Merchant Account Blog & Credit Card Processing Blog

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Visa announced that it will lower the Interchange Rate on gasoline purchases in an effort to lower the cost for consumers. The first is a “Cap” on debit card transaction fee’s for “Visa Debit Cards”. This change already become effective on July 18, 2008.

A restructuring of the Interchange Rate for gasoline sales will take effect in October 2008, which will lower the fee’s associated with “Visa Credit Cards”, charged to gas stations. Hopefully this is good news for consumers, who are finding hard to make ends meet. With the competitive nature of the gasoline stations, consumers should get some relief as gas station owners pass along the saving on credit card processing to the consumers.

No word yet on Mastercard, but it is likely they will follow suit.

MARK SANDS
http://www.usa-merchantaccount.com

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Credit Card Fair Free Act (HR 5546) ) - House Of Represenatives

On July 16, 2008, the U.S. House Judiciary Committee passed the Credit Card Fair Fee Act (HR 5546), by a 19 to 16 vote. Legislation was introduced by D-Rep John Conyers of Michigan back in March of this year. The bill addresses government price controls of interchange rates charged to businesses through their merchant account agreements. This bill clearly states that the board will “set rates and terms” for access to the benefits of accepting electronic payments.

We feel this bill is very dangerous to small merchant’s with business types of higher risk, as they may get squeezed out of the market, by mandated pricing by the goverment. By lowering the margin’s of the credit card processing providers, they will surely cut the amount of risk they are willing to accept. This would surely cost may small businesses, especially internet-based-merchants the ability to accept credit cards at their business, as no provider would accept the risk with lower rewards.

The credit card processing indusrty over the past ten years has regulated itself, as it should in a Free Market Economy. Ten years ago, a merchant’s monthly overhead to accept credit cards was much higher than it is today. Then, a merchant had a choice of paying $1,200 for a credit card terminal or leasing one for $3,400 over a 4 Year Contract. Those day’s are gone, as merchants can receive a free terminal with their merchant account. Today, many things are negociable, even to the smallest of merchants, as the competion is fierce with the introduction of the internet.

As for the idea of government price controls in a free market economy, well today’s congress just does not get it. Back in September of 2007, legislation was passed to control the interest-rates on student loans. This caused all of the major banks to stop student loan lending in the Spring of 2008, then guess who came to the rescue 2 month’s ago, the legislature !!! They passed a new bill, guaranteeing the student debt, with tax payer dollars. ( I don’t think they will be guranteeing any merchant accounts when mom & pop can’t get a one, do you ?? ).

Again, we think this is bad politics and bad for business. Please share your thoughts.

MARK SANDS
http://www.usa-merchantaccount.com

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Level 4 Merchants:

According to Visa’s Website, a level 4 merchant is described as: Any merchant processing fewer than 20,000 Visa e-commerce transactions per year, and all other merchants-regardless of acceptance channel-processing up to 1,000,000 Visa transactions per year. Please keep in mind that this reffers to Transactions Processed, not dollar volume processed.

PCI Compliance Requirments:

An annual PCI Self-Assessment Questionnaire is to be completed ans signed by the Principal or Officers of the company. Questionaire should be available by contacting your merchant services provider.

A Quarterly Network Scan provided by an Approved Scan Vendor, is also required.

Again, please direct any questions to your merchant services provider, as failure to become compliant could result is termination of your credit card processing agreement.

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 PCI DSS stands for “Payment Card Industry Data Security Standard”. The card associations are cracking down on loose security measures with regard to credit card processing. The new effort will provide new standards to follow with regards to credit card data handling and data security.

Seems that not only eCommerce Transactions are in question, as the card associations have defined different levels, including “Card Present” retail transactions. Security issues will vary by level and all merchant types must be within compliance or risk termination of your merchant account.

We will be covering this topic in detail, shortly. 

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