HOW TO CHOOSE A MERCHANT PROCESSOR PRESENTED BY PAMELA FULLERTON Bank of America Merchant Services 301-875-8631
Why accept electronic payment methods? • Customers are more likely to buy when they have multiple payment options and they are more likely to spend more when they use a credit or debit card than check or cash • You receive real-time payment authorization, so less time isspent on collections • With a Bank of America business checking account, your payments are credited to you within 24 hours* • You can reduce the time-intensive effort associated with paper check and cash, as well as track transactions online to obtain up-to-the-minute account information on credit card purchases • For online purchases, Merchant Services Online provides adaptive risk profiling technology for additional security
CHOICES Choosing a Company to process your credit card transactions can be a daunting task, but just as with any major financial decision that you make, there are two major factors to consider: • The Company structure • The rate and surcharge structure. Understanding these two factors can help you make an informed decision when choosing the best processor for your business.
THE COMPANY Even before discussing rates, it is imperative to find out about the Company that will be handling your transactions. Some essential questions to ask the Salesperson are: • Which Company does the Salesperson represent, and what is their history? • Are the transactions processed in-house or through a third-party company? • What sort of Service and Support is given by the Processing Company, the Sales Company and the Sales Rep? • How soon are funds deposited into your account? • How long is the contract and what are the penalties for early termination? Once you are satisfied with the Company that is making the offer, then you examine the rate structure.
RATES AND SURCHARGES Basic processing rates are based on the volume of transactions processed, the average size of each transaction, the transmission method, and the risk involved. Additional surcharges are assessed based on the type of card, the transmission method and other various circumstances. In Merchant Processing, one size does not fit all and it is important that your basic rate and surcharge schedule is tailored to your particular business model.
BASIC PROCESSING RATES Most companies’ basic rates are very competitive, but it is very important to make sure that you start with the right basic rate structure. As well as your transaction size and volume, your basic rate must take into account your transmission method: whether you are swiping the card’s magnetic strip (face-to-face), or keying in the card information (hand-keyed, phone or internet). For example, swiped transactions pose the least risk for fraudulent transactions, so have the lowest rate, but if the majority of your transactions are processed by phone, and your rate is based on swiped transactions, your true rate will be significantly higher once the surcharges are assessed. Also, the per item fee, the per transaction and the batch authorization fee must to taken into account to calculate the true rate.
SURCHARGES Just as important as the basic rate are the surcharges that are attached to it. Surcharges are added when the transaction falls into certain categories. The are several different circumstances that will cause a transaction to incur a surcharge, but the most common are: • The transmission method is different to the basic rate method • The type of card used – Debit, Credit, Rewards, Business, Government or International • The transmission delay – Transactions are not settled within the time frame set by Visa/MasterCard When considering a rate, the surcharges must be reviewed at the same time. For example, if you are a federal contractor, then you must add the government surcharge to your base rate to get your true rate.
IMPORTANT QUESTIONS TO ASK In short, as a government contractor, there are 10 pertinent questions you must ask: • Does the company do their own processing, or do they represent a 3rd party? • Do they have a local presence for customer service? • When are funds deposited into your account? • Is there a term contract? If yes, what is the early termination fee? • Is the rate being quoted the check card rate or the credit card rate? • Is the rate being quoted the swiped rate or the keyed in rate? • What are the downgrade rates and what will cause them? • *Is the equipment PCI compliant? • *Can they do level II and Level III processing? • Can they put it in writing?
CONCLUSION Once you have obtained the essential information, you can now make an informed decision and select the right Merchant Processor for your business.
Bank of America Merchant Services offers payment processing solutions for businesses of all sizes, making it easy and affordable for you to accept credit and debit cards. • Solutions range from point-of-sale equipment to specialized services for retail, restaurant and Internet businesses. Provide your customers with more ways to pay, and watch your sales grow. • We have provided payment services to merchants like you for more than 47 years. • We process 1 out of ever 5 Visa and MasterCard transaction in the US. • Bank of America has customer care and technical support 24/7, we are here whenever it is most convenient for you • Our experienced staff can help you set up your solution • We can even help you set-up your electronic store online