Category Archives: Merchant Services Feedback
We have had several questions regarding basis points today at the PaymentMax office. What they are? and how to figure to them out. So, I decided to revisit an article I wrote back in September 2010, “What are Merchant Account Basis Points?”
- Basis points are equal to the discount rate on a merchant account.
- Basis points are represented by a whole number to eliminate decimal and fraction expressions.
- A basis point equals 1/100th of 1% (or 0.01%).
For example, if you have 159 basis points than the qualified rate would be 1.59%.
- The qualifed rate will have the highest basis points because the mid-qualified and non-qualified rates are actually surcharges on top of the qualified rate.
For example, if your qualified rate is 150 basis points (1.50%) and your mid-qualified rate is 30 basis points than your total basis points will be 150 + 30=180 basis points, or 1.80%. Similarly, if your non-qualifed surcharge is 1% (100 basis points) than the total basis points for a non-qualifed transaction is 250 (2.50%).
- Basis points are determined by card associations (also known as interchange) and merchant account provider fees. Interchange is what merchant account providers pay to card associations for processing merchant’s transactions. The current interchange rate is available on card associations websites.
For example, if interchange is 148 basis points (1.48%) and your merchant account provider’s fees are 20 basis points than the total discount rate would be 168 basis points (1.68%)
For more information on merchant account basis points, rates, fees, or next day funding visit www.paymentmax.com.
We get a lot of great questions here at the PaymentMax office. So good, that I like to post them for other merchants out there who are thinking the exact same thought…Today’s top question has been about re-emailing receipts to customers, and how long the user has access to previous transactions.
The answer is 30 days. You can easily resend any receipt (via email) to your customers from the past 30 days transactions. If you are using ROAMpay mobile you would select Inquiry, Last 30 days, and locate the transaction in question. Click on the receipt to resend, and enter the email address. Done! Easy!
If you have not received an email from your recent transactions, log in and find ROAMplayer web edition, click it, log in, and select transactions from the menu list. Find the transaction in question and resend it to yourself or your customer.
As mobile businesses grow a common concern among merchants is, “how do I add multiple lines, and can I use multiple devices?” The answer is yes..PaymentMax Processing makes growing your mobile business a breeze. Here are some details.
You can set up your credit card terminal, cell phones, and tablets to one merchant account. There is no need to have multiple merchant MID or TID. All linked devices will process under one merchant account and deposit funds into the same bank account.
All that is needed to add additional sub-lines to your merchant account is a separate phone number. The sub-lines can then be added to your mobile credit card processing app manually by the user.
There are additional charges for sub-lines. Contact your merchant services provider for the different fee schedules.
Sub-lines are easily distinguished from one another with detailed mobile credit card processing billing reports.
For more information on mobile credit card processing, adding devices, or sub-lines to your merchant account. Visit www.paymentmax.com
A great question we received in the office today is do I need to manage software updates on my phone if I choose AprivaPay over ROAMpay (or PAYware mobile)? The answer is “No”.
A great benefit of AprivaPay is that it is browser not software based. This means that instead of downloading a credit card processing app, the merchant accesses AprivaPay’s mobile terminal site with their cell phone.
A username and password is entered on the AprivaPay site. Then credit card information is entered and processed. AprivaPay manages the back-end. There are never any software updates to download.
This can be a huge benefit for those merchants who do not like to be distracted by updates. AprivaPay is compatible with a few phones including the iPhone 4 and Droid X.
For more information on AprivaPay and compatible phones visit www.paymentmax.com.
The FD100ti is becoming a very popular point-of-sale device for merchants wanting a speedy, sleek, more secure credit card terminal. A common question I hear in the office is what are the differences between First Data’s FD100 and FD100ti?
Here is how they are different.
The FD100ti uses less space. It is sleeker and more compact than the FD100.
FD100ti has 1.5 times the memory, and an updated CPU.
FD100ti’s latest software provides greater security than the FD100.
FD100ti WiFi version is available.
FD100 ti uses industry standard 2.25″ thermal paper. This can be found at most office supply stores.
Better Screen Visibility
The FD100ti new black and white screen provides a clear view at multiple angles and lighting conditions. The screen is also graphic touch screen.
The new FD100ti has a titanium color versus the FD100 standard gray color.
To find out if the FD100ti is right for your business, or find out about PaymentMax low processing rates visit www.paymentmax.com.
Two common questions I receive are: what are merchant account basis points? And why do merchant account providers use the basis point system?
Basis points are simply the percentage of a sale that a merchant pays their merchant services provider to process credit cards, or the discount rate. Basis points are expressed as 1/100th of 1%, or 0.01%. For example, a business with a basis point of 149 has a discount rate of 1.49%. Or, a basis point of 34 would equal 0.34%.
Merchant account providers use the basis point system when referring to the discount rate because it gives a whole number representation, instead of using fractions and decimals. It is much easier to communicate with whole numbers versus fractions of a percentage.
Merchants must also remember that with a tiered merchant account, the first tier will always have the most basis points, followed by the mid-qualified and non-qualified tiers. The second and third tier basis points will represent the surcharge, plus the first tier qualified rate. For example, the qualified rate (first tier) may have a basis point of 159, or 1.59%, followed by a mid-qualified surcharge of 35, or .35%, and a non-qualified surcharge of 100, or 1%.
New debit card legislation will have the federal government policing the interchange rates charged to merchants for their customers debit card transactions. While the specifics of the new law are being worked out, here is what merchants can expect.
1. Merchants could set a $10 debit card transaction minimum.
2. Merchants would be allowed to offer cash discounts for use of cash over a debit card.
3. Government debit cards and reloadable pre-paid cards would be exempt.
4. Banks with over $10 billion would be subject to the fee oversight.
5. Fees would have to be reasonable and proportional to processing costs. The Feds have 9 months (after the bill was signed into law) to figure this out.
With over 1.6 trillion dollars in total debit card purchases in 2009, this new legislation is sure to have an impact on all parties involved, large and small. Whether the impact will benefit the consumer is yet to be seen. Some are speculating that the cap on “swipe” fees will only benefit the big retailers like Wal-Mart and Target, while consumers end up fitting the bill with less bank services, and minimum transaction amounts.
Unfortunately, employee theft is a concern that all business owners have, whether big or small. According to the National Retail Federation, employee theft contributed to a sales loss of over 35 billion dollars in 2008. Employee theft ranked #4 in major sources of shrink, coming behind vendor fraud, administrative errors, and shoplifting. With so many dollars being lost to employees with sticky fingers, it is no wonder business owners are watching them carefully.
Here are some tips to help reduce employee theft in your business.
1. Be on the look out for employees that have a calculator, or receipt books at the point-of-sale. These employees might be using these tools to deceive customers into paying more, while they pocket the money.
2. Look at cash vs. credit ratios. The typical cash to credit ratio is 30% cash to 70% credit. If cash ratios drop below 30% start asking questions.
3. Business owners and managers must stop by often, and make those appearances unannounced. Research shows that frequent, surprise visits by the boss, reduce employee theft.
4. Encourage employees to report incidences of theft by fellow employees. Callers should always have the right to do so anonymously. If they do reveal themselves, consider offering a reward.
5. A high amount of no sales can be an indicator of theft. If the cash drawer is opened frequently, without a corresponding sale, someone might be helping themselves to the contents.
6. Inventory tracking system. Businesses must have a way to precisely track their inventory, before they can get a handle on employee theft. Tracking must also include loss to other factors, like damage or spoilage.
7. Train employees. Train employees. Train employees. This cannot be stressed enough. Train them on the companies anti-theft measures. Let them know they are being watched.
8. Post signs. Post employee theft hotline signs where employees take breaks and clock-in. Remind them that your company has a zero% tolerance on employee theft, even if it is just a soda!
9. Spot check. Business owners and managers must make spot checks of cash register drawers and inventory on a routine basis.
10. Z tape. Follow the control number on the z tape to insure that all tapes are accounted for. One franchisee found that an opening employee would close out the register 2 hours into his shift, and then pocket the money. Missing z numbers is what led them to the thief.
and last but not least…keep an eye on your returns. Employees with a higher than average return rate, may be ringing false returns and pocketing the money.
Saving money on credit card processing fees can be as simple as maintaining credit card terminals. Improper cleaning and maintenance can lower the “swipe-ability” of credit and debit cards, ultimately costing merchants more to process them. Here are a few quick, and easy tips to maintain your terminal.
1. Clean the magnetic stripe reader on the credit card terminal frequently. Card reader cleaning cards can clean the read head and entire track of a magnetic stripe reader in one pass. Or, try a clean new dollar bill wrapped around a credit card, and swipe through the magnetic reader. Compressed air can also remove lint, crumbs, and other contaminants from the machine.
2. Replace old terminals that are not reading credit cards like they used to, or consider replacing just the magnetic reader.
3. Complete terminal failure may indicate loss of power, the need for the machine to be reprogrammed by the merchant services provider, or a broken terminal. First check the power source, if there is power to the unit-a simple reprogram may be needed. If the unit is plugged-in and there is no response, the terminal may need to be repaired or replaced.
Proper cleaning, maintenance, and replacement of non-functioning credit card terminals will improve swipe rates, and save merchants money on downgraded, keyed-in transactions.
1. Fast Funds. It takes third party processors, like Paypal, several days-up to a week to allocate funds. PaymentMax Processing will have all credit card funds deposited next day.
2. Record Keeping. Third party processors do not release any information regarding the cardholder. This information can be imperative in copy requests, and chargeback disputes.
3. Lower chargebacks. Having your own merchant account will properly place your DBA (Doing Business As) on the customer’s credit card statement. Third party processors do not list DBA’s which can cause confusion, and spark a chargeback request.
4. Save money. If you are processing over $500 dollars in credit cards through a third party processor-you are paying too much, much more than a merchant account.
5. PaymentMax will “give back” a percentage of net processing fees to documented non-profit organizations.