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FAQ

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FAQ

The following information is more than just F.A.Q. section of our services. It is a comprehensive guide to the credit card processing industry as a whole. Every credit card processor has the same cost structure consisting of three categories.

The following is a breakdown of these categories:

Interchange Banking Fees - Acquiring banks and their credit card processing service providers are subject to interchange banking fees. These fees are compiled of over 270 categories which have been set by Visa/MC. Most processing companies bundle these 270+ categories into Qualified, Mid-Qualified, and Non-Qualified rates. Interchange banking fees are uniform across the industry and are designed to compensate Visa/MC Card issuing member banks for the risk associated with these transactions.

Transaction Fees - The processing networks house huge servers and are responsible for authorizing (validating) credit cards in real-time and transmitting data back and forth between banks and merchants. Transaction fees will vary between credit card processing companies and generally range between $0.10 and $0.35 per transaction.

Dues and Assessments - Similar to interchange banking fees, all acquiring banks and their credit card processing service providers are subject to dues and assessments, which are set by Visa and MasterCard and are uniform (the same for every processor) across the industry. Currently, dues and assessments for Visa are 0.0925% (0.000925) and 0.095% (0.00095) for MasterCard. Dues and assessments are paid by acquiring banks directly to Visa and MasterCard.

Questions & Answers

Q: What is a merchant account, and do I need one?

A: A merchant account is set up with a financial institution to allow you to accept credit card payments directly from your clients. Unlike with most third party services, money collected through your merchant account is deposited directly into your checking account within 2 to 3 business days. You need a merchant account if you want to take credit card payments from your clients using your own business name, and having the money deposited directly into your business checking account.

Q: How long does it take to receive our funds once an order is processed?

A: Funds are deposited directly into your checking account, within 24 - 48hrs.

Q: Q: Why are there different rates for different accounts?

A: The rates for merchant accounts vary based on the amount of risk involved in the transaction. The accounts with the lowest rates will always be the ones where the customer is present and the card is swiped and a receipt signed in a face to face transaction. The credit card companies view these types of transactions to be fairly low in risk for fraud, whereas internet transactions and transactions where orders are taken by phone or mail are generally considered higher risk since the customer is not present and the card is not in hand.

Q: What is a charge back?

A: A chargeback occurs when a customer disputes a charge on their statement by contacting the issuing bank instead of contacting you. If a customer does not recognize the charge on their statement, or they believe the amount was wrong, they may call their credit card company and ask them to investigate. Thus begins the chargeback. The merchant bank will charge you a fee for the retrieval of information and the charge back. The customer will be refunded their money directly through the credit card company and your checking account will be debited. Eventually, if your account has excessive charge backs, the bank may chose to cancel your account. The more you do to protect yourself against chargebacks, the better you will be. There is a great forum on this topic at merchant911.org. It's absolutely free and they will provide you with many tools and information to help cut down on the amount of charge backs and fradulent orders you will recieve.

Q: How can I accept 3rd party credit cards like AMEX, Discover, Diners and JCB?

A: When you sign up for a merchant account you are agreeing to accept Visa/MasterCard as form of payment and most 3rd party credit cards can be added to your account. It cant be requested by the merchant during the application process or anytime after. The 3rd party credit card company will assign the merchant an additional merchant account # and provide that file to the processor, who will then download your account information into your terminal or POS so all 3rd party transactions are processed.