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Is your retail business entitled to some cash back from Visa/MasterCard
Posted by: Curtis Stevens on December 9th, 2009

Many retailers will receive some cash back from Visa/MasterCard due to a lawsuit brought by some of the top largest retailers that was settled in 2003.  It totals over 1 billion.   The original settlement was for 3.1 billion, which 1.85 billion has already been paid and were allowed to pay it on an installment plan.  Instead of making yearly payments, they will pay 1.1 billion all at once this fall.  This means they will receive a little less than agreed, but it does mean they will receive it all at once instead of over the next 2 years per the original agreement. This is a little good news for the credit card processing industry I suppose. I’m glad V/MC had that much money to pay, which they probably have plenty more due to their profit margin. The payments will go out to over 600,000 merchants and the amount is based on their volume of signature debit card transactions.  The lawsuit itself was about V/MC rules of honor all cards, which merchants must honor all cards if they wanted to accept them.  Now, merchants can choose to either accept debit or credit or both.

Fairytale Brownies, how they empower their business
Posted by: Curtis Stevens on December 9th, 2009

Fairytale Brownies empowers its business mostly from printed catalogs they mail to almost 2 million households yearly. They normally gross over 7 million a year. Even though they draw most of their business from the Internet and the catalog mailings is their biggest lead source, it is all because most of the people that go to their site received the catalog in the mail. They have also created their own shopping cart system that was customized from an off the shelf product. They use First Data for their credit card processing service. They said the key to their success is their cart runs everything except accounting. It runs shipping, printing the orders, manage the customer database and inventory all the transactions. They also mentioned a few other things such as giving employees the power to make sure every customer is satisfied, how you label an employee and what they do with customer service. I did noticed they do not have much of an organic SEO campaign besides their blog, so they could be missing out a lot there. However, 7 to 8 million a year in sales says they are doing fairly well already. I simply wonder how much better they could do.

Google’s new future algorithm
Posted by: Curtis Stevens on December 8th, 2009

I recently read an article that I totally agree with when it comes to SEO.  This really doesn’t relate much to the credit card processing business, but I felt every ecommerce business should know this. There have been studies published that show a web site’s speed & load time has a definite affect on its conversion ratio. Us humans are impatient and we are expecting web sites to load faster than ever before. There has been talk among the SEO industry that load speed would find its way into Google’s ranking algorithm. Google hasn’t stated anything of such, but they have released a new feature in webmaster tools that shows you statistics on how fast your site has been for Google and how long some pages have been taking to load. This is a big sign that Google very well may end up implementing this in their rankings, as early as 2010.

It makes complete sense to me. They use the service for their adwords, which is the bread & butter for Google, why not implement it for the organic results, the big drive that brings users to Google to search in the first place, which gets people to click on their paid links. I would recommend looking into this and get your website up to speed. If you need to get a faster web host, then do it.

Credit card usage down this holiday season
Posted by: Curtis Stevens on December 4th, 2009

I just saw a report that says credit card usage by consumers for gifts is down this holiday season.  It is down over 3% compared to last year.  It gave a story from Mike who paid off his credit card balance and is only spending $1K this year on the family instead of the normal 3 to 4K.  He said it will be a light Christmas this year.  A spokes person from FirstData said pin debit is up 9% for pin debit compared to last year.  More and more people are only spending what they have.  From one side of the table, I’m all for that as people should control their personal spending and not get themselves into a hole.  On the other side, it affects our company as our profits are all based on how much merchants processing and what they pay on their credit card processing bill. I wished everyone lived a solid financial life, but if that were to happen, the unfortunate thing is it would greatly affect the merchant account industry.

Will Fiserv’s new credit card change the landscape
Posted by: Curtis Stevens on December 4th, 2009

Bus_20091201151211_97It appears that Fiserv has created a new credit card by turning it on its side.  Instead of the card being horizontal like it has been for decades, it now printed Vertical.  I think this has a lot of cool factor.  They said they have a trademark on the “Card Collection” name and have over 70 card designs.  Cardholders can even create a card using a photo, which will give it great personalization and faster checks out at times as there is no concern with the merchant if it is a legitimate transaction.  I assume the magnetic strip will work like any other card, so all existing credit card processing machines will be compatible and able to process them without any hiccups.

Can using a debit card online be dangerous
Posted by: Curtis Stevens on December 3rd, 2009

I saw an article by a woman named Mary.  There are a few things I would like to say about her comments.  She goes into details about using a debit card when making a purchase online.   A reader asked if it was ok to use a debit card to buy something online.  Mary explains that debit cards are simply that, the funds always come directly from your checking account.  Do not confuse them with a credit card that is tied to a line of credit.  So when a retailer asks you debit or credit, they are simply asking if you want to process the card by pin debit using your pin number or to sign for it using the Visa/MC networks.

I have always been a fan of using a credit card for signature purchases and the main reason is this.  If you buy something online using your debit card, the number is now out there.  If someone gets a hold of it, they could drain your checking account. You then have to report the fraudulent transactions, deal with your bank and hopefully get all of your money.  But then every other transaction or check you wrote could bounce, creating a lot of havoc for you.  With a credit card, you don’t have those issues since it is going against a line of credit that isn’t tied to the rest of your finances.  However, many consumers still make purchases online with their debit card.  The good news is for merchants as the Interchange rates are less for debit cards and that should result in lower credit card processing fees with their merchant provider.

A merchant provider gives questionable advise
Posted by: Curtis Stevens on December 3rd, 2009

I read some recent advice from another competitor on how a merchant can save on their processing fees. There are a few things they mentioned that raised an eyebrow. The company is Nova merchant funding and states they were founded in 1984. This is obviously not true. It appears they are an agent for North American Bankcard, which Nova’s domain name was only registered last year. NAB may have been founded in 1984, but not Nova. Then the article goes onto to say that a termination fee is one area that merchants should avoid at all costs. The last time I checked, NAB has a very hefty cancellation fee by default. It could very well be true that this agent has decided to waive the cancellation fee with NAB’s permission, but with the fact that other false information is being given, I personally would question their promises. Lastly, I disagree with notion that cancellation fees are bad. I understand both sides of the table, but us processors incur a lot of expenses boarding any single merchant and having them leave for another provider to save a few extra bucks, isn’t profitable for anyone. Now, I totally understand if there are service issues or promises not delivered. In those cases, any fees should be waived. But for a small business that wants to test the waters and cancel in 3 months, isn’t profitable for any credit card processing firm or agent, regardless of how big or small they are.

When is it time to leave Paypal as a payment processor
Posted by: Curtis Stevens on December 3rd, 2009

Sean from Transfs had a customer contact them asking when would it be time to leave Paypal for a true credit card processing account that goes through actual underwriting. Sean made the comment that the downside to using Paypal is the user must finalize the payments off the merchant’s site and will go to Paypal’s site to complete the payment. This would result in a less than professional image and may hinder conversion ratios, which would affect your bottom line. This was totally true for many years until Paypal introduced their API service earlier this year. That means merchants can now integrate their web site or shopping cart seamlessly. The API eliminates this issue, so why wouldn’t you go with Paypal? I can think of several reasons. Their reputation, level of customer service (will you be able to get a hold of someone if you need service), no personal service from an assigned account manager and greater chances of issues with their risk department for they never do any underwriting. When you do not underwrite for risk, you will have a tendency to give your merchants greater trouble as you operate on a business practice like  “approve first, ask questions later.”  He suggested to leave once you are processing over $5K a month in revenue.  I suggest doing it as soon as you can afford to.

A comparison site for credit card processing
Posted by: Curtis Stevens on December 3rd, 2009

A comparison shopping site is definitely a new concept for the merchant account service industry.   Sean, its founder, formed Transfs as a comparison site for merchants that want to easily obtain quotes from multiple credit card processing companies. The whole site is based on Interchange plus pricing quotes. The merchant enters some basic information about their business and the processors bid for their business. At the end, the merchant selects the processor that have chosen to do business with. Only at that time, the processor will see the merchant’s contact information to finalize the deal. I spoke to Sean about their service and it seems to be doing quite well for them. He mentioned that have had very small merchants doing 20K a month to merchants doing over 2 million a month use their service.



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