Every small business needs some form of payment processing and it is necessary to understand how to select merchant services as it has a great impact on sales revenue and profit. Following are six essential questions for selecting merchant services.

What are Merchant Services and who offers them?

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Merchant services are a method to enable credit card payments from your customers to your business. This account is connected to credit card processer to route payments to your bank account. These services are provided by specialized merchant service providers or independent sales organizations that offer payment processing. Merchant account services are also offered by different financial institutions.

Which company suits small business needs?

It is necessary to check which company suits your needs and this depends on the situation of your business. Banks turn-down home based business owners on the basis that their business isn’t well established. In such cases merchant service providers are flexible options and they are credit card processor who offers services at low rates.

Merchant account is not the only source of accepting as credit cards can be accepted by contracting with companies to process payments on your behalf. Credit card processors are a better option as they charge a small percentage of payment that is received as compared to heavy amount charged by other companies. Merchant account services are a better option to trade online.

Requirements of payment processing

Payment processing can be done if you have the following things available:

1. The first requirement is to have a Secure Server with Certificate to prevent data interception using SSL encryption so that no unauthorized decoding can be done.
2. The second thing is that for customers to safely enter personal and banking information, the order form should be on a secure server.
3. You should have a safe gateway as it is a tunnel that is used for authorization, processing and management of the merchant services.
4. Shopping cart should also be available on your online business. This is software that calculates all the purchases automatically for you. Before installing, make sure that the software is compatible with the gateway.
5. All the things that are mentioned above can be obtained by you but until you have a merchant account, real-time processing cannot take place. Merchant account provides access to processor and makes it able to authorize, capture and settle the transactions that are made.

Alternatives to accept Credit Card payments

Merchant account services are a good way to process online payments. If you don’t want to get in to merchant account services for payments, you can outsource them to a third party who collects customer data and rest of the work is done to process payments for your business.

Apart from this outsourcing method, credit card payments can be accepted online with help of deferred payment processing. In this method, customer inputs data which is received by you manually without any gateway. This method has the advantage that each order can be checked and corrected. Such solution is not ideal as it can be time consuming for numerous payments.

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Trends have changed a great deal lately and one will possibly come up with even better and convenient solutions in the future. Doubtlessly, the online payment processors have made life a lot easier as they can get you deals done in no time. The conventional methods were quite out of the market and one could expect nothing good from them. Your credit card and debit cards will be used over on the internet but for quite a limited time duration and once you transfer your cash into the online payment processor, you will not be afraid of having your credit card hacked.

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The benefits:

Online payment processor gives you with the convenience that you want. You can now manage all your online business with just a few clicks. The latest integration not only allows you to manage between your credit and debit cards but you also get a chance to track your online accounts as well such as PayPal, Alert Pay, Moneybookers, etc. These provide you with better and affordable solutions compared to other online merchant account services that have a number of charges that set a higher price at the end. Most of these allow you to have the countless benefits against just the monthly fee and the processing fee.

In addition to just that, you get the following exciting benefits:

• Affordable payment solutions
• Less processing time
• Convenience and reliability
• Fund available all the time
• Better and enhanced cash management
• No credit rating
• Processing is completely integrated.

You can transfer your money from your bank account to the online payment processor or backwards. You will have the liberty to use your money in the way that you like; may it be ready cash or online spending. Most online payment processor even gives you cards that are Visa or MasterCard in nature so that you can use their services around the world in both the online and the real time environment.

Online payment processor for your business:

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Online payment processor is a blessing for people who are buying or selling goods in the online world. The credit card mode was quite inconvenient in the past and there was a need for something better that processes fast and does not have the risk of being exposed to the hackers. The checks are so outdated now that no one even considers them for the payment these days so you will be left with this option as the best one amongst all solutions. You need not to carry cash with you and still you get your business processes go as smooth as anything.

One account with an online payment processor will get you loads of benefits altogether that will enhance your business and your reputation will certainly go higher once there will be no issues in the transactions that you carry out.

An excellent feature for your business provided by the online payment processors is the fraud management. The payment processor identifies the faulty source in case you meet their requirement criteria and you get your money back if you are not guilty.

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Heartland

It is the prime concern of every retail merchants and business owners to manage their finances in the right and secure way and get it done through a safe and secure method. Heartland Payment Systems are the perfect way to accomplish these targets. Heartland Payment Systems has always provided the retail merchants, restaurant owners, and other small and mid-sized business organizations to perform their business smoothly. It has definitely the small and mid-sized business owners an easy and safe way to carry out their regular business transaction.

Heartland Payment System offers the convenient and the safest way to make and accept payments. It has basic mode of payments, which is the online payment. Heartland offered two options for online payment. You can use any of them according to your convenience and get the best out of it. Before you take any decision, let’s have a look at the different modes of payment processing through Heartland Payment Systems.

Heartland Payment Systems, Online Payments:

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This form of money procession is quite helpful for the business owners. Using internet they can process payments instantaneously without any kind of delay. This form of payment is especially beneficial for the retail merchants who always look for ways to increase the number of customers, to expand their business ultimately. With the help of this kind of payment processing, a customer can now order goods and services online. It means that a business will able to fetch more number of customers. Ultimately, it will help the business to grow and it will make it more efficient as well.

There are many benefits of Heartland Online payment. Some of them are:

• Heartland online payment system removes the worries of gateway fees;
• The benefits offered by the system also help you to reduce equipment cost;
• With Heartland Payment systems you do not have to pay anything for the update or up gradation of your account;
• Heartland Payment system provides the facility of process transaction through phones;
• Now you do not have to use any special software for the customer’s recurring bill.

Heartland Online payment system offers two modes of payment. The first one is the Heartland Connect and the second is the Heartland WebConnect. Let’s have a detailed look into both of it:

1. Heartland Connect:  This is a virtual terminal which can quickly process the transactions related to your debit card and credit card as well. Along with, it also manages the transactions related to the recurring bill. You can easily install it in your PC or laptop, and it will be ready for use. Heartland Connect is really fast with its service. It automatically captures the information related to the sales transaction, and offers top quality security and protection.
2. Heartland WebConnect: Heartland WebConnect with all the features of Heartland Connect, and apart from them, it also offers some added benefits as well. It enables the customers to order directly from your website. The user interface of this application is really easy and comfortable.

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Can you afford the luxury of letting your competitors stay ahead of you? Well, nobody can. So, why should you lag behind in the use of latest tools which are available so as to design your ecommerce website? In fact, if you own any type of online business, you should make continuous endeavors to stay ahead of time and your competitors. Some of the next generation ecommerce tools explained below can help you in a big way to do that.

• User controlled view of every item: Most online buyers refrain from buying stuff like apparels, footwear and prescription glasses online. This is because these items need to be tried once by the buyer before buying and they can’t do so on Internet. Even if any store is providing a standard sized item, there is a possibility that the exact dimensions of the apparel or footwear provided by it might not be same as that of the same item with same provided by another store.

• With the help of new age tools that are available, an online business can change the way customers buy these items. For example, many online stores involved in selling of prescription eyeglasses or sunglasses provide such interactive applications to their customers which enable them to try the sunglasses in a virtual trial room. They can do so on a photograph of their own or of a model whose face type matches their own face.

• Availability of live chat: An online business can take customer satisfaction to new levels by deployment of dedicated staff to help the customers in time they need any information regarding the product or service in question. If a visitor finds this service, this can even motivate him/her to make impromptu purchase!

• Detailed information on availability of a product: It is common to see customers getting frustrated when they see their effort in searching for a product going down the drain when they are informed about unavailability of the product at the last moment. In fact, if an online business can display the availability status of its products upfront, it can prevent building up of a negative image and save the frustration on part of the customer.

• Personalized assistance to regular customers: This feature is almost unheard of till now in online stores. Whereas we witness it quite often, albeit in smaller stores where the store owner or its representative can identify regular customers and provide personalized services to them. An online business can make shopping experience of its customers a memorable one by providing personalized assistance by keeping track of their profile, past purchases and other factors related even remotely to them. In fact, a case worth mentioning here is regarding popular video blog YouTube where every user is shown links to videos related to his/her past views. This prevents a visitor from starting search for videos of his/her interest from scratch every time he/she visits this site. Any service which is even remotely linked to this feature can keep customers interested and motivate them to visit again.

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The role of smart phones
The smart phone is undeniably becoming more and more indispensable in our lives. Staying in touch via Twitter and other forms of social networking is a breeze with this gadget. Besides that, a good Internet or Wi-Fi connection allows its users to enjoy a myriad of online games, navigate their way around using GPS and even go on an online shopping spree using just their mobile devices! There are applications for just about anything you need! And speaking of which, the mobile e-Commerce industry is indeed booming, with new innovations released into the world each day. And one area that is definitely catching both the consumers and industry players’ eyes is payment processing.

PayPal – Old innovation made new
PayPal is no stranger to the e-Commerce field and is touted as the entity that made payment processing more accessible and friendly. With their recent launch of a new app innovation called “Send Money”, they are expected to take payment processing to the next level. The “Send Money” feature is not a foreign feature in their online website but it will be, at least for mobile users who want a faster and more convenient way of transferring PayPal funds.

How does it work?
This new application will allow two iPhone users to make payments merely by bumping their mobile devices together. All they need are their iPhones and PayPal accounts. Besides that, an added convenience for users who access this app is the ability to split bills easily among no more than 20 people. Definitely a useful tool if you think about the difficulties involved in splitting bills during corporate lunches or a cab ride with friends in tow. Tax and tips will be divvied up evenly so there are no worries about anyone overpaying at all. Security is also not an issue here because PayPal reassures consumers that no financial data will b e stored on the mobile device. Losing your phone will not jeopardize sensitive financial information and will not signify the end of the world, unless your phone is one made of solid gold or is diamond-encrusted, in which case you must launch a nationwide hunt immediately to retrieve it!

How much will it cost to acquire this app? NOTHING! It’s currently being offered for free but it is not known if PayPal has plans to release a paid app that gives even more features to account holders in the future. Time will tell.

Recap of PayPal’s mobile “Send Money” app

• Convenience at the touch of a button
• Only an iPhone and PayPal account is needed
• Application is free
• Instantly transfer funds by bumping mobile devices such as iPhones together
• No data stored in mobile phones; security assured for greater peace of mind

PayPal vs. Square vs. MoBeePay
Remember our previous blog post about Square which also advocates the usage of the iPhone as a payment processing device? With PayPal’s app, we are certain that Square and its founder Jack Dorsey will be doing all they can to encourage more users to tap into their services.

MoBeePay is also newcomer to the scene and is expected to put up a bit of a fight with their new payment processing innovations. Read about how they are revolutionizing the e-Commerce world with their mobile payment solutions here.

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What are Card Verification Codes?
All major credit card companies and associations have implemented a three- or four-digit security code that is printed on the front or back of each card. This added security measure enables a retailer to verify that the buyer has the actual card in hand during a card-not-present transaction, thus reducing fraudulent
transactions. Check out for information below on the card security codes for
each of the major brands.

Visa
Security code: CVV2 (Card Verification Value 2)
Details: Located on the back of all Visa cards, the CVV2 consists of the last three digits printed on the signature panel.

MasterCard
Security code: CVV2 (Card Verification Value 2)
Details: CVC2 is a three-digit code printed on the signature panel of MasterCard cards.

Discover
Security code: CID (Card Identification Number)
Details: CID is a three-digit code printed on the signature panel of Discover cards.

American Express
Security code: CID (Card Identification Number)
Details: CID is a four-digit code printed above the card number on the front of American Express cards.

How do Card Verification Codes work?
Step 1: The merchant asks the customer for the Verification Code and sends it to the card issuer as part of the authorization request.
Step 2: The card issuer checks the Verification Code to determine its validity, and then sends a result code back to the merchant along with the authorization decision.
Step 3: The merchant evaluates the result code, taking into consideration the authorization decision and any other relevant or questionable data.

What else should merchants find out about Card Verification Codes?
a) Not all payment processors support security codes. You must check to see if it is available on their system.
b) Uncertified card issuers lose chargeback rights for fraudulent Mail Order / Telephone Order (MO / TO) transactions when the Verification Code is included in the authorization message.
c) To protect Verification Codes from being compromised, merchants should never keep or store them once a transaction has been completed. Such action is prohibited and could result in fines.
d) Card Verification Codes are only printed on the cards, they are not contained in the magnetic strip information and do not appear on sales receipts or statements.

Very useful Visa resources for card-not-present merchants
A “card-not-present” transaction is the bane of most, if not all, merchants. Here are useful risk management resources provided by Visa:

•  Merchant Guide to the Visa Address Verification Service (AVS)–VBS 07.03.01
•  Chargeback Management Guide for Visa Merchants–VBS 05.01.02
•  Visa E-Commerce Merchants’ Guide to Risk Management–VBS 05.02.02
•  CyberSource Advanced Fraud Screen Enhanced by Visa–VBS 03.01.02
•  Protect Your Virtual Storefront–VBS 01.04.01

If you are in need of such publications, feel free to call your friendly merchant services provider and they will be more than happy to assist you. Alternatively you may also ring the Visa Fulfillment Center at 800-847-2311.

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In continuation from our last post, let’s take a look at more of the industry standard fees that one should know.

Statement Fee: Statement fees are usually payable every month for as long as you request a monthly statement to be mailed to your doorstep. We would suggest you to “go green” and opt for the electronic version. This way, your statement will be made available online for you to download – a pretty nifty feature especially if you plan to upload it to your accounting program for taxation purposes. Your accountant will love you for it!

Hidden Fees/Junk Fees: Security fee, audit fee and excessive transactions fees. Sounds dodgy, don’t they? These are what we classify under the category of junk fees – fees that should raise warning bells and prompt you to go shopping for a new provider.

As for hidden fees, these are a dime a dozen when it comes to dealing with less-than-honest merchant account providers who saw no wrong in not mentioning them to you in the first place. Granted, a new merchant may not know what sort of fees to look out for, but if a provider is truly sincere in offering you quality services, he should mention all the fees upfront and not hide them from your knowledge.

One hidden fee that you should look out for is the teaser rate that is offered – not unlike a carrot dangled in front of a hungry beast. This teaser rate is almost always ridiculously low – so low that you’ll be tempted to say ‘yes’ and sign on to that merchant account provider on the spot. If and when you do, you will quickly discover that this is just a temporary rate and does not last long. Another tactic employed by dishonest providers is the old bait and switch. They tempt you with teaser rates applicable to one particular card type in a particular category, but charge exorbitantly for the rest of the cards in other categories! In the end you will end up paying more than you realize.

Application Fee: An application fee is paid to facilitate your merchant account application. Providers who say that they will waive this may not be entirely truthful. IF they indeed waive this fee, then count yourself lucky, if not you may be overcharged elsewhere. However, if you have reasonably good credit history, your chances of having the application fee waived is high.

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Buy and sell anytime anywhere – Physically or digitally
iPhones are fast becoming an indispensable gadget these days. There are close to 150,000 apps in the App Store that can improve the way you work and play. From organizing work assignments with flexible to-do lists to indulging in addictive games like Doodle Jump, the iPhone offers endless possibilities that one cannot even begin to imagine. Business owners as well as consumers will also find the iPhone indispensable; recently a highly convenient app called MoBeePay was launched so that sellers can sell products without placing too much importance on whether they have a physical or digital store, and consumers can buy their desired items without going through the hassle of lengthy and complicated payment processes.

How MoBeePay works
MoBeePay is set to revolutionize the e-Commerce world in a simple manner. A lot of people, yours truly included, went: “Now why did I not think of that?” Basically what a merchant does is to first register their offerings with MoBeePay. The items they wish to sell will be assigned MoBeeTags and or MoBeeCodes. These data matricies are stored in the cloud – also known as MoBeeHive. So once their products are out in the market, and catches the eye of a potential customer, the customer will then whip out his iPhone to capture the MoBeeTags inscribed upon pages of magazine, billboards or just about any advertisement medium. When or if an app-incompatible device is used, customers can still take note of the product’s MoBeeCodes (now you know what these are for!) and send it to the MoBeeHive via SMS or MMS. Either way, the customer has to be logged into his MoBeePay account. Once the tags or codes are delivered to the MoBeeHive, the data is compared, authenticity verified and the payment process approved in no time! This means that the seller will be notified and simultaneously, the product will be on its way to the buyer without much hassle.

MoBeePay Vs Verifone’s PAYware
While some may compare MoBeePay’s service with Paypal’s, they really are not competitors at all. Paypal places importance in whether your products are sold in physical or digital web stores, but that’s not the case for MoBeePay. With MoBeePay, the virtual world is your oyster.

MoBeePay’s rival is touted to be the popular Square, created by Jack Dorsey (Twitter’s co-founder) and Verifone’s PAYware. To counter these competitors, MoBeePay is set to release MoBeeSwipe, a credit / debit card swiper that can be attached to the iPhone’s earjack, allowing merchants to accept credit cards instantly.

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A lot of merchants think finding the perfect online merchant account providers is just a matter of depending on word of mouth and signing up with the provider that everyone is raving about. However, the actual truth is that you still need to take time to research properly in order to locate a really good merchant account provider and payment processor, instead of blindly taking in other people’s recommendation. Trying to spot and anticipate merchant account problems before they happen can also save you a lot of time without running around in circles, as well as help you save your earnings. Here are some basic problems and ways to counter them:

Disaster #1: Beware of providers who freeze your account if you made too much money!
Yes, you read it right. Merchant account providers have been known to freeze business owners’ accounts if they made too much money in a short period of time. Apparently a lot of merchant account owners have reported that they face immense problems when it comes to this issue. They claimed that the merchant account providers withhold their money until they are certain that all the customers have gotten their card statements in the mail, and that no complaints of fraud were reported. This could mean that business owners could have their hard earned cash frozen up to six months at length! An Internet marketer who earned $4 million in a short period of time found that his provider blacklisted him and took half of his profits as fees. That’s $2 million lost for not doing anything wrong at all!

This is quite a hassle for people who do not know how much money is too much. Plus, won’t you all agree that it’s preferably to be MAKING money rather than LOSING them? Should there be a limit as to how much an e-Commerce business owner should be earning?

The solution: The answer to your problem lies in seeking the right merchant account provider that will not set a limit to the amount of money you can earn from month to month. It is almost impossible to anticipate just how much cash rolls in so if you were asked to estimate how much you will earn in a month, politely decline and look for another merchant account provider who is more sensitive and understanding to your needs.

Disaster #2: Sell something different and you could be shut down
One online marketer who began selling pressed flowers to complement her scrapbook supplies business found that her merchant account provider decided to freeze her account. The reason? She was “veering” away from her initial business plan without their approval!

The solution: Even if you cannot foresee additions to your business plans in the future, you should be able to be as general as possible when submitting the original plan to your merchant account providers. Don’t say you’re selling “jam” but instead, tell them you’ll be selling “food”. Also, if you decide to sell two or more completely different products, be prepare to enlist help from separate providers.

Disaster #3: Too many charge backs can lead to fraud accusation
When and if too many charge backs occur, you may find yourself being accused of heading fraudulent activities. When this happens, you may find yourself being blacklisted not only by merchant account providers but also by your local banks.

The solution: Ensure you have a no-questions-asked refunds policy in place. Try to call up or email your customers to verify the sale and if they cannot be reached, refund them anyway. Your credibility and profits are on the line.

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Hope for the future – even with bad credit

Each day, more and more people are getting into the business of e-Commerce. Whatever benefits they seek to enjoy with their new endeavors, most would agree that getting an online merchant account should be priority No.1… And for a good reason too!

With an online merchant account, you will be able to enjoy a whole new world of freedom in accepting payments from your customers. Your customers in turn will love the flexibility given to them when it comes to making payments. This means you can choose to pay via credit or debit card instead of having to perform bank transfers or mail in their checks. With an online merchant account, purchasing from your store is even easier than swiping their credit cards in a brick-and-mortar store. And when convenience is on their side, your customers will want to keep purchasing from you. All those repeat businesses mean one thing: more profits!

So you can definitely see the benefits attached to acquiring your own online merchant account. However, if you are new to the scene, you may be discouraged with the roadblocks on the way to setting up your own account. This is especially true if you have a less than perfect credit history. Providers will take a peek into your credit background. If they like what they see, they will usually approve you in 2 weeks or less. If not, they will deny you your much needed merchant account.

To prevent that form happening, here are the basic steps you should take in order to secure an online merchant account for yourself:

1. Locate merchant account providers who can help
It is no secret that some providers are very picky about who they give merchant accounts to. If you cannot convince them, then simply look for other providers who will be willing to help. Do your homework and research on providers and credit card processors who can overlook this wee weakness of yours. Once you locate them, find out what their requirements are, and pick honest providers who tell you upfront what is needed to obtain an online merchant account.

2. Enlist help from a cosigner
A cosignor is typically someone close to you, a guarantor of sorts, actually. Oftentimes, you will need to get a cosignor when you are faced with providers who may not approve your application. Your best bet is a business partner with good credit standing – someone who will assure your would-be providers. However bear in mind that the guarantor must understand the risk he is taking by being your cosignor. Each debt incurred will reflect badly on his financial standing and ultimately mar his credit history.

3. Borrow some capital
You can “embellish” your credit background if you are able to borrow some money from a local bank. Set up an appointment with your banker, present your business plan with supporting business history and you may obtain the business capital you are looking for – along with a speedy approval of your own online merchant account.

4. Apply for a merchant account
Now that you have everything in place, you can now shop around for merchant account providers. Read reviews on the providers of your choice, compare rates and fees (setup fees, percentage per transaction, etc.) and make your decision based on the providers that best fulfill your needs!

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