One thing is certain! Whether you decide to lease or purchase, you cannot do without Credit card machines. Credit Card processing equipment helps process credit card payments safely and efficiently. Additionally, the customers are provided with a much-needed flexibility of shopping with plastic money!

Once the necessity of acquiring a credit card processing terminal has been established, merchants may come face to face with the dilemma of choosing between leasing or buying a credit card processing terminal. Even though paying a small lease amount monthly may not prove to be a burden on the pocket, merchants often end up paying two to four times the upfront cost of purchasing the same equipment. Here’s an example- If you choose to lease a $ 500 credit card terminal for $30/month for 3-4 years, at the end of the lease term you would have paid $1,440 in lease, which is nearly triple the cost price of the equipment.

Having said that, I do not claim that purchasing credit card equipment works for all merchants. On the contrary, there are some factors that must decide the way to go in acquiring your credit card processing machine:

Cash flow- If you have the money available, purchase suitable credit card machinery without a second thought. However, if coughing up a lump sum for a machine would adversely affect your business, choose to lease the equipment, even though it will cost you more in the long run. Perhaps when your business is well-established you can buy out the leased equipment.

Tax- If you’re leasing the equipment, you will be able to deduct the interest portion thereof from your taxable income each year.

Legal Owner-To become the legal owner of the credit card equipment, you have to make a purchase. Leased equipment, even if used for several years, with monthly lease payments having already exceeded the value of the machine, does not give you a legal title over the equipment. It is a good idea to agree for a ‘purchase option payment’ at the end of the lease term in order to acquire actual ownership of the swipe.

Financial liability- If you’re leasing your credit card equipment, please remember that this would appear on your financial statements as a liability.

The above factors must be considered when deciding between leasing or purchasing credit card equipment. Once you’ve read through the above, do take out time to verify the cost involved in purchasing a credit card machine. That’s because, with time, the price of credit card equipment has dropped. Today, you can find equipment for as little as $99 with a built in printer, to high quality credit card machines that can be purchased for an affordable $149 that are top of the line, fast, small, lightweight machines that contain thermal printers that never need ink.

The bottom-line is that buy your credit card equipment if you can afford the upfront cost, and if you have no choice but to lease, read the fine print before you sign on that dotted line!

For more, visit here

Merchant accounts are now offering the cutting edge in wireless processing capabilities making it possible for customers to process credit cards without chaining you to a physical location. Wireless processing allows you to do business whenever you want, wherever you want!

With Wireless technology, many merchants have seen their sales volume multiply. This is owing to the flexibility offered by a mobile merchant account, with which you’ll be able to process credit card transactions from virtually anywhere—at home, in your car, at a customer’s office, or at trade shows and conventions. A wireless credit card terminal is ideal for many service businesses.

In case of wireless processing, you won’t need a phone line or any external source of power. Wireless terminals have an internal battery that powers wireless service and access to your merchant account.

Wireless credit card transactions take three seconds or less to process and you can get instant approval and decline codes. Also, you can get a wireless credit card terminal that uses a fast thermal printer so that you can give your customer a physical receipt on the spot. Additionally, wireless credit card payments can qualify as swiped “card present” transactions, so you’ll get the lowest interchange rates.

A wireless credit card terminal is also the answer to your needs if you have a high sales volume, for which an extra fast transaction speed is required. The convenience of wireless payment processing also reduces the number of lost sales opportunities.

It’s fairly easy to set up a wireless merchant account. Firstly, check for network coverage. Wireless credit card terminals work on a network, just like cell phones, and the service varies depending on your location. Also consider how weather, network traffic, terrain, signal strength, obstructions, building density, construction, and environmental conditions will affect your wireless credit card terminal.

Next, you have to choose the right wireless credit card processing terminal. Get a lightweight, flexible terminal that allows you to securely process error-free transactions in a short amount of time. A handheld wireless terminal should support credit, debit, T&E, EBT, Smart Card, gift cards, and loyalty cards. An easy-to-load thermal
printer, GPRS, a touch screen, a built-in PIN Pad, or an EMV smart card reader, are all desirable add-ons! Also, get an equipment warranty with your processor to save time and effort.

It’s time for you to join the wireless revolution to offer your company and your clients a whole new world of opportunities.

For more, visit here

Merchant Account
A merchant account is an account with a bank that allows you to process credit cards. This bank account is established with a payment processor for the settlement of credit card transactions, with the money being transferred to your standard business account in real-time or during various points in a 24 hour period. Any merchant who wants to take credit card orders must establish a merchant account, which is a crucial part of ecommerce. Internet merchants need a “Card Not Present Merchant Account.”

Discount Rate
A Discount rate is a percentage rate charged by the bank for processing a merchant’s transaction. This rate is usually determined by the type of business and/or how the credit card is processed. Retail based transactions (card present) will always have a lower discount rate than mail, phone, or Internet transactions (card absent).A percentage that is paid to the credit card company on each transaction. If a customer makes a credit card purchase worth $10.00 and your discount rate is 2.40%, you pay $0.24 for the $10 sale. A competitive discount rate is roughly 2.40%.

Monthly Processing Minimum
Monthly Processing Minimum is the minimum amount you must pay each month for your credit card processing. A competitive monthly minimum is approx $30. The monthly minimum does not apply to monthly fees or transaction fees. For instance, if you sell $1000 in goods over one month, your total Discount Rate (see explanation above) would be $23.90. This amount does not meet the $30 minimum so the credit card company will round your charge up to $30. If the discount rate and transaction fees exceed $30, then you have met the Monthly Processing Minimum and the fee does not apply.

Gateway Processor
A gateway processor makes for communication between the merchant’s website and the bank’s computer networks, acting as an interface between the two. It charges your customers’ credit cards via the web and sends the funds to your merchant account.

Real-Time Processing
Real-time credit card processing is designed to respond to a credit card purchase within a pre-determined time. Real-time processing of credit card charging authorizes and charges the customer’s credit card at the time of purchase.

Offline Processing
This method of credit card processing allows a business to collect a customer’s credit card information, and then process the charge at a later time.

Secure Socket Layer (SSL)
SSL is a Secure Socket Layer protocol developed by Netscape Communications Corporation for securing data transmission in commercial transactions on the Internet, designed to ensure cardholder information is safe during the ordering process.

Statement Fee
The statement fee is charged by the bank each month to process and send you your statement. Statement fees usually cost between $10.00-$15.00/month.

Transaction Fee
Transaction fees usually fall between $0.20 and $1 (US). It is the amount charged for each credit card transaction, collected by the merchant account provider. This amount is in addition to the discount rate.

For more, visit here

Transactions, whether business related or personal, are now completed with the help of credit cards. Credit cards eliminate the need of carrying a large amount of cash. Hence, they are convenient both for the customer as well as the seller because transactions can be carried out any time you want. It helps in managing your money and can be especially used during emergencies.

There are several financial services that offer merchant accounts to home based, mail order and Internet businesses. That just makes for a lot to choose from and locating a service right for your business is still a difficult task, fraught with many pitfalls, both before and after you get the account.

Accepting credit cards becomes increasingly beneficial if you intend to take your business online. Online selling can boost your business profit against your competitor. Here are the three key elements needed for credit card processing:

1. Payment gateway - A payment gateway is a software program integrated to a merchant’s website to transmit transaction data to the credit card / Net Banking acquirer for authorization and settlement. Customers can pay for purchases across the Internet through credit cards within seconds, after the gateway obtains authorization from the credit card institutions.

2. Internet merchant account-relationship between a retailing company and a merchant bank which gives authorization to collect funds from customer’s credit card account.

3. Bank account-an account or account number that holds funds from which they can make withdrawals.

The key to online sales is accepting credit cards. Credit cards is great financial tool is used correctly and properly. Beware of increased security risks and occurrence of credit card fraud, and acquire a secure, confidential and protected means of dealing with sensitive credit card information.

You may choose to utilize the services of a third-party credit card processor which is a payment gateway at the same time. Several such third-party services are offered in the market today. These services usually incorporate a shopping cart application as part of the deal. Do not wince at the initial costs as this will save you in the long run from the outlay on shopping cart applications and expensive long time contracts.

When choosing a third-party service for credit card payments, consider the sales volume and frequency of your sales. Once you have all the mentioned key elements, you can start accepting credit cards for your business!

For more, visit here

In the world of business, like any other, mistakes are bound to happen, as you walk on the path of success. This is truer than ever for an ecommerce business. Instead of pointing fingers at who’s to blame, it’s advisable to concentrate on avoiding a few mistakes typical of merchants who accept credit cards for their goods or services.

“Free Merchant Accounts”, more often than not are a glitch! The word “Free” is often enough to make merchants forget about studying the agreements & contracts, which are always present. On the contrary, the fine print on the contract must always be read thoroughly and understood properly. Else, this can be one of the factors bringing about the downfall of a merchant. Other than falling prey to the lure of a free merchant account, following are some common mistakes that merchants make. After reading the following points you should be able to easily avoid these pitfalls:

Merchants tend to forget about hidden charges/fees. Just as there is no such thing as free lunch, similarly, no merchant account is “free” in the true sense! Merchants can evade the mistake of believing that their merchant account will not cost a dime by asking for all charges and fees they might incur when they start processing. This includes but isn’t limited to the discount rate, transaction fees, and monthly processing fees.

Merchants fail to read the fine print. It is a fact that the world will scurry to get without giving, hence the attraction of the word “Free”. But that is not how business works. Merchant account services are in this line of work to make money too, so why would they agree to serve you for free? The point is that after reading that services are free, merchants discontinue reading the agreement, while it is the fine print that may talk of certain conditions under which payments are to be made.

In all the excitement of acquiring a merchant account, merchants fail to ask when they can access funds. Make sure that your merchant account provider frees you of restrictions when it comes to having access to your funds/revenue.

Merchants consider background checks unnecessary. Background checks are a necessary precaution! Whether it’s a credit card processing provider, a payment gateway, or a shopping cart, always make background checks. Get reviews of merchant accounts, payment gateways, and more to make sure you are associating your business with trustworthy professionals.

Merchants don’t negotiate for freebies. Consider the freebies offered by a free merchant account, which may include a free setup, application fees, monthly fees, etc, depending on your provider. A merchant should always be on the look out for providers who offer freebies from time to time.

Lastly, do not innocently believe every word the service provider tells you. Instead, gain knowledge which will empower you to ask the right questions. Continue your search for the right merchant account service until you find one that can answer all your queries. After all, you want the best for your business!

For more, visit here

As mentioned in a previous write-up, businesses must always consider the substantial working capital benefits which are a result of effective coordination of credit card factoring and credit card processing. Businesses frequently need cash for investment, business growth, etc. To meet short-term cash requirements, a prudent working capital business loan becomes an important financing tool. The solution sounds great! But is coordinating credit card processing and credit card factoring, all that simple? The answer is “No”. In fact, there are a number of common business cash advance and credit card processing problems that you must steer clear of!

As much as $300,000 can be obtained from a business cash advance based on sales volume and future credit card sales for a business. Following are some Cash Advance Problems and Recommended Business Loan Solutions.

(1) Problem to Avoid: Closing costs requisite. Recommended solution: Zero closing costs.

(2) Problem to Avoid: Up-front fees. Recommended solution: No up-front fees

(3) Problem to Avoid: Collateral required. Recommended solution: Collateral not required.

(4) Problem to Avoid: Financial statements required. Recommended solution: No financial statements required except for larger business cash advances.

(5) Problem to Avoid: fixed payments to pay off the business cash advance. Recommended solution: No fixed payments

(6) Problem to Avoid: Fixed term to pay off the business cash advance. Recommended solution: No fixed term for repayment

(7) Problem to Avoid: 2-3 years or more in business required to qualify. Recommended solution: 1 year in business

(8) Problem to Avoid: Credit scores of 700 required to qualify. Recommended solution: Credit scores of 500 to 700 acceptable.

(9) Problem to Avoid: Business cash advance limited to $50,000. Recommended solution: Maximum cash advance of $300,000.

(10) Problem to Avoid: 12 to 24 months of credit card sales required. Recommended solution: Most recent six months at $5,000 or more in sales

The above obstacles are relevant to all commercial borrowers who use credit card receivables and credit card processing as the basis for obtaining short term business loans. Search for available credit card receivables programs that anticipate and eliminate these Credit Card Factoring and Credit Card Processing difficulties.

For more, visit here

Here are your alternatives- spend more money to accept credit cards through a great credit card processor or spend less for the identical services and features via a merchant account of your own. The choice when put in this manner may seem very simple. However, between white and black, there are several shades of grey. Similarly, in the merchant industry the comparison is never easy! This is because billing structures, charges, fees etc all vary from one merchant account provider to another.

To start with, you have to locate a minimum of 3 separate financial institutions and merchant providers that provide particular benefits. There is a standard approval procedure that both the banks and the merchant services use. The following information will be required in order to process your application:

1. A feasible business plan,

2. A good credit history, and

3. Proof that you are able to pay (and have to ability to continue to pay) the charges related to a merchant account.

Now, we come to the fee structure charged by potential merchant services. Several providers shy from fully disclosing their terms and conditions. Before you actually sign up for the account ask them for a copy of their “terms and conditions”. Make certain that you understand the terms and conditions of a company before deciding to work with them. Things to look out for are:

1. Charges to cancel (how much, details, contract duration)

2. “Variable” or Introductory Discount Rates – Ensure that the discount rate is single, locked-in, and non-changing. If it’s on a sliding scale, or can be altered without notice – search for another provider.

3. Free Equipment Offers – verify the return policies on the equipment provided to you by your merchant services provider. Sometimes there is a clause according to which, if the equipment is “damaged” in any way at all, you could be held liable to substitute it at full market value - this can be extremely costly.

Plentiful pricing plans and incentives are available for setting up a merchant account. Find out which one suits you the best. Some companies waive the installation fee, but others have a one-time overall fee and throw in other facilities at no charge. Each provider charges a discount rate, ranging from 1% - 5% and up, based on the type of account. A transaction fee, ranging from $0.05 to $0.25, is generally included. Retailers with a high sales volume will focus on lowering their discount rates and per-transaction fees as much as possible more so than their monthly fees, whereas smaller businesses with a lesser volume would turn their focus primarily on lowering monthly/minimum fees.

Armed with these tips, do your homework well and shop many different companies for the best priced terms and conditions. At the same time, make certain the company has a good reputation, and a good customer service department. Finally take an industry opinion on your prospective merchant provider, and compare it with your research. This way you can never go wrong!

For more, visit here

You surely must have heard of payment gateways by now! As complicated as the term may sound as a part of the financial jargon understood only by financial gurus, you no longer have to remain in the dark. In fact, it’s of paramount importance that you learn what a payment gateway is and what is its functionality or role in the process of accepting credit card payments for your products or services.

Following are some important things about payment gateway.

1. A Payment gateway is a computer program that works for online businessmen. If you plan to sell your goods online, then you need to have a Payment Gateway.

2. A Payment Gateway works in conjunction with a shopping cart software using an online shopping cart, customers browsing through the products that you have showcased online, can select whatever they would like to purchase including it’s color, size, quantity, etc. After the decision to buy all the items has been made, the customer is allowed to proceed to the virtual checkout counter where the shopping cart software not only adds up all the cost of the items chosen, but also adds the necessary shipping tax and other charges to finally compute the total payment due. The shopping cart itself contains an online form where customers enter their credit card numbers and other pertinent customers’ information.

3. The card information entered is encrypted by the shopping cart software. once the online form is complete, the customer clicks “SEND”. Then, the payment gateway software encrypts the information and submits the data to the credit card processing company. The gateway then informs the customer whether his/her credit card transaction is accepted or denied with the appropriate return message. The entire process is carried out under extreme security measures!

4. A payment Gateway offers Merchant Batch Processing. At the end of every business day, the payment gateway gathers all the transactions that occurred on your site and then sends them all in one batch to your bank. The bank then collects payments from customers and deposits them in your account.

5. A Payment Gateway includes a reporting tool. The payment gateway software includes a reporting tool where you can view all your online shop’s transactions. You can then review these transactions, correct them, or store them in your PC. This way you stay up-to-date with your online site.

6. A payment gateway screens all transactions to check for fraud.With payment gateway, you need not worry about dishonest customers using fake, cloned, or stolen credit cards. It contains highly-effective screening tools that screens out these fraudulent transactions.

7. Virtual terminal facility.With payment gateway virtual terminal, you can manually enter this information into the payment gateway software.

To get a payment gateway for your online business, you can either just buy it, or you can subscribe to a company that offers a payment gateway program. There are many firms that offer this service. Choose one that meets your business style, needs and budget.

For more, visit here

The minimum credit card payment limit, calculated as only 2% of your credit card balance, was brought up to 4%, according to the guidelines formulated by bank regulators. This came as good news for most consumers, who would be highly pleased by the fact that they can now save thousands of dollars in interest or finance charges. However, the change also came as a rude shock to many consumers who could see their minimum payments double over night.

Simply put, this is how the increased minimum credit card payment is supposed to work. If you have a $5,000 balance on a credit card your minimum payment could double from $100, or 2 percent of the balance, to $200, or 4 percent of the balance. Bank regulators, including the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision are responsible for this increase.

What was happening earlier was that the consumer was not benefiting at all from a minimum that did not even pay for the interest, so that when they made the minimum payment it didn’t buy down the interest and the balance increased every month. The guidelines were put together in 2003, but card issuers were allowed to roll out the new rules slowly. Over the past couple of years, banks converted their systems to the new payment schedule. The present guidelines being followed say that the minimum payment must include all of the interest and part of the principal.

The positive part is that it will force people to pay down their debts more quickly, thus save them money in the long run. However, it’s going to be difficult for those whose paychecks are leveraged. They will have to make alterations and adjustments to their budget. It becomes more important than ever to make sure your interest rates are low and fees are avoided. The good part is that minimum payments must not only include all new finance or interest charges and any penalty fees, but must also reduce your principal by 1% each month. Customers will no longer go through the distress of paying on a credit card for several years.

So, if your minimum credit card payment hasn’t risen yet, keep a check on your credit card statements hence forward. Call your credit card issuer to inquire now, because not all card issuers will be increasing their minimum payments!

For more, visit here

It’s true that no e-commerce business can survive if the merchant refuses to convert to the latest methods of accepting payments. Consumers simply do not carry cash any more! Credit Cards or other forms of plastic money are convenient, and secure. However, that is not where it ends. For a merchant account to function properly and accept credit card payments, a merchant needs to acquire certain pre-requisites. The right infrastructure would be an e-commerce Web host and a merchant account provider, who can provide you with the features you need.

First, ensure a secure payment area. This is to protect sensitive information such as credit card details from fraudulent elements who are always on a lookout to access credit card information during the transaction process. Identity theft and credit card fraud are extremely common on the Internet, and you need to protect not only your own interests, but are responsible for the safety of your customers too. In fact, today’s consumer takes care to educate himself of what all is involved in credit card payments and will probably refuse to buy from a site that does not provide secure transactions.

Secure your site with a secure socket layer certificate, or SSL. SSL encrypts information being entered on your site as it is sent across the Internet. You can purchase this certificate yourself, or your Web host may let you use theirs as a part of its service.
Another important component of fostering successful online sales from your website is a compatible shopping cart application. Ascertain that the shopping cart application on your website is compatible with your payment-processing gateway. Several payment gateways exist, and each one has its own set of standards.

Boost the confidence of your customers with PGP encryption. For Phone/mail orders, the information being transferred among the participants of a credit card transaction, must be encrypted.. PGP, which stands for “pretty good privacy,” is the most common form of email encryption. PGP encrypts emails when they are sent and decrypts when the information has reached its intended recipient. Do you plan to use PGP? In that case you need to make sure that your email client supports it. Keep the security key to yourself!

Get a firewall for your server! To your customer’s data or credit card numbers that you may have saved on your server, it is vital to have a site wide firewall to protect this information.

Once you have all the above technology requirements, it’s time to approach credit card processing service providers. Provide your customers with a safe and secure payment processing solution!

For more, visit here