How to Choose a Credit Card Processor

how-does-credit-card-processing-workIf you’re going to run any kind of business, you need to accommodate various payment methods from your customers. One of the most popular methods of payment, especially for purchases made through online businesses, is the use of a credit card. When you run a credit card for a customer, standing between you and the credit card company is a third-party processor. It is necessary to have this third-party processor to accept payment from major credit cards, and as with any aspect of running a business, careful planning must go in to choosing which credit card processor you’ll be working with to ensure you and your customers are satisfied with the purchase outcome.

What to Look for when Selecting a Credit Card Processor

It’s tempting when starting out a business to base many decisions solely on cost to save money. But, the old adage “you get what you pay for” often applies to essential services that are needed to run your business. Credit card processing is one of them, and there are several things you can look for that will ensure the purchasing end of your business is a success.

Total Overall Costs
Cost is important, but there are several associated with hiring a third-party credit processor. Start-up fees, monthly service charges, fees for transactions and verification of customer addresses can all add up so be sure to ask about these during the browsing process. Also ask for any discount rates that may be available with certain transactions, or based on number of transactions.

Comparison Shopping is Difficult
Be prepared to do plenty of research. Merchant sales parties are often hesitant to discuss final prices until terms are agreed upon, and it can be difficult to negotiate around this. Be sure to read the agreement in full before signing to ensure you understand what you will be paying for, and what you’ll get in return.

Ensure Software Compatibility
Be sure to check that the processor you’ll be working with has proprietary software that is compatible with any online shopping cart software you may use. Most processors work with the same company which has fairly universal compatibility, but it’s important to check to prevent problems during purchases.

Check into Cancellation and Termination Fees
In a perfect world, processors won’t charge for this, but make sure to ask about any fees that would be charged to you should you end your contract prior to term. The charge, if any, should be no more than $200-$400.

Make Sure Interchange-Plus Pricing is an Option
Interchange-Plus Pricing allows you to see both what the credit card company charges, plus what you are paying the processor to run the transaction. Without this service, you can be charged up to three different fees for different transaction levels depending on the card and how it is processed. Interchange-Plus Pricing allows you to see exactly what you are paying and where it’s going.

Customer Support
Every business software will run into problems from time to time, and when this happens, you’ll need support to resolve the issues. Find out hours of customer service and stick with processors who offer 24-7 support for no additional cost.

You want your customers to be able to purchase products and services with ease, and the processing of these purchases should be easy on your end as well to ensure you spend more time serving the customers than dealing with back-end issues. By choosing a reliable credit card processor, you will save time and money and make your business more successful in the long run.

Seven Common Mistakes to avoid when using Prepaid Credit Cards

gift-card-mistakesPrepaid credit cards are a popular gift, and a convenient way to inhibit spending but provide yourself the wide acceptance that credit cards offer. But, oftentimes the users of these cards do not get the most out of them due to several features that can make them difficult to use. Whether you’re planning to gift a prepaid credit card to someone, or purchasing one to use on travels, heed these seven suggestions to ensure you get the most value out of these valuable purchasing tools.

Seven Mistakes made When Using Prepaid Credit Cards

Mistakes can be made with credit cards through overspending, but mistakes can even be made when using a pre-paid card that can cause the user to lose money. To prevent this from happening, keep these seven tips in mind when using or purchasing a prepaid credit card.

1. Stay with the Familiar
When purchasing a prepaid credit card to use yourself on travels, or to gift to someone, stick with the popular brands. Visa and MasterCard are accepted at vendors worldwide and by selecting these brands you are ensuring your card will be accepted no matter where you go.

2. Stay Away from Specifics
While everyone has a favorite store, it may be unwise to purchase a prepaid credit card specifically for that retailer. This severely limits what a persona can purchase, and could even tie one into paying higher prices for items that they could get on sale due to card restrictions.

3. Keep Track of Purchase
Even with prepaid cards, you need to keep track of what you are spending. Knowing how much you have left on the card will prevent a situation where you purchase over the amount available, and lack another form of payment to make up the balance.

4. Watch for Fees
Some cards charge a purchase fee when using the card, or they offer the ability to withdraw money from an ATM, but charge an additional fee to do so. These fees can add up and take away from the amount available on the card that you can use for purchase.

5. Rewards have Advantages
Many card companies offer rewards and points accumulation that can add up to free merchandise when used properly. When purchasing a card, keep this in mind as you can end up with more than your original purchase value.

6. Plan Ahead
If you’re purchasing the card to use for traveling, be sure to load plenty onto it to avoid running out of money, or paying additional fees to reload more funds. Some cards charge fees to add more money, so be sure to load plenty on it to ensure you have access to the money no matter where you are or what time of month it is.

7. Don’t Assume Acceptance
While most cards are widely accepted, especially if it’s one of the major credit cards, some vendors will not accept prepaid credit cards due to their processing fees. Make sure you carry an additional form of payment at all times to ensure you’re not scrambling in the event of an emergency.

Keeping these tips in mind will help you get the most out of your prepaid credit card, and ensure you don’t get charged any additional fees while using it.

How does credit card processing work?

how-does-credit-card-processing-workCredit cards are an extremely important part of modern life. Access to a credit card makes life easier in many ways for the credit card holder. A credit card user can avoid carrying large amounts of cash that may easily get lost as they go about their business. Credit cards also allow people accomplish other important financial tasks.

People can use the credit card to earn points for merchandise or even cash if they charge a certain amount during a given period. People can also use the card to buy items and pay them off in small amounts, thus helping to build a strong credit history. A good credit history is vitally important in many areas of life including applying for many jobs and renting an apartment or buying a house.

While many people are aware of such advantages, they are not entirely aware of exactly how credit card processing works when they go to buy something in a store. The process has four basic steps: authorization, batching, clearing and funding. While some aspects of each step may differ from place to place, the general process is the same in all areas.

Authorization is the first step. During this step, the person holding the credit card asks to buy a product or service from a retailer or other merchant. The person’s request is then submitted by the merchant to the authorization agency or acquirer that is in charge of processing the credit card transaction. The agency will then ask the bank or credit card agency authorizing the card if the person holding the card has valid credit. If this is true, the authorizer will grant permission for the person with the card to buy the product.

Batching takes place at the end of the day. Each individual merchant gathers up the day’s receipts in a batch. The batch is then sent to the acquirer. Batches may be sent to multiple acquirers if necessary. Sometimes stores find this is necessary as different credit cards have been used during the day’s transactions. But most merchants use a single acquirer for all their credit card processing work.

Clearing takes place as the batch is sent to the acquirer to ask for payment. The card network sends each transaction to the appropriate card network. The issuer will charge small fees known as interchange fees for each purchase made. Interchange fees vary from card to card but are generally one percent of the value of the purchase price. The credit card company then sends the remaining amount of the purchase price to the acquirer.

The last step is known is funding. Funding is when the merchant gets paid. The acquirer adds what is known as a discount fee to the purchase. A discount fee is a small sum that the acquiring bank takes to offset the cost of processing the transaction. After that step is completed, the merchant is paid for the purchases buyers have bought with their credit cards.

What are the steps to take after discovering credit card fraud?

credit-card-fraudCredit cards are one of our most versatile financial tools. A credit card is widely accepted in many venues. Unfortunately, sometimes a credit card can create problems for the cardholder. Credit card fraud is a fairly common crime, one that costs us all billions of dollars each year.

Take Multiple Steps
If you have discovered that you are a victim of potential credit card fraud, there are multiple steps you must take to avoid problems. Carrying out such steps will help make sure that you are not forced to pay for items you did not purchase or confront the nightmare of ongoing bad credit as a result of someone else’s fraudulent behavior.

Confirm the Problem
The first thing you should do is make sure the problem is real. Sometimes scammers send out false emails to people hoping to get them to reveal their credit card number. The only person you should trust to verify fraud on your account are workers at the credit card company or your bank.

Learn Specifics
Get specific information about what was taken. In almost every state, consumers are only responsible for up to $50 in liability charges for credit card fraud. However, the criminal may have used to card to get other information about you such as your social security number, home phone number, exactly address and information about important fiscal aspects of your life such as your retirement accounts, monthly rent or mortgage payments. This can pose much bigger problems than a lost fifty bucks.

Cancel the Card
Cancel your card immediately. This can be a huge pain in neck but it must be done. Your old credit card must be made invalid as soon as possible. Call your bank and ask if they can issue you a new credit card as soon as possible. If fraud happens on a weekend, this can take a few days. On other days of the week, you should be able to get a new card very soon, possibly within the hour.

Create New Passwords
Create a totally new and challenging password for your new card. Create a password for your new account that is not obvious. Consult with your spouse about a password that is easy for both of you to remember. Use unusual characters and at least one number. Change other passwords as well including the passwords to your bank account, investment savings account and email addresses.

Pay Attention to Future Transactions
Just because it happened once doesn’t mean it can’t happen again. Monitor all your future statements closely. If possible, keep a spending diary for a few months. Note what you bought with your credit card and where it was purchased. Make sure your statements from the credit card company match the records you keep. If you see any potential problems, contact your credit card company immediately. You should also contact the three credit reporting companies TransUnion, Equifax and Experian and get a credit report to make sure they have accurate records about your credit.

9 Easy Steps to Prevent Credit Card Chargeback Fraud

credit-card-processingCredit card fraud is a serious issue for consumers and business owners alike. An increasingly new practice has arisen that’s causing concern for small business and e-businesses alike. It’s known as chargeback fraud, and it’s being performed by seasoned and novice criminals alike. While it may not seem as serious as other forms of fraud, it’s concerning for everyone involved and business owners need to know how to protect themselves and their business from this criminal practice.

What is Chargeback Fraud?

Consumers who engage in chargeback fraud will often claim a purchase was not authorized on their account and demand a refund. Or, alternately they will claim they ordered a good or service and it was never delivered and therefore are entitled to a refund. Since the “customer is always right,” the task of proving the purchase was authorized or the good was actually delivered falls on the bank providing the financing. If they cannot prove fraud, they’re forced to pay back the purchase amount and additional fees and fines along with it.

Many small businesses provide their own financing, or have limited funds within bank accounts, and paying these small fees over time can add up to bouncing funds and more fines for the business.

Merchants should be aware of chargeback fraud as the practice is on the rise. A 2012 study showed that approximately 60 percent of fraud claims are actually “friendly fraud,” and can result in merchants losing $2.33 for every $1.00 a customer claims has been lost.

Although this friendly fraud is difficult to recognize, these practices can help stop customers before they attempt to fraud you out, and assist in determining if a crime has taken place.

1. Select Reliable Payment Platforms – There are several platforms that are highly reliable for e-businesses, and some even offer fraud monitoring services as part of their packages.

2. Take Advantage of Security Codes – each credit card comes with a 3- or 4-digit code in addition to the regular credit card number. Ensuring customers are required to enter these numbers when making a purchase can help you confirm the validity of their card.

3. Track and Monitor Suspicious Practices – take caution when processing large orders and keep records of past fraudulent attempts to prevent similar situations in the future. Also keep track of customer information; if a customer requests a refund once, then several months later requests the same type of refund, this should raise red flags.

4. Provide Quality Customer Service – every order should come with a tracking number if being shipped, and you can even request signature confirmation upon delivery. For services, provide receipts to customers and always keep copies for business records as well.

5. Strong Passwords – sometimes customers and businesses are victims at the same time. To protect both you and your customers during online transactions, require strong passwords to protect both customer accounts and your business as a whole.

6. Stay Compliant – maintaining PCI compliance can help your business protect itself from potential fraud by ensuring customer data is protected in addition to all business transactions. Not only is this step helpful, it’s mandatory for all businesses.

7. Keep Websites Up-To-Date – once you’re business is PCI compliant and you are using a secure payment platform, make sure product URL’s are up to date and stay safe and secure throughout the order process. A security auditor can help with this process, or practice orders to make sure product URL’s are available all throughout checkout and afterwards during the tracking and shipping process.

8. Education for Staff – employees should be aware of security practices and how to watch for fraudulent practices and behaviors. The more vigilant your staff, the better chance you have of catching a fraud attempt in progress.

9. Details for Receipts – for e-businesses, provide confirmation emails that include detailed information about the charges that will appear on a bank statement. For personal services or transactions made in a store, provide receipts and keep records of the transactions and how they should appear on the card in order to fight back if someone reports a fraudulent claim.

Being vigilant will not only ensure the success of your business, but can prevent you from friendly and malicious fraud alike.

How do I report credit card fraud?

credit-card-fraud-what-to-doAccess to a credit card allows people to earn all kinds of important benefits including the opportunity to create a high credit score. Unfortunately, credit cards also come with some downsides. One of the most common problems associated with a credit card is the potential for fraud. Fraud is a highly common crime, one that is on the rise as thieves find it easier than ever to access important information from sources like online stores.

Credit card fraud can create all sorts of havoc in your life should you become a victim. A false credit card report may prevent someone not only from buying a product but also from getting a good mortgage rate or even a well-deserved promotion. If you think you have been the victim of credit card fraud, it is imperative you report the fraud as soon as you possibly can.

Your first step is to find out all you can about your card. Many people have multiple credit cards. Make sure that you know the exact name of the credit card involved. You will need to come to any report with as much information as possible about the details of the card use and the cardholder or cardholders if you and your spouse both share a credit card. This should include the name or names in which the card is held. It should also include the credit card number and the card’s expiration date. If you or your spouse use a different name on the card (such your maiden name) than the name you use for other purposes, this should be noted as well.

Be prepared to have all this information on hand before you do anything else. You will likely need your social security number as well as that of your spouse. You will also probably need his social security number and date of birth as well as your own.

Once you’ve gotten all information, you will need to file an identify theft report with your local police. You then need to call the credit card issuer. Note the people you speak to during the process including their names and titles. After you’ve finished the conversation, you should immediately write a letter providing all details about the fraud to the credit card company. Send it to your credit card company’s billing errors department. Ideally, mail it certified mail to confirm it was sent. The company will begin an investigation. You should be kept abreast of this investigation at every turn including when the investigation is concluded. At that point you have the right to ask for written conformation from the company that you have been exonerated.

In the meantime, file a fraud alert with Experian, Equifax and Transunion. These are the three major credit reporting companies in the United States. The companies will let merchants know that any further use of your credit card is unauthorized. This may help police catch the perpetrator. It will most certainly make sure that your credit rating is protected.

Guide to Selecting the Right Credit Card

prepaid-debit-cards2Credit cards can be the most useful items in anybody’s wallet. Florida credit card processing companies are now offering more services than ever including such things as cash back, identity theft protection and even travel insurance. However a lot of people have trouble with this many choices. But there are guidelines to follow in order to obtain the right credit card. The first step anybody should do is to get a glimpse of his/her credit report. This is the way lenders evaluate potential customers and will narrow down the field of offerings. A number of websites offer this service free of charge once every calendar year. 

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Small Business Versus Corporate Credit Cards

OLYMPUS DIGITAL CAMERAMany companies compare business credit cards versus corporate credit cards. While small business owners are usually the target market for business credit cards, larger organizations such as corporations or governments take advantage of so-called corporate credit cards. The usually higher fees necessary to establish a corporate credit card account makes sense for a large number of card users.

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Difference Between Credit Card and Line of Credit

Businesswoman writingWhen running a business, it is often necessary to open a credit account. With an established credit profile, a business owner can buy products and services on credit and build the company. With that being said, there are multiple lines of credit and loan products available. The two most popular styles of loans are credit cards and lines of credit; both offer distinct advantages to an entrepreneur. Here is a quick guide on the difference between a credit card and a line of credit.

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