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PCI Compliance, be ready

Posted by: Curtis Stevens on November 21st, 2009

Are you PCI compliance ready? Many merchants are not PCI DSS compliant and face stiff penalties and fines for not doing so. The good thing is almost all credit card processing companies are PCI compliant. Starting last October, PCI went from recommended to mandatory. If you process more than one million transactions a year, you must be using a certified PCI provider.

Acquiring banks are required to report any merchants that are not compliant to the card associations. Many merchants believe they only need to fill out the self-assessment questionnaire. This isn’t true if they collect the credit card data themselves instead of letting their payment gateway do the job. Merchants also need to have their networks scanned quarterly if they store, transmit or process the transactions. This is even true for MOTO merchants that use a virtual terminal. If they are keying in the information through a web site, they need to ensure their own personal computer is safe & secure. This would include running a firewall and anti-virus software. To help educate merchants and provide them with the tools necessary to tackle the job, most credit card processors charge a PCI compliance fee. Some pass along a monthly fee and others charge a yearly fee. Consult with your provider to see if they have one.

Wal-Mart didn’t get a bank charter, but it doesn’t seem to bother them

Posted by: Curtis Stevens on November 21st, 2009

It seems that Wal-Mart wasn’t able to obtain a bank charter and that doesn’t seem to be a problem.   Financial services is a small part of their business.  Since they have the largest credit card processing volume than any other company in the US, they tried to form a bank charter. The reason was they could become a sponsoring bank with Visa/MasterCard and save that profit that goes to their current sponsoring bank since all merchants must be sponsored one.

However, it doesn’t seem to have bothered them that much besides the miss opportunity of extra savings. Without one, they have been spending the past few years building a portfolio of financial services and have become a big competitor to traditional institutions, especially ones targeting low-income consumers. One of their major products are the pre-paid cards.

By not having a charter, they have also avoided a lot of attention from Washington on this issue. The issue being the separation of banking and commerce. Wal-Mart originally filed for a charter in Utah back in 2005, but withdrew two years before the Obama admin revealed reform that would eliminate specialty charters. Wal-Mart has also learned that just because you do not have a charter, doesn’t mean you cannot have your share of the financial industry. With over 2 million customers using their pre-paid product, they are on their way to becoming a big leader.

Will waiters & waitresses face credit cards fees

Posted by: Curtis Stevens on November 20th, 2009

Some employers have changed their practices when it comes to the credit card processing fees they pay. Laws were introduced early in 2009 that prevents restaurant owners from keeping customer tips. The rules state employers are no longer allowed to use the money they receive from tips as part of their minimum wage. However, it was also revealed that some owners are charging waitresses an admin fee for any tips they receive that are charged to a credit card. This is can totally understand, but the owner should NOT make any profit off of this. They should only charge an amount they had to pay to their merchant provider. The other controversy is how much you should tip. Oprah recently said on her show that 10% is adequate during these tough times. I think everyone’s opinion will be different. What I find crazy is how this industry over the years went from someone tipping someone because they did a good job to restaurants getting away with paying minimum wage and expect consumer’s tips to make up the difference. This has evolved over the years because most consumers tip when they receive good service. Restaurants have been able to get away with passing some of their cost to the consumers. I think it should go back to the way it was.

Banks & credit card acceptance, is that a good choice

Posted by: Curtis Stevens on November 20th, 2009

In my opinion, Banks are not a good source to get a credit card processing account setup and there are many reasons as to why I say that. It is still true today, most banks do not provide adequate services for ecommerce merchants. Banks have always been focused and geared toward consumers and retail merchants, but not much for the online arena. There are some big banks that are however. Most of your big banks like BOA, Wells & Chase do offer merchant services directly through them, but many of your regional banks do not. They generally partner with someone else like Gotmerchant.com to provide this service to their customers. I personally would rather share the wealth. If the bank already has your banking business, why not give the credit card processing to some other company that will provide you with the same level of service or better? This is with the assumption that the pricing is the same or similar between the two parties. Plus, because of the size of many banks, you do not get any personal service or attention. You are simply customer number 1,250,493 out of their 5 million customers for example. Lastly, I have personally found that banks at many times take advantage of merchants because they have that established relationship with the merchant. For that, I have seen merchants pay hefty fees for the processing and credit card machines.

Credit card processing provider’s tech support

Posted by: Curtis Stevens on November 20th, 2009

The tech support provided by your credit card processing company of course should be exceptional. There are some major factors that can play a role in the quality of service you receive. One factor being the kind of experience the provider has with your type of business. When it comes to risk, the risk department must manage and control the risk of all the accounts the company has on board so it doesn’t over extend itself and get into financial trouble. It is best to test out their tech support and customer service departments before you sign up with a company. You should have confidence that if you have any issues, you will be able to get a hold of someone to resolve it. The tech support department should be available 24/7. Since your Internet store never closes, you need round the clock support in-case something happens unexpectedly.

Start an ecommerce store using a drop shipper at low cost

Posted by: Curtis Stevens on November 20th, 2009

DSA offers a drop shipping service for ecommerce merchants at a relatively low expense. The company has received a lot of positive reviews on their service for being fast, easy and inexpensive. You can choose to design your own web site or use their builder tool. They have over 2K templates to choose from. They can also provide the hosting of the website. The good thing about using a drop shipper is you do not need to carry any inventory. There are some disadvantages to this, product selection and operational control being two of them. Interesting thing is the company is owned by Intuit, the makers of QuickBooks & Turbotax. The one thing that isn’t mentioned on their web site is any information about the credit card processing service and who they are compatible with. This is very important as some shopping cart solutions like Yahoo Stores are very restrictive on who you can use to process your transactions.  They in particular require you to use FirstData platform, which limits who you can use to only a handful of processors instead of the hundreds that are available today.

Network Solutions updated it’s ecommerce service

Posted by: Curtis Stevens on November 20th, 2009

Network Solutions updated its ecommerce software recently to help online merchants prepare for the holiday sales rush. The service in particular is their nsCommerceSpace service. The improvements are designed to help manage their stores better, maximize profits and increase their credit card processing speeds. Some feature enhancements include customized templates, shipping improvements and import capabilities. New promotional features like discounts and coupons will be available soon and before the big holiday sales rush.

When they made these improvements, they relied on their customer’s feedback and suggestions. By making improvements from listening to their customers, they expect everyone to have a successful season. The good thing about their service is they offer a 30 day money back guarantee. This doesn’t really help or is needed for merchants already on their system, but for new ones that are considering switching platforms, it is a nice appeal. I would however wait until the holiday season is over before making any changes. Also, keep an eye out for Google’s caffeine up date that should go completely live come January. If you have a great sales year this season because of great SEO, everything may change for you in two months.

A search tool unveiled in times for the holidays for ecommerce merchants

Posted by: Curtis Stevens on November 20th, 2009

Google has released a new search tool to help shoppers find what they need and merchants to get their products in front of their customers. Google has been releasing a lot of apps over the past few years, but very few are targeted towards ecommerce vendors. This is one of those apps, similar to Google Checkout that handles their credit card processing needs. The search tool allows consumers to search the web for a product they are interested in buying. Google then goes out and see’s which ecommerce stores are selling these items and returns the results. One great feature Google has been known for is their spell check suggestions, which can be great for people like me that type fast and make too many errors!

It is also noted that Microsoft’s new Bing engine has been making online shopping a focus point. Google’s new search tool is a product to fend off those efforts. Google is going after the retailer while Bing is marketing towards the consumer or shopper.

Should higher risk merchants pay more than lower risk

Posted by: Curtis Stevens on November 20th, 2009

I recent discussion on an industry forum was about another credit card processing competitor had a furniture store merchant that was considering switching companies.  He currently processes $300k a month.  He is currently paying Interchange plus 0.15% and some other provider quoted him 0.05%.  The sales agent went onto to mention this client has been with him for four years and he tried to explain to the merchant about the great service he has received during that time.  The question comes down to is that sufficient profit for any ISO to take the account.  That is only $150 total profit on the account, which the ISO will share with the agent.  I personally do not think that is enough profit for an account like that.  Furniture stores are very risky.  I have seen ISO’s take huge losses on furniture stores because of the way they are setup and how they buy/sell the products.  They could run $300k in charges and close their shop before the merchandise gets delivered, which would result in mostly chargebacks creating a huge loss for the ISO.

The question is, how much is a reasonable amount for the risk assumed?  0.50%, 1.00%?  I’m not sure what the correct answer is, but I know $150 is too low, even to service that type of account.  If you were to remove any associated risk, how much should you make to simply provide that merchant great service?  Take care of any needs they have when they call and really hold their hand.  All of this comes at a price.  I have merchants that make us a lot more than that each month with a fraction of the volume  and risk.  We take care of the merchant and everyone is happy.

Merchants have a new tool when it comes to chargebacks

Posted by: Curtis Stevens on November 20th, 2009

Badcustomer.com is a great new service that was designed to help merchants fight against consumers and their chargebacks.  This is a great tool in the merchant’s arsenal when it comes to credit card processing. The way the service works, is they keep a list of “bad” customers. Ones that have supposedly wronged a merchant by disputing a charge when they shouldn’t have. It also includes customers that are prone to having a lot o chargebacks, a sign of someone that simply isn’t ever happy. Over 300 merchants contribute to the list and is growing all the time. When a participating merchant uses the service, the customer’s information is matched against their database and the merchant is notified when a match has been made and what to do to rectify the situation as the transaction has been declined.

Consumers may get off the badcustomer.com’s database list, but it will cost them a $99 fee. If the consumer has tried to resolve the dispute with the merchant directly, they are removed from the list at no charge. The service itself is funded mostly by other services the company offers.



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