Merchant Account Blog & Credit Card Processing Blog

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VISA MASTERCARD INTERCHANGE INCREASE

Visa Changes ( April 2009 )

Commercial Cards
Visa is making two adjustments that will affect U.S. transactions processed under all three commercial products:

• The Level II data incentive interchange rate will be increased.
• The Standard interchange rate will be increased.

Additionally, Visa is making adjustments specific to Visa Corporate and Visa Purchasing products:

• For Visa Corporate products, Visa is reducing the Retail interchange rate and increasing the Electronic interchange rate.
• For Visa Purchasing products, Visa is increasing the Retail interchange rate, the Card Not Present interchange rate, and the Electronic interchange rate.

Changes for GSA Purchasing Card Transactions
Visa will allow GSA Purchasing Card and GSA Fleet Card transactions accepted at Non T&E* Merchant locations to be eligible for the Level 3 Interchange Rate program

• Transactions must meet the existing level 3 rate criteria to qualify
  • There are no changes to the existing Level 3 data requirements
• Today the best rate is Level 2

*T&E MCCs include: 3000-3999, 4112, 4411, 4511, 4722, 5812, 5814, 7011, and 7512

Visa will increase the existing GSA Large Ticket Rate for GSA Purchasing Card.

• Visa will delete the minimum transaction amount of $5000 and will delete the GSA Large Ticket I rate program

New Debt Repayment Fee Program

• Visa is introducing a new interchange fee program and rate for domestic debt repayment transactions
• Only transactions for collectible consumer debt on auto loans, credit card payment, mortgage payments, and student loans are allowed
• Only domestic consumer debit card transactions from the following MCC’s are eligible
  • 6012 —Financial institutions–merchandise and services
  • 6051 —Nonfinancial institutions–foreign currency, money orders (not wire transfer), and travelers cheques

New CPS/Debit Tax Payment Fee

• In the October 2002 business release, Visa announced a pilot program for U.S. federal, state, and real estate property tax payments which is scheduled to end in October 2008
• With the expiration of the tax pilot, Visa will implement a new interchange rate program for Visa consumer debit card transactions submitted by acquirers from a participating tax authority or third-party service provider accepting payments on behalf of the tax authority

MasterCard Changes ( April 2009 )

Consumer Bill Payment
Consumer Bill Payment

• Utility Rate Program Changes
  • MasterCard will no longer require the “U” code to qualify for Utility Interchange nor are they requiring registration
  • Utility (MCC 4900) consumer card qualified sales will only be eligible for the Utility Interchange rate program(s)
• MasterCard will no longer allow the Merit 3 or Service Industries break-even
• Service Industries Rate Program Changes
  • MasterCard is removing the following Merchant Categories as eligible MCCs to qualify for the Service Industries program (SIP)
• 4812 (Telecommunication Equipment/Sales)
• 5960 (Insurance - Direct Marketing)
• 6300 (Insurance Sales, Underwriting, and Premiums)
• UCAF (Full and Merchant), Merit III and Merit I Debit Program Changes
  • MasterCard is removing the following Insurance merchant categories as eligible for the UCAF (Full and Merchant), Merit I, and Merit III Consumer Debit interchange programs
• 5960 (Insurance - Direct Marketing)
• 6300 (Insurance Sales, Underwriting, and Premiums)
• MasterCard will no longer allow Real Estate (MCC 6513) to qualify for Merit III (Base) and Merchant UCAF Consumer Debit Rate programs

Chargebacks

Revised Standards for the Quick Payment Service Program

• MasterCard is requiring all QPS merchants, regardless of Merchant Category Code, to obtain full authorization in order to be chargeback protected
• The following MCC’s that previously received chargeback protection with no authorization required, will have to obtain full authorizations
  • 5814 (Fast Food Restaurants)
  • 7832 (Motion Picture Theaters)
  • 7523 (Automobile Parking Lots and Garages)

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VISA Reports Earnings After The Bell !!!!!!!!

Visa ( V ) reported strong numbers after the bell, sending shares higher in after-hours trading. Visa beat the street expectations posting an adjusted $0.78 earnings per share. Company more importantly reported a 12% Growth In Transaction Volume, over last year.

“We are very pleased with our fiscal first quarter earnings results and our ability to deliver strong operating performance,” said Joseph Saunders, Chairman and Chief Executive Officer. “Despite the increasingly challenging economy, processed transaction growth, the strength of debit, and the global diversity of our business continue to highlight the resilience of our business model.”

Keep in mind that Visa is not a lender, nor a bank. They make a “Percentage” on the transaction volume.

Shares are soaring at the moment, trading up in “After-Hours” trading.

DIGG THIS STORY !!!!!!!!!!!!!!!!!

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Cardholder Fees On Foreign Transactions !!!!

Planning a vacation out-side of the United States ??? Planning a large ecommerce purchase from a foreign country ???? Well be prepared to pay a “International Transaction Fee” if you are using your credit card. These fees are charged by issuing-banks to cardholders who make purchases outside of the United States and may include US Territories, such as the Virgin Islands or St. Thomas.

Keep in mind that the fee is based on US Dollar Amount of your purchase, ie.. if you make a purchase in Europe at $100 Euros, your fee is based on $125 US Dollars after the currency conversion. With the current value of the dollar being at historic lows, you may want to take this into consideration when planning major overseas purchases.

Fees may vary between different issuing banks, with Capitol One claiming they do not charge any fee on foreign credit card transactions. Here is a list of popular issuing banks published at CardRatings.Com, with their current fees for international purchases:

A January 2009 survey of credit card issuers revealed the following foreign transaction fees:

• American Express - 2.7%
• Bank of America - 3%
• Chase - 3%
• Citi Bank - 3%
• HSBC - 3%
• Washington Mutual - 1%
• Wells Fargo - 3%
• Capital One - No Foreign Transaction Fee !!!!!!!!!!!!!
• Discover- No fees. Accepted in China, the Caribbean, Central America, Mexico and certain parts of Europe. Note: Discover is adding a 2% fee on May 1, 2009.

CARDHOLDER’S BEWARE:

We hope this saves you a huge surprise when receiving that credit card statement after making that large foreign purchase. Reading that fine-print in a cardholder agreement is never easy, but knowing the facts can keep you from falling into a trap.

Buy American !!!!

DIGG THIS STORY !!!!!!!!!!!!!!!!!!!!!!!

MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683

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Heartland Payment Systems Inc Data Breach

More information has surfaced on the cardholder data breach that occurred at the Princeton NJ’s credit card processor, “Heartland Payments Systems, Inc”. President and Chief Financial Officer, Robert Baldwin, stated “As deeply regretful as we are, it is important to note that in most of the cases the information would be card number and expiration date only,” and that “The majority of the data breached did not have names or other personally identifiable information available to the bad guys. So there’s nothing our merchants need to worry about.”

Seems that only customer card numbers and expiration dates were compromised and that no personal information, such as names, addresses, social security numbers, were compromised in the theft. Still no information on any damages to cardholders have been released.

Merchant’s processing with Heartland Payment Systems, Inc will be held harmless, as the breach took place on the server-side of the card processor. Small business owners with a merchant account should be sure that they are PCI Compliant to avoid any credit card processing fines from Visa or Mastercard. Here is A GOOD VIDEO to help small merchants understand their risk and responsibilities in combating credit card fraud.

Company Cites Cyber Terorrism Attack

Baldwin said Heartland executives have been in discussion with the U.S. Department of Justice and the U.S. Secret Service and were informed that this breach was committed by an international organization that has also targeted other U.S. processors and financial institutions.

“I am finding it hard to believe that we are not responding to an obvious act of cyber terrorism aimed at trying to disrupt the payment system of the United States, and it just blows me away that nobody sees it,” Martaus said. “All of these intrusions are the work of one Russian Mafia gang. And 15 other processors apparently have been attacked and no one knows about it.”

Martaus suggested, however, that federal officials do know about these attacks but they’re not telling anybody. “This should be a national emergency, and the Pentagon, the National Security Agency, everybody should be involved in this,” he said. “This could absolutely destabilize the payments industry and bring it to its knees. A cyber terrorist attack, while not meant to destabilize the government or the economy, can do just that.”

MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683

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US Banks Report Lower Credit Card Spending

The large US Banks reported lower credit card spending in Q4-2008. According to CNN Money, the large issuing banks report consumer credit card spending was down in the 4th Quarter of 2008.

• Bank Of America: Down 17.2 % in Q4, over the same quarter.
• Citi Bank: Down 15 % year-over-year.
• JP Morgan Chase: 8 % decrease, year-over-year.

In the face of the worst economic cycle in decades, the consumer is pulling in the reins on credit card spending. With consumer confidence at the lowest levels since the “Great Depression” and the uncertainty on weather the new administration can actually put us on a path to recovery, the US Consumer is sitting on the sideline, waiting for the “Miracle Of Change”, promised last fall.

MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683

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H.R. 5244 Credit Cardholders Bill Of Rights

Consumer protection legislation sponsored by Rep. Carolyn Maloney (D-NY) that would limit interest rate hikes and hidden fees on credit card accounts. This bill passes the US House of Representatives and is awaiting a vote in the US Senate. President Barack Hussein Obama stated during the campaign that would sign the legislation into law, should the bill get through the Senate.

In the face of the “Credit Crisis”, new regulation on the card issuing banks is probably unwise and unlikely. Consumer protection laws governing banks at this point in time could potentially stifle credit card lending even further, causing a deeper spiral in the recession.

Even stark opponents of the credit card industry, like US Senator Chris Dodd ( D-CT ) are unlikely to try and move this legislation to the Senate Floor anytime soon.

MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683

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Potential Largest Breach In History

Heartland announced this week that the company breached possibly over 600 Million credit card transactions, since May, 2008, as reported in the Ny Times. Seems hacker’s secretly installed a software program that captured the personal credit card numbers, of customers swiping their credit cards at merchant locations who process credit cards with Heartland.

Information seems limited and it’s not clear, as to the extent of damages.

Heartland Payment Systems, Princeton, N.J., works with about 175,000 small merchant accounts and processes about 100 million credit card processing transactions a month.

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.

• Offer A Superior Product Or Service
• Quickly Resolve Customer Service Issues
• 100% Unconditional Return Policy
• Toll Free Customer Support
• Maintain Signatures + Shipping Records

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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Saving Money On Your Merchant Account Fee’s !!!!!!!!!!

Saving money on your merchant account & credit card processing fee’s has never been more simple. We have put together a program to save you hundreds, if not thousands of dollars in fees, depending on your current monthly volume. Perfect solution for any business owner looking to cut cost’s.

INTERCHANGE PLUS PRICING - Start Saving Today !!!!!

In the past, this program has been reserved for High Volume Chains, such as Wal-Mart or McDonalds. We have opened the flood gates for any business size to profit from the savings. For those of you who are not familiar with the term “Interchange”, interchange is the cost passed on by Visa & Mastercard which accounts for the majority of your transaction cost’s. Interchange consists of several hundred catagorys which any transaction could fall under. Here and links to the most recent Interchange Schedule’s for Visa and Mastercard, as you will see this is quite complicated.

To simplify matters, most merchant account’s are on a “Tiered System”, consisting of Qualified, Non-Qualified, and maybe Mid-Qualified rate. These tier’s cover any downgrades by Visa or Mastercard in which certain transactions may fall. This simplifies “Interchange”, but alway’s cost’s more in credit card processing fee’s to a merchant on the Tiered System.

BOTTOM LINE - SAVING MONEY LIKE THE BIG BOY’S !!!!!!

We are now offering “Interchange Plus Pricing” to merchants of any size. Previously reserved for large corporations, this pricing schedule will saving you money on your credit card processing fee’s and is available to any merchant account, regardless of size.

Call us immediately for a cost analysis and began saving like the big boy’s.

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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

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