Credit Card Processing
A merchant account is an agreement between your company and an acquiring entity which entitles you to accept credit card payments. A merchant account is required to accept credit card payments.
Non-qualified rate apply to transactions that involve internationally issued cards (where card issuing entity is located outside the merchant account country or region), corporate, and rewards credit cards. There are also specialized transactions like eCommerce and over the phone (IVR), that fall into non-qualified rates (a.k.a. card not present transactions).
A monthly minimum fee is similar to a monthly fee. It ensures there is minimum activity in the merchant account. Merchants pay a minimum amount per month, even if they do no transactions. However, if the merchant does do a certain level of transaction the monthly fee disappears. In general, monthly minimum fees are much better than monthly fees.
Here’s an example: if you process $1,000 in credit card sales over a month, and let’s say your credit card fees totaled $22.20 for that period. If your monthly minimum is set to $25, you would be charged $2.80 ($25.00 – $22.20) for the month. That’s much better than a flat rate of $25/mo. In general, monthly minimums are achieved with around $2000 in credit card sales.
- ACH transactions have the lowest cost associated with any payments system.
- An ACH payment is typically more secure than sending money by other means. This is because the ACH Network that this transaction passes through is completely automated and in order for the transaction to be processed, all of the banking information has to be completely verified and authorized, and they need to abide by the Operating Rules.
In 2000, the ACH began releasing a wave of new applications collectively referred to as “e-check” applications. These applications make it possible to accept payments by phone, online, and even the conversion of mailed in checks to electronic items.
Another variant of ACH transactions are “Same Day ACH” where payments and settlement are initiated and settled the same day. Also, “Real Time Payments” transactions might be also available, where payments are initiated and settled almost instantaneously.
Online Payment Gateways
The tool eliminates the need for paperwork to be mailed or faxed, which leads to easier and more efficient resolutions.
The most common claims for chargebacks are:
- Incorrect amount charged to the cardholder.
- Item not received.
- Items or services not as described.
The chargeback system is run by the card brands (Visa, MasterCard, Discover, American Express, etc.).
If you receive a chargeback notification in the mail, please respond as quickly as possible. There are time limitations and if the response date has passed, you may be left with little recourse to dispute the chargeback.