Posts Tagged ‘credit card processing’

Square Payments iphone credit card processing puts consumers and business owners at risk

Tuesday, May 17th, 2011

We get a lot of questions about  credit card processing through Iphones and Blackberries.  We do offer this service – but currently only with the option to key in the credit card number through a secure connection.  Multiple times a day we get requests for swipers that will plug directly into these devices.  More often than not we are being asked to sell a product similar to the  Square Payments credit card swiper.  Our fear has always been a lack of security involved with these types of  merchant card service transactions – and now it looks like we have been correct in not offering a product similar to Square’s.  Take a look at the link below  - From Verifone,  the largest credit card terminal manufacturer in the world, regarding security issues.

Square Payments security issues.

Are you sure you still want that cool new credit card skimmer – er – credit card swiper?

How will the new financial overhaul bill affect credit card processing?

Thursday, July 15th, 2010
6. Lower minimums for credit card purchases at stores
Say you walk into a gas station and pick up some soda, candy, and gum. The total is $11, but there’s a sign at the register saying you can only pay by credit card if the purchase is $20 or more. Under the new legislation, the minimum can be no more than $10, and only the Federal Reserve can raise it.
As many of you may have heard – the senate and congress have finally come to agreement on a financial regulation bill.  When the bill was initially drafted there was much concern in our industry that we would be fully regulated.  After they have chopped up their bill this fear has waned and at the end of the day we will see the following changes:
1.  Lower minimums for credit card purchases at stores
After years of not being allowed to do so – it will be legal for businesses to have a minimum charge amount  on a credit card. Under the new legislation, the minimum can be no more than $10, and only the Federal Reserve can raise it.
Many businesses with a lower average ticket have been enforcing minimums for years – now they will be able to do it legally – and for now, it can be no lower than $10.
2.  Limits on debit card fees
The Federal Reserve will have the power to limit the fees that card issuers can collect on debit-card transactions.   ( The interchange portion of the transaction that is kept by the issuing bank – NOT the transaction fee charged by the ISO)   Stores and restaurants say lower fees would allow them to cut prices, and to hire more people. But even if prices do fall at the store, banks might raise fees and rates for their customers. They could also scale back “reward” cards or free checking to make up for the money they’ll lose from stores and restaurants.
At the end of the day our industry will not see any massive changes in the pricing of accounts.  We will see a reduction in debit card interchange – which will be positive for businesses and for those clients still on a tiered rate structure , will create a great opportunity for savings by switching to interchange plus pricing,

What is ERR credit card processing pricing and is it ever good for a client?

Thursday, July 15th, 2010
Enhanced Recover Reduced (ERR)
Enhanced Recover Reduced or ERR is a pricing model that’s been around for a while but has been gaining in popularity lately as merchant service providers look for more profitable options to the less expensive flat rate or interchange plus pricing models.
ERR is often referred to as a mixed or blended rate because it’s a combination of tiered and interchange plus pricing – with a twist. ERR is a non-transparent form of pricing because it uses a base qualified rate and also a truly hidden charge in the form of the difference between actual interchange and the qualified rate. This hidden charge is the “enhanced” part of the pricing.
With ERR pricing, a merchant service provider will quote three different rates – a qualified debit rate, a qualified credit rate and a non-qualified surcharge. When a merchant processes a qualified transaction they will be charged the qualified rate quote by the provider. Things get a little fuzzier when they process a transaction that doesn’t qualify.
In this case, the merchant will be charged the true interchange rate, plus the non-qualified surcharge and the difference between target interchange for the transaction and the qualified rate. That’s the “enhanced” part of ERR pricing that makes it look a lot better than it really is.
Enhanced Recover Reduced (ERR)
Enhanced Recover Reduced or ERR is a credit card processing pricing model that’s been becoming more popular  as merchant service providers look for more profitable options to the less expensive flat rate or interchange plus pricing models.
ERR is often referred to as a mixed or blended rate because it’s a combination of tiered and interchange plus pricing – with a twist. ERR is a non-transparent form of pricing because it uses a base qualified rate and also a truly hidden charge in the form of the difference between actual interchange and the qualified rate. This hidden charge is the “enhanced” part of the pricing.
With ERR pricing, a merchant service provider will quote three different rates – a qualified debit rate, a qualified credit rate and a non-qualified surcharge. When a merchant processes a qualified transaction they will be charged the qualified rate quote by the provider. Things get a little fuzzier when they process a transaction that doesn’t qualify.
In this case, the merchant will be charged the true interchange rate, plus the non-qualified surcharge and the difference between target interchange for the transaction and the qualified rate. That’s the “enhanced” part of ERR pricing that makes it look a lot better than it really is.

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

How to understand Credit Card Processing statements

Friday, February 22nd, 2008

I am often asked by clients, sales representatives, and even other people in my position how to read merchant account statements. Unfortunately there are dozens of different formats to merchant account statements, and there are also dozens of versions of each format. (Much of this depends on the bank issuing the merchant card services statement.) So, even someone with many years of experience in the merchant services industry will occasionally stumble upon a statement format that they have never seen before or that they do not understand.

I am going to attempt to educate business owners and industry sales reps through the posts on this blog. I analyze dozens of merchant processing services statements every week for my sales representatives. I will post samples of some of the statements that I work on, and hopefully you can find it useful in understanding the statement that you are looking at.

Please feel free to email me with questions or if you would like me to review a credit card merchant services statement!

We have the most lucrative merchant service sales positions available in the country.  Selling credit card processing is one of the best sales opportunities in the country with which to achieve financial success.  Learn more

www.capital-bankcard.com