Credit Card Processing - Credit Card Factoring Solutions

Credit card processing is frequently one of the most problematic and overlooked issues for a business owner. An effective credit card factoring program can reduce many credit card processing problems by implementing appropriate cost-reduction strategies. Credit card factoring improvements can produce dual business benefits by both eliminating credit card processing problems and providing improved cash flow by enhanced management of business cash advance programs.

CREDIT CARD PROCESSING AND CREDIT CARD FACTORING SOLUTIONS: Reduce Credit Card Processing Costs Via the Credit Card Factoring and Business Cash Advance Process

As I noted in an earlier business loan article, for any business that accepts credit cards as a method of payment, a business cash advance (obtained through credit card factoring) is a critical working capital financing tool that is often overlooked. Even thriving businesses frequently need more working capital than they can borrow from a bank. However, what is typically even more overlooked by many business owners is the opportunity to reduce their credit card processing costs at the same time that they obtain a business cash advance via credit card factoring.

CREDIT CARD PROCESSING AND CREDIT CARD FACTORING SOLUTIONS: Key Problems to Avoid with Credit Card Factoring and Credit Card Processing

Credit card factoring is an important option to consider when a business is seeking short-term commercial loans, unsecured business loans and improved approaches to credit card processing services. Unfortunately there are a number of problems to be avoided with credit card processing and credit card factoring programs. As with any successful business financing strategy, there will typically be only a small number of commercial lenders who are effective at implementing the joint tasks of credit card processing and credit card factoring strategies properly.

Because of this, the prudent choice of an appropriate provider of credit card processing and credit card factoring is extremely important to any business owner that accepts credit cards. To help demonstrate which providers of credit card processing and credit card factoring to avoid, I have written an article which identifies ten key problems which should be avoided with credit card factoring and credit card processing.

CREDIT CARD PROCESSING AND CREDIT CARD FACTORING SOLUTIONS: How to Obtain The Best and Lowest-Cost Credit Card Processing Services

For business owners either unhappy with their current credit card processing services or simply wondering if cost improvements are viable, a credit card factoring program which eliminates all of the ten key problems noted above should be considered. One of the primary reasons for evaluating credit card processing and credit card factoring in this coordinated fashion is that the low-cost producers of the best business cash advance programs will almost certainly be using the best and lowest-cost producers of credit card processing services. In many cases, the best and lowest-cost providers of credit card processing are simply not available to the average business owner other than as part of a working capital management plan encompassing both credit card factoring and credit card processing.

CREDIT CARD PROCESSING AND CREDIT CARD FACTORING SOLUTIONS: Cost Reduction and Improved Cash Flow for Successful Working Capital Management

Business owners should not lose sight of the substantial total benefits which might accrue to their business by effectively combining credit card processing and credit card factoring services. As noted above, cost reduction and improved cash flow are primary goals of successful working capital management, and the proper coordination of credit card factoring and credit card processing should accomplish both of these difficult goals simultaneously.

Stephen Bush is the CEO of AEX Commercial Financing Group, LLC. Steve provides working capital loan and church financing assistance throughout the United States. Information about free online Business Financing Reports and a free online Commercial Real Estate Financing Course is available at select AEX Commercial Financing Group, LLC websites.

Ever Wonder How Credit Cards Are Made? - Manufacturing Credit Cards: Materials And Processes

The credit card is made of many plastic layers, laminated together. The center is commonly made from a plastic resin known as polyvinyl chloride acetate (PVCA). This resin is then mixed with other materials, such as dyes and plasticizers to give it the appropriate look and feel.

A variety of inks or dyes, in various colors, are also used for printing credit cards. These inks and dyes are especially made for use on plastic. Special magnetic ink is also available to print the magnetic stripe (magstripe) on the rear side of the card. The inks are made by dispersing metal oxide particles in the appropriate solvents. Card issuers, such as VISA, which have their own holograms, use additional special printing processes which are involved for cards, like VISA, with featured holograms.

The manufacturing of the credit card takes place in the following steps:

1. Plastic compounding and molding: The plastic for the core sheet is made my melting PVCA with other materials. This molten mixture is put in the appropriate molding equipment, and is flattened to the right thickness by passing it through rollers. This sheet is then allowed to cool down.

2. Printing: Each card sheet is then printed with text as well as graphics. Silk screening and magnetic ink printing are the processes used. The magnetic strip can also be created using hot stamping. Magnetic heads are used to code and decode the iron particles in the strip, so that relevant information can be stored in them. However, the magnetic particles can only be useful if they are on the surface of the card, therefore this step is performed after the lamination.

3. Lamination: Essentially, lamination protects the card, and improves its strength. Lamination is done on both sides of the card.

4. Cutting and Embossing: After lamination, each sheet is cut into a set of cards. Each sheet gives a yield of around 63 cards. The sheet is first cut into seven sections longitudinally, and then each of the seven sections is cut into nine cards. Each card is now a separate credit card, and will be embossed with account numbers, and other information. The cards are now ready for shipment to the cardholders! Each card has to be of the premium quality. Customers cannot be given cards which will break or be damaged after a certain period of time. Key quality issues are linked with the compounding of plastic and color matching of the inks. The American National Standards Institute has a standard for plastic raw materials (ANSI specification x4.16-1973). Ingredients have to be correctly weighed, mixed and blended under the proper temperatures and other manufacturing conditions. Similarly, the molding process must be scrutinized to avoid flaws and defects, which could cause the cards to crack or rupture. The final quality check is to make sure the right numbers are stamped on the cards through the embossing process.

The many evolving technologies in this area will help create the credit cards with better quality and make them more cost effective in terms of manufacturing. New generations of credit cards might carry integrated computer chips, containing a variety of valuable information, making the card more useful, as well as secure.

Richard Gilliland Provides Expert opinions and reviews to help you Compare and Apply for a Credit Card - Compare Credit Card Offers with Credit-Wisdom.com - Unraveling the best in credit cards.

Get Credit Card Processing For Your Internet Business

One of the best features of owning an online-based business is the amount of money you save on start up costs, and ongoing overhead in comparison to businesses with physical locations. Not only do you not have to pay high rental or mortgage payments for the space, but you save on utilities, business insurance, and even credit card processing accounts!

As an Internet business, you almost have a requirement to accept credit card payments for your products or services. Have you ever been to a website that doesn?t accept credit cards as payment? Consider how you would feel if you wanted to purchase something online but you couldn?t enter your payment details in the site- would you take the time to write a check, put it in an envelope and mail to the company or would you just find the next website offering the same products that DOES accept credit cards? Web sites that accept credit card payments have sales that are 50-400% higher than web sites that do not accept credit payments. It is so easy to get set up to accept credit card payments that there really is no excuse for an Internet business not to accept them!

As a web business, you have a choice. You can apply for a traditional merchant account at any of the local banks and hope to get accepted (and likely pay a set up fee and sometimes an ongoing monthly fee for having the service), or you can use one of the numerous card processing companies that operate online and are geared toward online businesses just like yours. Many of the card processing providers you can use online allow you to set up your website for accepting credit cards with no set up fees!

Merchants Providing Credit Card Processing

When you are just starting out as an online business, or you are a small business- you are probably not going to want any credit card processing provider that requires you process a minimum number of transactions each month. It is hard to predict what your minimum will be for a new business, and it might be better to pay a slightly higher per-transaction fee than to pay a higher monthly fee in exchange for a lower per-transaction fee based on a minimum number of cards processed each month.

Paynet Systems: Offers a variety of merchant accounts, with a few focused on Internet based businesses. You can get your account set up to accept credit card payments (ATM, and Debit also) for no set up fee. You pay a small monthly fee for the account ($8-10) and fees per transaction processed.

Merchant Express: Offers a merchant account for Internet businesses that can accept credit card payments in real-time. Your account with Merchant Express will also give you access to a free ?virtual terminal?, which will allow you to accept credit card payments by phone or mail as well as online.

Charge.com: Similar to Merchant Express in that it provides both a real time processor for web site orders, and a virtual terminal in case your customers provide their payment information via telephone, fax or mail. The software will automatically send you an email to help you fill the customer?s order once the card has been successfully processed.

There are many other providers that allow internet merchant account providers that can set your internet business up with the ability to accept credit card payments at no set up fee. Researching each company before signing up will help you compare the features and make sure you sign with a company that can provide you with the necessary options for your business and at the lowest fees.

This article has been provided by Creditor Web. Creditor Web has the articles and other credit card processing resources to help you choose the right provider

Third Party Credit Card Processors Facts and Figures

Doing business with a third party credit card processor can be a great alternative for anyone who is having trouble obtaining a merchant account or is considered a relatively small business. A Third Party Credit Card Processor has a merchant account and through agreement with him one can process credit cards through his account.

The Advantages of Using a Third Party Credit Card Processor

Third party credit card processors can let you start processing credit cards within 24 hours as to a standard Ecommerce merchant account where approval might take several weeks. If you need an offshore merchant account approval can take longer and not in all cases you are guaranteed to get approved. Third party credit card processors are a great alternative for a high risk merchant account due to the fact that they are much easier to obtain.

Rates and Fees Third Party Credit Card Processors Will Charge You

In most cases third party credit card processors will charge you a bit higher than the standard fees since they take all the risk. This might be a minor disadvantage however, if you didn't manage to get a merchant account I would think it is well worth while. Most third party processors will charge you anywhere from 3% - 9% commission on every credit card transaction obviously this depends on the type transactions you will be processing. The higher your volume will be the lower rates you will be getting naturally this is opened for negotiation and will be in effect only after your business has proven it's capabilities.

For more related information see our offshore merchant account page.

At Adjustcrcedit.com you can find all the information you need whether looking for a suitable merchant account provider for your business. Our web site also contains high risk merchant account related information for educational and research purposes

Wireless Credit Card Processing

New credit card processing options are available to telephone and mail order merchants that make it easy to do credit card processing by phone. A wireless credit card reader makes it easier for mobile merchants to obtain authorizations from remote locations than ever before. In most cases wireless credit card processing is even faster than for traditional landline transactions. Dedicated networks have been developed for wireless credit card processors of all types, which can transmit and receive data faster than most cell phone networks. Wireless credit card processing increases sales, saves time, and reduces operating expenses.

* Wireless is small, lightweight, and portable. Can carry in your pocket!
* Can accept cards where it previously was impossible (in a parking lot, outside a sports event, etc.)
* No second phone line needed and no need to rent phone lines at tradeshows.
* By swiping credit cards you get lower rates. This one feature alone can save you hundreds of dollars per month.
* Reduces risk. Swiping reduces chance of fraudulent or stolen card being used.
* Increased security. Wireless processing reduces the amount of cash you and your staff handle.

How a wireless credit card processing works?

1. The merchant slides the customer's card through the wireless credit card machine and enters the sale amount. Using a technology similar to a cell phone, the terminal will connect to a radio tower and send the credit card information and amount of the purchase.
2. The transaction information will be routed to Merchant account's processor.
3. Merchant account's processor will pass that information onto the bank that issued the credit card. The issuing bank will check to see if the card is valid and if the amount requested is available on the card, and set aside the amount of the purchase for the merchant.
4. The issuing bank will send back an approval number or a decline message to Merchant account's processor.
5. The information will be passed back to the mobile credit card machine, which will print a receipt for the customer to sign if the card is approved. It will take approximately 8-12 seconds to complete steps 1-5.

At the end of the day the merchant may manually "settle" their terminal which will begin the final process of the transaction. In most cases Merchant account's processor can automatically settle the transactions at a specified time each day. Once the settlement process is initiated the funds will be transferred from the card issuing bank and Merchant account's processor will electronically deposit them into the merchant's checking account. It typically takes two business days from the time of the original transaction for the funds to reach the merchant's checking account.

Ecommerce: Merchant Account and Credit Card Processing

Having an online business that takes in money over the internet requires the ability to accept credit cards directly from your website. This is commonly known as “ecommerce”, or electronic commerce. This tutorial will help explain all there is to know about processing credit cards over the internet.

The Basics

Terms to Know:

  • Shopping Cart: An online application that collects all your products and gets them ready for checkout, passing the information about the transaction to the payment gateway.
  • Merchant Account: The bank or financial institution that actually processes and handles the transaction of debiting one account and crediting another.
  • Payment Gateway: The program or application that communicates between the website and merchant account, verifying the credit card information and executing the transaction.
  • Web Hosting: Serving your website or web page from a web server to any requesting client browser.
  • Secured Socket Layer (SSL): The process by which information is securely exchanged between the web server and the client browser. 128-bit encryption is the most secure.
  • Secure Certificate: A certificate of authentication that assures website visitors that the website being used is safe, secure and tested and up-to-date.
  • IP Address (internet protocol address): The physical, numerical address that is associated with the domain name. There are two types of IP addresses:
      1. Static IP: There is one IP address that is associated with a domain name, and it never changes.
      2. Dynamic IP: The IP address can change at any time, depending on the need and whenever necessary, as determined by the hosting company.

There are 3 things required for credit card processing:
  1. A web hosting account with a static IP address
  2. A merchant account with a reputable company
  3. A current, secure SSL certificate

Web Hosting

There are many web hosting companies that operate online, and choosing one is not too difficult. However, there are a couple requirements that you need to look for when choosing your company. The hosting account must have a static IP address because a secure SSL certificate is required when transferring confidential information over the internet through the payment gateway.

Merchant Account

A merchant account is required for credit card processing because this is how the payment will be processed; money must be taken out the buyer’s account and deposited into the seller’s account. The merchant account is the generic name for the process by which all transactions are handled. This is explained in detail:

  1. The website visitor selects the product or service to purchase and initiates the sale.
  2. The website takes the visitor to secure area of website (with gold lock on bottom of browser) and requests payment information (credit card info).
  3. The visitor completes the required information and clicks ‘submit’.
  4. The information is sent securely through the payment gateway for the information to be verified as valid or invalid.
  5. After verifying the accuracy of the credit card information, the transaction amount is debited from the buyers account (bank or credit card) and deposited into the seller’s bank account.
  6. The buyer receives a payment confirmation via the website.

Account Fees & Charges:

There are two basic charges associated with a merchant account. These are:

  • Administrative Fee: This is usually a monthly fee that is assessed for all administrative fees.
  • Discount Rate: This is a fee (percentage based) that is imposed based on the total amount of the sale.
  • Per Transaction: This is a payment gateway fee that is charged with each transaction that comes from your website.

The way this fee system works is the same, no matter what merchant account provider you use. For instance, let’s say you have a transaction rate of $0.25 and a discount rate of 2.5%. If you have a product that you sell for $10 from your website, each time the product is purchased you will receive $10 deposited into your account. You will also be charged $0.25 for the transaction, and $0.25 discount rate (computed at the end of the month). That’s a total of $0.50 in fees for the $10 sale of your product.

Most merchant account providers will impose a monthly base (minimum) fee for the account. Let’s say the base fee is $15. This base rate is an either/or charge, meaning you are charged that amount unless your discount rate and per transaction fee amount to more than the base amount.

For example, through the course of business, you sell your $10 product to 20 buyers. At the discount rate and per transaction rate used above ($0.25 transaction and 2.5% discount), your fees amount to $10 on $300 ($10 x 30) in sales. Since this amount is less than the base rate ($15), you will be charged the base rate for the month. However, if you sell your $10 product to 90 buyers, your fees amount to $45 dollars for the month. Since your fees amount to more than the base rate ($45 vs. $15), you will be charged $45 on $900 in sales.

Types of Transactions

There are two basic types of transactions when purchasing goods or services online:

  1. One-time Purchase
  2. Recurring Subscription

Most online stores and catalogs deal with ‘one-time’ purchases, meaning you find a product online and purchase it. After confirmation of sale, this ends the relationship between buyer and seller.

The other type, ‘recurring subscription’, is based on interval billing. This type of purchase can be for membership fees, or for any other type of fee that is billed on intervals.

Payment Gateway

The payment gateway is an application that you integrate into your website. Most payment gateways have an API that allows for easy, seamless integration into your website, meaning the user’s experience on your website remains consistent, even through the credit card processing phase. The payment gateway is responsible for validating the credit card information provided, such as address verification and security code matching. There are many payment gateways available on the market, but to ensure compatibility, it’s recommended that you use the one provided at the time of your merchant account setup.

SSL Certificate

The secure digital certificate validates the site as being secure, letting the buyer know that the information exchanged over the internet will be sent using the best possible encryption. In other words, the personal, confidential information sent will be scrambled to avoid interception by a 3rd party and used fraudulently. An SSL certificate requires a static IP address, but does not have to be associated with your website. You can link the transaction to another website (sharing a certificate) to handle the transaction. However, it is recommended that your website have its own static IP and secure certificate to maintain site continuity. Think of it this way; you're at the supermarket, and when you go to checkout, you are either taken across the street to handle the transaction, or the transaction can be handled at the store you're currently at. Basically, it looks more professional to process the transaction immediately, rather than take the buyer somewhere else.

In Conclusion

That is what merchant accounts are all about. All merchant accounts operate on the same guidelines, and determining which merchant account you want to conduct business with is up to you. The main things to consider are the per transaction fee, discount rate and base monthly rate. Make certain that the merchant account provider you are going to use is a top-tier provider, meaning the company is the actual processor, and not a reseller of another provider. This is important when it comes to the fees and customer service for your account.

This article was written by Gus Garcia, owner and operator of http://www.merchantaccountchoices.com, a free-to-use merchant account comparison website.

Click here to see the top credit card merchant account providers in the industry.

Passing On Credit Card Processing Costs

 

I recently spoke with a retail merchant who told me that she was not too concerned about the fees that we assess. While I was detailing all relevant rates, she asked me a very interesting question: “How much do you think that I should charge my customers to make up for my credit card processing costs?” She added, “I would like to charge a surcharge.”

I had an instant flashback to the time I placed a food order with a pizzeria. When I walked into the restaurant, the aroma whetted my appetite. Immersed in the beckoning scent, I barely heard the cashier when he told me that the bill was “$24.95.” Upon seeing my credit card, however, the cashier rang up “$26.50.” At the risk of appearing frugal, I did not question this action – only taking notice that it was blatantly unfair. Apparently, the restaurant owner decided to charge a surcharge when customers presented credit cards although I’m not certain how the cashier came up with a surcharge of $1.55. (What would have been the surcharge if my bill were $100 or more?)

Sharing this experience with the retail merchant, I explained that charging a surcharge is against Visa / MasterCard rules and violates the stipulations in merchant account contracts. Indeed, if a retail merchant decided to add a credit card payment surcharge, this business owner can lose the right to process credit cards and be placed on the infamous MATCH / Terminated Merchant File (TMF) where it would be exceedingly difficult to secure credit card processing capability with anyone.

The retail merchant protested and said, “But I know some fast food restaurants charge a surcharge for debit cards.” I answered, “If they are processing pin-based debit cards over the Visa / MasterCard network and charging a surcharge, they’re violating Visa / MasterCard terms.” I explained that if a business owner uses a credit card terminal to process both credit and debit cards over the Visa / MasterCard network, the retail merchant cannot indiscriminately surcharge those debit cards.

Of course, exceptions always exist and certain government and municipalities, and even the IRS, can charge a “convenience fee,” especially when credit cards are not a traditional form of payment. Moreover, merchants who accept Discover cards can institute a surcharge. After a federal antitrust suit was brought by a group of merchants who contended that they would have to raise prices if not allowed to surcharge, Discover yielded. They now permit merchants to surcharge. It may only be a matter of time before Visa and MasterCard consent or are forced to allow merchants the right to surcharge.

But I suggested an alternative to the retail merchant. Perhaps she can offer a cash discount for non-credit card payments. “This is perfectly acceptable,” I assured her.

This retail merchant wanted to know about the surcharge rules for online merchants. I extended a simple, “I don’t know,” and committed to researching this topic. Upon investigation, I learned the following:

Internet business owners can surcharge under the following conditions: a) A fixed surcharge is assessed, not a percentage of the sale; and b) Any surcharge must be assessed for all forms of payment – not just credit cards.

Of course, as a final thought, merchants may very well factor in the costs of credit card processing to determine the fees that they should charge their customers. Moreover, as always, it is imperative for merchants to reduce the costs of doing business. Finding an affordable merchant account provider will help in this endeavor.

Andy Lax is an account manager at IntelliCollect, a low cost credit card processing provider. Please visit the following site, http://www.intelli-collect.com to obtain an affordable, merchant-friendly merchant account.