Archive for June, 2008

Visa reduces Credit Card Processing prices at the pump!

Saturday, June 28th, 2008

Beginning July 18, 2008, Visa Inc. will implement a cap on interchange rates for Visa debit and prepaid fuel transactions in an effort to help lower costs for oil companies and service stations that can be passed on to consumers at the pump. Systemwide implementation for restructured Visa credit card processing interchange fees on gas purchases takes effect October 2008.

“While Visa cannot lower the price of crude oil, there are things we can do to help make the process of buying gas easier for our cardholders,” said Bill Sheedy, Global Head of Corporate Strategy and Business Development for Visa. “As oil prices rise, we are accelerating our ongoing efforts to address the issues in the fuel segment.”

Interchange fees for Visa debit and prepaid gas purchases will be capped at 95 cents per transaction. Credit card rates will adjust to 1.15 percent of the total purchase plus 25 cents. In addition to the interchange fee adjustment, Visa will implement its Real-Time Clearing (RTC) program to process transactions immediately and reduce the hold times that financial institutions (FIs) place on cardholders’ account.

This new program is Visa’s way of contending with a nearly 100 percent jump in crude oil prices since June 2007, which drove gas prices in the United States from an average of $2.98 per gallon to $4.07 in a year. Visa hopes the interchange cap will give consumers more buying power and offer fuel dispenser merchants opportunities to improve business operations.

“People are frustrated enough with the price of gas today,” Sheedy said. “They shouldn’t be frustrated with the payments process as well. We took an entirely new approach to processing fuel payments and created a solution that removes many of the major barriers that consumers and station owners face at the pump today.”

Real-time authorization

In April 2008, the limit on debit transactions receiving chargeback protection increased to $75. RTC provides merchants and acquirers clearance within two hours. This can help drive sales for stations because it gives consumers the ability to pump more gas in a single transaction without hitting price limitations.

“The number one inconvenience that we’ve been hearing about is that when you use a debit card to buy gas, service stations can put a hold on your funds of up to $75,” said Maria Hatzikonstantinou, Vice President, Visa Public Relations. “So now with real-time clearance, it basically eliminates the hold that some stations put on your money.”

RTC can also qualify stations’ transactions for better interchange rates at higher ticket amounts, which can lower station owners’ costs.

Until the new processing changes take effect in Visa’s systems upgrade this October, the company will allow consumer fuel transactions up to $125 to qualify for its best-available interchange rates. This interim step is effective July 18, 2008. Once gas stations and their FIs migrate to RTC, consumer fuel transactions up to $500 will qualify for Visa’s best available interchange rates.

www.capital-bankcard.com

Why you should not lease a credit card terminal….

Wednesday, June 18th, 2008

Businesses often look at leasing as a viable alternative to purchasing high priced equipment. After all, not many small businesses can foot the bill for a $15,000 color copier. But would you lease a $200 cell phone or a $300 cash register? Of course not! So why do some businesses lease $150-$300 credit card terminals?

Most credit card terminal leases involve a 48 month term, and at least $20 a month. That totals $960 in payments! You could have received this terminal with only a small deposit using our free terminal program!

The Games Lease Providers Play:

Most merchants are given inflated costs to make them more inclined to lease. For instance, some companies will say a terminal, which costs $299, costs $600. With no frame of reference, many new customers will simply assume this is accurate, but may not have the cash or credit for that amount.

Also, some companies claim tax advantages to leasing. This is simply false. It is true that lease payments are deductible, but any business purchase is deductible. Would you rather deduct an expense or have the cash in your pocket?

That’s not the only bad news. Here are a few more facts about leasing credit card terminals…

Credit Card Machine Leasing Contracts are Binding.
Regardless of your circumstances, you cannot terminate the lease before the term ends.
You Have to Return the Equipment.
After you spend your $960, you then have to return the terminal
Leasing Has Costly Strings Attached
Terminal leasing companies sometimes continue to charge monthly fees beyond the contract term unless you contact them to cancel.
Equipment insurance is required for all leases, adding to monthly fees.

Don’t get stuck in a long-term leasing contract while paying far more than necessary to process credit cards. Save money and avoid the hassles of leasing—contact one of our independent sales representatives to learn more about our free equipment program..

www.capital-bankcard.com

What are the different types of merchant card service accounts?

Wednesday, June 18th, 2008

In the merchant card service industry, every merchant is classified into a specific “merchant account type” category, based on how they collect card information and conduct transactions. To learn which category your business is classified under, we have defined the characteristics of each merchant account type in this article.

There are two main merchant account type categories, “Swiped” and “Keyed,” which reflect the basic methods used to capture card information. Within these main categories are sub-categories, broken down according to the business environment and processing technique.

“Swiped” or, “Card Present” merchants directly interact with their customers face-to-face and capture card information by physically swiping cards through a terminal or point-of-sale system. The sub-categories within this group include:

Retail Merchants: “Retail” merchants typically conduct business in a storefront or office where they interact with their customers face-to-face and physically swipe cards through a terminal or Point-of-Sale system.

Restaurant Merchants: “Restaurant” merchants require the ability to add tips to their charges (Note: Restaurants that do not process tips are still considered “Retail” merchants in this industry). Using a special tip function, they authorize a customer’s card for a certain sale amount and then settle that authorization with an adjusted price to include the tip amount.

Wireless/Mobile Merchants: “Wireless” or “Mobile” merchants need to accept and authorize cards wherever they are located, which is usually on the road. Using a portable wireless terminal, these merchants process on-site, real-time transactions at their customers’ locations.

Lodging Merchants: “Lodging” merchants (e.g. Hotels, Motels, and Bed & Breakfasts) authorize a customer’s card for a specific sale amount and, depending on the customer’s length of stay, will adjust and settle out that authorization a day or more later to include additional fees such as taxes, etc.

“Keyed or, “Card-Not-Present” merchants indirectly collect their customers’ card information, and, depending on the business environment and technology used, can process transactions in various ways. The sub-categories within this group include:

Keyed Face-to-Face Merchants: “Keyed Face-to-Face” merchants eventually meet their customers in person to deliver the product or provide the service, but they don’t actually collect card information with the customer or card present. Generally, they take orders over the telephone, via fax, mail, email, or the Internet, and then manually key-enter card information into a terminal, software, payment gateway, or other point-of-sale system.

Mail Order/Telephone Order (“M.O.T.O.”) Merchants: “M.O.T.O.” merchants rarely, if ever, meet their customers face-to-face. Instead, these merchants collect orders and card information over the telephone, by mail, fax, or via the Internet, and manually key-enter transactions through a terminal, software, payment gateway, or point-of-sale system. Then, once payment for an order is confirmed, the product is shipped for future delivery.

Internet or E-Commerce Merchants: “Internet” or, “E-Commerce” merchants conduct all business through a website, so all card information is collected and transactions are processed online, in real-time, using a payment gateway that’s built into their website’s shopping cart. So, once the order/sale is confirmed, the card is charged instantly and the product is shipped for future delivery. (Note: This merchant type does not apply to businesses that only market on the Internet, but do not immediately process payments via their website, upon order confirmation.)

www.capital-bankcard.com