Processors are having to invest resources, money and labor in order to implement and manage the processes needed to meet these new reporting requirements.  As you may have guessed, the industry seems to be taking a similar approach as they did with PCI Compliance by passing on this expense to the merchant.  It is unknown at this time what the industry will do as a whole, but so far some very large processors have already assessed a $99 yearly fee.  Most processors have yet to make an announcement on what they are going to do but should as the year progresses.

Did you find this information helpful? If so, become one of our merchants!  This is one of the many benefits you receive when you allow us to handle your processing.  Give me a call (800) 605-3972 ext 111.

If the system is having a problem, our tech support team can remotely log into the system to trouble shoot.  This will help resolve issues more quickly than ever before.  No other POS system offers this feature!  There is a retail, restaurant and pizza version of the software to meet most merchant’s needs.  And of course, the device is 100% PCI compliant and will include any and all upgrades in the future!

The current selling price for this product is better than any other competing product in the market place.  We are currently selling the device at an introductory price of $199 and that is a steal!

Also, check out the video on our product page that compares this to a wireless credit card machine.  It is very entertaining.

1. Customer Service – Gotmerchant.com strives to provide excellent customer service. This is the main reason why each merchant is assigned a personal account manager that they may call directly at any time. If you do some searching online, you may find that this is not the same with companies like Paypal. Try calling their customer service department sometime and see what kind of results you get.

2. Seamless Integration & Better Conversions - Using payment gateways such as Authorize.net allows you to offer a seamless integration within your web site.  What does this mean?  The visitor will never leave your web site during the entire checkout process.  This is very important for any major ecommerce merchant.  Neither PayPal or Google Checkout allow your customers to remain on your website during the entire checkout process.   When you add a few extra mundane steps to your checkout process, it increases your chances of losing a sale.  Would you not agree having the highest conversion ratio possible is important to your bottom line?  Think about it from a retail perspective.  How quickly do consumers get irritated sitting in line at the register waiting for their turn?  The longer they wait, the less satisfied they are.   This is no different with Internet shopping.  You want your checkout process as easy, quick and simplified as possible.  Give a customer a reason to abandon their cart and they will.

3. Underwriting - Unlike third party providers, all merchant account providers send their applications through an underwriting process.  This is where a human reviews the account and evaluates it for risk and determines if the business type is acceptable.  Obviously there are certain business types merchant providers will not take, such as adult related businesses.  The list of unacceptable merchant types will vary though from one provider to the next.  There are also many stories available online that start off with something similar to,  “Paypal froze my account.”  This should be expected more often as they instantly approve accounts and ask questions after the merchant starts processing.  According to some information found online, once an account gets held, Paypal can be difficult to reach, especially their risk management department.  It is also said that their call centers are located overseas whereas most merchant providers keep that within the USA.

Something else to consider is the chargeback process.  With Paypal, consumers have two opportunities to dispute a charge, known as a chargeback.  They can dispute the charge with Paypal directly.  If  Paypal rules in the merchant’s favor, they can then dispute the charge with their credit card issuer.  At this time,  Paypal is at the mercy of the card issuer like the rest of us merchant providers.

4. Deposits - Paypal deposits your money into your Paypal account and you then must manually withdraw your funds.  Whereas merchant providers automatically deposit your funds directly into your checking account and this results in much faster funding times.   This doesn’t apply to Google Checkout however as they also make direct deposits.

5. Paypal’s Reputation - Many businesses and consumers refuse to use Paypal. This could be based on a previous bad experience with the company from a consumer standpoint or as a merchant.  You should ultimately give your clients the payment method they choose.  It may be a good idea to offer Paypal & Google Checkout as an alternative option, but not your primary or only option.

At the end of their Q&A session on their webcast announcement, Visa does suggest that they will be doing away with the acquiring division of CyberSource / Authorize.net and turning it primarily into a referral based business.  This part is good news for Authorize.net resellers such as ourselves.  They have been competing with their resellers for several years by providing merchant accounts themselves through a partnership.

For years, there have been reps or companies that make the claim that they are direct with Visa.  This has never been true for what I explained above.  However,  now that Visa is acquiring CyberSource, I would not be surprised if anyone working for CyberSource now tries to makes use of that line even though it is still not true.  Visa may now legally own CyberSource, but that does not change any of the relationships, costs or how everyone is interconnected with one another.

Lets assume we are dealing with Interchange plus pricing. If your processor charges you 10 cents per transaction, that is 1% on a $10 ticket amount.  You would then have to add the Interchange per item fee which can range from 4 cents on up depending on the type of card you process.  You will also have a percentage to pay as well. When you have a restaurant such as Jimmy John’s that does close to a million a year in revenue, this becomes even more critical.  The best advice I can give anyone with a low average ticket is as follow:

1. Get setup using the Interchange plus pricing model instead of 3 tiered.  It is much easier to control your cost by knowing how low your processor can go as you are dealing with costs.
2. Process your transactions over IP instead of dial up.  IP processing is having your transactions submitted using a high speed Internet connection.   Not only does this speed up your checkout, but most processors can offer you lower transaction fees than if you were to use dial up.

If you have any questions, feel free to leave your comments.

Verifone’s PAYware starts selling around the country this month through the Apple iPhone store.  According to Verifone, the product uses its Connect payment gateway to process payments.  Most processors are compatible with their gateway product, so merchants should be able to pick any merchant provider they choose.  It will definitely be interesting to see how mobile processing progresses over the next few years.  Will the wireless terminals we have been selling for years become obsolete and be replaced with our cellphones that are hooked up to a swiping device (including all cell phones and not just iPhones)?  If anything, new products like this is certainly making the service more appealing to small businesses that will not process very many credit cards.

The first step would be to run an authorization only transaction on the card, such as for $50.  This checks to make sure the card is still valid and the funds are available.  At the end of the night, you close the tab which captures the final purchase amount and this can be less or more than the original authorization amount.  What you need to seriously consider is what does your business do to encourage customers to close their tab and sign the credit card receipt before leaving.

Listed below are some options you may want to consider.  Not all options will work with every business.  You will need to find the appropriate one for your customer base as some may not go over well.

1. Hold on to their credit card and give it back after they close the tab.    If they leave & you still have the credit card, call the card issuing bank using the number on the back and inform them that you have the cardholder’s credit card and to inform their customer. Ask them to come in, pickup their card & sign their receipt. If you do this, you may also want to ask for a drivers license and compare the signatures to ensure they are both legitimate.
2. Have a key locker similar to valet parking. You ask for their keys and place them in safe place.  You give them a ticket stub that references their keys. When they close their tab, they get their keys back.
3. Do nothing and see how much your losses are and decide if it is worth it.
4. Ask for their phone number, which you can call them if they leave without closing their tab. You may also want to ask for a driver licenses as well to verify legitimacy.
5. Ask for their drivers license and hold on to that.
6. A combination of any of  the above.

I hope you find this information helpful.  If you have any other ideas or tips, please leave your comments.

3-Tiered Pricing VS. Interchange Plus Pricing

Under the 3-tiered pricing plan, you pay one of three rates called Qualified, Mid-Qualified & Non-Qualified. The rate you pay for each transaction is determined by the applicable Interchange rate. Under the Interchange plus pricing plan, we simply pass along actual Interchange cost and add a set markup to every transaction.

The chart below should demonstrate the concept and make things clearer.

Are you currently paying 3-tiered credit card processing rates and want to know how to compare this to the more cost effective Interchange plus plan? The following example should make things clearer. Lets say you decided to go to the grocery store and purchase 3 oranges. The prices for all of the available oranges are listed below. The ones you selected are Orange 1, Orange 5 & Orange 8.
The Orange prices below represents Visa & MasterCard Interchange cost.
Orange 1 costs $0.01 Orange 2 costs $0.02 Orange 3 costs $0.03 Orange 4 costs $0.04 Orange 5 costs $0.05	Orange 6 costs $0.06 Orange 7 costs $0.07 Orange 8 costs $0.08 Orange 9 costs $0.09 Orange 10 costs $0.10
In this example under a 3 tiered pricing plan you would have paid a total of 30¢ with the following credit card processing rates: (5¢ qualified, 10¢ mid-qualified & 15¢ non-qualified). This is calculated as follow: Orange 1 would be qualified at 5¢, Orange 5 mid-qualified at 10¢ and Orange 8 non-qualified at 15¢.
Lets assume Gotmercant.com’s markup in this example is 5¢. Under the Interchange plus pricing plan, you would have paid 19¢ total. This is calculated as follow: Orange 1 at 1¢ + Orange 5 at 5¢ + Orange 8 at 8¢ = 14¢ + our 5¢ markup, making a grand total of 19¢.

What is Gotmerchant.com’s Offer?

Gotmerchant.com’s markup under the Interchange plus program varies based on your business type, average monthly volume and transaction size. Please call or email us for a rate quote and let us know you are interested in the Interchange plus pricing program.

Did this post make things clearer for you?  Please leave your comments and let us know.