Merchant Guide

Today (on March 16, 2011), Visa Inc., the global leader in payments, announced the launch of its Personal payment service that will allow users to send and receive funds to any Visa credit or debit card around the world. To provide this service, Visa has enhanced its VisaNet platform to allow financial institutions for accepting incoming funds.

For processing the payments, Visa has also announced strategic product agreements with CashEdge Inc. and Fiserv, Inc. As part of this deal, Visa will make use of their PopMoney and ZashPay platforms to send money to the Visa accounts. For processing his funds, all the person needs to do is enter the 16-digit Visa account number of the recipient and send the money.

While Visa personal payments are already available in more than 70 countries around the globe, the new system will not only allow them to provide their users in the US with the capability of sending payments directly, but also puts them in direct competition with PayPal, which provides similar money-management services in the US. The system will also provide options like online, personal and mobile payments, thus making this service extremely easy to use.

Visa has announced that the Visa Personal Payment feature will be made available by the second half of 2011. Whether or not it will upstage PayPal, only time will tell…

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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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America’s first social business credit card processor and merchant account provider opens doors. „We’ve received great feedback; businesses appreciate the added benefits of a social business partner“ says Samir Said, MBA, CEO of Social Business Bank (http://www.SocialBusinessBank.com).

With Americas first and only social business merchant account provider joining the competitive credit card processing industry, innovation is key. „Since we disburse all profits to the communities we serve, we’re incentivized to provide the best value“, adds Mr. Said. Social Business Bank is distributing its net profits to community programs such as microfinance lending site Kiva.org and incentivizes its employees through a value-based compensation model.

„Our goal is to help our clients grow their business, that’s another way how we can give back to the community“. For more information visit or subscribe to RSS or email at: http://www.SocialBusinessBank.com

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