Entries tagged with “Merchants”.


Picking a payment processor just got harder. It turns out that cyber criminals are becoming more sophisticated (or more desperate?). Recently, it’s been revealed that they’ve now started targeting parking garages. That’s right, they’re not only trying to steal your information in-store, but now, even before you walk into the store. Over the Black Friday weekend, “hackers got into the systems of a large parking vendor… and were indeed able to steal customer name and payment card information.” What’s more troubling is that “the breach ran [undetected] for almost seven months… [involving parking garages in Chicago], Cleveland, Philadelphia, Seattle, and Evanston….”

Another news article was recently released of an unlicensed, illegal payment processor whose majority of business catered to credit card fraud, identity theft, investment fraud, computer hacking, and other crimes. Basically, it acted almost like a money laundering business, except that it merely facilitated the transfer of funds between criminal clients and criminal suppliers.

Why is this important? Choosing the right payment processor is paramount to a successful business. Not only do you have to worry about choosing the payment processor with the lowest fees and the greatest number of available payment method options – you also have to worry about their cyber security and legitimacy. If their cyber security breach causes your consumers any fraudulent transactions, you will share in the reputation loss. If the payment processor turns out to be doing illegal dealings, you will also take on a negative view for having been associated with them.

ProPay offers payment processing solutions you can trust,  contact us today to learn more.

As a merchant there are many things to be wary including merchant processing fees and percentage rates. The problem? When you see a certain percentage rate, it’s not necessarily the rate you’re actually going to be paying. So what factors are leading to credit card companies charging merchants extreme and varying processing fees?

Base Credit Card Processing Fees- The Types of Merchant Processing Fees

In order to better understand merchant processing fees, it’s important to know the two main components involved: interchange rates and fees, and assessments. So what are these exactly? Let’s dive right in and see for ourselves:

Interchange Rates and Fees

Interchange rates and fees account for the majority of credit card processing fees. Specifically, interchange is the process during a transaction that takes places when money is transferred from the acquiring bank to the issuing bank; these associated fees are established by major credit card companies. How do credit card companies establish these fees and rates? It’s easy—basic stakeholders of major credit card companies like American Express, Visa, MasterCard, and Discover decide how much they want to charge merchants when they accept their credit cards. These credit card companies (or banks) then decide on interchange fees that are associated with things such as processing methods, types of credit cards, and other associated merchant variables.

Assessments

Large credit processing companies like Visa, MasterCard, and Discover card make money by charging assessments on every transaction involving one of their credit cards. Although assessment fees are charged the same for all processors, if bundled, assessments can be charged differently.  Bundled pricing gives processors more control to manipulate pricing and are changed periodically by the card brand and type.

The Solution: ProPay

Typically, merchant processing companies charge different percentage rates for different cards. For example, if a company offers you a rate as low as 1.99%, you won’t necessarily get that rate with all cards— rather just with major credit card providers such as Visa and Mastercard. At ProPay, what you see is what you get–if we offer you a low rate, you will receive that same rate on all transactions. We believe that transparency is the key to running a successful business and we want all or our customers to feel 100% satisfied, 100% of the time.  ProPay makes it simple to decide who to choose for your merchant and credit card processing. To learn more about ProPay and how you can simplify your business, click here.

Running a business is expensive. Gone are the days where overhead charges were composed of mere office supplies and rent. Now you can add high-speed internet, company cellphones, computers and laptops, a well-versed staff, and yep, even those dreaded merchandise swipe charges to the list.

Swipe Charges Defined

What are swipe charges exactly? Broken down into simple terms, swipe charges are the hidden fees that merchants pay credit and debit card companies every time they swipe a card for payment. Swiping allows you to accept mobile payments on your phone, tablet, laptop, or other mobile devices. Depending on the merchandise service company you decide to go with, interest rates for swipe fees typically start around 3% and increase based on additional services added. Resulting in an initially small overhead charge suddenly turning into a seemingly large expense for merchants everywhere. But swipe charges don’t have to turn into another large business expense—with ProPay’s low interest rates, constant accessibility, and multiple options to choose from, both you and your company are going to benefit.

They’re How Low?

No, we are not talking about your limbo skills here but rather, extremely low interest rates. Although some companies are still charging merchandise companies insane swipe rates, ProPay is helping save small and large businesses money every day. With a low swipe rate of… wait for it, 2.6%, you can give your customers the satisfaction of being able to pay conveniently, while saving on massive overhead charges. These low rates are definitely worth bragging about.

Anytime, Anywhere

Ever since we have said goodbye to the screech ridden days of dial-up internet, there is virtually no need for anyone to wait for technology to do its job. With the constant accessibility to cellphones and/or tablets, there’s no reason why you as business owner shouldn’t be able to take payments on the go.

A Variety to Choose From

“I hate having options”, said no one ever. Luckily for merchants everywhere, ProPay has several Swipe options to choose from. Whether you are looking for something simplified or something that can work both on and offline, there’s an option for you and your business.

  • JAK- With the ProPay JAK, you can take payments directly from your Android or Iphone, anywhere, anytime.

  • Card Reader-Regardless of whether you have a stable internet connection or not, ProPay’s Card Reader allows you to take payment both off and online.

Low rates, constant accessibility, and a variety of options to choose from are just a few of the reasons that make ProPay the number one provider to choose from. To learn more about ProPay, click here.

As a business owner you have to deal with the many ups and downs that accompany ownership–including credit card merchants and processing companies. When first looking at your credit card processing statement, you might skip across a few key components but there’s one in particular that’s important to understand: Effective rates. Effective rates are the combination of the total processing fees divided by the total sales volume.

How Do They Work?

Now that we know what effective rates are, how do they work exactly? Merchants will charge different transaction fees based on the type of transaction and the type of card used. For example, a customer at a retail store (the type of transaction) uses a qualified consumer credit card (the type of credit card).

An Ode to the Percentage Rate

You’ve all seen them, merchant providers advertising “rates as low as xx%” but how many transactions will actually qualify for that specific rate? Let’s look at an example below that exhibits the type of card along with the transaction rates and hidden fees:

Type of Card

Transaction Rates & Fees

Qualified Regular Consumer Cards

1.48% + $0.20

Qualified Rewards Cards

2.20% + $0.20

Typed or Keyed in Commercial Cards

2.91% + $0.33

Non-Qualified (US Govt. / Outside of US

3.75% + $0.33

How Can You Calculate an Effective Rate

Learning how to calculate your effective rate comes with a list of equations such as: r = (1 + .05/12)^12 – 1, or r = 5.12 percent. However, using ProPay’s fee structure will help you put those days of long and monotonous calculations aside. Need an example? Let’s look at the chart below:

Calculating An Effective Rate*

(Based on: Average Monthly Processing = $2,000; Average Transaction Size = $200)

Typical Fee Structure

ProPay’s Fee Structure (Swipe)

ProPay’s Fee Structure (Keyed)

Application Fee

$25

$0

$0

Annual Account Fee

$0

$49.95 (Premium Plus Account)*

$49.95 (Premium Plus Account)*

Monthly Fee

$0

$0

$0

Monthly Minimum Fee

$20

$0

$0

Monthly Statement Fee

$4.95

$0

$0

Contract Term Commitment

2 years / $95 Cancellation Fee

n/a

n/a

Terminal

Required

n/a

n/a

Terminal Cost

$479

n/a

n/a

Terminal Lease Cost

$50 / month – 12 month lease

$35 / month – 24 month lease

n/a

n/a

Virtual Terminal (keyed transactions over the Internet)

$179 or $8 / month

n/a

n/a

Sign up / Approval Time

5-7 days

Within minutes

Within minutes

Processing Fees

Qualified Consumer / Card Present / Card Swiped

1.48% + $0.20

2.29% +$0.25*

2.29% +$0.25*

Qualified Rewards / MOTO / Internet

1.99% + $0.27

2.99% +$0.30*

Qualified Rewards

2.20% + $0.20

2.99% +$0.30*

Keyed or Typed In / Commercial Card

2.91% + $0.33

2.99% +$0.30*

Non-Qualified

3.75% + $0.33

2.99% +$0.30*

Effective Rate Comparison

Processing Fees

$510 ($1.99% + $0.27)

$579.60 (2.29% +$0.25)

$753.60 (2.99%+$0.30)

Other Fees**

$982.40

$49.95

$49.95

Total Cost

$1492.40

$629.55

$803.55

Effective Rate

6.22%

2.62%

3.35%

* Based on research conducted in January 2011

** For this example the following fees are included in the calculation: Application Fee, Monthly Minimum Fee, Monthly Statement Fee, Annual Terminal Fee, Annual Virtual Terminal Fee).

The Solution

Understanding effective rates can come with a long list of complexities and hidden fees. At ProPay, there are no hidden fees and we make rates as transparent as possible. Our motto? It’s simple–what you see is what you get—a simple, straightforward, non-variable rate with no hidden fees and the most flexible options for processing cards anytime, anywhere. Learn more about ProPay here.

As a business it’s important to understand that when you sign a contract with a bank in order to accept credit card payments, you are borrowing the money. If your customer is the one who is  paying with their personal credit card, how are you still liable? When the acquiring bank transfers the money to the merchant, it assumes the risk that the money won’t go through and that there will ultimately be a chargeback.  That risk remains intact until the transaction has expired. In return, the acquiring bank sees the money as a loan until all the funds have cleared and the money has gone through. In essence, the faster the money goes through, the less of liability it is for you and your business.

Transaction Time–Time is Money

Now that we know why it’s important for the money to go through as quickly as possible, it’s time to do some further investigation. How long does it typically take for transactions to go through?  According to an online article, credit card holds can take as long as 30 days to go through, depending on the issuing bank. Now, if you consider how many transactions your business receives in a day, if every one of those transactions can take up to 30 days to process, your company is essentially liable for every one of those cumulative transactions. That’s a position that no company wants to be in. So, how can you decrease that 30 day time period? With a simple and professional credit card processing company.

Avoid the Wait Time Altogether

At Propay, you can avoid the long wait time and 30 day headache that most merchant processing firms require. A credit card transaction usually takes 2-3 days to settle in your ProPay Account. Once the funds have settled, you then have the ability to transfer the funds to any bank account in the United States. And if you have a Premium or higher-level ProPay Account, you can also spend the money using a Prepaid MasterCard® card.

Perks for Small Merchants

As a small merchant, sometimes it can seem like you’re the middle-child–you get ignored by merchant processing firms and typically get the short-end of the stick. However, at ProPay we see small merchants much differently. With ProPay, most small merchants can set up an account online and accept credit cards the same day, all without buying special equipment or making long term commitments or investment.

The time it takes to get the final processing approval on a credit card transaction is typically up to 30 days. And during those 30 days, banks view the essentially pending transaction as a loan on your end. Avoid any further difficulty or unnecessary expenses and shorten that time altogether with ProPay. To learn more about ProPay click here.