Merchant Ideas

Discount rates are divided into 3 levels for merchant accounts and are called qualified, mid-qualified, and non-qualified.

Example:
 Qualified - 1.69%
 Mid-Qualified - 2.20
 Non-Qualified - 2.94

Qualified rates are the lowest and are commonly advertised and quoted by merchant service providers because they are the most attractive. These rates are considered to be standard.
Mid-qualified rates are the next highest percentage rates.
Non-qualified rates are the highest percentage rates that can be charged to a transaction.

Here are 3 reasons why transactions can downgrade to mid or non – qualified rates:

1. Keying in credit card transactions instead of swiping
Retail merchants are setup to accept credit cards by swiping them through a terminal by hand; a “card present” transaction. If a merchant keys in a credit card transaction instead of manually swiping the credit card, then those transactions will downgrade to a mid or non-qualified rate.

For example, if a merchant uses their retail merchant account to process a transaction from their website or mail order; they will be charged a higher rate.

2. Processing special credit cards
When a special credit card, such as a rewards or business credit card is used; those transactions are downgraded to a mid-qualified discount rate. Consumer credit cards are the only credit cards that will not downgrade to a higher discount rate. You can expect process at the qualified rate for these types of credit cards.

This reason is the only reason that you really don’t have any control over because you can’t stop your customers from using a certain type of credit card.

3. Failing to settle the daily batch
Credit card transactions remaining on a merchant’s terminal are stored in an “open” batch. They will remain there unless the merchant “batches out”. Once the merchant batches out, the daily sales are submitted for processing, and the batch is now “closed” or “settled”. This should be done on a daily basis. Some merchant account providers offer equipment that has auto-batch software installed, which will settle their batches automatically each day. Failing to settle your daily batch within the allotted timeframe will cause transactions to downgrade to non-qualified rates.

Every month when you receive your monthly merchant account statement, make it a habit of reviewing your mid and non-qualified transactions. If you notice a big difference you should work with your merchant account service provider to adjust your service.
If you know of any other reasons that may cause transactions to downgrade to higher discount rates; please feel free to post them in a comment.

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Whether you own a retail store, are a webmaster or run a small business out of your home, accepting credit cards is a critical part of running a successful business. Accepting credit cards for payment reduces your business overhead and can greatly improve your cash flow.
There are several advantages for business owners as well.

Here are 10 reasons why business owners need to accept credit cards:

1.  Convenience
If you’re running a small business, you want to afford your customers the convenience of using credit by being able to say we accept Visa/MasterCard. By offering extra convenience to your customers, you build up your professional image and show clients that you’re a serious enterprise.

2.  Impulse Buying
Merchants who are accepting credit cards, ATM/ debit cards, gift cards and checks are able to increase customer satisfaction and impulse buying. Accepting cards encourages customer purchasing and helps grow your business

3.  Increased average ticket size
Customers who use credit cards spend 2-3 times more per purchase and buy more frequently than the average shopper. This can account for bigger profits for your business especially during the holiday seasons.

4.  Competitive Edge
If your competitors are accepting credit cards, make sure you are doing the same. You can effectively compete with other businesses in your industry and surrounding area. Customers will flock to where they can find convenience and flexibility.

5.  Faster payment process
In mere seconds a credit card transaction is authorized, checked for funds availability, and complete. The customer is out of the door in no time and the funds will hit the merchant’s bank account in 48 hours.

6.  Preferred solution for online shopping
How many times have you purchased something online using an online check or cash? You don’t or it’s very rare and you can’t. The preferred method is by credit card because of the instant authorization and convenience. An online check functions like a regular check, you still have to wait for the funds to clear before you receive your product.

7.  Acquire international customers
Accepting credit cards gives you the ability to attract orders from around the world. Card issuers and the internet have made it possible to do business internationally by utilizing currency exchanges.

8.  Reduces Costs
Accepting credit cards help make operating costs more efficient, guarantee payments, and reduce overhead by eliminating the need to send bills and manage account receivables. It is often less expensive to process credit and debit cards than to accept checks. Merchants are often concerned about how transaction fees and the discount rate of each transaction are paid to the merchant account provider and the impact it has on profitability of their business. However, the benefits of credit card acceptance far outweigh the fee expenditures

9.  Builds credibility
By accepting credit cards, your business gains immediate credibility in the eyes of current and potential customers. This instantly will translate into increased customer loyalty.

10.  Improves productivity
With credit card processing, acceptance and settlement of transactions are conducted automatically. This allows a merchant’s funds from credit or debit transactions to be deposited directly to their bank account. This makes the payment process more efficient and less time consuming allowing a merchant to focus on other aspects of their business.

Accepting credit cards online or offline is vitally important for the growth of your business and profits. If you run a business without accepting credit cards, you could be turning a way a large number of potential customers. Remember, the costs are minimal when you consider how much increased business you can and will take in.

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Here we are at day 2 of why the Trinity System is the ideal credit card processing solution.  Day 1 I talked to you about how this system will allow a business to process credit cards at the office, on your website, and wirelessly.

#2 is there is no software to install.

The use of any computer, or laptop with internet access will allow you to process credit cards instantly.  This is what makes the Trinity System so cost effective and scalable because you don’t have to buy or lease overpriced, outdated and slow equipment.  Your credit card processing is done at a highly secured website that you can access with your login Id and password.

To your success,

Melvin Pritchett

PS - For more information and to view a video presentation of the Trinity System’s three components, visit my official website.

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Filed under: Merchant Account Services

If your business has a high average ticket amount, you should work with your credit card processing company or merchant account provider to get your discount rate lowered as much as possible.  Doing so may require your transaction fee to go up. 

For a low average ticket amount, it’s best that you work to get your transaction fee lowered.  This will mean an increase in your discount rate.  Following these simple steps can mean a serious decrease in your processing charges over time. 

Here are two examples that illustrate a business with a high average ticket amount and one with a low average ticket amount.  

1. Let’s say your business has an high average ticket amount of $400.  Your merchant account has you locked in at a discount rate of 1.80, and a transaction fee of $.10.
$600 x .0180 + .10 = $10.90 - Avg. charge per transaction

2. Let’s lower your discount rate to 1.49 with a transaction fee of $.40.
$400 x .0149 + .40 = $9.34 - Avg. charge per transaction

Option 2 saves your business $1.56 per transaction because the lowered discount rate carries all the weight.

1. Now let’s look at what happens if your business has a low average ticket amount of $8.00.  Your merchant account has you locked in at a discount rate of 1.80, and a transaction fee of $.10. 
$8.00 x .0180 + .10 = $.24 - Avg. charge per transaction

2. The discount rate now drops to 1.49 with the transaction fee at $.40.
$8.00 x .0149 + .40 = $.52 - Avg. charge per transaction

The transaction fee carries all the weight so option 1 will save your business $.28 per transaction.

The manipulation of just those two credit card processing fees can save your business a lot of money each month.  It’s just a matter of applying simple arithmetic. 

Review your most recent credit card statement and use the example above to determine a strategy to get your fees lowered to where you feel your business needs to be.  Be sure to use your current rates, not those above.  Those are for illustration only. 

Once you have devised a plan, communicate that to your merchant account provider.

To your success,

Melvin Pritchett 

PS - For more information, and to sign up for my brand new report for maximum credit card processing success, ‘The 7 Important Things Business Owners Must Know About Accepting Credit Cards’, visit the website below.

http://www.ImportantMerchantTips.com

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Filed under: Merchant Account Services

Credit card processing through phone line terminals has been the norm since the late 1970’s.  While useful in the past, this equipment is overpriced, slow, and drastically outdated.  Even today, you’ll notice not much has changed.  Sure the technology in the equipment has evolved and the terminal itself is less bulky and more streamlined, but the use of the telephone is still a mandatory fixture.  How we do business has been drastically influenced by the Internet age…

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Filed under: Merchant Account Services