public records.

Depending on why you’re on the TMF, you will have an easier-or a harder-time getting off of it. If you committed fraud, you probably won’t ever get off the list.

As soon as you find out that you’re on the TMF, call your merchant account provider-or the company that placed you on the list. Prepare to work to speak to many departments until you get in touch with the right person. You might end up being referred to the processing bank.

If you believe your business or name was mistakenly added to the Match file, you must work with the acquirer that added the listing to the file. Only the company that placed you on the list is authorized to request a change or deletion of the information.

If your acquirer recognizes that the listing was in error, they must request the file correction immediately. Examples of errors include termination for reasons that don’t warrant a public listing such as inactivity.

To request a change or deletion, the listing bank submits its request to MasterCard International in Purchase New York. The designated individual at MasterCard will review the merchant’s explanation and listing bank’s justification for change or removal from the listing. MasterCard International reserves the right to deny the request. The listing bank must justify its reason for the deletion.

Losing your merchant account and not being able to process credit cards is stressful but try to remain calm and act courteously to every person you talk to, no matter how upset or frustrated you are. Once you reach someone that knows something about your situation-probably in the risk department-he or she should be able to tell you why you are on the match file and explain your options to get off the file. Get a direct phone number for someone that you can correspond with about the situation in the future.

If you were placed on the match file for a high chargeback ratio, time is usually the only thing that will get you off the list. Your bank needs to know that it isn’t going to get stuck with unpaid bills resulting from the merchant’s former customers’ chargebacks. Lowest Merchant Account Fees

If you didn’t pay your final bill, you may only need to pay off your debt with your former processor. You could be re-instated after a week or so after you make payment.

On the other hand, you could face more opposition. It can take several weeks to get off the match file in many cases. Sometimes you will have to negotiate to get charges resolved or fees removed. If after a few weeks you don’t make any progress, you may need to hire a lawyer.

Processors often use arbitration to avoid taking individual cases to court. It’s cheaper than going to a court and the results are often better for both parties. If you need legal assistance in getting of the Match file, seek a lawyer with experience in bankcard law.

MSIQ is dedicated to saving merchants money on what they already have to pay. We believe that educating our merchants about the industry is the best way to earn and keep your business.

New Avenues For E-Commerce

How Can New Avenues Like Facebook Expand Your Business?

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1-800-Flowers is paving the way, yet again, for retailers to reach consumers.

The company has jumped on the Facebook bandwagon and is taking advantage of the viral social networking phenomenon. In late July, they became the first store to sell their products directly through Facebook, via a Facebook application. They simply added a “Shop” tab to their page where users can shop, purchase, and ship, all without leaving Facebook.

As one of the first brick and mortar retailers go to online, 1-800-Flowers continues to lead the pack in thinking outside the box. Started as a single flower store in the 70s, the company launched a toll-free brand in the 80s and then evolved into one of the first online retailers in the mid-90s. Already utilizing mobile phone apps and Twitter, Facebook adds another avenue where the company is finding ways to go directly to the consumer, rather than waiting for the consumers to come to their web site.

“Facebook was the world’s fourth most visited web site in June… “

According to Alexa, a web information research company, Facebook users spend, on average, 30 minutes a day on the site. This gives online retailers, with at least a Facebook “fan” page, more opportunity to capture the attention of their current and future customers. It’s about allowing the consumer as many avenues for purchase as possible.

In addition to 1-800-Flowers’ fan page, followers can also post comments, provide feedback and publish links on their profiles. The company also provides apps for iPhones, Blackberrys and Androids, as well as a basic mobile site, where consumers can shop the Mobile Gift Center and receive SMS offers via their mobile phone.

Besides being a company which seems to forge new marketing paths, 1-800-Flowers needs to throw a pretty wide net out there to catch consumers. 1-800-Flowers’ target market is larger than consumers looking to send flowers, since the acquisition of several companies over the years has expanded its basic product line to include popcorn and specialty treats, cookies and baked goods, premium chocolates and confections, gourmet foods, wine gifts, gift baskets, home décor and children’s gifts.

The company also provides apps for iPhones, Blackberrys and Androids Lowest Merchant Account Fees

With its 250 million member base, Facebook was the world’s fourth most visited web site in June, according to figures from comScore, an Internet marketing research firm. So far, Facebook has become a very strong marketing platform (hence the word “viral” that has been added to the original “social networking” term). However, based on other known security issues, the site’s payment platform still has analysts and developers wary of using the site for payment checkout. 1-800-Flowers uses an embedded transactional advertising widget, which operates as a fully functioning storefront. To serve its new e-commerce channel, Facebook is developing a new electronic payments system that might compete with Paypal. Facebook’s Vice President of Product, Christopher Cox, said “software developers who sell applications on Facebook are testing the payments system, but it is unclear whether the company will manage e-commerce transactions across the Web.”

Similar to offering alternative payments, merchants can stay ahead of the curve by regularly finding new ways to maintain their current customer base and reach new consumers. They need to be thinking – “where is my target customer spending their time?” The old adage of “build it and they will come” doesn’t apply in every situation – especially in today’s virtual world.

MSIQ is dedicated to saving merchants money on what they already have to pay. We believe that educating our merchants about the industry is the best way to earn and keep your business.

Want to Pay by Credit Card? Minimum Purchase $10.

Minimum Purchase

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“Minimum Credit Card Purchase is $10″.  If you have seen a sign like this at a retail store, you are not alone.  No matter what the sign says, if a merchant accepts credit or debit cards, you are allowed to use any card they accept for a purchase of any amount.  Merchants cannot, in any case, impose minimum or maximum purchase amounts for card payments.  Those who try to pull this off think they are being smart by avoiding merchant fees on small dollar items that may already have a thin profit margin.  What they don’t realize (or they do and think the customer will be naïve) is that they are in violation of card association operating guidelines.  They can also anger customers who must purchase more in order to pay by card.

Even if a merchant accepts all the card types, they must follow the strictest operating guideline.  In most cases, that will be Visa.  (Merchants can choose what card types to accept. For example, Costco only accepts Amex and debit cards.  However, Visa and MasterCard are grouped together in most cases.)  Violation of the minimum or maximum purchase guideline can get a merchant terminated by Visa or MasterCard (who own the dominant share of the card payment market).  Terminated merchants are put on the Terminated Merchant File list – called TMF or MATCH.  Merchants can land on the MATCH file as a result of violating the terms of their credit card agreements with either Visa or MasterCard.  Once a merchant is on the MATCH file, it is very hard to be removed.  It is considered a blacklist in the card processing industry. Click for more information on the MATCH file.

In today’s world, a merchant not being able to accept card payments will have a hard time existing at all.

Interestingly enough, some states (i.e. New York) allow this practice so long as a sign is clearly posted.  No matter, since the merchant needs to understand that they must abide by the respective card company operating guidelines.  If they violate the rules, they are terminated.  Visa and MasterCard, not the legal system in this case, rule the roost.

Merchant fees, on average, run about 2% of the sale and include items such as, but not limited to, discount and/or transaction fees, card association fees, statement fees, AVS (address verification), gateway fees and monthly statement fees.  Merchants need to accept these fees as a cost of doing business, similar to other operating fees.  Instead of focusing on the cost of accepting card payments, merchants should concentrate on the reduced risk of card payments, which are guaranteed at the time of purchase.  (Exceptions to this payment guarantee would be if chargebacks come in to play at a later date.)  In a time when cash or checks were the only option and consumers felt more comfortable paying by check, a merchant had to wait until the check cleared – and also took the risk not getting paid if a check bounced. The funds from debit and credit card purchases are deposited anywhere from 24 – 72 hours from the batch closing date.

If they violate the rules, they are terminated.

Business owners are constantly finding ways to help their profit margin – by using effective practices to reduce merchant fees and increasing customer loyalty.  Some have their POS systems set to default to PIN debit (merchant fees for debit cards are typically lower than those for credit cards).  Others offer discounts for cash payments.  No matter how a merchant chooses to operate in favor of their bottom line, they have to ensure that they are adhering to card association operating guidelines.  In today’s world, a merchant not being able to accept card payments will have a hard time existing at all.

MSIQ is dedicated to saving merchants money on what they already have to pay. We believe that educating our merchants about the industry is the best way to earn and keep your business.

The Players of the Credit Card Industry

Who are the main players of the credit card industry?

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One of the main goals of companies that establish merchant accounts is to simply a complicated process. By simplifying it not only do they make their jobs in selling the service easier, but it also makes it easier for the merchant to understand as well. As with any other business, there are also many layers of participants who make a service happen. Knowing whom all of the players in establishing merchant accounts really isn’t necessary to accept credit cards. But knowing who affects your rates and how your account operates allows you to make better informed decisions when establishing an account or working with an existing account.

The Card Companies

Without the credit card companies there would be no credit card to accept. These companies not only issue the credit cards and govern how consumers may use them, but they also govern how the merchants may accept them.

Visa and MasterCard

Visa and MasterCard are separate worldwide payment service organizations composed of member institutions. They set and enforce rules and regulations governing their bankcards, such as operational and Interchange procedures. They create advertising and promotion programs to support their brands and develop new products to serve banks and consumers and are also responsible for conducting clearing and settlement processing of credit card transactions through Interchange. They supervise the bankcard processing function within their members’ banks.

Combined Visa and MasterCard account for 83% of all credit card transactions in the United States.

American Express

American Express started off as a travel card and is often classified as a “Travel & Entertainment” card. However, it is a true credit card like Visa and MasterCard and is accepted at most types of business. American Express is the preferred credit card of many businesses and, although American express usage is far less then that of Visa and MasterCard, businesses that deal primarily with other businesses (b2b) or is frequented by business professionals may see American Express as their primary credit card being accepted. Unlike Visa and MasterCard American Express is not comprised of member banks but is its own entity. This means you need to apply directly with American Express or your merchant account provider needs to be an authorized representative to establish the account for you.

American Express accounts for 13% of all credit card transactions in the United States.

Discover Card

Discover Card was started by Sears and is the newest of the four major credit cards. Although Discover Card has more cardholders then American Express, in terms of processing it is by far the smallest of all of the major credit card providers. Like American Express, Discover Card is not comprised of member banks but is its own entity and a merchant account must be established directly through them. Unlike American Express, however, Discover Card is now partnering with processing banks to have merchant accounts established just like Visa and MasterCard.

Discover Card accounts for 4% of all credit card transactions in the United States.

Others

While Visa, MasterCard, American Express, and Discover Card comprise the overwhelming vast majority of credit card transactions in the United States, they aren’t the only credit cards some merchant may see in the normal day-to-day of operating their business. Foreign credit cards like the Japanese issued JCB credit card are fairly popular on the west coast in Hawaii. Some restaurants may accept the Diners Club card. Truck stops may accept fleet cards. Since these special cards are so limited in their use and acceptance this article will not cover them.

The Card Issuing Banks

The card issuing bank is the bank that issues the credit card. They are a licensed member of Visa and MasterCard and can also be an Acquirer (see below). The Issuing Bank solicits, screens, and approves the cardholder for a credit limit. Once the cardholder has the card, the Issuing Bank approves or declines sales the cardholder wants to make with the card, bills the cardholder for charges to the card, and collects funds from the cardholder to pay the merchant for purchases.

Acquirers and Processing Banks

The Acquirer provides credit card processing services to the merchant by acting as the communications link between the merchant and the card issuing bank. The Acquirer is a member of Visa and/or MasterCard.

Member Service Provider / Independent Sales Organization

A Member Service Provider (MSP) is a licensed broker of credit card services or banks through which business is processed. A MSP is usually an independent salesperson or company who contracts with a bank or a processor to sell credit card processing, equipment, and services to the merchant. The MSP sometimes provides back office functions such as settlement and chargeback/retrieval management, equipment-related customer service, paper storage and retrieval, and supplies. MasterCard originated the term MSP, while Visa uses the term ISO (Independent Sales Organization).

Sales Agents

Sales agents are individuals who represent a MSP/ISO. They are not members of Visa or MasterCard and are not contracted directly with a bank or processor. As a result they are not allowed to sell merchant accounts under their own business name. They must use the business name of the MSP/ISO with whom they are affiliated.

The Cardholder

The cardholder uses the credit card given by the card issuing bank to purchase goods and services or to obtain a cash advance and receives a monthly bill from the card issuing bank for every purchase or use of the card. The cardholder is expected to sign the back of the card and limit its use to only authorized users, stay within the assigned credit limit, and pay the card issuing bank all or a minimum amount of the balance when the monthly bill is received.

The Merchant

The merchant provides goods and/or services to the cardholder. Visa and MasterCard require that the merchant be financially responsible and of good repute and adhere to all rules and regulations set forth by them. The acquirer requires that the merchant adhere to the merchant processing agreement they signed that details the prices the merchant will pay for equipment, discount rates and fees. It also spells out the terms and conditions under which the merchant will conduct credit card business, such as the card types the merchant will accept, chargeback rights, and access to the merchant’s bank accounts.

Platforms and Networks

Processing Platforms, also known as Processing Networks, are the computer networks that electronic transactions occur over each day. There are multiple networks available for electronic transactions to occur over but the merchant does not choose which platform(s) they use. Each acquiring bank establishes relationships with the processing platforms they feel would be best for their business model (usually basing the decision on cost and availability).

Not all platforms are created equally. Each platform establishes a unique API for which software and equipment can communicate with it. Thus, software and equipment cannot use a platform to process electronic transactions until it has verified that it can support that platform’s API successfully. As a result some software and equipment will only work on some platforms and not others.

When choosing a merchant account provider, some merchants will base their decision on the platforms that provider has available to them. This will typically be because the merchant has a specific piece of software or equipment that only works on a specific platform. An example would be restaurants that use proprietary POS software.

MSIQ is dedicated to saving merchants money on what they already have to pay. We believe that educating our merchants about the industry is the best way to earn and keep your business.

Why Accept Gift Cards?

The Benefits of Gift Cards

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Paper, or Plastic?

These days, consumers prefer plastic. So fulfill your customer’s demand, and replace those old-fashioned, paper gift certificates with plastic gift cards today!

Already throughout the retail industry, merchants are issuing their customers gift cards, and to keep your business competitive, you should do the same.

Gift card services can be beneficial for you and your customers….

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Merchant Benefits:

• Enhance sales and revenue. By offering customers more options and incentives to remain loyal to your business, sales will automatically increase.
• Earn interest from each gift card, from the point of purchase to the time of use.
• Encourage, build, and maintain customer loyalty. To redeem the card value, customers will revisit your store and, quite possibly, purchase more.
• “Slippage.” Unlike gift certificates, cash is not reimbursed to customers who do not redeem their full gift card value. Estimates state that approximately 10-15% of gift card balances are never used.
• Avoid theft and fraud damages. Gift cards require activation to be used and contain other security features to help minimize the risk of theft and fraud.

Customer Benefits:

• Save your customers valuable time. With this easy gift solution, customers know the recipient will get something they like.
• Let customers give the gift of convenience. Gift cards offer flexibility because they can be used at any time, at any participating location, and toward any store purchase.
• Give customers the control. Customers can easily control spending with a pre-paid, “stored value” card.

General Gift Card Information:

• Gift cards hold, or “store” a pre-paid value that can be used for purchases.
• Gift cards can be customized to fit the branding and image of the merchant.
• Magnetic stripe gift cards are processed as secure, electronic payments through most existing Point of Sale systems and credit card terminals.
• Merchants can select from various program options to better suit their objectives.
• Gift cards can hold value until the balances are redeemed or have expired, or they can be “re-loadable.”
• As further incentive to customer loyalty, predetermined rewards can be given back to customers.

…Gift cards have practically replaced gift certificates.”

With approximately 65% of Americans having purchased or received a gift card in the past year, trends show that gift cards have practically replaced gift certificates. Not only do they supply easy earnings for merchants, but they offer invaluable convenience for customers. So start expanding your business, and upgrade or add a gift card program.

MSIQ is dedicated to saving merchants money on what they already have to pay. We believe that educating our merchants about the industry is the best way to earn and keep your business.

Can You Afford to Give Your Credit Card Processing to the Lowest Bidder?

Is The Lowest Bidder The Right Choice?

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In my experience in this business, I have come across numerous merchants that got exactly what they paid for – very little.

With 80% of online shoppers using credit cards, you can’t afford NOT to take credit cards. Did you know that merchants offering credit cards as a payment option increase their profitability by estimated 50%? With the inherent advantages involving credit card processing, should you really go with your initial instinct and choose the cheapest option?

Let’s face it – we all strive to have that BMW as opposed to a Dodge Neon, and even shop around for the best appliances. Knowing this, have you ever stopped to wonder why we, as business owners, opt for the lowest bidding credit card processor for something as important as our business?

As with other products, cheaper does not necessarily equate to better. How about reliability? If your customers are charged the wrong amount, or transactions are declined due to an unreliable or inaccurate gateway, who do you think they will blame? That’s right, YOU! Consider this – is the money you’re saving using the cheapest solution worth the cost of losing future business?

Let me share with you this example, a few weeks ago, a merchant was having trouble getting cards approved on his website. He then had his funds held by his processor. His merchant services provider told him it was his gateway and conversely, the gateway provider told him it was his merchant services provider. Needless to say, this merchant chose his provider based on the lowest bid, and what he got as far as service and reliability was a whole lot of finger-pointing and denial of liability.

Is the money you’re saving using the cheapest solution worth the cost of losing future business?

I’m sure as business owners you are bombarded with calls and mailers from merchant services companies on a daily basis claiming their fees are the lowest. Fees for merchant services are an unfortunate reality, irrespective of the processor you choose, so it is important to choose the right company to partner up with. Here are some things you should know when deciding on a merchant services provider:

• Make sure whatever gateway you choose is compatible with your shopping cart software.
• Rates and fees are determined by many factors: length of time in business, percentage of sales made over the phone or the internet, type of business, personal credit rating, and dollar amount of sales per month. A typical rate should be about 2.30% to 3.5%, but some companies charge as high as 6%. Poor personal credit or business type may warrant a much higher rate.
• Do not agree to a high discount unless you are sure no other company will process your charges for lower.
• Be sure to ask about all fees involved such as Gateway fees, ACH fees, monthly minimums, Address Verification Fees, transaction fees and statement fees.
• Read all agreements closely to determine the circumstances for which your money can be put on hold.
• Find out if there will be a hold or reserve on your account. If so, how much with be held and how long will it be held for?
• What types of fraud and risk monitoring does the processor and gateway provide?
• Who do you call when you have questions? For instance, a processor offering its own gateway is a better choice since there will be fewer support calls to make in the event of service interruption.

In my experience in this business, I have come across numerous merchants that got exactly what they paid for – very little.

Take my advice, do your homework and don’t settle for the lowest bidder.