Information on Merchant Accounts,
Ecommerce and Credit Card Processing

May 4th, 2022 by J B

Are you breaking these credit card processing rules?

Filed in: Merchant Accounts |

When it comes to accepting credit cards there are a lot of rules and a lot of drab documentation to go with them. Many times businesses are breaking rules that they don’t even know exist. In this article, we are going to take a look at a few key rules, why they exist, and how they can affect your business.

For those of you who love really digging into rules and regulations, I have you covered as well. I have linked to the more than 1,300 pages of Visa and MasterCard rules to get you started. Spoiler alert, you will be asleep before you get through Visa’s 41-page table of contents.

Let’s jump in…

Accept All Cards

This is a band-related rule. If you accept Visa cards you must accept all types of Visa cards. The same goes for MasterCard and other card brands. Now there is some nuance depending on what country you are in, but for the most part, the rule is to accept one card from a brand you accept all cards from a brand.

It’s not good for anyone if businesses are checking cards and denying payments by customers with certain cards. Some of you might be wondering why on earth a business would do such a thing, and the truth different is cards can have higher interchange chargers than others increasing a business’s cost. Different card types may carry additional chargeback or fraud risks. While most of these are mitigated by contactless and EMV payment acceptance, not all businesses have the ability to accept payments in person.

From what I have seen merchants who try to avoid cards that they think cause higher interchange fees still end up accepting the same mix of cards, and all they have done is irritated some of their customers.


This is kind of a No No… The card brands would really rather you not surcharge the cardholders and it’s currently not allowed outside of the US, Australia, New Zealand, and Europe. Even where it is allowed there are conditions that have to be met before you are actually allowed to surcharge.

Here are the main requirements.

  1. Surcharging must not be prohibited in your state.
  2. You must notify the card brands and your processor 30 days prior to surcharging.
  3. You can only surcharge credit-based transactions.
  4. You can not charge more than your cost to accept the payment.
  5. You must have proper signage and notification to your customers.

If you feel like surcharging is something you want to do I would start by reviewing your current payment processing setup and understand the fees you are being charged. From there reach out to your processor, or to us, and have a discussion about the requirements, and how you can comply properly. Then think about what effect that may have on the business both from an expense and customer perspective. At that point, you will know if it’s right for you.

There are also alternative ways to offset your transaction costs that are not considered surcharging. We will go over one such option in our next article.

Minimum Transaction Amount

In the past, this was not allowed, however for the US merchants are now allowed to have a minimum transaction amount as long as it doesn’t exceed $10. Again like with Surcharges this only applies to credit transactions. You cannot put a minimum on debit transactions.

Generally, it is not a good idea to put minimums on credit card transactions, it increases friction with your customers. That said for merchants who have many small ticket items this can help to greatly reduce their effective transaction cost. Imagine someone buying a pack of gum for $0.89, and the merchant paying as much as $0.43 just to accept the payment, when a $10 transaction might cost them $0.57. The $0.89 transaction has an effective cost of almost 50% whereas the $10 charge has a cost of 5.7%. Now yes both of these scenarios are exaggerated, but they really are not unrealistic for some small ticket businesses.

Don’t Run your own credit card

I can’t stress this one enough, just don’t do it…

Why? From the perspective of the card issuer and processor, they don’t know if you are buying something from your business or if you are loaning the business money from your credit card. If it was a loan to the business then it would be subject to other rules and at minimum have to be processed as a Cash Advance. Because of this uncertainty, it’s not allowed at all, with the exception of test sales at $1.00 or less.

There is also the potential for a merchant to attempt to dispute their own credit card transaction after either depleting the bank account or taking the product. This has come up a couple of times in businesses with multiple partners or owners, where one tries to steal from the business by using the credit card network. I can assure you that it doesn’t turn out well for anyone. From held funds to termination by processors and issuers, to potentially serious legal action.

For that matter, you shouldn’t be running anyone’s card outside of your day-to-day sales operations… If you need funding for your business there are other options that are legal and don’t jeopardize your business’s ability to accept payments.

Finally, Do not run credit cards for anything for anyone else

This tends to come up when a new business wants to use another business’s payment processing because their own sales are currently too low to support a merchant account of their own. At first glance, it doesn’t seem like there would be any harm done, but the devil is in the details. For one thing, the two businesses are likely selling different products and services which changes the risk profile of the business with the merchant account. Even if they sell the same products or services some of the transactions they process will show up with the wrong business name on them causing confusion for cardholders and increasing chargeback risk. Then there are processing fees, two businesses mixing funds, and potential disputes between the two businesses sharing this account.

But those are small potatoes compared to the real risk. If you are the business owner who personally guaranteed the merchant account you carry 100% of the liability. So if the person/business that is using your merchant account starts dealing in high-risk or illegal transactions it doesn’t matter if they were the one running the cards. You and your business are the only financially responsible parties. You may even run into some personal criminal charges as well.

Please avoid this at all costs.

Are you ready for the Rules?

As promised above, 1,300+ captivating pages. All joking aside it’s actually a really good idea to know what’s in these, at least the ones that pertain to your business. There is some really good information in these documents and a lot of time and effort has been put into them. Unfortunately, the topic just isn’t very exciting.

Visa Core Rules and Visa Product and Service Rules

Mastercard Rules 2021

If you have any questions about any payment processing rules, you at least have a place a start looking. If you find your processor isn’t a great resource we are more than willing to answer or give direction on any questions that you have.

April 13th, 2022 by J B

Terminal Overview – Dejavoo QD Series

Filed in: Merchant Accounts |

Dejavoo recently released the QD series of Android-based credit card terminals and we figured it was about time to put together a brief overview.

These new QD devices use Android as their operating system, that said Dejavoo did a great job of keeping the functionality of these devices the same as the Z line of terminals. Someone can easily switch between the two different series of devices and feel right at home.

QD Family of Devices:

Dejavoo has released 5 new devices so far in this line up as listed below. While each has its specialty these devices appear to be very flexible and could work in multiple business types.

DevicePrimary FocusCommunicationAcceptance Type
QD1Rigid WirelessBluetooth, WiFi, & 4GEMV/Contactless/Swipe
QD2Mobile WirelessBluetooth, WiFi, IP, & 4G EMV/Contactless/Swipe
QD3mPOSBluetooth, WiFi, & 4G EMV/Contactless/Swipe
QD4Countertop TerminalBluetooth, WiFi, & IP EMV/Contactless/Swipe
QD5Customer Facing PINPadBluetooth, WiFi, USB, & WiFi EMV/Contactless/Swipe

First Look Thoughts: Dejavoo QD2

The QD2s that we purchased for testing are stout terminals in a form factor that is similar to the Dejavoo Z line and most of the industry. Where this device really stands out is its 5.5″ screen size. The Dejavoo software doesn’t feel cramped on smaller machines, but on this one there is so much more space. The additional space and button sizes are nice to have on a full touch screen system, especially one that you are not holding close to your face.

Battery life definitely feels like it would last all day even under load, however, I didn’t have time to run a day’s worth of business through the device. My unit came set up with the power cable and Ethernet adapter screwed in place, which is not something I would expect for a mobile device. Nevertheless, it was easy to remove a few screws and clips to set this machine up for my use case.

It’s also nice to see Dejavoo has been thinking about cable routing and management. In some of their product slicks, linked below, you can see where they are routing cables in different ways depending on the device’s purpose. From what I am seeing on the QD2 you are not just stuck with cables that are forced to come out one side of the terminal. This will make it much easier for those of you trying to keep a clean counter.

You can see in this picture I have already removed the screws, I just had not removed the cables yet.

Link: Dejavoo DQ Line Brochure

Payment Acceptance:

There isn’t much to say here, because the device has everything you need. EMV, Contactless, Swipe, Debit, and EBT if it’s a mainstream acceptance type you can process it.

I also like to point out that the contactless area is clearly identified for the consumer, as opposed to some devices that show they are contactless but you can’t ever seem to find where the reader is.


Communication options on the entire line are wonderful. It has everything you want to see, however, there are a couple of things to note.

There is no phone port or Ethernet port integrated into the device, or at least in the QD2 I was working with. The Ethernet connection is via a USB dongle, which has its pros and cons. Yes, it’s another dongle you have to keep up with, however, it appears to be a standard USB Ethernet dongle. We purchased a random TPLink USB dongle from the local computer store and tried it on the QD2. Worked like a charm. That said not all USB dongles are going to be supported natively by Android OS.


I feel like Dejavoo has another homerun device line with the QD series. These are robust payment devices that are loaded with the feature sets that businesses today need. The move to an Android-based system also opens up Dejavoo to additional options in the future, while delivering a SMART phone-style user experience. If you are in the market for a new payment device this lineup is something you definitely take a look at.

Interesting Techie Fact: Which I’m sure are not supported use cases.

Since the terminal has a single USB A connector for its USB dongle. For laughs, I connected my Logitech mouse and keyboard to it, and as expected both worked. For some reason, I couldn’t terminal to accept input from my keyboard’s 10-key.

I also tried plugging in a USB hub and was able to successfully process sales using a mouse/keyboard while also connecting via the USB Ethernet adapter.

Then I tried using the supplied Ethernet dongle on a test PC we have running windows 11. It was plug and play, Ethernet worked as soon as I plugged it in.

March 24th, 2022 by J B

Unintended consequences of a stopped payment

Filed in: Merchant Accounts |

Would you place a stop payment on your previous merchant account provider if you found out you had some absurd early termination fee?

We recently set up a new client that was referred to us. He operates a very small business that manufactures and sells a unique product that fits a growing niche. He had previously been processing with a payments provider that either set up his account incorrectly or that was purposely charging him outrageous fees. As an example when we started talking to him about signing up with us he was effectively being charged 30% in payment fees.

He was clearly not happy with that situation and was ready to find a better solution. We promptly got him set up and operational. What we found out later is his previous provider was trying to charge him a $2,000 early termination fee. When he heard about this fee he opted to do a stop payment on the couple hundred dollars in monthly fees they were charging him. Unfortunately, he didn’t realize that many payment providers use the same backend services that handle funding. So placing a stop payment on his old provider effectively placed a stop payment on us. A downside with placing a stop payment on a corporate bank account is whoever was accessing your account is no longer allowed to re-attempt any transaction to that account. It’s designed to prevent re-attempted charges which makes a lot of sense. Unfortunately, that includes deposits as well. As soon as the stop payment was received we were no longer allowed to fund that bank account.

We worked with the merchant and his bank to get this resolved as quickly as possible, but the bank was unwilling to lift the stop payment as it would allow his previous provider to access his account as well. He eventually ended up having to go through the cancelation process with his old provider and pay the early termination fee. Again during this process, we were not made aware of this early termination fee nor that he was going to place a stop payment on them. If we had been aware we may have been able to coach him on maybe getting that early termination fee lowered or removed. At the very least we could have helped him confirm if placing a stop payment would have affected our ability to make deposits into his account. Between all the hoops he ended up jumping through closing out his old account, it took 25 days for his bank to give us written permission to access his bank account.

Stop payments have their place, but should really be used as a last resort if at all possible. You should also reach out to your payments provider and ask for advice especially when it comes to another payment processor. We see all kinds of scenarios concerning bank accounts that most businesses never run into. While most people see our primary function as access to card payments a lot of what we do behind the scenes is focused on making sure our customers can stay focused on their business. Any time we can help prevent a bank issue from occurring is an excellent use of our time.

When working with payment providers feel free to be upfront and let your provider know what you are facing. A great merchant account provider will that the experience to at minimum make sure you are pointed in the right direction and can help steer your away from any pitfalls.

March 24th, 2022 by J B

Attorneys: Avoid accidental commingling of funds (Payments and IOLTAs)

Filed in: Merchant Accounts |

This comes up more often than you might think, many attorneys out there misunderstand how payment processing may cause accidental commingling of funds if not set up correctly. While attorneys are familiar with IOLTAs, a trust account used to hold clients’ funds, they don’t always recognize the path they may be taking to fund an IOLTA could cause accidental commingling.

Generally, speaking attorneys who may be handling client funds will have at least one operating account used for accepting payment on complete work and running business operations. They will then have a second account for storing client funds like retainers or other funds that belong to their clients. While that seems easy enough getting funds into the trust account isn’t always so simple.

Sure if a client has the ability to write a check to your IOLTA account its just a matter of depositing the check. Its similar with Cash assuming you have the IOLTA account at a local bank branch where you can make the deposit. You see you can’t just deposit funds into your operating account and then transfer the same sum to the IOLTA. Yes, in effect it accomplishes the same thing, however, the rules are set up to prevent a law office from ever having direct access to their client’s funds.

It gets even more complicated when a client wants to pay on a credit or debit card. Many attorneys accept credit cards for payments for work completed but those depositing go to their operating account. Some attorneys like to set up a separate merchant account that allows them to accept credit and debit card payments that deposit directly to their IOLTA account. What people tend to not think about are the payment processing fees.

Imagine you get an IOLTA setup you add a merchant account as an additional way to fund that account and you figure you’re all set. The funds never hit the operating account, so many feel like they are in compliance. This still isn’t a perfect setup as the processing fees are charged to the IOLTA which is a cost of doing business that should be applied against the operating account, which is not allowed.

That said it is very easy to set this up right the first time. Its key to be clear with your payments provider about what you are doing and explain that you need the funds to deposit directly to the IOLTA account and any and all fees be applied to the operating account. This should not require any additional paperwork than a normal merchant account setup aside from maybe a second voided check or a bank letter. Generally, you will need to submit a voided check for each bank account that the payments provider will be accessing.

Most payment devices can even be made to support multiple merchant accounts meaning you don’t usually need additional hardware. We even have ways to accept payments via a web interface so you can operate from anywhere and don’t need any equipment at all.

If you have any questions about properly handling processing clients’ funds please reach out to us. We would be happy to tell you about options and make sure you get on the right path. It really is a simple setup and the right way to handle those funds.

March 3rd, 2022 by J B

From Tips to Chargebacks

Filed in: Merchant Accounts |

If you accept tipped payments there are some potential, lesser-known, chargeback risks you should be aware of. For some types of tips, a card issuer is allowed to dispute any portion of a tip that exceeds 20% of the original sale. This is not the case with all types of tips, however, this does affect the most common tipping method for restaurants and bars. If you accept tips now or plan to accept tips you should be aware of the potential for chargebacks and understand why they might come through. Unfortunately, there is little that can be done to prevent the type of chargeback we are going to discuss, however not all is lost. While I really don’t like this set of rules, I also can’t see another way to handle it from an issuance perspective without serious changes to how cards are authorized.

Let’s set up some background:
If your business does restaurant-style tipping with a tip line and a later tip adjustment you are at additional risk of chargebacks. For businesses like restaurants, bars, hair salons, etc. there is an allowance of 20% for them to adjust a pre-authorized transaction in order to collect their tips without processing an additional sale. If you are a business in an industry that does not have these allowances you are at additional risk of chargeback if you settle a transaction for any amount over its approval.

Not all businesses accept tips via tip adjustment. Many businesses that accept tips use a method that I will refer to as tip-in-transaction. This is a method of asking for the tip at the time of sale and including that amount within the original authorization. These merchants don’t have the additional risk that comes with adjusting the settlement amount after authorization. There are some businesses that could use this method, but prefer tip adjust so they don’t have to ask for a tip or have a device that prompts the customer during checkout. That said if you are doing tip adjust today you may have the ability to switch to tip-in-transaction if it’s a fit for your business.

Let’s get into the risks for those who do adjust their tips:

The risk comes into play once the tip amount exceeds 20%. Technically your approval allows you to capture up to 20% more than your original authorization. An issuer has the ability to dispute any amount above that 20% ceiling without even notifying the cardholder. The majority of the time this never happens and so most merchants don’t even realize that it’s something that could happen. Just because the card issuer has the ability doesn’t mean they will use it. In rare instances, I have heard about a chargeback originating from extremely irregular tips on very high authorizations. Most likely this is an issuer or cardholder thinking there was some sort of mistake when entering the tip amount or maybe even attempted fraud. To me, it makes sense that issuers and cardholders would need the ability to dispute tip amounts in these cases.

Recently I have heard of and reviewed a couple of instances where the amounts were small and quite normal. For example, one chargeback I looked at was for a bar. The authorization amount was $3.00 and the customer left a $1.00 tip for a total of $4.00. The issuer was disputing $0.40 of the total transaction. When I first heard about it I was thinking there is clearly some kind of miscommunication here, why would an issuer spend time disputing a $0.40 overage on such a common thing.

What was even more perplexing is that this wasn’t the only transaction we found that was being disputed on this merchant’s account. We found 3 more that were similarly small as the first. The highest dispute was for around $1.40.

Why would an issuer spend time disputing such small amounts?

As far as we could tell this is a pre-paid gift card. Not to be confused with a pre-paid credit card. Unlike Pre-Paid credit cards, the Visa/MasterCard/Amex gift cards, like the kind you get at the grocery store and are given out around the holidays, are not linked back to an individual person.

If a business puts through a transaction that exceeds the card’s available balance by authorizing one amount but settling a higher amount then that is a real problem for those issuers. When one of those cards is processed at a restaurant they likely check the balance of the card and only approve the sale if the card’s balance exceeds the authorization amount by 20%. This would be done to prevent losses while also allowing those cards to operate in a tipping environment.

This is where it becomes difficult to find a better solution.

When tips are involved the card issuer cant know what the cardholder is going to tip. On traditional credit and debit cards, this isn’t a huge issue. The issuer can increase the balance that is owed by the cardholder. They can also charge fees for going beyond the card’s limits, or even draw a bank account negative and collect the funds and fees at a later date.

For PrePaids they have to decide between setting a tip-ceiling or setting those cards to only work at businesses that don’t accept tips.

Maybe there is a better way that the industry could handle tipped transactions on prepaid cards. One possible way is at the time of approval to have a notice printed on the receipt that the card is unable to accept over its ceiling. That way the business and the cardholder would be alerted that the card can’t accept tips beyond 20%. This would not be too different than how partial authorization work now. For some card types, the issuer can approve a transaction up to the limit or balance of the card. When the payment device prints the receipt it clearly states the card was approved for an amount lower than the total and prompts the merchant to collect another form of payment for the remaining balance due. Doing this would allow normal cards to operate as they do today while preventing chargebacks on cards that don’t allow the cardholder to exceed the ceiling.

While that is easily stated it would likely require changes to both the issuance and acquiring side of the industry. It would also take time for businesses and consumers to adapt to these changes. Businesses would catch on quite quickly, but it would likely require businesses to explain to their customers that their card has a hard tip limit which I would assume would be an annoyance at best to the business and the people receiving the tips.

People who work in tipped environments are not going to be happy about telling people they are not allowed to tip you above 20% due to the limits of their payment method.

While the amounts are small, the costs add up.

Some of you may be thinking it’s $0.40 here or there, and this doesn’t come up very often, what’s the big deal? It’s the chargeback fees. If you’re paying $15+ for each chargeback then that $0.40 overage likely costs you more than the revenue from that sale. Four chargebacks quickly because $45+ just in fees. In this particular instance, we manually waved the merchant chargeback fees but that isn’t a long-term solution.

While this isn’t a common issue, it’s one I would like to see addressed and changed. Hopefully, this is something that is in the works. In the mean, it is rare and is just something to be aware of.

You can find the actual rules from Visa here. The purpose of this article is to alert people to potential risks and is not designed to be a comprehensive guide. In order to keep this article from going on for pages, we encourage everyone to review Visa and MasterCards guidelines and understand how they may be applied to your business.

February 14th, 2022 by J B

5 More Advanced Processing Options That are More Affordable Than You Think.

Filed in: Merchant Accounts |

Here we look at 5 more ways to accept payments that are generally much cheaper than most businesses expect. Just like in our first 5 ways, many of these do have an additional transaction fee that is part of the overall billing.  That said those fees are generally in pennies per transaction and if they increase sales or operational efficiency, they will be a negligible cost.

  1. Virtual Terminal

Many businesses out there operate with a standard credit card terminal even though they don’t do any card-present transactions.  A virtual terminal sets you free from needing to be at your device to process payments.  You also get the benefits of full data reporting, easy access to payment records, and simple ways to process refunds without needing the card data.  Unlike traditional terminals, there are no up-front fees to just have a virtual terminal.  You will generally pay around $5.00 monthly.

2. IOLTA Accounts

If you’re not an attorney you probably want to skip this one, but if you are you don’t need to pay for specialty software just to properly handle your IOLTA account.  We have simple setup options that prevent any co-mingling of funds while properly routing fees through an operating account.  Some of the systems out there can cost an arm and a leg and include many features that you do not even use.  We can handle your setup for as little as $12.00 per month in addition to your normal merchant account fees.

3. Online Check Processing

Check processing has its own set of fees separate from processing credit/debit cards.  Many online check offerings have even more fees piled on top for risk assessment purposes.  The truth is for traditional check conversion most of the time there is not a need for those additional risk assessment fees.  For most businesses, we can eliminate the need to have an expense check reader and the need to take a check to the bank for a deposit for as little as $12 per month.

4. Gift Cards

We find that many merchants do not look into gift cards because they feel their business is too small, but we have seen some of the smallest businesses leverage the power of gift cards.  While there is a small upfront cost of getting cards printed and shipped, you can start with a small order to get started.  From there you can work gift cards into your sales approach.  The monthly and transaction costs of gift cards vary, and the options won’t fit in the scope of this list, however, they are quite reasonable, and many times work with your existing payment hardware.

5. Cellular Payments

Cellular processing options are quite different than they were in the past.  From options to process payments on your phone to Wi-Fi terminals that you can tether to your existing wireless plans, it has never been more cost-effective to process over a cellular connection.  The traditional cellular terminals still exist and are a great option for some, but for many just are not worth the additional costs.  If you are looking to expand into cellular payment processing, there are many options that can be started for just a few dollars a month.

February 3rd, 2022 by J B

Apple iPhones, a new payment terminal?

Filed in: Merchant Accounts |

Apple Inc. is said to be nearing the release of a new service that allows businesses to accept payments directly on their iPhones. This service would likely be some form of tap-to-pay using the Near Field Communication (NFC) technology built into some of Apple’s devices. Meaning an iPhone user could simply tap their iPhone or NFC credit card on the merchant’s iPhone to complete a transaction without the need for a separate card reader. This could put Apple in direct competition with other payment providers however that will highly depend on the implementation of such a service. The rollout of Apple’s new service is reported to be months away with some outlets reporting a potential beta release in the upcoming IOS 15.4.

Tap-to-pay technology has been readily available in the US for many years and cardholders continue to adopt the technology, however that adoption has not been particularly quick. From my experience, a lot of Smartphone users don’t know about, or at least don’t use NFC payments on their phones. That said the technology will continue to grow especially as more and more credit cards are released with tap-to-pay built-in.

So how does this affect merchants and the processing industry as a whole?

A lot of that depends on Apple’s implementation of this new service. If Apple makes this service proprietary and requires merchants to use it’s own payment service that would put it in direct competition with aggregators like Square. However, without functions from a traditional terminal or from a Point of Sale software, this payment functionality can only go so far. I could see where this would help ApplePay to keep pace with companies like Venmo, which has also been pushing to increase the number of businesses using its payments platform.

On the other hand, if Apple opens this service to third-party apps, and processors then it could turn the iPhone into an additional payment device for existing businesses by utilizing their existing payment service to process the transaction. That sort of setup would benefit aggregators as well as full-service payment processors while helping drive ApplePay adoption. For merchants, it would allow them to keep their existing payment systems in place and easily add their iPhone or maybe even iPads as a card reader enabling more payment acceptance options without additional hardware.

While this second scenario is not likely, judging by Apple’s track record, it’s also not completely outside the realm of possibilities. Apple has yet to really dip its toe into the acquiring side of the payment space and is likely using someone else’s network to facilitate its transactions. Meaning it might be easier for Apple to act as a middleman with a service that is open for other providers to use. When coupled with the scrutiny on Apple and other large tech firms releasing a new open service would doesn’t seem completely out of this world.

Don’t get me wrong, it’s very unlikely this will be the case. Apple is likely taking a step into payment processing at some point in the foreseeable future and this would be an easy starting point to build from.

So what would adoption look like?

Assuming this system isn’t going to be open to existing payment processors… If, and when, they roll out such a payment service I could definitely see quick adoption from younger entrepreneurs just starting a business or a micro business. I could also see it taking some transactions away from payment aggregators, but out of the gate, this isn’t likely to change the payments space all that much. The cardholder adoption of NFC payments just isn’t there yet. That said this is a long play by Apple, and with consistent NFC adoption by consumers, I think this sets the stage for Apple’s eventual entry into the merchant acquiring side of the payments industry.

Apple is definitely capable of coming into the processing side of payments. I imagine they have no problem even if it costs them tens of millions per year as long as it fits their long-term strategies. That said, without additional payment devices and business management software I think this service will likely become an additional payment option for businesses and consumers in an ever-expanding payments space.

January 6th, 2022 by J B

Another 5 Ways to Lose Money Through Your Merchant Account.

Filed in: Merchant Accounts |

  1. Not Reviewing Deposits

Most merchants think that as soon as they run the card funds are guaranteed.  Unfortunately, there are many reasons why funds may not make it to your account when you expect them to.  While most of these are extremely easy to resolve many merchants don’t catch the fact that they are missing funds until weeks down the road.  Most of the time when there is a funding delay is pertaining to a bank holiday, but sometimes it could be related to batch issues, device issues, or risk-related issues and need to be addressed as soon as possible.  When you see a deposit, issue contact the processor immediately and they will work with you to get the issue resolved.

2. Improperly handling returns

When returning money to a customer it’s important to return those funds the same way they were received.  It is also important that you use the correct device option, so you use the most cost-effective way of returning those funds.

Many merchants will accept a credit card payment and later if there is a return, they will pay the customer out in cash.  This opens the merchant up to dispute as there is no proof the customer ever received such a refund.  You also need to think about how you return funds through your payment device.

One option many merchants overlook is the void option.  If a return is due on the same day of the original transaction you can void that original transaction instead of processing a return.  A void deletes the transaction from the batch which keeps the funds from moving from the cardholder’s account to the business.  If funds never move the issuer and processor don’t charge the percentage rate on that transaction, saving the merchant money.  If the original transaction has already settled, then the only option you have remaining is processing a return which works as the opposite of a sale.

3. Not using current processing technology

If you are still swiping all your transactions, you are leaving yourself open to disputes.  When swiping transactions, a business has little to no protection against stolen credit cards.  Any stolen card accept may generate a chargeback that is unwinnable by the merchant.  This was not always the case, as before EMV swiping was the most secure way to process a credit card.  These days as more and more card processing technologies become mainstream it’s important to use the most secure methods you can.  Also accepting a wide range of transaction types also allows you to serve the highest number of customers.  You do not want money to walk out the door only because you couldn’t accept their form of payment.

4. Not using the best payment option for the transaction

Many businesses out there accept credit and PIN debit transactions without thinking about the underlying cost structure of each card type.  It’s assumed by many that Pin debit transactions are always cheaper than processing a debit card as signature-based credit.   That said this is not always the case, and many merchants could save quite a bit by being selective about which network they process their payments on.  Its starts with reviewing your statement and getting a better understanding of how you are charged for each card type.  Under a certain dollar amount, one way will be more cost-effective than the other.  Once the transaction amount is higher than that dollar amount it becomes more cost-effective to process the sale on the alternative network.  Which way is best for your business is going to come down to how you are being billed for Credit and Pin Debit.

5. Not changing accounts types based on business volume

There are a couple of primary merchant account types available these days.  There is an aggregator base merchant account and a fully underwritten merchant account.  The aggregator-based accounts generally have low to no monthly or annual fees but come with a higher flat price per transaction.  The fully underwritten accounts will have monthly and annual fees but also include lower transactional costs and personal service.

Depending on your business’s processing volume one of the account types will be more cost-effective than the other.  In general, if you’re processing an average of $2,000 per month consistently, or $24k per year even if seasonal you are better with a fully underwritten account as far as cost is concerned. 

I have seen businesses processing less than $1,000 per year who won’t let go of their fully underwritten merchant account even though it’s costing them through the nose.  On the other hand, I have seen companies processing $50k+ with an aggregator account paying 30% more than they should annually.

There is something to be said for staying with what is familiar, but you should at least know what that is costing your business.   Once you know what the cost difference is you will know if it’s worth it to you to keep with what you are doing on try something else.

December 15th, 2021 by J B

How Fraud Affects Businesses

Filed in: Fraud, Merchant Accounts |

Everyone loves the holidays, but with the holiday rush, traveling employees, and chaos of busy schedules, it is very easy for fraud to fly under the radar, especially for small businesses.  But fear not!  We are here to explain to you how fraud works so that you can be proactive in protecting your business from it.

What is Return Fraud?

One of the biggest types of fraud that affects small businesses during and after the holidays is return fraud.  Return fraud is “an online scam that occurs when a person purchases an item from a retail store with the intent to return it immediately or use duplicate receipts to get money back.”  These sneaky fraudsters use the company’s return process against itself to acquire extra money, gift cards, or benefits from items.  With Christmas and New Years being over, many people try to return things they do not want.  And the heavy influx of in-store traffic and returns around and after the holidays makes it that much harder to catch this type of fraud.  To protect your business from return fraud, you need to know the different types and how to combat them.

Price Tag Swap

Price tag swap involves a customer swapping the price tags of two items to buy the more expensive one for a cheaper price or to receive more money back from the return of a cheaper item.  This type of fraud is very prevalent in self-checkout, which has become commonplace in many businesses. 

Solution: Preventing this fraud can be difficult, but it can be reduced by using price tags that are difficult to remove, which means avoiding stickers.  Also, have employees double-check items at check out.

Returning Shoplifted Items

With this type of fraud, a person takes an item from the store and tries to return it either without a receipt for in-store credit or with a fake or duplicate receipt for cash. 

Solution: To reduce this type of fraud, all you have to do is require a valid receipt when people try to return items– no returns without receipts.  Also, have employees mark the receipts when the item is returned so it cannot be reused.

Rent and return

This fraud is very common for clothing.  It involves buying an item, using it once or twice, then returning it.  This is very common for things like formal dresses and suits because they are generally used for a few occasions, most of which do not involve them getting dirty or messed up.

Solution: To help prevent this from occurring, companies can use price tags that make clothing difficult to wear without removing the tag.  Employees must also closely examine returned objects before accepting them back.


Shoplisting is where a person finds an old receipt or picks up someone else’s receipt and uses it as their own personal shopping list.  They, then, walk around the store picking up items listed on that receipt and try to return the new items to get money back. 

Solution: The only way to stop this other than keeping a close eye on suspicious customers is to set a time limit for returning items.  That way, people cannot use old receipts for as long.

Receipt Fraud

The final return fraud we will talk about is receipt fraud.  This is where people steal or reuse old receipts to return items for profit.  People may use copied, stolen, or reused receipts. 

Solution: Stick to using the SKU’s on receipts.  If the SKU on the receipt does not match up, do not allow employees to accept the return. 

Return fraud is rampant around the holidays, and it can cost your company BIG TIME if you are not proactive in combating it.  It is important to have a strict company return policy to stick to.  Make sure you are protecting your business from fraudsters’ devious schemes.

September 30th, 2021 by J B

5 Advanced Processing Options That are Much More Affordable Than You Think.

Filed in: Merchant Accounts |

There are many ways to accept payments and some are more cost-effective than others.  Here is our list of 5 ways to accept payments that are generally much cheaper than most businesses expect.  Here we are going to focus on the monthly costs.  Keep in mind most of these do have an additional transaction fee that is part of the overall billing.  That said those fees are generally pennies per transaction and if they increase sales or operational efficiency, they will likely come at a negligible cost.

  1. Recurring Billing

Many businesses feel that Recurring Billing on credit/debit cards or even electronic checks is the type of service that would be costly to set up and hard to manage. The truth is for most businesses it can be set up for a nominal cost and is easily managed through a web portal. Once set up, this gives merchants a wide variety of recurring billing options from totally custom per-customer to pre-configured plans, all for around $10 per month.

2. Invoicing

Invoicing allows a merchant to send out an email invoice that includes a direct link for the customer to enter their own payment details. This can be a very useful tool for most service-oriented businesses. This is another option that most merchants do not feel is within reach, or simply have not done the research into what might be available, but again this option can be set up for under $10 per month in most cases.

3. Customer Vaulting

In addition to recurring billing, vaulting offers a way to store a customer’s credit card information for later use. This is done securely through a payment gateway in what is called a vault. When thinking about storing credit card numbers, it rightfully is considered highly complex with many areas of potential loss and liability. A vault takes away most of the risk in storing customer information allowing a merchant to later charge their customer’s card for differing amounts depending on the services being sold. This is often very convenient for companies that have contracts with variable pricing and delivery dates. Using vault storage usually also allows for recurring billing through the vault, making it possible for both fixed recurring charges and variable needs-based payments without the customer having to provide their payment information after the initial entry. Using a customer vault reduces errors common with manually entering payment information while drastically decreasing the complexity and time required to store and charge a customer’s card in the future and generally costs $5 – $10 per month for the service.

4. QuickBooks integration

Quickbooks is one of the most common accounting software products in use by businesses all over the world. Intuit knows this and frequently charges exorbitant fees for its built-in processing services. Unfortunately, some versions of QuickBooks remain off-limits to developers but for others, there are options to process with a 3rd party directly through your QuickBooks program, or outside of QuickBooks, with the option of importing payments, for just a few dollars per month in software costs.

Because this service is completely dependent on the version of QuickBooks being used, please contact us with your QuickBooks product information, and we can provide options for integrating without being forced to use Intuit’s expensive processing services.

5. Full Featured Point of Sale Systems

Long gone are the days when buying or leasing a point of sale system required a second mortgage on the family business and a double-digit percentage of gross sales in annual fees just to keep the system running.

For as little as about $10 per month plus the cost of hardware, there are full-featured systems for almost every type of business: retail stores, restaurants, food trailers, counter-service, and just about everything else in between. Newer, cloud-based, point of sale services additionally have the ability to integrate hundreds of custom applications and features into a system, making even the most robust legacy point of sale system obsolete. Many systems are available for as little as around $500 for a complete hardware setup with a printer. Mobile, completely wireless POS systems are becoming increasingly common and affordable for businesses without access to the internet or reliable sources of power such as food trailers, trade-show merchants, and mobile trade services.

If you have been wanting a way to improve your business’s ability to process sales the price really isn’t an issue anymore. It is well worth taking a look at what’s out there and in most cases for penny’s a transaction you could greatly improve how you handle payments. If you are not sure where to start, feel free to reach out to our team and we will get you on the right path.