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

The Players of the Credit Card Industry

Who are the main players of the credit card industry?

Lowest Merchant Account Fees

---

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.

Terms To Know When Shopping For A Merchant Account

Fee Terms And What They Mean

Over the past couple of weeks I have run into many merchants that feel ripped off by their merchant sales representative. Time and time again I hear “I just didn’t know what to ask for.” Like with any other purchase for your business, it is important to learn about your product.

Here is a list of common terms you should know when talking to credit card processing companies:

• Qualified Rate – This is typically the rate you are quoted when you sign up for a merchant account. This rate only applies to swiped regular retail cards. Be sure to ask what your Mid-Qualified and non-Qualified rate will be.
• You may also be charged an Authorization fee. This is the amount charged to a merchant account each time communication happens between the software or point of sale terminal and the authorizing network. Make sure you are not charged an additional transaction fee because the two are the same.
• Your sales agent may refer to Basis Points. Basis points are the percentage that you are charged on a credit card transaction. One basis point is equal to 1/100th of 1 percent. Thus a rate of 1.85% is equivalent to 185 basis points. For some merchants, a basis point mark above Interchange is advantageous.
• Batch Closure fee – This is a fee charged each time a settlement or end of day processing totals are sent to the financial institution.
• Electronic Data Interchange (EDI) – The electronic communication of business transactions, such as orders, confirmations and invoices.
• Transaction Fee – A per transaction amount charged by the bank for processing each transaction. This amount is in addition to the discount rate. For example: a discount rate of 1.85% plus 30 cents per transaction. Make sure you are not being charged an Authorization fee as well.
• PCI Compliance Fee – This fee is usually assessed by your merchant bank because they are passing on a fine they received from the card associations. Make sure to dispute this with your processor if you see it on your statement.

Knowing the merchant processing industry lingo is just one way to protect your business from getting ripped off.

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.