Information on Merchant Accounts,
Ecommerce and Credit Card Processing

 

June 11th, 2014 by Jamie Estep

New Wireless Terminals

Filed in: Credit Card Equipment |

The Verifone (previously Nurit) 8020 is officially at its end of life. The 8020 is by far the most widely used full-featured wireless terminal on the market today. Verifone has produced the 610 and the 670, but for a number of reasons the 8020 has been a superior terminal to both of these for most merchants.

vx675-frontHaving to find a replacement terminal, Verifone has recently introduced the VX675 which we expect to become Verifone’s most popular wireless terminal. It comes in at a great price, is EMV ready, and is more appealing than Verifone’s other wireless terminals. We’ve also been very pleased with 2 other terminals we’ve recently been introduced to, the Pax S90 and the Dejavoo V9. Both are very well designed wireless terminals with a ton of features such as EMV and options such as prepaid data plans. Both are offered in GPRS and CDMA versions which is important as some areas, rural especially, do not have sufficient access to one or the other network.

Although iPhone and Android processing is the current trend, we still think that full featured wireless terminals have a number of benefits in reliability, security, and function over cell phone based solutions. Many merchant’s sales volume or operational procedures quickly outgrow cell phone based solutions and wireless terminals have been time tested to work for a variety of mobile merchants. We anticipate these terminals to be the standard in stand-alone wireless units for the foreseeable future.

April 3rd, 2014 by Jamie Estep

Multiple terminals coming to an end

Filed in: Merchant Accounts |

It looks like almost all current credit card terminals are going to be discontinued by their manufacturers at the end of April 2014.

While it’s not entirely clear if this is due to EMV or PCI changes to credit card terminals, or some other manufacturing or logistical issue, but all current Hypercom / Equinox and most Verifone terminals will be discontinued after April of 2014. By our information this includes Verifone VX510, VX510LE, and VX570 terminals, and includes all current Equinox terminals, the 4205, 4210, and 4220.

After April of 2014 the only of these terminals available will be existing stock or refurbished terminals.

Equinox has the Apollo line of terminals that is set to replace the Optimum 4210 and 4220 series which includes a traditional all in one terminal, and a dual merchant / customer facing setup. As of right now, Apollo terminals are not well supported at most processors so there may be a delay, possibly significant, before these terminals are available with most processors.

Verifone has the VX520 line which is already overpassing VX510 and VX570 terminals. The VX520 comes in several versions including EMV and even a contactless NFC version.

As of right now, we recommend the VX520 with EMV, as many merchants will want to be able to adopt the new EMV standards for processing when they are finally rolled out.

Dejavoo, Ingenico, FirstData also have terminals that appear to be unaffected by the changes.

Existing users of these discontinued terminals should have several years before they need to think about upgrading. As of now, this is strictly a supply issue and shouldn’t affect current operation.

April 1st, 2014 by Jamie Estep

Problems with used credit card terminals on eBay and craigslist

Filed in: Credit Card Equipment, Merchant Accounts |

Many business owners sell their used credit card terminals on ebay to other business owners after they upgrade or no longer need them. These terminals often go for a fraction of the retail price even if they are relatively new.

Buying a used terminal has always been a bit of a gamble since it’s unclear how the terminal was treated and how much life it possibly has in it. Even so many times the price is good enough to take a chance with it.

However, we are increasingly seeing problems with used terminals on ebay and craigslist that prevent them from being used at all by the purchaser. Many, if not most, merchant account providers have free terminal programs for their retail merchants. What merchants may not know is that they do not actually own the terminal that they’re given to use and they’re supposed to return the terminal to their provider if they switch processors or cancel their account.

What’s happening is that many of these terminals are not being returned and instead being sold on ebay or craigslist or other marketplaces. These terminals are usually locked at a hardware level so that they cannot be used with another provider, and the processor will not unlock a terminal that they were supposed to get back as they technically still own it. This is to protect the processor from losing a $200 – $500 terminal every time they lend one out. But, as a purchaser there is virtually no way of knowing if a terminal is locked until your own provider tries to program it. By that time you may not be able to get a refund or even find the seller if it is on craigslist. As far as ebay goes, if they seller states it’s a working terminal, it doesn’t actually have to be usable with your processor, and it is very difficult to win a dispute through paypal’s dispute resolution system in this case.

Unless you are 100% certain that a particular terminal is not locked with any provider, we strongly recommend only buying equipment that is new or manufacturer refurbished and is not proprietary to any particular company. This will save money and a huge amount of wasted time if you accidentally purchase a locked terminal.

November 20th, 2013 by Jamie Estep

Credit card logo generator and API – Updated

Filed in: Ecommerce, Merchant Accounts, Tools | 10 comments

Update 11-2013 - Added transparency option. Just omit the bgcolor from the url and the background of the logos will be transparent. This allows the logo to match any background color they are placed on without trying to match up HEX colors.

Update 05-2013 - Added Bitcoin and Google Wallet.

Update 03-2013 - Added Skrill, Verified by Visa, and Mastercard Secure Code logos.

Update 08-2011 – Added ebillme and 2checkout.com logos.

We’ve just completed a simple credit card logo generator and have included an API for web designers to use as well.

The API supports different logos for card issuers, paypal, google checkout and a few other. A developer can use the API to specify the size, background color and the order of the logos that they need on their website.

Here’s a quick tutorial and a few examples of how to use the API.

  1. Create an image tag with the root url: https://www.merchantequip.com/image/
  2. Next either leave the parameter bgcolor blank for the logoes to have a transparent background, or add the bgcolor parameter to specify a 3 or 6 character HEX background color for your logo. If you do not know the background color: FFF is white, 000 is black. Here is a full HEX color chart. There are also a variety of browser addons if you need to match the exact colors of your website.
  3. Next specify the actual logos that you would like to add to your site, in the order you would like to display them. Separate the logos with a pipe | character. Example: v|m|a|d for Visa then MasterCard followed by Amex and Discover.All of the available logo codes are:
    • v = Visa
    • m = MasterCard
    • d = Discover
    • a = Amex
    • g = Google Checkout
    • p = Paypal
    • bml = Bill Me Later
    • ec = eCheck
    • jcb = JCB
    • dc = Diners Club
    • s = Solo
    • me = Maestro
    • mb = Moneybookers
    • az = Amazon Payments
    • in = Interac
    • ebm = eBillme
    • 2co = 2checkout.com
    • vbv = Verified by Visa
    • msc = Mastercard Secure Code
    • sk = Skrill
    • bit = Bitcoin
    • gw = Google Wallet
  4. Finally specify the height of the logos. The images currently come in 32px and 64px, so size accordingly allowing for a small margin around the images. We will be allowing for dynamic resizing in the future, but for now the only 2 sizes supported are 32px and 64px. Any additional height will be added as a margin.

The actual image url should look like (these are all generated through this exact API):

https://www.merchantequip.com/image/?bgcolor=FFFFFF&logos=v|m|a|d&height=32

The image HTML will look like:

<img src=”https://www.merchantequip.com/image/?bgcolor=FFFFFF&logos=v|m|a|d&height=32″ />

The logo above will display as:

Card Logos

Here’s the same logo using the larger image sizes:

Card Logos

Here’s all of the currently available logos:

Card Logos
Card Logos 2
Card Logos 3
Card Logos 4

While this tool is free to use we greatly appreciate a backlink or credit if you are using images that are hosted through the API. These images are all served securely over SSL, so they may be used on secure/SSL websites and ecommerce sites without errors.

If you have no idea of what an API is or just need logos for your website, please use the credit card logo generator and ignore this post.

Thanks again.

October 29th, 2013 by Jamie Estep

Unethical marketing fax scam

Filed in: Fraud, Merchant Accounts | 2 comments

This is what unethical sales in the merchant account world looks like. I’ve crossed out the business information, but Mr. Michael Lendon is pretending to be this company’s merchant service provider which he is not. That’s very unlikely a real person as I’ve found at least another public example of the same deceptive marketing on the internet.

These fraudulent marketing forms might seem benign but can have disastrous consequences for businesses that fall for them. Many times a business is subject to termination fees and even being sent to collection because they end up switching companies and their old account was never closed. But, more importantly they are now trusting the money and possibly the very existence of their business with a company that flat out committed fraud to obtain their business.

0735_001

Text version:

From: Merchant Services Fax: 8887816053 To: Fax: + Paga 1 of 1 1012612013 5:54

Merchant Services

• T. 888-547-1666 • F. 888-781-6053 •

FROM: Michael Lendon RE: Your Merchant Account
Management has finally approved you a lower rate of 0 .98°/o due to your consistent sales volume on Visa, MasterCard and due to being a lower risk merchant with minimal chargebacks.

You are currently overpaying on your merchant blll every month under the original program. Please complete form below today before Visa and Mastercard Increases their rate so we can LOCK It for you at the lower rate. This low rate program is for customer retention purposes which you qualify for as a low risk merchant, and as long as you stay with the program you will continue to receive the benefits of lower rate savings.

Additional benefits of this new program:

• Next day deposit,
• NO monthly fee, NO annual fee, NO set up fee,
• Seamless transition with no downtime: we will handle the transfer from your current
program to the new,
• Amex, wlll have faster deposit timeframe (same as V /MC/D) and will be on one
statement with V /MC/D.
Complete below & FAX directly to me at (888) 781-6053 and we wlll fax you the new
merchant application – if you get a busy signal you can Fax to (888) 563-0420 .

To discontinue our offer in the future to lower your merchant monthly cost, fax this form back crossed out. F 888-781-6053 or if you get a busy signal try an alternative Fax# (888) 563-0420

October 17th, 2013 by Jamie Estep

Here comes Durbin again

Filed in: Merchant Accounts | 2 comments

If it hasn’t already happened, small merchants are about to get a rude awakening if they currently accept PIN debit transactions. Because of certain provisions in the durbin amendment which regulated debit card interchange, debit networks are now individually allowed to charge annual fees for facilitating debit transactions on their networks. This means if you accepted a PIN debit transaction through Pulse, Star, or many of the other debit networks, or if you’re even set up to accept these transactions, you will most likely be seeing annual fees from $5+ per debit network appearing on an upcoming statement. There are 13 debit networks currently, but not all merchants are likely setup on all networks.

While this isn’t an extraordinarily large fee, many merchants only accept a few PIN debit transactions per month or even per year. PIN debit network fees are going to be a major headache for small merchants who may not even know they are setup to accept them. This is one of those unintended consequences of the debit regulation, which has no effect on the super corporations that lobbied so hard for it, but may have a much larger effect on small merchants.

March 5th, 2013 by Jamie Estep

Square gets shut down in Illinois

Filed in: 3rd Party Processors, Industry News |

The state of Illinois has issued a cease and desist against Square Inc. (pdf) for violating a money transmitter act and is requiring them to cease all money transferring activities with any resident of the state.

stop_signWhat this basically means is that Square is not operating within money transfer regulations by Illinois’s interpretation of Square’s practices. Much of this is directly focused on anti money laundering regulations. It is extremely easy to setup an account with Square and there are numerous reports and even instructions on how to use Square for illicit businesses, it’s not surprising that this has come to a head.

It will be interesting to see how this plays out and if other states take the same interpretation of Square’s business practices.

I know that the traditional processing industry has been less than thrilled at how Square is allowed to conduct business and solicit customers.  Much of this may be a natural reaction to a fierce competitor. However the reality is also the observation of Square’s apparent rejection of the rigorous standards that are required by existing credit card processors. While regulations are often a burden and a barrier to progress, many of these standards are in place to prevent fraud and combat money laundering. To be blunt, Square came across as completely ignoring many of standards just to reduce their own barrier in getting a customers processing account setup.

February 4th, 2013 by Jamie Estep

Make sure your credit card processor has the correct tax information for your business

Filed in: Industry News, Merchant Accounts |

The IRS 6050W mandate passed in 2008 requires credit card processors to report merchant processing revenue to the IRS for each year of active processing. The IRS essentially thinks business owners are cheating on their taxes and are using credit card processors to try and identify egregious tax dodgers. Merchants with tax related information that is incorrect when their processors files a 1099-K will be subject to having funds held by their credit card processor. Last year, we were given a bye and didn’t have to hold merchant funds for those merchants with incorrect TIN information. This year appears to be different and processors will be holding funds per IRS regulations. We’ve already seen numerous cases where Amex was forced to put a hold on merchant’s funds.

You may have recently received notice from your credit card processor of your TIN or corporate name mismatching, or simply a notice to verify your processor has the correct TIN/EIN number and corporate name on file for your business. Do not ignore these notices!

It is extremely important to make sure this information is up to date and is correct with your processor. Incorrect TIN information can result in your processor being forced to hold the money being processed through your merchant account. American Express is a separate entity and you need to make sure that your TIN information is correct with American Express separately from your merchant account.

To update this information, you will be required to provide your credit card processor or American Express with an accurate W9 form. Completing this form properly is critical to preventing a TIN mismatch. This form must be filled out with the exact information you used to register your TIN with the IRS which is also the same information required when filing your taxes. A single misplaced letter or punctuation, the incorrect type of business, or an incorrect TIN will cause a mismatch. The IRS doesn’t have an adequate system for your processor to verify this information, or lookup the correct information, so it is up to you to make sure it is accurate. If you don’t know the TIN or the exact name you established your TIN under, you can contact the IRS to get the correct information.

Make sure this information is correct with your processor and with American Express to avoid having your money held.

January 23rd, 2013 by Jamie Estep

You may now surcharge on credit card transactions, sort of…

Filed in: Amex / Discover, Industry News, Merchant Accounts |

A result of the recent card association / merchant settlement is that merchants may now place a surcharge on their credit transactions. We’ve already been getting a lot of phone calls about this, so let’s go over a few of the basics. You should also review Visa’s official information on surcharging for the in-depth details.

If you live in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, or Texas forget about it. It is illegal in your state to add any surcharge on a credit transaction and state laws always trump operating regulations facilitated by private entities.

If you live in one of the other 40 states, you may be able to surcharge beginning January 27th, 2013.

In a nutshell, here’s what’s going to happen. Make sure you check with Visa’s and other association websites before adding a surcharge to ensure you are complying with all of the implemented rules and regulations.

  • Notify Visa and your acquirer at least 30 days in advance of beginning to surcharge.
  • Limit surcharging to credit cards only (no surcharging debit and prepaid cards) and limit the amount to your merchant discount rate for the applicable credit card surcharged.
  • Disclose the surcharge as a merchant fee and clearly alert consumers to the practice at the point of sale – both in store and online – and on every receipt.

Remember, you cannot surcharge a debit card no matter how it is processed. You cannot surcharge if you accept American Express or Paypal. You cannot charge a prepaid card no matter how it is processed. You cannot under any circumstance charge more than you are paying to accept that specific card. There are specific rate limits listed on Visa’s website.

Although this may seem like a beneficial and obvious solution to some merchants, I strongly urge you to take a good look before implementing a surcharge. Shifting a cost like this is not going to fare well with many customers. I would personally not make a decision like this lightly. If you do decide that you want to surcharge, make sure you have a plan to test and back out if necessary. As proven in Australia, surcharging credit transactions has the potential to drastically alter payment preferences and will often upset a customer no matter how the surcharge is presented. In the world of social media, surcharging has the potential to generate a lot of bad publicity, very quickly, if you upset the wrong customer base.

Lastly, don’t be surprised if this change in regulation is retracted in the future. Consumers drive commerce in the US and they certainly will have their shot at overturning surcharging if they feel that it is unfair.

November 27th, 2012 by Jamie Estep

Pay your Drug Dealer with Square

Filed in: 3rd Party Processors, Merchant Accounts |

We’ve been speculating since Square got started that it would quickly infiltrate illegal markets. Partnered with prepaid debit cards, it offers an almost 100% anonymous method of accepting credit cards.

While reading some actual stories of drugs being purchased via debit card through a square reader, I went and did some searching on Google. To my surprise, not only are there multiple articles and instruction on how to accept debit cards for illegal sales, but Square is actually advertising for drug dealer related search terms. What a nice company.

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