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.

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.

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.

Types Of Merchant Accounts

In the world of credit card processing one size does not fit all

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Businesses operate in different manners and this affects the kind of merchant account they will have. It is important for a merchant account provider to establish a merchant with the proper account during the application process as to prevent the many problems that can arise if the merchant is improperly classified. Having the proper merchant account not only helps to keep a merchant’s rates to a minimum, thus saving them money, but also helps to protect against fraud and chargebacks.

Retail (Card Present)

A retail business is face-to-face with their customers and can swipe their customers’ credit cards through a credit card terminal and process them in real time. Brink ‘n Mortar retail stores are typical examples of a retail business but they are not the only ones. Merchants who have stands at flea markets and have access to a telephone line and electricity can also be retail if they use a credit card terminal at their stand.

A merchant with a wireless credit card terminal is also considered to be retail. Why? Even though they may be standing on a street corner while processing their transaction they can swipe their customers’ credit cards through their credit card terminal and process the sale in real time. As a result they get all of the perks and benefits typically offered to a traditional retail store.

Card Not Present

Businesses that are not face-to-face with their customers at the time of sale are classified as Card Not Present (CNP) accounts. These businesses typically take payment in any of the following manners:

• Telephone
• Fax
• Email
• Mail

The one thing they all have in common is that the merchant is not face-to-face with the customer at the point of sale. These transactions are usually keyed into a credit card terminal or POS software.

Another for of CNP business is merchants who perform recurring billing. Although the very first transaction may occur in a retail environment (face-to-face with the merchant and swiping the credit card through a credit card terminal) every recurring transaction afterwards will not be swiped. Because these recurring transactions comprise the majority of the transaction for this merchant they would be considered a CNP merchant.

In the world of credit card processing one size does not fit all

Internet

An Internet business is very similar to a CNP business. The distinguishing characteristic between the two is how the customer’s credit card information is acquired. An Internet merchant acquires their customers’ credit card information through their website. The customer’s information is physically captured and transmitted through the merchant’s website.

A business is not considered to be an Internet business for the following reasons:

• A company has .com in their business name
• The website that advertises their products but does not take payment
• Customers place an order over the phone by reading the contents off of the website
• The merchant uses a payment gateway to process their transactions

Although some of the situations listed above are characteristics of an Internet business, unless payment is accepted through the merchant’s website, the merchant is considered to be a CNP business.

Mobile

A mobile business is very similar to a retail business. They are face-to-face with their customers at the time of sale. The main difference is that a mobile business does not have the means to process the transaction in real time. Typically this is the result of a telephone line or electricity being available at the point of sale.

To compensate for the lack of resources to process a transaction in real time, a mobile merchant typically uses a manual imprinter to capture an imprint of their customers’ credit cards and obtain a signature. This allows them to manually process the transaction at a later point in time. It also offers the mobile merchant additional chargeback protection typically reserved for retail merchants.

Seasonal Businesses

A seasonal business is only open for a specified period each year. This period is consistent and does not change from year to year. For example, a Xmas decoration store will be open every year from October through December. They won’t need their account from January through September. Seasonal businesses can have their accounts closed for the off-months each year during which they will incur no fees including their monthly service charge.

Typical seasonal businesses include:

• Landscapers
• Fireworks sales
• Xmas/Holiday-based
• Some tradeshow merchants

Seasonal merchants cannot open and close their account at random times. The months they wish to be closed must be determined during the application period. They may vary slightly based on the needs of the merchant but this is on a case-by-case basis. Merchants who were not declared seasonal during the application process typically cannot close their account on a temporary basis.

Some Businesses Should Always Accept American Express

Who Needs to Accept American Express?

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American express is the 3rd most widely used credit card in the US. Depending on who your customers are, not accepting American Express may be a very poor business decision.

A typical retail business’s credit card acceptance percentages will look something like:

Visa – 60%
MasterCard – 25%
American Express – 10%
Discover – 5%

10% for Amex is not a huge number, especially considering that the majority of Amex users also have a Visa or MasterCard. Amex is more expensive than Visa and MasterCard, and businesses often choose not to accept it.

When we look at businesses that sell in areas where there are a lot of business professionals, or they cater to other businesses (B2B), we see Amex percentage go up drastically. Amex has a very strong business card program that many businesses use. Something as simple as having a location near a major business center, can have a huge increase on the amount of people that want to pay with American Express.

For a moderately B2B company, the credit card usage looks more like:
Visa: 45%
MasterCard: 25%
American Express: 25%
Discover: 5%

True B2B companies will see a very large increase in Amex sales, and these can be as high as 50% or more.

Even though your customers may have a Visa or MasterCard, you may lose them as a customer if you don’t accept Amex. Businesses that take their clients out want to pay with their business card. The same thing goes for purchasing office supplies, equipment, computers, paper, food, or anything else that could be considered a business related expense. If you don’t take Amex, the people wanting to use their Amex business card will find someone else who does.

Turning down sales because they cost a little bit more, doesn’t save money because those people are no longer spending money with you.

A Business Survival Secret

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In these turbulent economic times, it is imperative that business owners seek and embrace ideas to save money. One expenditure-reduction secret hinges on this often over-looked principle: the way a business collects money may be an integral factor in how much money that business collects. By devising an advantageous accounts-receivable system, owners pave the way for favorable cash flow.

How can business owners collect money due (to them) in quicker, cheaper and more effective ways?

Cash flow is crucial to a business’s vitality. One of the primary reasons any given enterprise fails may be attributed to cash flow problems where expenses outpace revenues. Future returns cannot offset present day expenditures. Thus, by maximizing revenues, by instituting a method where a company collects payments in a more timely, efficient manner–cash flow becomes more favorable and concomitant business success appears more likely.

The operative question arises: “How can business owners collect money due (to them) in quicker, cheaper and more effective ways?” Companies specializing in outstanding payment services can implement services immediately and serve as a means of keeping owners’ prices competitive while preserving profits–a rare combination for today’s business establishments. The following provides a glimpse of several exciting accounts receivable services:

Checks by Phone: This service is especially ideal for owners whose business has a mail order component. Payment is secured via the telephone upon the customer’s authorization and deposited into the owner’s account within 48 hours. A phone checks system offers a distinct advantage over credit card processing: tremendous cost savings (as high discount/transaction fees do not exist).

Online Electronic Checks: Here, an owner may easily accept and process electronic check payments directly on his/her website. It takes less than two days for the funds to be transferred to the owner’s account (a much shorter duration than a paper check). Again, credit card expenditures are avoided as the potential number of clients increase. In addition, “impulse” purchases are more likely to occur.

Automated payments: Various companies have the software to produce bank drafts for businesses that expect to receive payments on a recurring (e.g., monthly) and/or nonrecurring basis. These drafts collect customers’ payments using automatic bank deductions from their checking accounts. Paper drafts are delivered to the owner on their due date. For larger businesses, payments may be processed through the ACH system. Using an automated payment system, owners need not worry about late payments and unnecessary time and labor costs.

Electronic check conversion: Paper checks are handled in much the same manner as credit cards where the owner receives payment within two days. A check is scanned and, like a credit card, is converted to an electronic item at the point of sale. Conversion machines may come equipped with verification (to ensure that a potential customer is not listed on a negative database of individuals who have previously bounced checks) and technology to electronically collect that “falls through the loop” NSF check. Research indicates that about 18 billion point-of-sale checks are written every year in the United States and a business can increase its profit potential 30% by accepting checks.

MSIQ can perform a detailed and honest black & white numbers analysis to add efficiency to your costs

Credit Cards: Ultimately, a business owner must still include this option, as this may be the preferred method of payment by customers. Retailers must be aware, as many credit card carriers overcharge for equipment and quote unreasonable discount and transaction rates. In addition, subtle fees may come into play that cause “cash flow paralysis.” An owner must perform due diligence when contracting with credit card carriers, taking price and quality of customer service into account. Contrary to popular opinion, banks are usually not the best resource.

Substantial profits may be obtained by knowing how to cut expenses and optimize efficiency. A vibrant and healthy accounts receivable system saves more than money; indeed, it just may save the enterprise! MSIQ can perform a detailed and honest black & white numbers analysis of your current rates, or setup low rates for those businesses that do not yet accept credit card payments.

How Do Business Owners Keep Up With New Compliance Rules Each Year?

Payment Card Industry Data Security Standards Compliance

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What is PCI Compliance?

Business owners already have a lot to worry about regarding changing tax laws and employee wage laws, now they have to add Payment Card Industry Data Security Standards Compliance to the mix. PCI Compliance has evolved with each passing year. Business owners are already up against rules, restrictions, and deadlines that are added every year. Some feel that compliance is expensive or too hard to achieve, but achieving PCI Compliance does not have to be difficult.

PCI Compliance is a key element in protecting card holder data. So how can your business stay compliant without breaking the bank?

1.     Although a firewall provides a first line of defense, by itself it can still leave a website vulnerable. You or your service provider should perform manual reviews of all application source code. There are tools available that auto scan source code for vulnerability and security risks.

2.     In addition to a standard Network Firewall, it is recommended to put in place a web application firewall between your web server and end-point devices.

3.     As of September 30^th, 2009, all Level 1 and Level 2 merchants who are classified as large merchants (processing one to over six million visa transactions) will no longer be allowed to retain any data that is currently encoded on a magnetic stripe. If you are a merchant that falls into this category, you will be required to do annual on site PCI Assessment and a quarterly network scan. By September 30^th, 2010, acquiring banks must prove that all Level 1 Merchants have demonstrated compliance with the PCI DSS. For more information you can refer to Visa’s website and download compliance policies and procedures.

achieving PCI Compliance does not have to be difficult.

Compliance regulations get added each year, so my recommendation is to stay ahead of pack. A small amount of money invested in security now can save you a lot of money in fines and lost data later.

 

A Guide to Small Business Security PDF Download

The BBB has co-authored a guide to help small businesses be secure and to help protect user privacy.

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This is an excellent guide for any small business. It was sponsored by Visa, IBM, Equifax, Verizon, The Wall Street Journal, Ebay, and Paypal. We support and recommend these practices in every way.

Please click on the link to view the PDF or save it to your computer.

Guide to Small Business Security PDF

Merchant Accounts and the Payment Card Industry (PCI)

The Credit Card Industry

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One would be hard pressed to find anyone in the United States or around the world that doesn’t have at least one credit card in their wallet.

Whether you have one or ten credit cards, chances are you have used it to purchase something recently. I can only speak for myself, but I am still amazed (and sometimes annoyed) when I go to pay for something with my credit card just to be told “We don’t accept credit cards” or “Sorry cash only.” The first words out of my mouth are always “Why don’t you accept credit cards?” and I have noticed time and time again that the reasons these merchants give never make any sense to me.

The majority of merchants seem to have no idea just how beneficial accepting credit cards can be for their business. If they just took a little time to learn how the Payment Card Industry works, I am sure I would hear a lot fewer negative comments. There is a common misperception that accepting credit cards or opening a merchant account is expensive, time consuming and just not really worth it. For every merchant that has turned away a paying customer because they wanted to pay with a credit card I ask, “Can you afford not to take credit cards?” More often than not I find myself spending some time with the merchant to let them know what the benefits to their business could be and also explaining the simple process of getting a merchant account.

Once they realize that the main reason they’ve had for not opening a merchant account is incorrect or misguided they want to know more and always have some degree of questions for me. I typically try to find out what their concerns are, begin at the top and work my way down starting with the major credit card companies we are all familiar with and ending with their customers – all the while answering questions along the way.

The big credit card companies are not an actual bank as many think, but have relationships with many different financial institutions, the most common being what you and I think of as a traditional bank. In the Payment Card Industry these are referred to as “Member Banks” or “Acquiring Banks” and have been approved by the credit card company to issue merchant accounts based on certain criteria. The guidelines and requirements are set by the credit card company themselves and must be agreed upon in order for that bank to become a “Member” of said company and therefore qualified to approve accounts allowing merchants to accept that type of credit card. The biggest of these is of course Visa and I will use Visa as the standard for demonstrating any examples. So up to this point we have Visa and a bank that has been accepted as a member of Visa and thus is now considered an “Acquiring Bank”.

MSIQ is committed to providing the largest array of credit card products, services, and solutions possible in these days where plastic is King.

Once a bank has been approved by Visa they are able to qualify and approve businesses for merchant accounts. These banks often times also create relationships with other companies to generate more business or to cover a larger demographic or geological area. Since the bread-and-butter for most banks is not in merchant services or the merchant account sphere, many encourage other companies who focus entirely on merchant services to become “registered” with them. In the Payment Card Industry (or PCI) these companies are referred to as “Processor’s” or “Service Providers” and are to able to approve merchant accounts assuming they meet the agreed upon criteria.

Ultimately, the merchant has the final say as to whether or not they are going to accept credit cards as one form of payment for their products or services. The ability of a merchant to accept payment via credit cards is getting safer, faster, easier, and more accessible everyday. MSIQ is committed to providing the largest array of credit card products, services, and solutions possible in these days where plastic is King.

What are Non-Qualified Transactions and How Can Merchants Avoid Them?

What are Non-Qualified Transactions? How Can Merchants Avoid Them?

How can merchants avoid being charged these surcharges and still qualify for the best rate possible?

I frequently get calls from merchants who say they were quoted one rate, but claim different rates are showing up on their statements. Unfortunately, merchants can experience a rate increase or surcharge because of the type of card your customers are using, such as sky miles cards and rewards cards. Another cause of increased processing costs is transactions being processed incorrectly by the merchant.

First, it is important to understand the different types of transactions that can occur when running a credit card sale:

• Retail swiped account transactions will get a Qualified Discount Rate, which is the lowest rate possible. In this type of transaction the card holder is present, they are using a standard consumer credit card, and once the card is swiped the transaction is batched within 24 hours. If any of these criteria change, you could downgrade to a MID-Qualified or a Non-Qualified transaction, thus increasing your rate.
• A keyed transaction, or manually entered transaction, will get a MID-Qualified Rate. This can also occur if AVS (Address Verification Service) is not entered when the customer uses a rewards card, or if the transaction is not batched within 24 hours.
• A Non-Qualified transaction occurs when a card is key-entered with no AVS info, or if a Corporate, Government, or International Card is used.

If you are not able to swipe a card because you are using an online payment gateway, how can you also take advantage of better pricing? When processing a MOTO (Mail Order Telephone Order) or Ecommerce transaction make sure to do the following.

• Make sure all required AVS information is entered
• Set your payment gateway or terminal to batch or settle within 24 hours
• Enter an Order or Invoice number
• Make sure to enter the CVV2 number

Many different factors can determine the rate you are assessed on your transactions. If you know you are going to be taking card types that will typically fit into the Non-Qualified category described above, be smart when setting up your credit card processing account – make sure to find out what your Non-Qualified rate will be. Be sure to find out all the fees involved before signing on the dotted line.

Merchant Solutions IQ 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. Just contact me, Kevin at ksarisky@merchantsolutionsiq.com for more information.