Merchant Guide

Social Business Bank has started  a new campaign called Win 1 Year Free Credit Card Processing. There is no requirement to enter the drawing; to participate visit

www.socialbusinessbank.com/win

“With this campaign every merchant in the United States has the chance to reduce his processing costs immensly”, says Samir Said, CEO of Social Business Bank.He adds

“There´s nothing more to do than filling out the contact form on our website. With this campaign,we want to show the world, that there are other values when applying for a merchant account than just bankable collaterals. This is the first step to show how Social Business can help businesses with meaningful actions. Trust and respect are very important in every business.

Our customers trust us and fell comfortable when they call us because they know there´s someone who helps them and solve their issues. Frankly, is there be a better job making a living by helping hard working people succeed in their businesses ventures? I don´t think so.”

Social Business Bank is Americas first Social Business Banking and Financial Institution. With Easy Shopping^tm and Easy Services^tm Social Business Bank provides full-service credit card acceptance and merchant account solutions for small businesses, social & non-profit entities and corporate organizations.

Introducing dignity back into the banking and financial services along with making social business a mainstream and well understood term are the two goals of Social Business Bank.

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3 Things You should know about PayPal

Check out Part 1 – is PayPal the alternative, a review about PayPal to get fast facts about the good and not-so-good sides of PayPal. In a nutshell PayPal is a great provider and may be just the right choice for you. This article will tell you what PayPal won’t tell you, the three things you should know about PayPal. If you’re ok with these risks, a PayPal account should be just about the right option for you. If you do have a problem with either one of these points, PayPal still might be a solution; you can decide best what is best for your business.

As the author of this article, I thank you in advance for your comments and posts. Feel free to let me know your two cents about this article; find me on Twitter @ SBBSam.

Sudden Account Termination

As such a huge provider like PayPal, they’re confronted with heaps of fraud every day and that makes them sensitive, very sensitive when it comes to protect their assets. Being huge unfortunately often also comes hand-in-hand with a “we don’t really care”-attitude. Mark, who’s running a small business for instance, woke up one day to see his PayPal account with over $50,000 balance frozen. “After weeks of trying to get my account activated, sending document after document, I was finally told that my account will remain suspended and that I could never use their system again” he writes in his post on Alexa.

Alex Tew, this name might ring a bell with you already, we featured him in our viral marketing article already, had the idea of the “million dollar homepage”. In a piece featured in the Entrepreneur magazine, Alex talks about the problems he had with PayPal when they went ahead and blocked his account (high volumes of transactions are often blocked by PayPal automatically in order to avoid money-laundering schemes.) just when his idea started to become big. It’s also a great article to get inspired; you can find the full article here.

PayPal’s Reserve Policy

It’s all about security and risk management. Unfortunately this can become quite problematic, particularly if you are relying on stable cashflows. The consumerist had a feature article about some customers that were hit by it. Melissa, a at-that-time PayPal customer said in the interview: “On July 1, without any notification or explanation whatsoever, PayPal has (daily) deducted 20% of our money from sales and put it into a “Rolling Reserve” account.”

Bill, an analyst at the risk department of PayPal, eventually came around and wrote a blog post after PayPal received massive critique from businesses and media alike. Please note that PayPal does not automatically run a rolling reserve on your payments, however, they may do so if they feel it is necessary.

Reputation

Most of PayPal’s success comes through eBay, its parent company. As an internet giant, eBay uses PayPal as a supported tool to run its daily auction transactions. Hence, many people immediately link PayPal with eBay and on-the-side businesses that are run in the basement in the evening hours after your regular job.

In short, PayPal doesn’t stand for much credibility. Many customers (like me) prefer to use a credit card directly. In my particular case for instance, I have my credit card linked to an old PayPal account which I’ve lost the access information for. PayPal support proofed unhelpful to get the account deactivated or removed so that I can link my card in my new account. So my new PayPal account cannot accept my credit card since it is already “in the system” but I can’t delete my old account either.

Paypal’s reputation isn’t the best after all. Alexa users rate PayPal services at a modest 2 ½ stars, with twice as many 1 star vs. 5 star ratings. Wikipedia even has a separate section where former PayPal customers vent about frozen accounts and rolling reserves.

It’s in the details; trust and reputation are very important. Did you know that PayPal generally keeps all the fees they charge on each transaction, even if the seller is forced to refund the monies received? It’s actions like these which gets people to even setup a separate website dedicated to the blunders of PayPal: http://www.paypalsucks.com

If these three points are not so important to you and not critical to your business success, PayPal can indeed be a great partner. Stay tuned for upcoming articles. Till then, I’m waiting to hear some feedback from you. Contact me personally at Twitter (personal account).

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Everybody knows PayPal; just in case you’re an astronaut who’s been discovering Mars for the past 10 years, Wikipedia covers the company and its history extensively. In short, PayPal allows you to send and accept payment and was bought by eBay, a giant in the online business, in 2002.

Particularly for start-ups PayPal is often referred as “the alternative” to a full merchant account. Today we’ll take a closer look at PayPal; there’s a big controversy about this topic here at SBB. On the one hand we feel that writing about PayPal might be interpreted as bad-mouthing a competitor, though on the other hand – being a merchant account acquirer ourselves – we can bring a lot of market insight and knowledge to the table. We did our best to point out the great aspects of this company along with the not-so-good sides possible merchants should be aware of.

As the lead author of this article, I thank you in advance for your comments and posts. Feel free to let me know if you liked this article or not, find me on Twitter @ SBBSam.

1. Pro #1:

Being part of a huge internet giant like eBay, PayPal is very unlikely to go out of business tomorrow. PayPal itself accounts for 10% of eBays total revenue already and is likely to become even bigger in the upcoming years. So apparently they must do something right; after all why should so many people go with PayPal if it wasn’t working, right?

1. Con #1:

Being big often times means that you’re just a number. Even larger companies, I mean the big guys processing north of $100 Million annually, share these kind of problems because for an $8 billion dollar giant it still means peanuts.

1. Pro #2:

With a global reach like PayPal’s, many people can pay you through their system. Implementation is fairly easy which makes it a prominent payment system particularly for start-ups and on-the-side businesses and most importantly, the technology in use is proven and works.

1. Con #2:

PayPal’s technology works; if they want it to work. All too often that’s exactly the problem. There are many angry customers out there who vent publicly in forums and internet pages about PayPal’s customer service. There’s even a full website dedicated to “PayPal nightmares”, though one must add to PayPal’s defense, it’s a pretty big organization and you can’t make everyone happy all the time.

Stay tuned for Part 2: 3 Things You must know about PayPal. Till then, I’m waiting to hear some feedback from you. Contact me personally at Twitter (personal account).

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We are looking forward to answer your questions: (888) 255-4162. If you want to know more about Social Business Bank visit http://www.socialbusinessbank.com or follow us on Twitter (corporate account)!
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Hidden Fees for High volume Merchants

High-volume merchants have a great advantage towards startups and businesses that rarely process credit cards: merchant providers love them. In fact, as a high volume merchant you’re likely to get a 50% – 60% discount in your rates compared to a startup. Unfortunately that’s not because your purchasing power allows you to make a bunch of savings but much rather because most merchant providers overcharge startups and small businesses with super-high monthly fees.

Since your processing volume is high, per transaction fees are more important to you than monthly charges. That’s why you should be on the look-out for the two biggest profit-melting hidden fees out there:

Hidden Fee #3: Downgrades

Fact is, downgrades are impossible to be avoided if you want to accept credit cards. But it is within your influence to reduce them significantly. Michael, who commented on part 1 of this series, pointed out an important fact: there’s a lot of stuff involved with downgrades. Starting with your POS (the terminal you use daily to run credit card transactions if you’re in retail) over incorrect batch times to keying in a transaction vs. swiping the card; literally dozens of factors influence your downgrade activity. As a rule of thumb, if more than 20% of your charges are downgraded, you should get an expert to check into it.

A professional analysis should typically not cost you anything as a merchant, you can get one here; make sure that your merchant provider shares any and all findings with you regardless if you consider switching the provider or not. Working with a completely transparent provider is a very strong indicator for its excellence.

Hidden Fee #4: Interchange

The interchange is the single highest fee that any and all merchants are forced to pay to the credit card networks of Visa, Mastercard, American Express and the like. The interchange fees are non-negotiable and all merchants have to pay them. This fee, sometimes reaching even 3% of the sale, is a huge cost factor for any size of business. While there is no immediate remedy, organizations are fighting the banking lobbyist in Washington to get interchange fees lowered. To show your support, visit http://www.thecreditcardcon.com for more information.

Contact us know. We are looking forward to answer your questions: (888) 255-4162

If you want to know more about Social Business Bank visit http://www.socialbusinessbank.com or follow us on Twitter!

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Nobody likes hidden fees, though usually such fees rarely exceed a few dollars any given month and aren’t a major cost factor for midsize and large merchants. But there’s also the other type of hidden fees that may cost your business hundreds or even thousands of dollars and you don’t even know that they exist, because they are – in the truest sense of the words – hidden, so well hidden that you won’t find them on your merchant statement at all.

What’s a high volume Merchant

A merchant is typically considered high volume if the monthly processing volume exceeds $100,000. Some steps listed in this article may only make sense once a certain processing volume is reached and there are some other factors that need to be considered besides volume as well.

A good merchant provider will name you these cost drivers and a great credit card processor will work on eliminating these costs with you.

Hidden Fee #1: Refunds & Chargebacks

Refunds requests are part of daily business and are sometimes the only way to avoid a chargeback. However, refunds are costly to you and that in more than one way. Credit card processors often charge you transaction fees above and beyond the chargeback and refund amount, making you pay twice. Ask your provider to conduct a thorough processing analysis and share the results with you.

Hidden Fee #2: Authorization-Voids

An Auth-Void transaction is an attempt to charge a credit or debit card which gets voided before the transaction goes through. Imagine you’re a pizza store owner and you’re about to charge a customer $10 for a pizza. After authorizing the transaction the customer asks fora bottle of coke to be added, so you go ahead and void the original $10 transaction and charge him $12 instead.

The $10 transaction never reached the customer s credit card. In fact, the transaction never happened since it got voided in time. Yet you’ve most likely paid for it. Doesn’t sound too fair to be charged for something that has never happened to begin with, does it?

A great merchant account provider and processor will not charge you an authorization but a capture fee – so that you only pay when you make an actual sale; after all, a great process will align ist success with your success to eliminate conflicts of interest.

Hidden Fee #3: Downgrades

Downgrades are the end-all-be-all of hidden costs. Nothing eats away your profits faster and is more complicated to get fixed. Stay tuned and subscribe to the RSS feed or email newsletter to bet he first to know how you can eliminate downgrades in our upcoming issue.

Contact us know. We are looking forward to answer your questions: (888) 255-4162

If you want to know more about Social Business Bank visit http://www.socialbusinessbank.com or follow us on Twitter!

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Merchant accounts can become tricky and choosing a new merchant account provider without some background information can get quite pricy to your business. This blog features articles to help you learn more about this industry. Submit your email address on the sidebar and you´ll get our posts per email or add our feed to Google Reader or another Feed Reader.

1. LinkedIn as information provider

Another way to learn and inform yourself is to create an account on LinkedIn and join groups of interest. You can find groups by searching the with the search box. Get started by joining these groups:

• Social Business Bank LinkedIn Group
• Merchant Level Sales
• Merchant Partnerships, Credit Card Processing

2. Collect Blogs and Magazines

The next step is to read blogs like this one. Blogs are a great tool to learn and discuss. There are also some amazing onlines business magazines like inc.com or entrepreneur.com out there, where you will find useful articles about credit card processing. Most of the magazines have a feed for every category, so you can focus on what is most important to you. A feed reader like Google Reader helps you organize and collect all feed subscriptions; take your time to read them carefully, they may help you to establish new ideas and partnerships.

3. Talk, Talk, Talk

The very best you can do is talking to people. The web offers an answer for almost everything, but isn´t it easier to send a direct message,  email,  contact a blog author or call the company you´re interested in? People typically aren’t very secretive about their success. Far from it! They can give the answers you are looking for and help you reach out to new potential clients and partners.

Contact us know. We are looking forward to answer you questions: (888) 255-4162

If you want to know more about Social Business Bank visit http://www.socialbusinessbank.com or follow us on Twitter!

Entrepreneurs, Merchant Guide Blog, credit card processing, education, linkedin, merchant account, talking

1. Your Website Goals

Define the goals of your website. Make sure you have a clear understanding of the website’s purpose. If you don’t have a clear picture what your website is about, how should your customers? Do you want to sell producs, provide information or use it for marketing purposes?

2. Your Domain Name

Choose an easy to remember domain name that’s easy to spell. People should associate your domain name with your company. That doesn’t mean creativity is a no-no. Here´s an example:

If your company’s name is Tony Miller Shirts and you sell T-Shirts online, tonymiller.com might not be the best of all domain names for you. Unless you have a strong brand associated with “Tony Miller”, nobody will care about tonymiller.com and domain names like millertshirts.com or tonysshirts.com could be a much stronger asset for your company.

3. Your Design

Desiging a website by oneself is possible, though unless you really know what you’re doing, give this job to someone who actually earns a living creating brilliantly designed websites. It’ll pay off in the long run. Make sure your designer understands what your business is about and communicate your ideas. Most importantly, let them do what they can do best: handle the designing part of your website. You will get a great design and will save time and troubles.

A great source for good and competitively-priced designers is Sortfolio.com.

4. Your Logo

In most instances you web designer will also be able to create an awesome looking logo for your company. Again, make sure to communicate your ideas and possibly send him self-made drafts until you have the feeling he truly understands what you’re looking for. Be careful, a logo is like your domain name. Your customers should identify your business with the logo every time they see it. Your logo should be uniform across all your marketing material, may it be your website or business cards, be sure it has exactly the same design and colours. Why? Take a look at CI.

5. Your Content

Tell your customers not what you want to sell. Tell them why they should buy your products and why you are better than your competitors. Be sure that all your content is easy to understand. Give you customers as many information as you can provide. Don’t forget to list your phone number, email address and also you business address for more credibility you may want to get a Better Business Bureau online seal as well.

6. Testing

Test your website. How long does it take to load? Are your pages W3C valid? You can test it here. Be vary about too many images. They may look great, but no visitor has the patience to wait until they’re all loaded. If you want to get fancy, be sure to think about visitors that do not have the latest version of Adobe Flash Player installed, and the folks that didn’t even download it in the first place.

7. Social Media

Integrate widgets in your website. Use Facebook, Twitter and co. to promote you website. If you have running a blog, connect it with Twitter and Facebook. Social Media is an ongoing project. Read the messages from your twitter friends and the wall posts of your Facebook page. Social Media means to communicate and to communicate regularly.

8. Feedback

Do you have a contact form on your website? Give your customers the chance to contact you without calling you. Why? Many people are interested in your products but are shy to ask their questions via phone.

9. Search Engines and SEO

Add your website to all popular search engines like Yahoo!, Bing and Google. Give every page of your website a specific title and add your keywords in headers and in your content. Use Bing Webmasters, Yahoo SiteExplore and Google Webmaster Tools. This tools will show you how “visible” (aka search engine friendly) your website is.

10. Analyse your website

Add an analysis software like Google Analytics or Piwik to your website. They’re both free. So you can control the visits on your site. These reports provide you with essential information like page views and visits per day, the countries of your visitors, the time and location of your visitors and much more.

If you want to know more about Social Business Bank visit http://www.socialbusinessbank.com.

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Crack the code on your card processing bills. Part 1.

No one likes bills, especially those types of bills that are filled with cryptic codes and dozens of line items. That’s a pretty good description of a statement from a credit card processor or – if you already have one – your merchant account provider.

In order to accept credit cards like Visa, Mastercard, [...]

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1. Use your existing Reporting and Bookkeeping

Credit card processing is a sophisticated industry and like every other industry there’s many ways how to tweak the system to make it more efficient and cost effective. Your businesses processing costs depend on many factors such as the relation between card-present and card-not-present transaction and so forth.

Solution: Regularly check your reporting and bookkeeping and find out the relation between keyed and swiped transactions, online vs. in-store transactions, etc. and forward your reports to your merchant processor to get your processing settings up to date and configured based on your latest transaction data.

2. Reduce your Risk

In the processing industry it is all about risk. Merchant account acquirers and credit card service providers assess the risk of every merchant signing up and quote processing rates based on the perceived risks. You can be sure that your merchant provider will notice if circumstances change for the worse, often however, they “forget” to notice improvements.

Regularly check in with your merchant provider and update him on recent developments in your business. Forward the latest financials and create a personal connection to build up trust. The lower the perceived risk of a business default is, the lower you rates will be.

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Last issue we talked about rates, rates and you’ve guessed it: billbacks. This issue, we’ll provide you with more tips & tricks how you can crack the code on your credit card processing statement, such as why rates are not everything, why you can’t find the single largest hidden cost on your statement and why you should avoid bucket rates in most cases.

1. Rates are not Everything

Especially in today’s economy businesses are eager to cut costs and to swap your merchant service provider may seem like a great opportunity to slash your credit card processing rates. A solid and – this one’s important – regular review of your merchant service provider is crucial to gain the lowest rates possible, but it’s not everything.

In the first part we already untapped some of the factors that influence your bottom line credit card processing costs. Often times the rates quoted by the merchant acquirers are not the bottom line rates you end up paying. Watch out the fine print and any fees above and beyond processing rates such as termination fees, minimum length contracts or bucket rates and credit card transaction qualification levels.

Solution: Read the fine prints and prioritize. Are you looking for the cheapest offer or the best value for the price? What’s important to your business? Is it solely cost driven or would a great technological integration with your ERP system and online shopping cart given you a competitive edge? The merchant acquirer provides an integral part of payment services and can help to get it all integrated to fit your specific needs and business opportunities.

2. Bucket Rates and Qualifications

Because Visa’s and MasterCard’s interchange fees are so complex, processors sometimes categorize transactions as qualified, mid-qualified, and nonqualified. One rate covers all the transactions that fall into a category. Suppose this statement is that of a restaurant. When a customer pays with a generic Visa card, Visa charges an interchange fee of about 1.63 percent. The processor considers that a qualified transaction and charges a discount rate of 1.74 percent. If someone uses a Visa rewards card, however, the interchange jumps to nearly 2 percent. The processor labels it as mid-qualified and charges 2.85 percent. Every processor sets its own tiered pricing, so one type of credit card transaction may be considered mid-qualified by one and qualified by another. It’s up to you to find out how your processor defines things. Large organizations generally use a system called “cost plus”. In a cost plus system the interchange charged by Visa and Mastercard is forwarded to the merchant at cost, plus an additional fee to cover for the merchant acquirers services. Corporations prefer cost plus due to its full transparency, which makes it much easier to understand the credit card processing bill.

Solution: Ask your merchant provider if they offer a cost plus system as well. It depends on your businesses’ particular needs; however, a serious merchant account provider will at least offer you the opportunity to transfer your account to a more transparent cost plus system.

3. Hidden Costs (that’s a biggie)

Especially for medium and large businesses processing $10 million annually and upwards, rates are much less an issue than other factors such as the technological integration of their payment acceptance points (PAP) with the credit card network back-end. Often a perfectly valid credit card transaction gets flagged by the credit card network as possibly fraudulent transaction which increases the risk to the merchant acquirer, thus charging much higher rates for the transaction.

The credit card network is a complex system linking many financial institutions and parties together. If the system is not perfectly optimized for the individual business, chances are that many transactions are captured at a rate which can be up to 350% higher than a regular transaction.

Solution: If you’re running a medium or large business ask your merchant provider to provide a cost-savings analysis based on better technological integration. Your provider should be able to tell you what you can do to lower unnecessary mark-ups on your transaction and provide assistance during the implementation.

Read Part 1 of this post here.

If you want to know more about Social Business Bank, visit socialbusinessbank.com.

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