What to Avoid When Searching for a Credit Card Processor

April 11, 2018

Finding the best credit card processing company for your business can be an adventure — and not always the best kind. Here are some pitfalls to avoid when performing your search.

Long-Term Contracts and/or Early Termination Fees

Be wary of processors asking you to sign a long-term contract with early termination fees. It’s common in the industry to find contracts of up to five years in length, and some processors have an auto-renewal clause.

In addition, there are processors who don’t charge a flat early termination fee but calculate the amount using a method referred to as “liquidated damages.” With liquidated damages, you’ll be charged the amount in revenue that your processor determines it will lose due to you closing your account. For example, if you have a three-year contract, and you cancel after one year, you will pay a cancellation fee equal to two years worth of processing costs.

Long-Term Non Cancellable Equipment Leases

Leasing versus purchasing a credit card terminal can seem like an affordable option, but lessee beware. Often times, these long-term lease agreements cannot be cancelled, which means that you are the hook for monthly payments for the entire duration of the lease term — even if you switch processors or stop accepting cards altogether .

Unexpected Rate Increases

Don’t fall for the classic “bait and switch.” Processors will quote aritifically low rates only then to raise them a few months later. Always read the Terms and Conditions to ensure that the processing company does not reserve the right to raise your rates.

Confusing Pricing and Statements

Credit card processors employ a few different pricing methods. One in particular — tiered pricing — can lead to confusing, hard-to-understand statements and unexpected higher rates.

With this pricing model, transactions are lumped into “rate buckets,” such as qualified, mid-qualified and non-qualified. Usually the processor advertises the rate associated with the qualified bucket because it is the lowest. What often happens, however, is that a large amount of the merchant’s transactions are downgraded and consequently charged at a higher rate.

Hidden Fees

The devil is in the details. Ask for an outline of all the extra monthly and annual fees you will be charged. Make sure that the rate they quote takes into account all of those fees. Take the time to reach through the Terms and Conditions to ensure that what you’re being promised is what you’re going to receive.

In essence, credit card processors are in the “trust” business. You trust them to safely process your credit card receipts for a fair price. By doing some homework, you can help ensure that you find the best processor for your business and its unique needs.

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Merchant Guide: 10 Essential Tips for Preventing Chargebacks

March 14, 2018

A chargeback – also called a reversal – is the return of credit card funds that were used to make a purchase to the cardholder. A chargeback occurs when a customer makes a refund request through their credit card’s issuing bank.

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Most chargeback situations arise at the time the transaction is completed. Possible reasons for chargebacks include:

  • Unauthorized use of a credit card (stolen card)
  • Product or service not being received
  • Customer dissatisfaction with a product or service
  • “Friendly fraud” or the result of a consumers filing an illegitimate chargeback

Every business wants to keep their chargeback expenses to a minimum. Here are our top tips on doing so.

  1. When a cardholder disputes a transaction, the issuing bank may request the merchant to provide copies of receipts and other paperwork related to the sale. Always respond to these requests.
  2. Do not a complete a transaction if the authorization request was declined. Do not repeat authorization for payments that are declined.
  3. Make sure your billing descriptor is accurate. Often a customer will initiate a chargeback because the business name on the statement is unfamiliar and doesn’t match your DBA.
  4. Clearly communicate your contact information, as well as return, refund, cancellation and shipping policies.
  5. If a customer is ordering online, promptly send a receipt via email.
  6. Settle and deposit your sales receipts with your merchant bank in a timely manner.
  7. If a customer request cancellation of a recurring transaction, such as a membership or service, always respond to the request and cancel the transaction as specified by the customer.
  8. Be accurate and clear about your product and service to prevent any customer misunderstandings.
  9. Ship merchandise before depositing and transaction.

If a product or service is going to be delayed, advise the cardholder the option of a different product or service or canceling the transaction all together.


Payment System Defined

August 5, 2016

Definition: A PAYMENT SYSTEM encompasses the entire process for accepting card payments in a retail location (including stores/shops and e-commerce storefronts), and may include a payment terminal, electronic cash register, other devices or systems connected to a payment terminal (examples: Wi-Fi for connectivity or PC used for inventory), services with e-commerce components such as payment pages and connections out to a merchant bank.

 Payment system infographic

2015 Global Security Report Released

June 10, 2015

The recently released Trustwave 2015 Global Security Report studied 574 data compromises across 15 countries. The comprehensive report outlines the most prevalent vulnerabilities and exploits used in attacks, common password vulnerabilities, and the return on investment that can be gained from a proactive cybercrime readiness and prevention campaign. Consider these stats:

  • 42% of compromises studied were e-commerce, while 40% were at the point-of-sale
  • Weak passwords or weak remote access security contributed to 90% of point-of-sale breaches
  • 86 days is the median length it took to detect a data breach
  • 111 days is the median length of a breach from intrusion to containment
  • Estimated time it takes to crack an 8-character password — one day
  • Estimated time it takes to crack a 10-character password — 591days
  • 39% of passwords have 8 characters

The less you know about your enemies, the slower you can respond to them, and the more effective they will be against you. Use this report to help you battle today’s data security enemies.

Read the entire report here.

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Are YOU EMV-Ready?

May 14, 2015

EMV- payments are coming, and they’re coming soon! The EMV liability deadline hits October 2015.

EMV is a joint, international effort between the card brands to increase card and cardholder security. Rather than relying on card magnetic-stripe technology (which is the same technology used in cassette tapes), EMV payments use “smart” or “chip” cards. The new cards encode a user’s account information in the embedded chip, which generates a unique, one-time code for each sale. This prevents the data from being stolen and used to create counterfeit cards.

Rather than swiped, smart cards will be entered into the terminal during a transaction. Consumers will also have to either a sign a pin pad or enter a PIN to complete a transaction. This all means that existing swipe terminals must be upgraded to EMV-compliant equipment in order to take advantage of the new security measures.

EMV Deadline — October 2015

The October 2015 Fraud Liability Deadline means that there will be a change in financial responsibility if a fraudulent transaction takes place. Merchants who experience fraud or chargebacks while using a non-EMV processing equipment will assume the liability for those transactions.

EMV Readiness Resources

As the deadline approaches, EMV education efforts are ramping up. Here’s a look at the ones we think are most helpful.

GoChipCard.com addresses the basics of how to identify and use a chip-enabled terminal, how to slide EMV cards into the readers and, most importantly, not to remove the card until prompted to do so.

SellSafeInfo.org was recently launched by the Electronic Transactions Association to help protect both merchants and consumers. The site is a one-stop information resource for merchants about today’s payments landscape.

emv-connection.com provides up-to-date information for all industry stakeholders on the status of EMV migration, along with tutorials and educational resources that will assist with migration.

Visa online EMV toolkit includes a step-by-step guide to adopting chip as well as videos, infographics, and other resources to help merchants make the seamless transition to chip-activated terminals.

Chip 360 from MasterCard is a campaign that aims to communicate actionable information, educate on steps to take and advocate why the change is needed to protect cardholders

Learn about EMV and chip cards with frequently asked questions from Discover Card and American Express.

Don’t Wait Until It’s Too Late

OMEGA Processing Solutions can upgrade your processing equipment to EMV-compatible terminals today at little or no cost. Contact your Account Executive or our Customer Service Center at 866.888.9724 Ext. 7 for more details.

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