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MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683
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Credit Ratings & Merchant Account Approval
People sometimes do not understand why their credit rating is a factor that underwriters look at when approving a new merchant account application. Many times credit card processors will “Decline” a merchant soley based on their credit score.
Why The Credit Factor Is Important
Business owners must realize that appling for a merchant account, is like appling for a credit line. The projected “Monthly Volume” stated on a new merchant account application, is the amount of “Risk” the merchant’s processor is willing to accept. If you are asking for $20,000 in Monthly Volume and your credit scores are “Very Poor”, you may be declined an approval on your merchant account.
Understanding The Risk - In Credit Card Processing
Understanding the “Risk” in credit card processing should be understood by every new merchant. Accepting credit cards is not like accepting cash, as every cardholder has the right to call their credit card company and potentially get a charge “Reversed” in a “Chargeback”.
The risk for the bank is that the merchant may not have those “Reversed Funds” immediately available to complete the chargeback process. In this case, the merchant bank must cover the chargeback and then come after the merchant for the “Money Owed”.
This is why the financial responsibility is so important !!!!!!!
In closing every merchant application is on a case-by-case basis, with many other factors that are considered. If you have “Poor Credit” and need help in getting a merchant account, please give me a call to discuss your options.
MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683
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Consumer Credit Line Cutting Has Begun !!!!!!
Starting last December, credit card companies have begun to cut credit card limits on consumer credit cards. The cut backs seem to be across the board for all consumers, as even cardholders with +700 credit ratings are feeling the pinch. In an effort to reduce their risk, credit card companies will put a strange on the average business owner, by not only cutting their credit lines, but reduce the buying power of consumers and other business owners, as well.
These actions are sure to increase the pain of the current recession, by snowballing the slowing spending on both the consumer side and the business investment side. As spending slow’s, more jobs will be cut, more mortgages in default, and more folks seeking the social safety nets of welfare.
We firmly believe that things will get worse, before they get better.
Today, we had a new President sworn in, as the 44th President of the United States. We’ve handed the reins to a social idealist, with many Anti-Capitalistic Idea’s in his heart.
Not sure if this is a time for social change, when financial growth is the crisis that will destroy the well-being of every American.
SOCIAL CHANGE ?????? FINANCIAL CRISIS ??????
God Bless America !!!!!! DIGG THIS NOW !!!!!!
MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683
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Understanding Your Merchant Account Responsibities !!!!
If you are shopping for a new merchant account, you need to understand what you are getting into. Many times business owners are in a rush to set-up credit card processing for their business, they overlook the fact that they are entering into a contract that has many responsibilities and rules to abide by.
Many times merchants will find out the hard way, by being fined or getting their merchant account shut down. In some instances, merchants are “TMF’d” which means they lose their privilege to accept credit cards in the future. It surely make more sense to understand your responsibilities and model your business to conform with the rules set-forth by Visa and Mastercard.
Accepting Credit Cards - A Privilege:
Understand that being accepted to accept credit cards is a privilege, not your right !!!! Should you take this lightly, you could find yourself losing this privilege, permanently. That’s right, permanently !!!! You could personally be banned from ever accepting credit cards, for any business endeavor in the future.
Unhappy Customers Can Destroy You:
An unhappy customer can create havoc on your business. Credit card holder’s have the right to call their credit card company and dispute a transaction on their credit card. These disputes have the potential of becoming a “Chargeback” to your business. A chargeback is simply a reversal of the charge, from your bank account, back to the customers card. These reversals come with very stiff fines to the business owner and could get your account terminated. Here some key points to avoiding chargebacks.
Exceeding Volume Limit’s:
Every merchant account agreement has an “Average Monthly Volume” amount for Visa & Matercard. During your approval process, this amount is underwritten by the processor and is usually based on the credit scores of the merchant. If you are approved for that amount, you must process within the limit.
Should the limit become an issue, you must call in to ask that it be re-evaluated by the underwriting department. If your credit scores are too low, you may not get an increase.
If you simply ignore this limit, at some point your account will be shut-off.
Exceeding Ticket Limit’s:
Every merchant account agreement has an “Average Ticket” amount for Visa & Mastercard. Again, during the approval process, this amount is underwritten based on your credit scores. From an underwriting stand point, the higher the ticket, the higher the risk. If your account is approved for a certain ticket amount, you must process within that limit. Occasional “High Tickets” should be disclosed on the application, prior to underwriting. Contacting your “Risk Department”, prior to running high tickets is advised.
If you simply ignore this limit, your account could be terminated.
Honor All Cards:
Every merchant account agreement has a “Honor All Cards” Claus. This means as a Visa / Mastercard Merchant, you are bound to honor every credit card transaction presented to your business. That tiny sign at your local diner that states, “$10 Credit Card Minimum” is in direct violation of the terms of the merchant account agreement.
You cannot charge a “Surcharge” on credit card transactions either, this would also be in violation of the merchant agreemnet, as well.
Reserve Account:At any time, at the sole discretion of the bank, the bank has the right to place funds on hold in a non-interest barring reserve account. Reserve account is to protect the bank from future losses due to fines, chargebacks, ect that may come through your merchant account. Hold time-frame will be determined by the bank and is usually for long enough time period to cover future customer chargebacks.
In Conclusion:
As you can see, “Your Privilege” to accept Visa & Mastercard comes with many duties and responsibilities. Failure to comply, could prove to be very costly and cause your account to get “Terminated” and potentially lose your credit card processing privilege in future business endeavours. Play it safe, understand the rules and play by them.
If you have any questions, please feel free to give me a call.
MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683
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Merchant accounts processing with 1st National Processing can put there fears aside with becomming PCI Compliant with the complicated standards recently set-forth by Visa & Mastercard. We have simplified the process, making it quite simple for our merchants who process with us.
First, we have painless online survey which will walk you through each step of completing your Self Assessment Questionaire, required for PCI Compliance. Once the “SAQ” is completed, you will receive an email if you need to perform a “Quarterly PCI Scan” of your website or network. You will then receive instructions by mail for performing any required PCI Scans.
Lastly, if you are required to perform PCI Scans the cost is included in our Annual PCI Compliance Fee of only $30.00. This minimal fee is cheap when compared to other processors, who charge $79-$99 and expect you to become PCI Compliant on your own.
If you are looking for more information on PCI Compliance, here’s a great 10 Minute Video that will educate you on the subject.
1st National Processing Customers can begin the PCI Compliance Process by clicking here.
MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683
If you enjoyed this post, make sure you subscribe to my RSS feed!
Understanding your merchant account and the risk associated with it are very important, when it comes to avoiding disaster. Merchant account risk can vary from business type to business type. Lets look at a “Retail” business first. A customer comes in your store and purchases $300 worth of merchandise. You run the credit card and customer signs receipt. In this senario the purchase was made with a stolen credit card. Thirty days from now, the true card holder receives their statement and disputes the charge. Guess who is responsible for that charge…the merchant. The merchant has received stolen money and the charge will be reversed. This is just one risk associated with a merchant account.
Another senerio for “Ecommerce”, you receive an order huge order for 10,000 Widgets and run down to your post office to ship it. Three weeks from now the customers call his credit card company and says, “I did not receive the order”. You have not proof that you mail it or he received it, becuase you used the post office. This charge will be reversed at your expense.
You need to be aware of the risks and try to avoid problems. A sound plan for avoiding chargebacks should be put in place and you should always be aware of potenial problems. We put together a pdf about avoiding the pitfalls of a chargeback, take a look.
If you have any questions about merchant account risk or avoiding chargebacks, please give me a call.
MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683
If you enjoyed this post, make sure you subscribe to my RSS feed!
Understanding the term “Chargeback” is the first step in preventing them. A “Chargeback” is when a customer calls their credit card company and disputes charge on their statement. This dispute has the potential of turning into a “Chargeback”, which is a forced reversal of the charge from your account back to your customers account. Keep in mind that it comes with penalty fee per occurrance and if you get to many chargebacks within a given month, your account will be closed for “Excessive Charrgebacks” and under Visa / Mastercard Rules, placed on a Terminated Merchant File.
With that said, you can see that “Excessive Chargebacks” can destroy your reputation and the future of your business. So lets analyize the process and how to prevent them. First, when a customer makes the initial dispute, you will receive a “Retrieval Letter” requesting that you provide information on the transaction in question. You have only 7 Days to respond to the “Retrieval Request”. If you do not provided the requested documents within the time-frame, this transaction will become a “Chargeback”.
Now you need to analyize why this happened and take steps to keep this from happening again. Ask yourself, “What Can I Do Differently To Avoid This In The Future”. Below are somethings to consider:
1) Did the customer remember my Business Name and the fact they made the purchase ?
2) Did I ship the product in a Timely Manner from the time I processed the credit card ?
3) Do I have evidence of shipping, such as Signed Receipt from Fed-Ex, UPS, DHL, USPS ?
4) Do I have evidence of a Signed Credit Card Receipt or Manual Imprint of the card ?
5) Is my Customer Service Phone being answered to address potential customer problems ?
6) Do I need to change my “Return Policy” and be more understanding to customer issues ?
7) Am I on the Alert For Credit Card Fruad and using methoods set-forth by Visa / MasterCard ?
The above 7 questions will usually give you the answers to how Chargebacks can be avoided in the future. You must use common sense and make a honest assessment of the situation. Don’t fool yourself and think that this won’t happen again, because if their is a problem somewhere, it will happen again.
Remember that accepting credit cards is a “Privilege not a Right” and if you abuse that privilege, you may not be given a second chance. Stay out of trouble !!!!!!
If you have any questions about Preventing Chargebacks, feel free to give me a call.
MARK SANDS
http://www.usa-merchantaccount.com
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