The idea here is to help hoteliers save a lot of money for their hotels, with augmented credit card processing techniques. Most hotels are unaware of the existing pricing schemes. In fact 95% of hotels are under the traditional method that can cost them more money.

There are two pricing schemes. The “standard” pricing model for credit card processing is called “3 Tier pricing”, which comprises:
1) Qualified (best rate),
2) Keyed in transactions, sometimes called “Mid-Qualified”, and
3) “Non-Qualified”.

Not long ago, surfaced a new program that acts as a better pricing model than “3 Tier Pricing”. It is called “Interchange” Pricing. “Interchange” is the term used for the previously mentioned rates that all the credit card processing companies are provided by Visa and MasterCard. Charges are based in the following manner. A percentage amount is assigned to a set number of basis points, for instance 100 basis points = 1%. This way extra savings will be generated. Yet, the majority of the marketplace remains under the “3 Tier pricing” scheme.

Interchange pricing method is undoubtedly better because this way the credit card processing company can cover up on “Mid-Qualified” or “Non-Qualified” transactions, on which the 3 Tier Pricing model frequently defaults.

The good news for hotels is that they can anytime avail the option of changing their current credit card processing provider, without changing their credit card equipment, and their depository bank. Also, instead of a POS System, using a magnetic stripe reader and POS Software, may allow changing processors without changing their software.

Hotels must know the difference between a qualified transaction and a keyed-in transaction, as the latter has higher processing rates. Similarly, “card type” also plays an important role. Merchants pay a higher rate when you are accepting what are called “Loyalty Cards”, also known as “Rewards Cards”. Check Cards have a lower “Interchange Rate” than regular credit cards. However, the same regular higher rates are charged on a “3 Tier Pricing” for Check Cards, which can comprise 30-40% of transactions.

The least expensive method of accepting payment from a customer is when they pay by their bank issued ATM/Debit cards. Another area of potential cost savings is credit card equipment. If a hotel is renting its credit card equipment, they tend to shell out up to $500 per month as lease. Instead, go in for a “Free Credit Card Terminal” program, with which you can receive many credit card terminals, printers, and ATM/Debit pin-pads to the hotel “for free”.

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There are numerous online businessmen who think that they don’t need a merchant account and can easily carry out financial transaction using other payment processing option?? But think again is it really possible??

It is true that the service quality and security offered by merchant account service providers is matchless.

The first argument favoring Merchant accounts talks of its vast approach by offering international transactions. Mostly, the alternative payment options are restricted to inbound transactions. A few of the processing options available allow the users to carry out international transactions. But the word international is several times used in limited sense as they are related to a few countries. Hence, choosing a merchant account becomes a correct decision over other payment solutions.

Obviously price is an important factor while choosing a provider - but it should not be the only factor.

Customer support can be essential - problems in credit card processing can promptly impact your bottom line. The best way to learn about a provider’s level of customer service is to obtain customer referrals from current clients.

You can request referrals to merchants that are similar to your company in size and industry. Then asking several customer feedbacks related questions like do they have to wait several minutes before reaching a customer support reply? Are their needs serviced quickly? Are they satisfied by the services? How does the provider deal with charge backs? Also ask the provider about their level of support - do they have phones staffed around the clock? Do they find someone at your service at the time you require or you try to call?? Do they charge per incident?

If your business will be selling over the Internet and you do not have a secure server that can encrypt credit card information, make sure your provider can offer secure ordering through SSL (secure sockets layer, a widely-used web standard for security). Setting up your own secure site is expensive and technically challenging.

Finally, if you are not using a bank or financial company you recognize, make sure you verify that the company you are investigating is justifiable - there are cheat artists and scammers who set up fake processing companies just to collect setup fees then vanish. Hence, you require to be very careful while selecting the providers. It is advisable to check the company’s status if you are unsure, and if you find a provider on the Web, make sure you get a physical address and phone number.

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