All applications for a merchant account go through an underwriting process to gauge the level of risk for that particular business and business type. Some of these processors are directly affiliated with the member bank and in some cases owned by the member bank. All of these processors must be “registered” as an Independent Sales Office (or ISO) with a member or acquiring bank. Member Banks need ISO’s in order to generate and approve as many merchant accounts as possible. The Payment Card Industry strictly monitors activity at all levels in order to provide retailers and their customers the highest level of privacy and security.

The Independent Sales Office, or ISO, is not only focused on generating merchant accounts for the Processor they are registered with, but are responsible for maintaining their relationships with the merchants that are accepting and processing credit cards through them. An ISO can be anywhere is size from a few people to hundreds and can offer everything from merchant accounts and customer service to technical support and credit card terminals.

Continue reading "What is an ISO and How Does it Affect Merchant Accounts?"

One would be hard pressed to find anyone in the United States or around the world that doesn’t have at least one credit card in their wallet. Whether you have one or ten credit cards, chances are you have used it to purchase something recently. I can only speak for myself, but I am still amazed (and sometimes annoyed) when I go to pay for something with my credit card just to be told “We don’t accept credit cards” or “Sorry cash only.” The first words out of my mouth are always “Why don’t you accept credit cards?” and I have noticed time and time again that the reasons these merchants give never make any sense to me.

The majority of merchants seem to have no idea just how beneficial accepting credit cards can be for their business. If they just took a little time to learn how the Payment Card Industry works, I am sure I would hear a lot fewer negative comments. There is a common misperception that accepting credit cards or opening a merchant account is expensive, time consuming and just not really worth it. For every merchant that has turned away a paying customer because they wanted to pay with a credit card I ask, “Can you afford not to take credit cards?” More often than not I find myself spending some time with the merchant to let them know what the benefits to their business could be and also explaining the simple process of getting a merchant account.

Continue reading "Merchant Accounts and the Payment Card Industry (PCI)"

Most merchants like to think they are savvy when it comes to shopping for a merchant account. I mean how hard can it be, you just look at the rate, find the cheapest one and sign up, right? It is no wonder that many merchants feel taken advantage of by their processor and angry with their sales representative. Many sales agents are not educated on what to ask merchant service providers, and it may be up to you to provide them with the appropriate questions.

Here are some tips to ensure your account is set up correctly:

Continue reading "What to Know When Opening a Merchant Account"

We all frequently read about various types of scams to look out for, warnings of Packet Sniffing, and stolen card numbers. The real scams to look for are the ones that are directly on your merchant account application. Fees seem to suddenly pop up after you have signed your agreement.

One of the most interesting scams that has come up frequently is related to hidden merchant fees. This scam entices merchants to apply for accounts at low rates with a brief quote. They conceal fees, rates, and many various extra charges. When applying for a merchant account, is important to stay away from advertisements that claim to have the lowest rates around. Some key fees to ask for are: discount rates, mid qualified rates (keyed rates), non qualified rates (rewards card and purchase card rates), transaction fees, setup fees, annual fees, statement fees, services fees, PCI Compliance fees, merchant club fees, and early termination fees.

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With technology on the rise and our economy weakening more and more, scams are evolving within various industries. The merchant services industry is vulnerable to a variety of different scams.

About a month ago, a merchant contacted our company to set up a merchant account and began running thousands of dollars in transactions. After the first month of processing we received a call from a business owner claiming he received a credit card processing bill from us, but that he does not take credit cards. The imposter account was a SCAM! The fake purchases were made with stolen credit cards and deposited into bank accounts owned by the fake company. These guys generally run small transactions and fly under the radar. They also registered a domain name that is similar to that of the business they were impersonating.

How might this have been caught sooner? Merchants and consumers should check their credit reports frequently and report any suspicious activity. It is also helpful if companies look through the web to see if there are websites that resemble their own or use their business name.

Continue reading "Watch Out For Merchant Account Scams"

Credit card processing has been around for many years in some form or another. Back on the “Little House on the Prairie,” the Olsen general store allowed consumers to pay for items on an account. All the consumers were kept in a log book and paid when they could. We have evolved as a nation, and so has our technology.

In New York, in 1950, the first credit card was released by Franklin National Bank of Long Island. It was also in New York in 2001 that our entire outlook changed. The World Trade Center was attacked and Homeland Security was created to protect our nation from terrorism. The government put in place The Patriot Act, which affected the merchant services industry by putting stricter guidelines on account approvals. Merchants are now required to submit a copy of government issued documents identifying themselves and their business.

The following items are considered acceptable (you will need a minimum of one from each category):

Continue reading "Is It Getting Harder To Get A Merchant Account?"

Our economy is in a downturn and many financial institutions are tightening up guidelines and raising fees. These days even acquiring banks are cracking down on various business types. No company wants to take on a possible financial loss. There are merchant services providers out there that specialize in high risk business, but you have to be prepared to provide all the information that is requested.

Merchants may be required to provide the following:

• Two years of tax returns for the guarantor
• Six months of processing statements. If you have not processed before, you will be required to provide six months of bank statements
• If you are an internet based account, you will need to make sure you have a clearly visible return policy
• It helps to have a tangible product – I once had a loan restructuring company create a package with a welcome letter and question kit to send to all his customers once they purchased his services.

Continue reading "Is Your Merchant Account Considered High Risk?"