Authorization Responses

An authorization is a request for verification that the cardholder’s account is in good standing with funds available at the time of the request. For most merchants, the authorization is obtained during the sale transaction.  It does not warrant that the person presenting the card is the rightful cardholder, nor is it a promise or guarantee the sale will not be subject to a chargeback. The following are some examples of responses received from the card issuers.

• Approved - Transaction is approved by issuer/company that governs the payment card
• Referral - Message indicating that the merchant must call their authorization center and follow instructions provided. Note: When a referral response is received the merchant should not attempt additional authorizations on the same card. The merchant should call the authorization center to receive a voice approval code to complete the transaction. A voice authorization should only be requested when a referral response is received. If the merchant receives an unfavorable response, another form of payment should be requested.
• Declined - Transaction was not approved by issuer/company that governs the payment card. The transaction should not be completed. Request another form of payment. Note: If a sale is declined, do not pursue alternative measures with the same card to obtain approval. Instead, request another form of payment. Merchants accepting and processing transactions with multiple authorizations are subject to chargebacks, Payment Card Company fines and/or cancellation of their processing agreement
• Pick Up Card - Card issuer wants to recover the card. Do not complete the transaction. Ask for another method of payment and if you feel comfortable recover the card from the cardholder. Note: Follow your internal procedures for card recovery

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5 Factors For Banks To Consider When Choosing A Payment Processing Partner

Banks can derive powerful benefits by partnering with a top-notch payment processor. But financial institutions that don’t vet those partners with due diligence may inadvertently invite problems. 

There are five key considerations to explore when selecting the right payment processing partner, and these can help ensure a more rewarding and value-adding relationship;

1.) Experience Serving Banks

Banks are advised to seek out a payment processor with a proven and verifiable track record of successful bank partnerships. Experience in the nuances of banking, coupled with an understanding of the needs and preferences of merchants who rely on banks, is essential. Otherwise a bank’s vital merchant relationships may be jeopardized because of the payment processor’s lack of knowledge, resources, and vision. A qualified payment processor will anticipate what a bank and its merchants require. Then it will offer customized solutions to help ensure stability, profitability, and growth.

2.) Robust Security

Proactive risk management is priority number one for banking institutions. Don’t let a processing partner who isn’t vigilant compromise security. When vetting a payment processor, make sure they are expert at guarding against potential data breaches. They should use all the latest payment protection technologies such as data encryption, tokenization, PCI-compliant Level 3 processing, and access-restricted cloud backup. They should also know how to accommodate the needs of businesses within regulated industries. Law firms, for example, need a payment system that supports approved escrow accountability. Healthcare providers must ensure airtight HIPAA compliance. A qualified payment processor will stay updated on compliance issues, technological solutions, and best practices. They’ll also facilitate ongoing payment system security training for bank personnel and partnering merchants.

3.) Specialized Public Sector Solutions

A partner with creative solutions for government agencies, municipalities, and educational institutions is a great asset. They can open up new opportunities for banks to pursue those potentially lucrative accounts. For example, a flexible rate payment system, which utilizes industry-compliant legal surcharging, can ensure that the organization never again has to pay credit card “swipe fees” to companies like VISA and MasterCard. Overhead is significantly reduced, net revenue is increased, and flex-rate payments build public trust through greater financial transparency and equity.

4.) Strategic Consultation and Collaboration

Always demand that a payment processing partner does more than simply sell products and services to the bank. Look for one that will become a long-term solution-focused success collaborator. Their support and innovation should improve the bank’s customer service to help attract and retain merchant accounts. Banks who choose a superior payment processing partner can reduce in-house labor and overhead, while expanding their merchant account portfolio and market share.

5.) Flexibility and 24/7 Support

A B2B payment platform should be designed exclusively for B2B and be able to process multiple payments simultaneously, in a variety of currencies, with instant electronic invoices and receipts. Choose a partner with dedicated, personalized support that is not outsourced to a third party and extends around the clock, even on bank holidays. Then enjoy the competitive advantage derived from having a technologically advanced, strategically innovative, and highly responsive payment processing partner. Source

Credit Card Processing Fees and Costs

Whatever pricing structure they use, processing companies base their pricing on four primary fees. These include interchange fees, assessment fees, processor markup fees and monthly account or statement fees. Knowing what goes into credit card processing fees can help you understand your options and spot the best payment processing service for your business.

Interchange Fees

Interchange fees are set by Visa, Mastercard, Discover and other card brands. These are the unavoidable, base-level costs of processing credit cards. Often called wholesale or base fees, interchange fees generally range from 1% to 2% of the transaction amount. Payment processing companies collect interchange fees during the transaction process. They then transfer these funds to issuing banks as payment for the credit service.

Interchange rates vary greatly and depend on the merchant’s industry, the transaction type and the brand and type of card used. Here are a few examples of factors that impact interchange rates merchants pay to process credit cards.

• Transaction type: Card-not-present transactions, such as online sales, have higher interchange rates than in-store sales, where cards are physically swiped.
• Debit vs. credit card: Debit cards have lower interchange rates than credit cards because they are considered a lower credit risk.
• Card brand: Discover and American Express have higher interchange rates than Visa and Mastercard.
• Card type: Rewards, corporate and governmental purchasing cards have higher interchange rates than non-rewards cards since these programs cost the issuing banks more to administer.

Assessment Fees

Assessment fees, often called per-transaction fees, are also set by the card brands. These are flat per-transaction fees attached to interchange fees and typically range from 1 to 5 cents, based on the type of card and transaction.

As with interchange fees, assessment fees are collected by card processing companies during the transaction process. However, these fees are paid to the card associations, such as Visa, Mastercard, Discover and American Express, not to the issuing banks.

Processor Markup Fees

Markup fees are what credit card processing companies charge for their processing services. Markup fees vary based on the card company’s processing fee structure, such as a straightforward markup percentage called interchange-plus, complex tiered rates or simple flat-rate fees.

Each fee structure has benefits and drawbacks, which we explore in more detail below. Bottom line, markup costs vary greatly from processor to processor, so it’s essential to shop around for the best deal.

Monthly Fees

In addition to markup fees, many credit card processing companies charge monthly fees for specific services, such as statements, online gateways, PCI compliance and card terminals and other processing hardware. Some roll all of these services under a monthly account or subscription fee.

A few charge no monthly fees for credit card processing services. However, these providers typically have higher flat-rate processing fees that can cost more compared to providers that combine monthly fees with lower processing rates.

Other Costs To Consider

Some credit card processing companies have add-on and conditional fees that can affect your overall processing costs. To avoid surprises on your monthly statement, always check the fine print for add-on fees when comparing credit card processing companies.

• Chargeback fees: Unfortunately, chargebacks are an inevitable part of accepting credit cards and the cost of processing a chargeback varies greatly among processing services.
• Batch processing fees: Some tiered and traditional merchant services providers charge per-batch fees.
• Setup or termination fees: Card processing services with negotiated or tiered rate plans often require contracts with setup costs and hefty early termination fees.
• Monthly minimum fees: Some negotiated and tiered rate plan providers charge a monthly fee if contracted transaction volume minimums aren’t met.
• Same-day funding fees: Most card processing services deposit funds within one to two business days with no added fees but charge a fee for instant or same-day access to processed funds.

Payment Gateway, Payment Processor and Payment Security Explained

 

 

Confused by payment gateways and processors? This video breaks it down in simple terms, with clear examples to help you understand:

The key differences: Gateways collect & verify info, Processors handle the nitty-gritty.

How they work together: See the seamless flow from customer checkout to your bank.

Why security matters: Dive into tokenization & encryption - your customers' data is safe with you!

 

Accepting Cryptocurrency

What is Cryptocurrency? 

Cryptocurrency is a digital currency that allows people to exchange value without a bank or government. It's a type of electronic cash that exists only as a digital token on a blockchain. Cryptocurrency has been a popular subject for quite a while now. As a consumer, you may be intrigued by it. Maybe you’ve already used it to buy goods and services. Or perhaps you’ve invested in it.

As a business owner, it’s the latest form of payment acceptance to offer your patients. So even if cryptocurrency isn’t on your radar otherwise, it’s important to consider it in terms of your practice.You want to make it easy for your patients to pay for services and supplies however it’s convenient for them. If they start asking about cryptocurrency as an option, you want to be prepared.

The process is similar to how you accept credit cards. Whether you use a credit card terminal, payment form, invoice or shopping cart, it’s a realistic, no-hassle option for your patients. Plus, there are no chargebacks!

NetCents

You can work with NetCents to easily integrate cryptocurrency payments into your practice. It’s basically like a virtual terminal or payment gateway. As long as you have internet access, you’re able to use it.

NetCents allows your patients to choose from popular cryptocurrencies, including Bitcoin, Litecoin, Ethereum, Bitcoin Cash and more. One important thing to note is you don’t have to receive the payment as cryptocurrency. You can choose to accept it as US dollars that go right into your account. You just may be surprised how easy it is for both in person and online transactions.

In-Person Transactions

As long as your patient has a crypto wallet set up on their smartphone, it’s a painless process.

• Countertop Terminal: If you prefer a terminal, we do have an option compatible with cryptocurrency. All you have to do is open the NetCents app, and you’re ready to accept the cryptocurrency payment.
• Smartphone, Browser, or Tablet: If you need to accept payments outside of your practice, or want another in-person option, you can use a smartphone, browser, or tablet.

Online Transactions

Your patients don’t have to be in your practice to pay with cryptocurrency. They can pay their bill or buy vitamins from you online by using one of these techniques;

• Shopping Cart/Payment Form: If your practice has an online presence with a payment form or shopping cart, accepting cryptocurrency is as easy as a credit card. 

Invoice: From your dashboard, you can create an invoice to send to your patient. When they open the invoice, there will be a QR code for them to scan. That’s when the customer takes out their smartphone with the crypto wallet to pay with their preferred cryptocurrency.  

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What You Need to Know About Your Credit Score

Your three-digit credit score — typically between 300 and 850 — lets lenders know whether or not you’re likely to repay your debts on time. Based on information found in your Experian, TransUnion or Equifax credit report, your credit score is calculated using your payment history, total credit usage and balance, credit mix, loan payments, open accounts, bankruptcies and collections, and the length of your credit history, among other factors. This Q/A blog post will give you some answers on things regarding credit score and hopefully help you better understand the reason behind having a credit score. 

Credit Score Ranges

• 800-850: Excellent
• 740-799: Very good
• 670-739: Good
• 580-669: Fair
• 300-579: Poor

What Do The Ranges Mean?

A higher score (“excellent”, “very good” and “good”) means you’ve demonstrated responsible borrowing and repayment and you’re likely to qualify for better interest rates and credit terms as a result.

A lower score (“fair” and “poor”) means you likely have multiple negative factors on your credit report, making you a high credit risk to lenders. A lower credit score can make it more difficult for you to obtain a loan or other line of credit, and you could pay higher interest rates if you do.

Who Determines My Credit Score?

There is no one company or organization that determines your credit score, meaning you might actually have several different ones. FICO(opens in a new window) and VantageScore(opens in a new window) are the two most common, with FICO being the one most used by lenders.

How Do I Check My Credit Score?

There are a few ways to check your score; some are even free...

Your Credit Card or Loan Company

The easiest — and cheapest — is by checking your credit card or other loan statement. Many credit card and auto loan companies now provide credit scores for customers on a monthly basis. Start by logging in to your account online or checking your monthly statement.

A Credit Score Service

There are scores (no pun intended) of websites advertising free credit scores. Websites like Credit Karma(opens in a new window) offer free credit scores, as does Credit Sesame(opens in a new window). Many sites that advertise “free credit scores” often require that you sign up for credit monitoring or even pay a subscription fee just to see it. Make sure you know what you’re paying for before you choose this option.

Buy It

One of the most secure ways to find your credit score is to pay for it. FICO offers three different options for checking your credit score, ranging in price from $19.95 to $39.95.

How Often Should I Check My Credit Score?

Checking your credit score on an annual basis is sufficient, though many people prefer to do it quarterly or monthly. It’s entirely up to you. Remember, it’s not what changes month-to-month, but rather your score over time that makes the most difference, especially if you’re looking to make a big purchase in the near future.

How Can I Improve My Credit Score?

Your credit score is not static and changes whenever new information is added. When you pay off a credit card or take out a loan, your credit score will reflect the changes.

Here are a few tips for simple ways to improve your credit score:

• Make all of your credit card and loan payments on time. Payment history accounts for 35% of your credit score, so staying on top of your bills is key toward bumping that score.
• Check your credit report for errors. Because your credit score pulls from your credit report, making sure that information is accurate is important. If you see something amiss, make sure you contact the credit reporting bureau to fix incorrect information.
• Pay off your credit card balances. Your credit utilization accounts for 30% of your credit score, so the more you can reduce your balances, the better your score will be.
• Don’t close your credit cards once you pay them off. Again, because credit utilization accounts for such a big percentage of your credit score, closing a credit card will have an effect on the amount of credit you have available. It's better to pay it off and keep it open rather than getting rid of it altogether to keep things in balance.
• Consider the implications of paying off installment loans early. It might feel good to pay off that student or car loan early, but consider the impact it could have on your credit score. A good credit mix should include both installment loans (mortgage, student loans or car loans) and revolving lines of credit (credit and retail cards) and counts for 10% of your overall credit score. Paying off an installment loan could create an imbalance in your credit mix, potentially causing a dip in your score.
• Request a credit line increase. It never hurts to ask your credit card company to bump your credit limit. If your account is in good standing, the increase could help lower your credit utilization rate as long as you resist the urge to spend it. Source

What's The Difference Between Merchant Services And A Merchant Account?

What are merchant services?

Merchant services are a collection of services developed by merchant service providers designed to facilitate business transactions. Often, these providers offer a suite of solutions depending on your needs. They might include in-store credit card processing services, fraud prevention tools, and point of sale (POS) devices. 

You can think of merchant services as being holistic support for accepting payments. They go beyond merely facilitating transactions to helping you integrate solutions with accounting software and linking them to your bank accounts. Merchant service providers can get you up and running in multiple areas, including accepting mobile wallet payments, Tap to Pay on iPhone, and other payment forms, without you having to build these systems yourself. 

What is a merchant account?

Merchant accounts are a type of bank account that lets you take customer card payments. It acts as an intermediary account where funds from card transactions are temporarily held before being transferred to the business's primary bank account. Similar to that of an “escrow account” if you were buying a home. Merchant accounts are essential for businesses that want to accept non-cash payments, whether in-person, online, or over the phone. 

Customers pay using their credit or debit cards via a POS terminal or online, and the account provider holds the money for a set period. Then, if there are no problems, the funds are transferred to the business bank account. While there is a slight delay, most businesses prefer this method because it allows them to accept more customers’ money. Opening a merchant account is usually the first step to receiving more holistic and comprehensive merchant services. 

How to open a merchant account.

To open a merchant account, the first step is to submit an application to a merchant service provider. Gather the necessary documentation, including your business license, tax identification number (EIN), financial statements, and a voided business check. Submit the application, detailing your business type, expected transaction volume, and average transaction size. 

Most businesses will be approved right away, but there are some business categories that are often denied. High risk businesses have a much harder time qualifying for a merchant account if they are not working with a dedicated high-risk provider. 

How merchant services and merchant accounts work together.

Merchant services are essentially add-on services that layer on top of merchant accounts provided by banks and other financial institutions. The latter provides the ability to accept payments, while the former improves security and makes incoming funds more manageable. The best solutions work together, enhancing your experience of your merchant account. By providing these additional services, you can provide your customers with more value. Source