Best Payment Processing Integrations For Accounting Software

Best Payment Processing Integrations for Accounting Software

Are you ready to start accepting credit and debit cards from your customers? Do you want your customers to be able to pay their invoices directly online? You’ve come to the right place.

Here at Merchant Maverick, we know payment processing can be a tricky concept to wrap your mind around. Finding the best option for your business isn’t always easy. The good news is we’ve done the hard work for you. The even better news? Each of these payment processors integrates directly with your accounting software to make your life that much easier.

This post will discuss five of the top payment processors that integrate directly with accounting software. We’ll cover the pros and cons of each to help you decide which is best for your small business. And we’ve even created a handy chart to help you compare all the payment processors that integrate with major accounting programs.

But before we begin, let’s cover a few basics about payment processing.

If you’re already a payment processing pro, feel free to skip this section and continue on to our top picks for best payment processing integrations. Or visit our merchant account reviews to see more payment processing options.

A Brief Intro To Payment Processing

There are two different types of payment processing companies — merchant accounts and payment service providers (or PSPs).

  • Merchant Account: A merchant account is an individual account that connects your business directly to a payment processor so you can accept credit cards and debit cards. When your customer pays with a card and the payment clears their banking institution, the transaction will be deposited directly into your bank account through your merchant account.
  • Payment Service Provider: A payment service provider also allows you to accept credit cards and debit cards. However, instead of creating an individual account, a PSP will lump all of your transactions into a shared account where multiple merchants transactions are stored.

So which one should you use? There are a lot of factors to consider, including your business type, the size of the transactions you’re processing, the number of transactions you process per month, and whether or not you are considered a “high-risk” merchant.

According to our merchant account expert, Tom DeSimone:

If you plan to process large transactions ($300 or more) or a sizeable monthly volume in card payments (about $10K or more, NOT INCLUDING cash and checks), you will want a merchant account to get the best rates.

On the other hand, he says this about PSPs:

While transactions fees might be a little higher than if you had your own merchant account, PSPs usually do not charge a monthly fee or other schedule fees. You just pay for what you use, which is ideal for businesses that only process sporadically.

It’s pretty simple, really. If you plan on processing large transactions or lots of transactions every month, a merchant account will probably be the way to go. If you’re a smaller business that doesn’t process much and needs a pay as you go option, a PSP might be a better choice.

There are other pros and cons to consider with each type of payment processing company, however.

We borrowed this handy chart from our Beginner’s Guide To Payment Processing to help you better understand the differences between merchant accounts and PSPs:

Best Payment Processing Integrations for Accounting Software

There is one more important concept to cover before we move on. In addition to merchant accounts and PSPs, you might encounter payment gateways.

If you’ve ever bought anything online, you’re already familiar with this concept (whether you know it or not):

  • Payment Gateway: A payment gateway allows you to accept credit and debit cards online. Payment gateways use either merchant accounts or PSPs to connect your business and your customer’s banking institution so you get paid.

Payment gateways account for some of the most common accounting integrations (think PayPal and Stripe).

In order to integrate your accounting software to a payment gateway, you will need to establish an account with that gateway provider. Depending on the payment gateway you choose, you may need to set up a merchant account or PSP account. Your payment gateway may require that you use a specific merchant account or PSP of theirs, or they may offer a payment gateway and merchant account or PSP bundle.

I know this is a lot to take in, believe me, but it gets easier from here. Now you can sit back, relax, and learn about our top five favorite payment processing integrations for accounting software.

Fattmerchant

Best Payment Processing Integrations for Accounting Software

Fattmerchant integrates with QuickBooks Online.

Fattmerchant (see our review) is a merchant account provider that was founded in 2014. This company sets itself apart by offering subscription-based pricing, making it competitive and potentially more affordable than other merchant accounts. Fattmerchant also offers 24/7 customer support and receives positive feedback from the majority of its customers.

Products & Services

Fattmerchant supports the following products and services:

  • Merchant account
  • Virtual terminal
  • Countertop terminals (pricing not disclosed)
  • Point of Sale (POS) integrations
  • Mobile payments
  • One mobile card reader ($75 for each additional reader)
  • Shopping cart integration
  • eCheck services ($29/mo + $0.25 per transaction)
  • Data analytics

The company does not have its own payment gateway, but Fattmerchant is compatible with Authorize.Net, Payeezy, or the TSYS Payment Gateway. It will set you up with a free gateway or integrate with your existing one.

Pricing

Fattmerchant offers two pricing plans that are paid monthly. There is no locked-in contract and no early termination fees for either plan.

  • Basic: $99/mo + $0.08 per transaction for retail ($0.15 per transaction for ecommerce)
  • Enterprise: $199/mo + $0.05 per transaction for retail ($0.10 for ecommerce)

If you’re looking for an affordable, honest merchant account, Fattmerchant is one of the best. This option is good for businesses looking for a predictable monthly subscription plan. Fattmerchant does not provide high-risk merchant accounts and may not be a good value for small businesses with low payment processing.

Read our full Fattmerchant review to learn more and see if this affordable merchant account option is right for you.

CDGcommerce

Best Payment Processing Integrations for Accounting Software

CDGcommerce integrates with QuickBooks Online.

CDGcommerce (see our review) is a merchant account provider with over 20 years of payment processing experience. This company is geared toward small to medium-sized business and also operates on a monthly subscription pricing model. A free payment gateway is included with every CDGcommerce merchant account. The company also sets itself apart with an impressive client retention rate and excellent customer support.

Products & Services

CDGcommerce supports the following products and services:

  • Virtual terminal
  • One credit card terminal (with a $79/yr insurance fee)
  • Mobile payments
  • POS systems
  • Optional security service
  • Data analytics and reports

CDGcommerce offers a free payment gateway. Users can choose between Quantum or Authorize.Net.

Pricing

CDGcommerce has two types of pricing: simplified pricing and advanced pricing. Simplified pricing rates depend on your business type and size.

  • Online: Interchange + 0.30% + $0.15 per transaction
  • Retail: Interchange + 0.25% + $0.10 per transaction
  • POS: Interchange + 0.25% + $0.10 per transaction
  • Mobile: Interchange + 0.25% + $0.10 per transaction
  • Non-Profit: Interchange + 0.20% + $0.10 per transaction

Advanced pricing offers discounts for business with a processing volume of $10,000+ each month. There are no long-term contracts or early terminations fees for either pricing structure. Check out our complete CDGcommerce review for more pricing details. To learn more about interchange and interchange-plus pricing, read Trading Ease For Transparency With Interchange Plus.

 

CDGcommerce is a scalable company with an impressive number of products and services. The free credit card terminal is also a huge plus. The only catch with this company is that it is limited to merchants in the US.

If you’d like to learn more about CDGcommerce, read our full CDGcommerce review.

Square

Best Payment Processing Integrations for Accounting Software

Square integrates with QuickBooks Online, Xero, Zoho Books, Kashoo, and Kashflow.

You’re probably familiar with the swipe-based payment processing system known as Square. Square (see our review) is one of the leaders in mobile processing. It offers great features including inventory, invoicing, and customer management features. And to top it off, Square has a ton of integrations.

Products & Services

Square supports the following products and services:

  • Virtual terminal
  • Gift cards ($2 per card)
  • Shopping cart integrations
  • e-Invoicing
  • Inventory management
  • POS app
  • Customer management
  • Customer feedback
  • Advanced reporting
  • Email marketing
  • Appointments ($30-$90/mo)
  • Payroll ($25/mo + $5/mo per employee)
  • Event rentals

Pricing

Square offers standard fees with no interchange-plus pricing. There are no monthly fees, no locked-in contracts, and no early termination fees.

  • Standard Swipe Transactions: 2.75% per transaction
  • Square Register Swipe Transactions: 2.5% + $0.10 per transaction
  • Virtual Terminal Transactions: 3.5% + $0.15 per transaction
  • eCommerce & Invoice Transactions: 2.9% + $0.30 per transaction

Square offers several add-ons and additional monthly services. Be sure to read our complete Square review for more pricing details.

If you’re looking for a mobile payment processor, this is one of the most well-known and developed options. Square is good for small businesses with low processing volumes and can be an affordable choice. However, Square is not meant for high-risk merchants or companies with a large processing volume as the company is known to hold funds and suddenly terminate accounts.

To learn if Square is the right payment processing option for your business, check out our full Square review or read our post: Is Square Right For Your Business?.

Authorize.Net

Best Payment Processing Integrations for Accounting Software

Authorize.Net integrates with QuickBooks Online, Xero, Zoho Books, FreshBooks (classic), and Microsoft Dynamics.

Authorize.Net (see our review) is a payment gateway that was founded in 1996; it has since supported over 400,000 merchants. Not only does Authorize.Net allow you to accept online payments from customers, it also has a checkout feature, recurring billing, contact management, and fraud protection. In addition, the company offers good customer support and key accounting integrations.

Products & Services

Authorize.Net supports the following products and services:

  • Virtual terminal
  • Mobile payments app
  • Supports mobile card reader ($42-$98 per reader)
  • Simple checkout
  • Apple pay support
  • Fraud detection
  • Recurring billing
  • Customer information management
  • eChecks (additional cost)

If you have a merchant account, Authorize.net is designed to be compatible with your existing merchant account.

If you don’t have a merchant account, you can have Authorize.Net set you up with one. Or, you can choose a merchant account provider that partners directly with Authorize.Net. If you want to go this route, we recommend Dharma Merchant Services, one of our all-time favorite payment processing providers.

Pricing

Authorize.Net offers two pricing plans: a gateway-only plan and a gateway + merchant account plan. There are no-long terms contracts or cancellations fees (but this may vary depending on your merchant account provider).

  • Payment-Only: $25/mo + $0.10 per transaction
  • Payment Gateway + Merchant Account: $25/mo + 2.9% + $0.30 per transaction

Note: If you are using a merchant account provider that partners with Authorize.Net, your merchant account may lower or even waive certain fees. Read our complete Authorize.Net review for more pricing details so you can make sure you get the best deal.

If you’re looking for a payment gateway, Authorize.Net is a great option. It boasts excellent customer service and tons of features to cover most business needs. One important thing to remember is that Authorize.Net is not good for data exporting. Pricing can also be expensive if you sign up with Authorize.Net directly, so make sure you explore all of your options before deciding.

Read our full Auhorize.Net review for more information.

Braintree

Best Payment Processing Integrations for Accounting Software

Braintree integrates with QuickBooks Online, Xero, Sage One, FreshBooks (classic), and Saasu.

Braintree (see our review) offers both merchant accounts and payment gateways. This processing company was established in 2007 and offers impressive features, multiple currency options, and excellent customer support. Flat-rate pricing and ample integrations are also a huge plus.

Products & Services

Braintree supports the following products and services:

  • eCommerce integration
  • Mobile payments
  • Recurring billing
  • Fraud detection
  • Tax support
  • Developer tools
  • PayPal integration

Braintree comes paired with its own payment processing, but merchants can choose to use a different merchant account with the Braintree gateway for an added fee.

Pricing

Braintree has a simple pricing plan. There are no monthly fees, setup fees, gateway fees, or early termination fees. Instead, you’ll pay a competitive, standard rate:

  • 2.9% + $0.30 per transaction

If you only want to use the Braintree gateway and not its payment processing, then you’ll have to pay a flat fee of $49 per month plus $0.10 per transaction instead.

We like Braintree so much that it even outranks PayPal and Stripe in our books. However, Braintree is not suited for high-risk merchants and certain types of businesses are prohibited from using Braintree.

Read our complete Braintree review for more details and to see if this merchant account and payment gateway provider is a good fit for your business.

Which Is Right For Me?

If you’ve learned anything from this post, it’s that when it comes to payment processing there are lots of options to choose from. The right payment processing provider for your business will depend on whether you’re looking for a merchant account or a payment gateway (or a combo of both), plus the number of transactions you process and the extra features your company requires.

One of the main things you should consider is which providers integrate with your accounting software. This will narrow down your decision quite a bit.

While we named some of our favorite companies above, there are several other common payment processing accounting integrations, including PayPal, Stripe, forte, and GoCardless. To make your search for the perfect payment processor easier, we’ve created a chart of the most common accounting programs and the payment processing providers they integrate with.

Software Payment Processing Integrations
QuickBooks Pro BluePay, Durango Merchant Services, QuickBooks Desktop Payments
QuickBooks Online Authorize.Net, BluePay, CDGcommerce, Fattmerchant, Forte, Partial.ly, Payline, PayPal, WorldPay, QuickBooks Payments,    Square, Stripe, WePay, WorldPay
Xero Authorize.Net, Bill&Pay, Braintree, Forte, GoCardless, PayPal, Square, Stripe, WorldPay
Zoho Books Authorize.Net, Braintree, Forte, PayPal, RazorPay, Square, Stripe, WePay
Wave PayPal, Stripe, Wave Payments
FreshBooks (new)  Partial.ly, Payments by FreshBooks, PayPal, Stripe
FreshBooks (classic) Authorize.Net, Braintree, Forte, PayPal, Stripe
Sage One Braintree, PayPal, Sage Payment Solutions,
Stripe, WayPay, WorldPay
Sage 50c GoCardless, Sage Payment Solutions
FreeAgent GoCardless, PayPal, Payal Here, Square, Stripe
Saasu Braintree, eWay, PayPal, PayWay, PinPayments, Stripe
Kashflow GoCardless, Global Payments, PayPal, Square,
Stripe, WorldPay,
Kashoo BluePay, PayPal, Stripe
ClearBooks GoCardless, PayPal,  PayPoint
AND CO PayPal, Stripe

Note: The above integrations are always changing and may vary by country. Check with your accounting software directly for the most up-to-date information.

Remember that when you are choosing the perfect payment processor to integrate with your accounting solution, you can never do enough research. Be sure to check out our merchant account reviews to learn how each software stacks up in terms of features, value for your money, and reliability. If you’re interested in learning more about payment processing, you can also download our free Beginner’s Guide To Payment Processing to learn to evaluate your options, negotiate a good merchant account contract, and more.

Best of luck, and stay tuned for more payment processing tips and tricks from the Merchant Maverick team. If you’d like to do more reading on the subject, the following articles will point you in the right direction:

The Complete Guide to Online Credit Card Processing With a Payment Gateway

Are You A High-Risk Merchant?

The 5 Best Small Business Credit Card Processing Companies

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The Best Credit Card Processing Apps for Small Retail Businesses

small-business-credit-card-processing-app

Say you have a small retail business. You don’t have a lot of money to invest in a super-complicated POS, and you don’t want to deal with a multi-year processing contract. Frankly, the idea of trying to narrow down the options in both categories at the same time is a little bit daunting. But enter another option: an app for a tablet (or even a smartphone) that bundles payment processing and POS software all in one go, with no contract or commitment. A single app with all (or at least most) of the features a brick-and-mortar storefront could want. But what are the best credit card processing apps for small retail businesses?

Cost is definitely part of the consideration, but more than that you need to make sure any software you use actually delivers the features you need to run your business. Most processing apps tend not to be as full-featured as a full POS, but they are capable of delivering on core needs. After we go over which features should be a priority, we’ll get into the most promising apps that let you process credit cards and run your business together.

Credit Card Processing Apps For Small Retailers

In addition to choosing apps based on the most useful features, we had two other criteria in choosing the apps: first, they had to be mobile apps for tablets (and preferably smartphones). Second, they must offer a bundled payment solutions. A couple of the options on the list allow you to bring your own processor if you want, but they do offer their own payment option as a default.

In no particular ranking, here are my favorite picks for retail-focused credit card processing apps:

Square

Square business model and mobile credit card processingSquare does have a specialty POS app for retailers, called Square for Retail. That one doesn’t actually make the cut because it’s designed for larger businesses and it actually lacks many features found in the basic free app, Square Point of Sale.

Point of Sale has definitely come a long way from just a basic mobile POS app, and it’s absolutely a solution that will grow with your business. Its clear, transparent pricing strategy (2.75% for swiped/dipped/tapped transactions) and robust app make it an attractive option for retailers. But then there’s the assortment of add-on services (email marketing, appointment scheduling, loyalty, payroll and more) that all integrate seamlessly. Combined with the huge assortment of supported phones and tablets, and the wide mix of supported hardware, and it’s hard not to see the appeal.

While Square does offer payroll and employee management, these features will cost you more — $5 per employee per month for each.

Something I do want to point out: Square does have many iPad-only features, but much of its hardware is equally compatible with Android devices as it is iPads, which is a major departure from most apps that favor the Apple ecosystem.

PayPal Here

PayPal Here review: One of the top Square alternativesPayPal is an obvious choice for a lot of retailers, especially those who sell online as well as in person. If you’re not interested in eCommerce, PayPal is still a good option because it does integrate with some very well known POS systems. PayPal also has its own credit card processing app, PayPal Here.

While PayPal Here is not quite as robust as the other options on this list (especially regarding inventory), it’s a very stable app with great pricing (2.7% per swipe/dip/tap) and a wide array of supported devices and compatible hardware. It’s the only app on this list to support Windows devices at all, and the phones on your tablet or phone doubles as a barcode scanner for both Android and iOS. Plus, you get up to 1,000 free employee accounts.

Plus, near-instant access to funds through your PayPal account is a pretty awesome deal, especially if you get the PayPal Debit card. Add in free sub-user accounts with restricted permissions (something Square will charge you monthly for), and you can see why PayPal makes the cut.

Shopify

Shopify started as an eCommerce offering but these days it’s added a powerful POS app that also works on smartphones as well as tablets. Everything syncs up nicely for a seamless experience whether you’re selling online, in a store, or even on the go, and while the smartphone version of the app is more limited, it’s still quite functional. Shopify’s features definitely line up more with a full-fledged POS than just a mobile POS.

Unsurprisingly, that means it’s a bit more expensive than the two previous options on this list. Shopify’s plans start at a very reasonable $29/month for its online store. If you want the countertop retail solution, that’s a $49 add-on per month, but you don’t need to purchase additional licenses to add more devices, which definitely ups the value.

You can also create staff PINs without creating staff accounts — which means if only a few of you need admin privileges but you do have a large staff and want to track who is running the register, you can get PINs without paying for additional accounts.

However, I do want to call attention to an underplayed solution Shopify offers: its Lite plan. For $9/month, you can sell on Facebook and other social media platforms, add a buy button to your blog, and use the POS app. The caveat is that you can’t add the retail package to it — which means while you have the app, you don’t have support for the receipt printer or cash drawer.

ShopKeep

Like Shopify, ShopKeep is more of a full-fledged POS than a mobile unit. But unlike Shopify, it’s not an eCommerce solution. It’s an iPad POS targeting all kinds of small businesses: retailers, yes, but also restaurants and quick-service environments. ShopKeep specifically targets small and medium-sized businesses, whereas many of these solutions are happy to tout that they work for businesses of all sizes.

ShopKeep’s user interface is highly intuitive, but also feature-rich, which is a major contributor to its popularity. In addition to its advanced inventory tracking tools, you get employee time-keeping, customizable reporting, and more. It also has a record for excellent (unlimited) customer support via email or live chat.

Sadly, there’s no smartphone app support for processing, but ShopKeep does offer integrated payments. Merchants get an interchange-plus plan based on their volume, which is pretty awesome considering there’s no contract involved, either. Everything is on a month-to-month basis. There’s also an additional $69 monthly charge per register.

Honorable Mention: SumUp

While SumUp has a few limitations — it lacks, for example, the ability to process simultaneously on multiple devices — it is overall a solid credit card processing app. The app supports a solid item library and variants, plus convenient tax settings. While there’s no offline mode and no invoicing, SumUp does have an interesting feature in its SMS payments. The app allows you to send a text message to a phone, with a link embedded. Customers can open the link, enter their payment information and complete the transaction.

Pricing is identical to Square for retail transactions: 2.75%. There is no keyed entry option within the app, but the low-priced virtual terminal (at 2.9% + $0.15, even below Square’s rate) is a workaround, though not one you should use for the bulk of your processing.

While new to the US market, SumUp has been operating in Europe for a few years, so it definitely has experience in the processing industry, and so I expect it to see fewer growing pains than other new solutions.

Must-Have App Features for Retailers

It’s safe to say what app features a business needs tends to vary from one business to the next. But there are definitely commonalities — solid inventory management or the ability to print receipts, for example. Check out our comprehensive comparison chart below to see how these systems compare to one another. 

Square for retail review logo imageSquare PayPal Here Shopify Shopkeep SumUp
BASICS
Integrated Processing Yes Yes Yes (Other options available) Yes (other options available) Yes
Processing Rates (for Most Swiped/Dipped Transactions) 2.75% 2.70% 2.70% Interchange-Plus based on volume 2.75%
Monthly Fee $0 $0 Plans start at $9/month $69 per register $0
Number of Devices Unlimited Unlimited Unlimited 1 (additional registers $69/month) 1
Tablet Support Apple, Android Apple, Android, Windows Apple, Android Apple Apple, Android
Smartphone support Apple, Android Apple, Android, Windows Apple, Android N/A Apple, Android
Email/SMS Receipts Email/SMS Email/SMS Email Only Email Only Email/SMS
Receipt Printer Connectivity Bluetooth, Ethernet, USB Bluetooth, LAN, Wireless Bluetooth, USB, LAN Bluetooth, Ethernet Bluetooth, LAN
Cash Drawer Connectivity Yes (Tablet Only, With Printer Connectivity) Yes (With Star Printer Connectivity) Yes (iPad Only, with Printer Connectivity) Yes (With Printer Connectivity) Yes (with Printer Connectivity)
Barcode Scanner Yes (Bluetooth for iPad only; USB for Android) Yes (USB for windows, device camera for iOS/Android) Yes (Bluetooth) Yes (Bluetooth) No
FEATURES
Split Tender Yes Yes Yes Yes No
Offline Processing Mode Yes No Very Limited No No
Full and Partial Returns Yes Yes Yes (including store credit) Yes (Check store credit) Full Only
Sub-User/Employee Accounts Yes (monthly fee) Yes (free) Yes (PINS/accounts) Yes Yes (Limited)
Discounts by $ or % Yes Yes Yes Yes No
Customizable Receipts Yes Yes Yes Yes No
Generate Invoices Yes Yes Yes No No
INVENTORY
Bulk Item Upload Yes No Yes Yes No
Item Counts Yes No Yes Yes No
Item Variants Yes Yes Yes Yes Yes
Item Photo Yes Yes Yes No Yes
Create Item From App or Dashboard Yes Yes Yes Yes No (App Only)

It’s worth mentioning that many of these systems have FAR more features that we don’t cover in this chart (think: virtual terminals, eCommerce support, supported integrations, etc.). If you really want to learn what a system is fully capable of, I recommend checking out our complete review of each credit card processing app.

Processing with Square or PayPal Here? Up Your Inventory Game with Shopventory

With retail environments, inventory is usually a major concern. Shopventory is a monthly add-on that works with Square, PayPal Here, and the Clover system (except Clover Go). It allows for inventory tracking and reporting, bundling, variants, and more. The biggest difference will be that you’ll no longer be using your credit card processing app for inventory reports or management. Everything will be done through Shopventory’s dashboard. Check out our Shopventory review for more information.

Final Thoughts

When it comes to software and processing, there isn’t a good one-size-fits-all solution for merchants. Every business’s needs are unique, so what works best for one business may not be good for another. Many of the credit card apps we’ve listed here have no monthly fees, and others offer free trials or a free pricing quote. They are all top-rated offerings, as well. The biggest difference you’ll find is the feature sets and little differences in the user interfaces.

If you’re on the fence about which to choose, I recommend checking out our full reviews of each product. Got questions? We’re always here to help, so please leave us a comment!

As always, thanks for reading!

The post The Best Credit Card Processing Apps for Small Retail Businesses appeared first on Merchant Maverick.

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The Best Credit Card Processing Apps for Quick-Serve Restaurants

It’s time to upgrade the POS for your coffee shop, but you haven’t got a clue what to look for. Maybe you’re not sure you need a full-fledged POS, or you’re worried about the cost — or you don’t want to be locked into a multi-year credit card processing contract. Where do you even start looking for the right solution?

As far as technology needs go, quick-serve businesses like bakeries, cafes, and ice cream parlors straddle the line between retail shop and restaurant. What POS features work for a retail business won’t quite cut it, but there’s no need for many of the features found in a full-service restaurant POS. Credit card processing apps combine the convenience of a POS and a merchant account into one single solution, with the convenience of a flexible (even mobile) setup.

We looked over the options for quick-serve businesses and put together a list of the best options. But first, a few criteria!

Choosing the Best Apps for Quick-Serve Businesses

A lot goes into choosing a credit card processing app — the cost, of course, as well as features. Our primary criteria, the non-negotiable elements, were that the app was a true app, something available on a tablet (and ideally a smartphone), and that it had a built-in payment processing option offered by default. A couple apps on this list do allow you the choice of integrating your own processor, though you should make sure the rates are competitive if the app charges any additional fees.

Additionally, we narrowed down the options based on whether the apps offered features essential for quick-serve businesses like cafes and ice cream parlors to function. There’s no one-size-fits-all approach, but there are some core themes to look out for. Check out feature comparison chart below for more information, or read on for our top picks for credit card processing apps!

Toast POS

toast pos reviewToast is an award-winning POS targeting all sorts of restaurants, including quick-serve businesses. It runs exclusively on Android tablets, with an intuitive user interface. It’s definitely feature-rich, with several add-on programs you can opt for (inventory, loyalty, online ordering), making Toast even more functional.

Toast only allows you to use its processing services, and your rates will vary. Plans start at $79/month and allow you up to 2 registers; with higher-tier plans (starting at $99/month), you get unlimited registers. It’s also worth noting that Toast, like Square and PayPal, requires you to use its processing services, and your rates will vary.

Breadcrumb POS

Whereas Toast is entirely Android-based, Breadcrumb POS is an iPad-exclusive system that works as part of Upserve’s larger restaurant management ecosystem. Feature-rich and designed to accommodate many types of businesses, Breadcrumb even integrates with GrubHub for online ordering and delivery.

Breadcrumb’s payment processing arm offers interchange-plus plans for merchants: you’ll pay interchange rates plus a $0.15 fee per each transaction. For very small-value tickets, this could wind up being more expensive than a percentage-based transaction, which is worth taking note of. However, an interchange-plus plan on a month-to-month contract is a good deal.

Breadcrumb’s monthly service fee might make to think twice compared to some of the other options on this list, but the value of the features you get is absolutely worth considering. The Core plan will start you at $99/month, with the mid-tier plan starting at $249.

Square

Square business model and mobile credit card processingSquare‘s free mPOS app, Point of Sale, remains hugely popular with all kinds of businesses. But with its inventory management and reporting, as well as custom tipping features, it has the core features most bakeries, cafes, and other quick-serve businesses need to thrive — plus multiple add-ons (such as loyalty and payroll) to make management even easier. The eCommerce integration even allows people to place orders online and pick them up in person, and there’s a delivery system through Caviar.

Without a doubt, one of Square’s biggest draws is its clear, transparent pricing. A solid 2.75% per swipe is very reasonable and the lack of a per-transaction fee keeps the costs down for businesses with low ticket values. There are no mandatory monthly fees, either — you pay only for the transactions you process, and any add-on services you opt into.

PayPal Here

PayPal Here review: One of the top Square alternativesPayPal’s mPOS solution, PayPal Here, isn’t quite as robust as the full-fledged POS systems that PayPal also integrates with. But it’s a highly mobile app available on multiple platforms, including Windows devices. The app doesn’t have a glut of features the way Square does, but it has all the essentials, from tipping to discounts.

Like Square, one of the big draws — especially if you have a small average ticket size — is its pricing: 2.7% per swipe, with no monthly fees. PayPal’s easy integration with all sorts of eCommerce services and instant access to funds also tend to be big draws for merchants.

ShopKeep

Rather than build a solution that appeals to businesses of all sizes, ShopKeep opted to tailor its POS software to small and medium-sized businesses, a decision that continues to define its capabilities. However, the company does cater to small and medium businesses in a variety of industries, including quick-serve businesses.

Feature rich and highly intuitive, ShopKeep even offers advanced inventory and timekeeping at no extra charge, which definitely adds to the value.

ShopKeep’s payment processing arm offers interchange-plus plans based on your monthly volume, which means possible per-transaction fees. ShopKeep charges $69/month per register, but has no contracts or other monthly fees, all of which are a great deal for merchants.

Must-Have Features for Quick-Serve Businesses

Apart from being a tablet app with integrated processing, I looked at some other features in creating my list. Menu creation is important — and while variants are great, the presence of categories and add-ons was more important. Tipping, kitchen receipt printing, and location management also merited consideration. Check out the table below for detailed information.

Toast Breadcrumb reviewBreadcrumb Square for retail review logo imageSquare PayPal Here Shopkeep
BASIC TECH
Integrated Processing Yes Yes (other options available) Yes Yes Yes (other options available)
Processing Rates (for most swiped/dipped transactions) varies interchange + $0.15 2.75% 2.70% Interchange-Plus based on volume
Monthly Fee $79 and up $99 and up $0 $0 $69 per register
Number of Devices 1-2 for base plan, unlimited for higher plans 1 ($50/additional) Unlimited Unlimited 1 (additional registers $69/month)
Tablet Support Android Apple Apple, Android Apple, Android, Windows Apple
Smartphone support N/A N/A Apple, Android Apple, Android, Windows N/A
Email/SMS Receipts Email/SMS Email Only Email/SMS Email/SMS Email Only
Receipt Printer Connectivity LAN Wi-Fi, Ethernet Bluetooth, Ethernet, USB Bluetooth, LAN, Wireless Bluetooth, Ethernet
Cash Drawer Connectivity Yes Yes (With Printer Connectivity) Yes (Tablet Only, With Printer Connectivity) Yes (With Star Printer Connectivity) Yes (With Printer Connectivity)
FEATURES
Split Tender Yes Yes Yes Yes Yes
Offline Processing Mode Yes Yes Yes No No
Sub-User/Employee Accounts Yes (free) Yes (free) Yes (monthly fee) Yes (free) Yes (free)
Tips by $ or % No (By % only) No (By % only) Yes Yes Yes
Add Tip after Signing Yes Yes Yes (iPad only) No Yes
Customizable Receipts Yes Yes Yes Yes Yes
Kitchen Ticket Printing Yes Yes Yes (iPad only) No Yes
Multi-location management Yes Yes Yes No Yes
MENU
Bulk Item/Menu Upload No Yes Yes No Yes
Item Counts With Inventory add-on Yes Yes No Yes
Item Add-Ons/Modifiers Yes Yes Yes Yes Yes
Item Photo No No Yes Yes No
Create Item from App or Dashboard Yes Yes Yes Yes Yes
Item Grouping/Sub-categories Yes Yes Yes Yes Yes

You can also browse our restaurant POS software and mobile payments categories for more solutions!

Final Thoughts

There’s never one right answer to the question “which software is right for me?” The best we can do is say “This is a good choice for lots of businesses” and explain the caveats. As far as credit card processing apps for quick-serve businesses, you need to have a firm number in mind for how much you’re willing to pay, and know which features or abilities the app must have, and go from. Our top picks — Toast, Breadcrumb, Square, PayPal Here, and ShopKeep are all targeted at the industry and so they do have some similarities and core capabilities. But you’ll also find major differences in costs and some features (inventory being a noteworthy one). So know what you need and make sure the system you choose fulfills those basic requirements.

As always, thanks for reading! If you’ve got questions, we’d love to help you out. Check our comment guidelines and leave us a comment!

The post The Best Credit Card Processing Apps for Quick-Serve Restaurants appeared first on Merchant Maverick.

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The Best Credit Card Processing Apps For Mobile And Service Businesses

mobile-card-payment-app-service

Being able to take payments on the go without having to jump through five million hoops is crucial for mobile businesses, whether you’re a service business that visits customers at home or just a small business without a permanent storefront. That’s where credit card processing apps come in: Combining integrated payments and feature-rich POS systems that run on smartphones and tablets, they’re designed to operate anywhere you can get a cellular or Wi-Fi signal.

We took a look at the most promising credit card processing apps for mobile and service businesses, comparing their features as well as their processing rates. Then, we compiled the best options into a list!

Choosing the Best App Features for Mobile & Service Businesses

If your business is primarily service-based or you tend to do more pop-up sales and events than deal with retail storefronts, you probably don’t need (or want) a whole lot of hardware. What you do need is an EMV-friendly reader and a smartphone or tablet to run the system from.

We used two primary criteria in deciding this list: first, the product has to have integrated payment processing, and the app must be available on a tablet (preferably a smartphone as well).

While hardware may not be a priority, knowing which systems can work as a countertop system as well as mobile is helpful. Invoicing, virtual terminals, solid sales tax management, and decent item libraries were also factors. Take a look at our comprehensive comparison chart to figure out which system might work best for your particular needs.

Square for retail review logo imageSquare PayPal Here Shopify Payline Mobile SumUp
BASICS
Integrated Processing Yes Yes Yes (Other options available) Yes Yes
Processing Rates (for most swiped/dipped transactions) 2.75% 2.70% 2.70% Interchange + 0.5% or 0.3% 2.75%
Monthly Fee $0 $0 Plans start at $9/month $0 / $9.95 $0
Number of Devices Unlimited Unlimited Unlimited Unlimited 1
Tablet Support Apple, Android Apple, Android, Windows Apple, Android Apple, Android Apple, Android
Smartphone Support Apple, Android Apple, Android, Windows Apple, Android Apple, Android Apple, Android
Email/SMS Receipts Email/SMS Email/SMS Email Only Yes Email/SMS
Receipt Printer Connectivity Bluetooth, Ethernet, USB Bluetooth, LAN, Wireless Bluetooth, USB, LAN No Bluetooth, LAN
Cash Drawer Connectivity Yes (Tablet Only, With Printer Connectivity) Yes (With Star Printer Connectivity) Yes (iPad Only, with Printer Connectivity) No Yes (with Printer Connectivity)
FEATURES
Split Tender Yes Yes Yes Yes No
Offline Processing Mode Yes No Very Limited No No
Full and Partial Returns Yes Yes Yes (including store credit) Yes Full Only
Sub-User/Employee Accounts Yes (monthly fee) Yes (free) Yes (PINS/accounts) Yes Yes (Limited)
Discounts by $ or % Yes Yes Yes Yes No
Tipping by $ or % Yes Yes No Yes Yes
Multiple Tax Rates Yes Yes Yes Yes Yes
Adjust Tax Rates In-App Yes Yes Yes Yes Yes
Customizable Receipts Yes Yes Yes Yes No
Generate Invoices Yes Yes Yes No No
Virtual Terminal Yes Yes (monthly fee) No Yes Yes
INVENTORY
Bulk Item Upload Yes No Yes No No
Item Counts Yes No Yes No No
Item Variants Yes Yes Yes No Yes
Item Add-ons Yes Yes No No No
Item Categories Yes Yes Yes No Yes
Item Photo Yes Yes Yes Yes Yes
Create Item from App or Dashboard Yes Yes Yes Yes No (App Only)

You can check out our reviews of each service for more information about features, user experience, and more.

Square

Square business model and mobile credit card processingSquare made its name with a mobile processing service that anyone could use, and while the company is definitely catering to larger entities these days, small and mobile businesses still make up a good portion of Square’s merchants. Square’s totally free processing app makes it easy to create an item library of physical products as well as services.

Square’s tax rate settings are easily adjustable from within the mobile app and you can pre-program different rates if you find yourself flipping between different locations often.

In addition, Square offers invoicing, recurring invoicing/storing cards on file, and a free virtual terminal. You can even integrate Square’s appointment booking software seamlessly.

Square will charge you 2.75% per swiped transaction, but invoicing will run you 2.9% + $0.30, and virtual terminal transactions will cost you 3.5% + $0.15.

PayPal Here

PayPal Here review: One of the top Square alternativesPayPal Here is another staple of mobile businesses with a free mobile app. PayPal has the advantage of massive eCommerce support as well as a solid mPOS so you can seamlessly blend different aspects of your business. Plus, your funds are available almost instantly in your PayPal account, and with the PayPal debit card, you can spend them anywhere. The free mobile app isn’t quite as feature-rich as Square’s, but it’s highly capable.

You’ll also find PayPal Here’s tax settings are adjustable within the app and you can easily accommodate different sales tax rates. Like Square, you get free in-app invoicing. However, if you are looking for a virtual terminal or recurring billing, they’re going to run you an additional $30 and $10 per month, respectively, which is a fairly high price tag.

You’ll pay 2.7% per transaction in the app, whereas invoices will run you 2.9% + $0.30. Virtual terminal transactions (not counting the monthly fee) cost 3.1% + $0.15.

Shopify

Shopify started out as just an eCommerce offering but it’s expanded into a multi-channel solution for business. You can get Shopify’s Point of Sale app for as little as $9/month with the Lite plan, or you can upgrade to a countertop-friendly version with the Retail package, and even add on integrations for appointment booking. However, if you don’t /need/ a receipt printer or cash drawer and don’t sell through your own site online, the Lite plan will absolutely get you through.

Shopify isn’t the most advanced credit card processing app out there — for example, it doesn’t support tipping — but overall it has most of the features mobile and service-based businesses need, and its integration with the eCommerce tools is definitely an asset. It even allows invoicing.

Shopify allows you to set a tax rate for a shop location and create overrides and exemptions. One thing I do like that I don’t often see in these sorts of apps is tax rates based on GPS location, which eases the burden on you considerably.

For Shopify Payments (the default processing method), you’re going to pay 2.7% per transaction to start out, though if you opt for the higher-tiered plans you’ll see some savings.

Payline Mobile

Payline is one of our favorite merchant account providers, and we like their mobile solution because it’s available independently of the other offerings and suitable for low-volume businesses, which isn’t common with traditional merchant accounts.

The app is overall solid, with inventory features, tipping, and discounts. While there’s no invoicing feature, the mobile plans do offer access to a virtual terminal. The app is also designed for mobile use only: it doesn’t support retail/countertop processing features like cash drawers or receipt printers. However, Payline supports multiple tax rates for different items as well as a master tax rate for checkout, depending on your needs.

Payline’s mobile products offer interchange-plus pricing, too: the Start plan (formerly Spark Plan) will charge you 0.5% over interchange plus $0.20 per transaction with no monthly fee; the Surge plan charges a 0.3% markup plus $0.20, with a $9.95 monthly fee. The $0.20 per-transaction fee is a little high, but doesn’t put Payline Mobile in the realm of unreasonable pricing. However, it does mean businesses with larger ticket sizes will feel the effects of that per-transaction fee less.

Spark Pay

Capital One’s mobile processing solution Spark Pay is part of the larger “Spark” line of businesses solutions, which includes a fairly advanced online store. However, despite that, Spark Pay the mobile app stands alone, with no integrations.

It has all the major features a merchant would need — tipping, custom discounts, an item library, and support for a countertop setup. Unfortunately, there’s no invoicing, and Spark Pay’s virtual terminal is only in beta mode. You can only set one tax rate in the app as well. However, the major shortcoming is simply that while Spark Pay does offer EMV terminals, there’s not currently an EMV-compliant mobile reader, something that all the other options here do offer.

That said, Spark Pay does offer great customer service, and its pricing is competitive. On the Go plan, there’s no monthly fee and transactions cost 2.65% + $0.05. The Pro plan has a $19 monthly fee, but your rates drop to 1.99% + $0.05.

SumUp

SumUp has been operating in Europe for several years now, but it’s only reached the US in the past year, which definitely makes it the newcomer. The app is overall solid, though more limited than the others on this list.

You do get a free mobile app and free virtual terminal, as well as a fairly unique tool: SMS payments where customers can complete a transaction by opening a link sent through text message.

However, you can only process on one device at a time, so while you can create sub-user accounts, there’s not much of a benefit. SumUp does support multiple tax rates, but tax rates can’t be deleted when they are associated with an item. You’ll have to delete the item first.

The lack of discounts and the ability to make some changes through the dashboard are a bit disappointing — but the fact that you can manage everything from within the app is a major improvement over a platform like Clover Go, which requires you to make many adjustments in the web dashboard.

There are no recurring billing or card-on-file options, though, and no invoicing, either. That said, SumUp charges a simple 2.75% per transaction, and 2.9% + $0.15 for virtual terminal and SMS payments, with no monthly fee.

Final Thoughts

I’m usually pretty hesitant to recommend one product above all others without consideration of the differences from one business to the next. And that’s true here. If you really only have simple needs, any of the options on this list will serve you well. As your needs get more advanced, it’s definitely worth looking at more advanced setups such as Square or PayPal Here. And as always, the price is a major consideration. Make sure you run the numbers and are confident the rates you will pay are competitive.

The good news is that all of these services have a no-monthly-fee option so you can try them out with no risk. I encourage you to check out our complete reviews of any credit card processing app you’re interested in pursuing. And if you have questions, I encourage you to reach out. We’re always here to help, so feel free to leave us a comment!

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How To Identify The Pricing Model On Your Processing Statement

Credit Card Processing Statement image

“It’s 11 o’clock. Do you know where your children are?”

This was a popular PSA broadcasted to parents in the ’70s and ’80s, back when “stranger danger” was just about the scariest thing out there. Now, I have an equally important PSA for small business owners: “You have your processing statement. Do you know your pricing model?”

The ability to recognize merchant account pricing models (and, most importantly, which one you have) is a crucial step toward understanding your statement, as well as increasing your overall merchant-savvy. We’ve found that many merchants recognize the rates and fees they were quoted for processing, but without any broader context of which pricing model they have. This makes deciphering an already-confusing card processing statement all the more difficult, and makes discerning whether you’re paying too much nearly impossible.

Starting with a statement and working backward to an accurate understanding of how your quoted rates actually kick in is maybe not the ideal introduction to pricing models. Yet, this is most often the way things go, and I’m not surprised. No one goes to “merchant account school” for this stuff, and account providers vary widely in both their skill and willingness to thoroughly explain pricing.

The good news is that small business owners are no strangers to learning on the fly. So, grab a statement or two, and let’s get cracking!

A Quick Primer On Pricing

In broad strokes, the main pricing models are differentiated by the way your merchant account provider handles the wholesale cost of processing (what it must pay to other entities in the processing chain) versus its own markup. There are two separate types of wholesale costs — interchange fees and card association fees — but the differences between pricing models mostly center around how interchange fees are handled.

You’re probably already aware of the vast variety of credit and debit cards in circulation. Each type of card has its own pre-set interchange cost (a percentage of the sale and sometimes a per-transaction fee) that all merchant account providers must pay to the card-issuing bank when that particular card type is used. Over the years, the main merchant account pricing models have developed based on two possible ways of dealing with these wholesale interchange costs:

  1. Pass the interchange costs directly to the merchant and also charge a separate “low” markup.
  2. Blend the interchange costs into one or more “high” overall rates for the merchant that already include a markup.

I’m putting “low” and “high” in quotation marks because we recognize they’re super-relative terms. Not to mention, the exact amount of your rate is only one piece of the puzzle. As a helpful simplification going forward, you can think of “low” as well under 1%, and high as over 1% (often at least 2%, or even much more). The important thing to remember is that a low rate may not include interchange already (look for those costs listed separately), while a high rate likely does.

The “Big Four” Models

The most common pricing models are interchange-plus, membership, flat-rate, and tiered. For more background on the models, check out these helpful articles:

  • Trading Ease For Transparency With Interchange-Plus
  • Tiered Pricing: The Epic Fail Of A Pricing Model
  • Get A 0% Interchange-Plus Markup With Membership Fee Pricing
  • Analyzing The Cost-Effectiveness of Square’s Mobile Processing Solution (flat-rate pricing)

If you’re still a bit foggy on the differences, that’s okay. For now, you can start with your statement and work toward a better understanding of merchant account pricing as a whole. We’ll get there!

Good Indicators, But Not Guarantees

While each pricing model leaves tell-tale signs on a statement, it’s important to note that no “standard” indicator is necessarily a guarantee. Think of the indicators we’ll discuss as good clues, or important signs. In truth, processors may include red herrings in their statements, or invent their own strange hybrid systems. Fortunately, most stick fairly closely to the main pricing models.

Now, we’re finally ready to look at the four main pricing models and their most common statement indicators. The more indicators for a certain model on your statement, the better the odds that’s the model you have. I’ll be using a few snippets of statements as examples, but note that any interchange rates listed are not necessarily the current values. Some of the statements are older. In any case, your statement will never match these completely. No two processors display this stuff in the same way.

Interchange-Plus / Cost-Plus Pricing

All things being equal, interchange-plus statements are the most difficult to read. The big payoff is that you clearly see the difference between wholesale costs and your account provider’s markup on your statements. In this model, the rate you were quoted was just the markup piece — the “plus” in “interchange-plus.” In other words, interchange fees and your account provider’s markup are charged separately. Typically, interchange-plus plans charge both a percentage markup and a flat, per-transaction markup. Here’s what you’ll likely see on your statement:

  • Itemized Interchange Rates: 

    Example A: One small section of a long list of interchange rates. Note that each type of card is charged its own pre-set rate, and passed through to the merchant.

  • Consistent “Low” Percentage Markup: Charged separately from interchange fees.

Example B: Consistent markup of 0.40% listed after each card type’s itemized list of interchange fees. All transactions/card types have the same 0.40% markup.

Example C: In the “Rate” column, a consistent 0.31% markup is shown directly above the itemized interchange rate for each type of card/transaction.

  • Consistent Transaction Fee Markup: This per-transaction markup may be found in the same line items as the percentage markups, or down in a separate “authorization” section.

    Example D: Along with a consistent 0.10% markup across the board (Disc %), there’s a consistent $0.10 transaction fee markup (Disc P/I) for all card/transaction types.

Subscription / Membership Pricing

Membership pricing is sort of a riff on interchange-plus. The wholesale interchange rates are still charged separately from the account provider’s markup. The difference is that the markup comes in the form of one flat monthly subscription fee, and also a small, per-transaction markup. No percentage markup is charged. Here are the main statement indicators of subscription pricing:

  • Itemized Interchange Rates: Similar to Example A above.
  • Consistent Transaction Fee Markup: See Example E below.
  • No Percentage Markup: See Example E below. Note that percentages will still be part of itemized interchange rates (not shown below), but no separate percentage markup is present.

Example E: Consistent $0.11 “Item Rate” charged on all card/transaction types. No “Disc Rate” % markup. This account had a membership fee of $120/month (not pictured).  Interchange rates were itemized separately (not pictured).

Flat-Rate / Blended Pricing

This is the model most commonly offered by third-party payment facilitators (a.k.a. PSPs, merchant aggregators) like PayPal, Stripe, and Square. Occasionally, traditional merchant account providers use it as well. In this all-inclusive model, wholesale charges and the processor’s markup are all blended together into your one, flat processing rate. If a per-transaction fee is part of your rate, this also goes toward covering your provider’s wholesale costs plus any profit margin. Your flat rate covers all types of transactions, from inexpensive signature debit transactions, all the way to expensive business rewards cards. You’ll typically observe:

  • No Itemized Interchange Rates: Your statement is quite simple, but you can’t see the actual wholesale cost behind any of your transactions.
  • Consistent “High” Rate: If any rate is displayed at all, it’s usually just one main rate in the high 2% to mid-3% range, and sometimes you’ll see a per-transaction fee as well. Note that some PSPs charge a couple different high rates based on the type of transactions you run (i.e., keyed or ecommmerce vs. swiped/dipped.)

Tiered / Bundled Pricing

This is another case where you can’t see the itemized interchange rates separate from your processor’s markup on your statement. Instead, your transactions are first grouped into tiers according to the processor’s pre-set criteria. Each group (tier) is then charged a flat rate that already includes the interchange costs for those transactions. If you’ve got a tiered plan but have only been quoted one rate, it’s typically the rate for transactions that fall under the lowest, “qualified” tier. In reality, some transactions may be downgraded to higher priced tiers (mid-qualified and non-qualified). You have no real way of predicting these downgrades ahead of time. Here’s what you’d see:

  • No Itemized Interchange Rates: You generally won’t see a list of interchange charges–because why list them if they’re already blended into your tiered rates?
  • Qualified, Mid-Qualified, Non-Qualified Labels: Any line items with any of these labels (or similar-looking abbreviations) is your biggest clue.

Example F: Transactions are charged 1.75%, 2.75% or 3.25% depending on the tier

  • Multiple Rates, Usually “High”: By definition, a tiered program must have at least two rate levels or tiers shown on the statement. The standard model is three levels: qualified (lowest), mid-qualified (middle), and non-qualified (highest). Note that some providers may create a separate set of three tiers for debit transactions, because these wholesale debit costs are cheaper. The bottom levels of a signature debit tier can actually be “low” (well under 1%) and still account for the interchange cost or act as a loss leader. You’ll need to be sure that there are no other higher rates charged on your statement (and examine other indicators) before you can assume your “low” rate means you’re on interchange-plus! On the other hand, all credit card tiers will likely be well over 1% and in the “high” category, so look for those as a better indicator. When you’re looking for multiple rates on your statement, the mid and non-qualified transactions may be listed right next to the qualified ones, or may be shown as separate surcharges later in the statement (like in Example H below).

Example G: Two “high” rates are charged, 1.75% + $0.10 for credit, and 1.21% + $ 0.20 for debit. These are the two qualified tiers of this plan.

Example H: In the same statement as above, we find a surcharge section. Twenty-two transactions were downgraded to non-qualified (amounting to an extra 2%) and 30 to mid-qualified (an extra 1.47%). Multiple rates for multiple tiers at play!

Final Thoughts

Did you recognize your own pricing model among these main four types? If you made it this far with your statement, I hope you’ve at least developed a strong hunch. While each model has its merits for different situations, you can probably tell we prefer the inherent transparency and comparability of models that separate out the interchange costs from the account provider’s markup. By the same token, we have a hard time getting behind the unpredictable downgrading and surcharging of tiered pricing. I’d encourage you to check out our top merchant account providers if you’re looking for a fresh start. All of them offer transparent interchange-plus or subscription pricing plans.

Parents of the 70s and 80s feared “stranger danger” above all else, but my biggest fear for merchants is that they pay too much or even get scammed because they don’t have a solid understanding of their processing statements. Knowing and recognizing your pricing model is one of your best protections as a merchant. If you’re still unsure about yours, drop us a line and we’ll see if we can help!

The post How To Identify The Pricing Model On Your Processing Statement appeared first on Merchant Maverick.

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The Complete Guide to Credit Card Transaction Fees

Are there days when you wonder if it’s even worth it to accept credit cards at your business? Do those days happen to correspond with the days you receive your monthly card processing statements? Hmm…interesting coincidence.

We know that accepting plastic is usually worth the cost in the end, whether or not you occasionally fantasize about the good ol’ days of all cash. Still, there’s no denying that card processing fees add up fast. It can be hard to determine where they are all coming from and why they are being charged. Some fees are automatically charged monthly, while others are charged consistently on a per-transaction basis. Still others are charged on a per-transaction basis but only under certain circumstances. Is your head already spinning?

Fortunately, Merchant Maverick has great resources on all things related to card processing costs. I’ll direct you to these as we go along. As you may have caught from the title, this post will focus specifically on credit card transaction fees. (Okay, we’ll throw debit cards in there too). Let’s begin by defining what we mean by “transaction fees.”

A broad definition of “transaction fee”

When most people think of “credit card transaction fees,” I’m pretty sure they’re thinking of the following definition: anything you are charged on a per-transaction basis. If you want an introduction to all of these various fees, this article might not be for you. Please see our Complete Guide to Rates and Fees for more generalized rate and fee information first. If, however, you are looking at your processing statement and want to figure out what some of the specific “nickel and dime” transaction fees mean, read on!

A more precise definition

In the payment processing industry, the term “transaction fee” can actually mean something a bit more specific. We often limit the use of the term to fees charged as a flat dollar amount per transaction. These are the fees we will examine in this post. We will not be looking at percentage-based fees here. Percentage-based fees are often referred to as processing “rates” rather than fees.

Why am I charged flat per-transaction fees?

Per-transaction fees are usually less than one dollar. Sometimes, they are even fractions of one cent. So why do they even exist, especially if you’re already getting charged a percentage of each sale? Is this just another excuse for “The Man” to squeeze you dry, $0.0001 at a time?

I find it helpful to think of these fees as what you pay for the privilege of using pieces of the processing system each time you run a card. Whatever costs are involved in transmitting, encrypting, storing, looking up, verifying, authorizing or otherwise handling the transaction and card data ought to be covered by flat per-transaction amounts. After all, data is data, no matter if the transaction was $5 or $5,000. We’re just moving electrons around in either case. In contrast, costs based on the percentage of the volume of the transaction cover the relative risk involved in handling different amounts of money.

Why should I keep a close eye on transaction fees?

Here are a few reasons transaction fees deserve your attention:

  • They are often “small” — sometimes even fractions of a cent — but can add up quickly
  • There are lots of different types
  • They tend to have odd or vague names and abbreviations
  • The names and abbreviations are not necessarily standardized across the industry
  • It’s hard to decipher exactly what function each one serves
  • It’s easy for merchant account providers to sneak in extra, unnecessary ones
  • It’s easy for providers markup existing, legitimate ones

How are transaction fees labeled on a statement?

Honestly, the nomenclature for transaction fees is all over the map. We’ll dive into some of the specific names and abbreviations for individual fees as we go. Fortunately, most statements will at least divide any percentage of volume charges and any per-transaction fees into two separate columns. Here are some common headings for flat per-transaction charges:

  • Item rate
  • Item fee
  • Sale item fee
  • Per item
  • Per item rate
  • Per item fee
  • P/I
  • Disc P/I
  • Tran fee
  • Trans fee

When you match up the main column heading to the individual name or abbreviation of each charge along the left-hand side of a statement, you should have a good idea of what the fee is and how much you’re charged each time. Pay attention to the number of transactions that incurred the fee too. This will often help clarify the fee’s identity and purpose.

Where will I encounter transaction fees?

1. Interchange Rates

The interchange rates (a.k.a., interchange reimbursement fee, wholesale rate, or discount rate) are decided upon by the card networks. Interchange rates differ depending on card and transaction type, but most are composed of a percentage of volume rate and a flat per-transaction fee. Interchange costs are considered non-negotiable for merchants.

2. Your Processor’s Markup

Depending on your pricing model (e.g., tiered, blended, interchange-plus, subscription), your processor’s markup will be handled differently. The markup over interchange may already be lumped in with your overall rate, or interchange may be charged separately from the markup. In other words, whatever is quoted as your “processing rate” may or may not have interchange already included. If you’re not sure which pricing model you have, check out our complete rate and fee guide. What you need to know going forward is that your rate — whether it’s just your provider’s markup or a blend of their markup and interchange — may include a percentage fee and a flat per-transaction fee component. And, depending on the pricing model, it may include just one or the other type of charge.

3. Card Brand Fees

These fees are collected by card networks — Visa, MasterCard, etc. — and most of them are charged on a transactional basis. Like the interchange costs, they’re considered non-negotiable, pass-through costs by your merchant account provider, so watch out to make sure they don’t get marked up! Card association fees may involve a percentage of volume or a flat, per-transaction charge, depending on what the fee is supposed to cover (catching a theme here?).

Dharma, one of our preferred merchant account providers, maintains a handy list of card brand fees. I’ll list just a few examples below. Each card brand tends to have fees that cover the same kind of things, but with frustratingly different names, just to annoy us all. As you might expect, Visa and MasterCard’s fees line up more closely than the other card brands.

  • Assessments: This is the main card brand fee. In fact, sometimes people just use “assessments” as a blanket term for all card brand fees. Visa charges 0.13% + $0.0195 per transaction for all your Visa credit card sales, for example. We might call the second piece — the $0.0195 — a “transaction fee” by our working definition. Sometimes, that flat per-transaction bit is separated out and called the Acquirer Processing Fee (APF). For MasterCard, the flat per transaction part of the assessment is called the Network Access and Brand Usage Fee (NABU). Note that some blended pricing plans may already incorporate these assessment costs into your rate quote.
  • Fees for Transaction Problems: Some card brand transaction fees only kick in if something out of the ordinary happens, such as when there’s been a mistake, mismatch, or omission in the way the transaction was processed. This includes fees with exciting names such as the Zero Floor Limit Fee, Misuse of Authorization Fee, and Transaction Integrity Fee.

4. Authorization & Authorization-Related Fees

All transactions require some kind of authorization. If the card is accepted, the authorization turns into a full-blown transaction. If the card is declined, then an authorization procedure has taken place without a transaction ultimately occurring. This means that you can potentially have more authorizations (and authorization fees) than transactions that actually go through.

So how do processors cover authorization costs? Well, some providers bake any authorization costs into the flat per-transaction fee that comes with your rate quote. In my mind, that’s exactly what any flat per-transaction fee charged by your processor should cover. Nevertheless, the technical difference between a transaction and an authorization is part of the reason why you’ll often see them broken down into separate categories and fees.

If you’re on a pricing plan that has no per-item flat fees, you can bet that authorization costs have been covered by a higher percentage of volume charge, or by some other piece of your plan’s overall fee structure. Meanwhile, there are definitely a few authorization and authorization-related costs that are commonly charged separately:

  • AVS Fee: The Address Verification Service is accessed as part of every keyed-in transaction to provide an additional layer of fraud protection. The card’s billing address is requested and verified before authorization is given. eCommerce and telephone-order businesses must use this service every single time they authorize a transaction. Consequently, many quoted rates for eCommerce and card-not-present transactions already have an AVS charge included as part of the flat per-transaction fee. But some don’t! If you run mostly card-not-present transactions, you’ll definitely want this matter clarified up front. Meanwhile, brick-and-mortar merchants will only see an AVS charge on the odd occasion that they must manually key-in the customers’ card info.
  • Gateway Fees: Payment gateways are used to authorize transactions that occur via the internet only. Since not every business needs one, gateways are often separate add-ons to merchant accounts, with separate fees. Gateway fee structures usually involve a monthly fee, and sometimes a flat per-transaction fee as well. You can see how costs could add up quickly for an eCommerce business if there was gateway fee, plus an AVS fee, plus a main transaction fee, plus a separate authorization fee! Thankfully, many eCommerce payment providers will charge a gateway fee in lieu of the AVS fee, or just charge one main “transaction fee” that covers everything. The important thing is to know the exact set-up for your account.
  • Voice Authorization Fee: This is a telephone dial-up service for transaction authorization. When a transaction is outside the normal range of a particular customer’s purchasing behavior, a voice authorization may be triggered. The customer will need to provide additional information over the phone to verify he or she is, in fact, the cardholder. Occasionally, merchants use this service as a backup if their terminal, internet connection, or software isn’t working to authorize transactions. Most businesses will rarely need this service, but it’s typically a per-transaction, flat fee if you do.
  • Other Authorization Fees: You’re gonna hate me for saying this, but there are lots of other authorizations that could be charged in addition to the regular “transaction fee” that’s part of a normal rate quote. Many of these charges come from the large processor behind the scenes of a merchant account, such as First Data, Elavon, or TSYS. This means your smaller merchant account provider might consider them as “pass-through” from their perspective, providing a convenient little excuse not to bring them up. The authorizations are usually named for the way the authorization is communicated, such as over a toll-free number, a “wide area telephone service” (a.k.a. WAT or WATS), a local phone number (LOC), digital data over voice, a dial-up point of sale device, carrier pigeon, stagecoach…you get the idea. So, if that’s the way your transactions are normally processed, you could get charged the corresponding fee every single time.

Final Thoughts: How can I keep my transaction fees under control?

You can’t avoid the fact that when it comes to card processing, multiple entities will whittle away at your profit, one tiny piece at a time. (You were tired of having money anyway, right?) The good news is that with a little time spent educating yourself on transaction fees, you can begin to spot any that are suspiciously high, and perhaps some that shouldn’t be there at all.

Here are a few actions steps, as well as questions to ask your merchant account provider about your transaction fees:

  • Know your pricing model. You should know what type of pricing model you have and which non-negotiable fees (i.e., interchange fees, card brand fees) are already blended into your rates.
  • Before you sign up for a merchant account, ask for a sample processing statement. If they agree to give you one (most good providers will), it may not have every possible transaction fee represented. However, you can still begin to familiarize yourself with their terminology, abbreviations, and categories for fees. It helps to have something concrete in front of you that you can ask questions about. Plus, you’ll have a baseline for spotting unexpected fees later.
  • Ask specifically about transactions fees and authorizations. Don’t be afraid to press your merchant account provider about transaction fees. “Will the transaction fee that’s part of the processing rate I’ve been quoted be the only transaction fee I’ll be charged? Are there any other separate authorization fees I should expect to see on the bulk of my transactions?” POS-WAT or POS-WATS is one that comes up a lot as an extra authorization charge for brick-and-mortar merchants, so you could even ask about that one as an example. If your sales rep can’t adequately answer these questions, ask to be put through to someone who can.
  • Card-not-present merchants: be especially aware of AVS and Gateway fees. All eCommerce and other card-not-present transactions will need to access the Address Verification Service to complete the authorization. This means eCommerce merchants should specifically ask if this fee is already included in your normal transaction fee, or if it will be a separate charge. eCommerce merchants should also inquire as to whether an additional gateway per-transaction fee is part of the pricing plan or if it’s already covered by the main transaction fee in your rate quote. Knowing whether these fees are already included in your rate will also help you better compare costs between providers.
  • Carefully review your statements. Even though this is the Complete Guide to Credit Card Transaction Fees, we couldn’t possibly cover every authorization, strange abbreviation, or totally made-up term your provider may use to identify each of the fees on your statement. Sneaky merchant account providers may mark up card brand fees, or invent tiny transaction fees that add up over time. Then, they’ll name their fees in confusing ways to cover their tracks. If you’re not sure about a certain interchange or card brand fee on your statement, you can usually look it up to see if 1) it’s a valid fee in the first place, and 2) the established price is what you’re being charged. If these wholesale costs were supposed to be blended into your rates, you should still keep an eye out for extra transaction fees charged separately. Compare what you were told when you signed up with what you see on your statement.
  • Watch out for multiple authorizations. Really, you shouldn’t be charged multiple times to authorize one transaction. At most, there may be an extra security step and fee involved (like in the case of AVS for eCommerce transactions). But even in that case, good providers will either charge you one flat per-transaction fee to cover authorization costs, or fully disclose additional fees like AVS, Voice Authorization or a backend processor’s pass-through authorization if it’s charged separately. The most exasperating fees are extra authorizations you were never told about, but that occur on pretty much every transaction. The only way to catch these is to scan your statement carefully for those flat per-transaction charges.

The post The Complete Guide to Credit Card Transaction Fees appeared first on Merchant Maverick.

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Small Business Taxes: What Information Does My Accountant Need?

What Information to Bring Accountant for Small Business Taxes

Preparing small business taxes by yourself can be daunting, so hiring an accountant or tax expert is a great way to save time and create peace of mind this tax season. However, you don’t want to show up to your tax appoinment empty handed. Accountants expect you to bring certain documents and be prepared with the information that is needed to complete your tax return.

In this post, we’ll talk about the specific information an accountant needs in order to file your small business taxes. We’ll also provide expert tips and tricks along the way to help make this the easiest tax season yet.

Personal Information

First things first. You will need to furnish your accountant with basic personal information including your legal name, current address, and social security number. The easiest way to provide this information is to bring your social security card to your tax appointment.

If you have an Employer Identification Number (EIN), you will need to provide it, along with your legal business name.

Previous Year’s Tax Return

Make sure to come with your previous year’s tax return. This 1) helps them get a better understanding of your business and 2) gives quick information about the deductions your company has (or hasn’t) been taking.

Financial Business Reports

Your accountant will need copies of your basic financial reports. These include:

  • Profit and Loss Report (or the Income Statement)
  • Balance Sheet
  • Statement of Cash flows

The profit and loss report shows your business’s overall profit ( or loss) for the year, while the balance sheet displays your company’s assets and liabilities. The statement of cash flows shows all transactions affecting your business’s cash account.

Jessica Kent, of the Houston Chronicle, suggests bringing copies of your general ledger and trial balance report as well.

You should be able to print these basic financial reports from nearly any accounting software program, though report availability varies from software to software. Contact your accountant or tax preparer to see if there are any additional reports they might require or find helpful.

Tax Forms

The tax forms your business is required to fill out depends entirely on your business type. These are the forms that may be required for your business:

  • Freelancers and Sole Proprietors: 1040, Schedule C, Schedule C-EZ, 1040-SE
  • Partnerships: 1065, 940, 941, 943
  • S Corporations: 1120-S, Schedule K-1, 940, 941, 943
  • Limited Liability Corporations (LLCs): 1065, 1120-S, Schedule K
  • Single Member Limited Liability Corporations (LLCs): 1040, Schedule C, Schedule E, Schedule F

To be certain about which forms your company is required to file, visit the IRS’s Forms and Instructions for Filing and Paying Business Taxes page. Here you will find specific forms and instructions for each business type. Bring the necessary forms to your accountant in order to file your tax return.

Note that your tax filing date may be affected by your business type. Read Entrepreneur’s First Time Business Owners: A Brief Guide to Tax Filings to learn more about when your business’s taxes are due.

Asset Infomation

Your accountant will need to know about any assets you’ve bought, sold, or depreciated during the last year. Bring any receipts, documents, or reports related to your assets and fixed assets.

Tip: Some accounting programs have fixed asset reports or fixed asset listing that you can run.

Loan Information

You’ll also need information on your business’s loans. If you’ve acquired a new loan in the last year, bring the loan agreement with you. Also, bring records of any loan payments and/or accrued interest. This will ensure that your accountant is up to date on your company’s total assets and liabilities.

Income Records

To verify the income amount on your profit and loss statement, you will need to provide your accountant with income records. According to Kent:

An accountant may request copies of bank statements, deposit slips or sales invoices.

Be sure to have these records available.

Expense Records

In order for your accountant to verify your company’s expenses and find you the correct deductions, you’ll need to bring several types of expense records as well, including:

  • Receipts
  • Bills
  • Bank statements
  • Credit card statements
  • 1098 Mortgage Interest and Property Taxes form

Be sure to keep these expense record, especially your companies business receipts, well-organized. Not only will your accountant thank you for not handing them a shoebox of receipts, your wallet will thank you too.

What Information to Bring Accountant for Small Business TaxesThe more time your accountant has to spend on your tax return, the more money you pay, so make everything as seamless and easy for them as possible.

Deductible Expense Information

Some business expenses require more than just receipts. So if you’re planning on claiming any of the following deductions, make sure you bring the proper information to your accountant:

  • Home Office Deduction: If you have a separate home office that is used exclusively for business, you may be eligible for the home office deduction. The home office deduction is heavily scrutinized by the IRS. For this reason, make sure you have the proper documentation. The popular credit card processing company Square suggests:

If you have a home office, be sure to take along information related to it. This includes the square footage of your home and the office. In addition, give your accountant the amounts you paid for your mortgage or rent, insurance and utilities, and any repairs you made to your home office.

  • Mileage Log: If you use your vehicle for business purchases, you also may be eligible for a vehicle deduction. Be sure to track all of your mileage throughout the year and bring this log to your accountant or tax professional, along with any receipts related to car expenses. Learn more about how the vehicle deduction is calculated.
  • Travel: Businesses can write off meals, travel, and entertainment expenses. This deduction also can be a red flag for an IRS audit depending whether expenses appear “lavish or extravagant.” For this reason, be sure to bring all receipts and any travel tickets or itineraries to your tax appointment.
  • Donations: If your company makes charitable donations, be sure to bring all documents related to your donations, including receipts and any statements you may receive.

Payroll Data

Your accountant or tax professional will also need your payroll data from the year. Bring copies of your employees W-2s, W-3s, and 1099-MISCs. Also gather health insurance records (as these can count as a business deduction) and any information regarding bonuses.

Inventory Total

Several tax forms require a COGS (Cost of Goods Sold) closing balance for the year. You should already have taken an opening balance of your inventory at the beginning of 2017. Now do another inventory count and bring the results to your accountant so they can properly fill out your tax return.

Other

Bring information related to all stocks and bonds your business has attained or sold during the year. You’ll also need a record of any owner’s investments made into or withdrawn from the company during the year. Square says:

As the owner of a sole proprietorship or LLC, you probably pay yourself by making withdrawals from the business. Your accountant will want to know about these withdrawals made to you personally, plus any information on any investments made by you.

Contact your accountant directly before your tax appointment to see if there is any other information they require.

Final Tax Tips

In addition to having all of your documents ready to go, there are a few other things you can do to be prepared for tax season.

Communicate With Your Accountant

On their blog, Square suggests that talking to your accountant is the key to a successful tax appointment:

…accountants may have a checklist of what they need. When you call to make your appointment, be sure to ask for this checklist.

Start Early

Geoff Williams, in the article 7 Things Tax Preparers Wish We Would Do, says being timely is imperative:

Get your paperwork to your tax preparer early…February is fantastic. March, especially the first half, is fine. But…if you give your material to your tax preparer on April 1, don’t be upset if you end up having to file an extension.

Be Prepared

The popular invoicing software FreshBooks recommends staying on top of your accounting processes:

Keeping proper accounting records throughout the year can make it a lot easier to prepare your return at tax time.

In her article How To Prepare Records for Your Accountant, Susan Ward reminds businesses that being unprepared can cost you, literally:

Accountants are paid by the hour, so the harder you make their job, the more it will cost you.

Stay Organized

One of the biggest ways you can save your business money is by being organized. Having all of your tax information together only goes so far. You accountant or tax preparer needs to be able to find and understand your records with ease. Organizing your business information can make or break a tax appointment.

Final Thoughts

Taking the extra time to gather and organize the proper tax information will help make the tax return process a breeze. If you want to learn how your accounting software can make this process even easier, read How Your Business Accounting Software Can Help You File 2018 Taxes or download our free 2018 Tax Prep Checklist. As always, good luck and happy filing!

The post Small Business Taxes: What Information Does My Accountant Need? appeared first on Merchant Maverick.

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The Complete Guide To Card Brand Fees For Merchant Accounts

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credit card processing fees image

In this guide, we’re tackling a surprisingly tricky and supremely detail-oriented topic in the world of card payment processing: card brand fees. Navigating these fees on your merchant account statement can feel like you’re on a scavenger hunt you didn’t sign up for — and not the fun kind. There’s no avoiding the fact that the devil’s in the details when it comes to card brand fees, but too many merchants overlook or misunderstand them at their own peril. Fortunately, Merchant Maverick is here to help you:

  • Understand card brand fees and how they apply to your specific merchant account.
  • Identify these fees on your statement with our reference list of commonly-charged card brand fees.
  • Discern if your card processor is ripping you off by messing with these fees.

Let’s dive right in, shall we?

Table of Contents

Card Brand Fees VS Interchange Fees

Wait, aren’t these the same thing? If you thought so, you’re not the only one. Many merchants are surprised to learn that interchange fees and card brand fees are two completely separate types of fees. If this includes you, then you are about to join the elite class of merchants who understand the difference!

The common conflation of these two fee types stems from the fact that both are considered part of the “wholesale” cost of card processing, as opposed to the “markup.” In processing lingo, “wholesale” simply means that your processor must pay these fees to a separate entity in the processing chain instead of keeping the money for its own use.

The key distinction between these two sub-categories of wholesale fees, therefore, is which link in the chain is owed each fee. Here’s the difference: An interchange fee goes to to the customer’s card-issuing bank, while card brand fees are ultimately paid to the actual card brands themselves (e.g., Visa, MasterCard, Discover, American Express).

For both of these wholesale costs, card processors and the merchant services providers (MSPs) who manage your accounts are faced with a choice. Do they itemize and “pass-through” these wholesale fees directly to the merchant? Or, do they absorb the wholesale cost into the pricing structure in other ways, perhaps by charging a higher processing rate or monthly fee? Or, do they use some solution in between?

As a merchant, you’re tasked with knowing how your own MSP handles wholesale fees — both interchange and card brand. We’re only addressing card brand fees in this article. For more on interchange fees and how the different pricing models (such as interchange-plus) incorporate them, see our complete guide to rates and fees.

Card brand fees are typically either a percentage of volume charge or a flat amount per instance. Some apply to all your transactions, while others only apply in very specific situations, such as when an authorization is abnormal in some way. We’ll cover these individual fees and their circumstances in the itemized list at the end of this article.

The good news is that card brand fees have set, established amounts across the industry. Like interchange fees, they’re considered non-negotiable, and the processor has no control over the amounts. The bad news is that finding the true wholesale amounts for card brand fees is generally more difficult than looking up interchange rates.

Before we delve into why these fees are so pesky, note that they’re also called card network fees, card association fees, or assessments (although, as you’ll see, an “assessment” is technically a specific sub-category of card brand fee).

Card Brand Fees Are Especially Tricky

Due to several regrettable quirks of the processing industry, card brand fees are particularly complicated and opaque. Here are the primary reasons:

  • They’re not displayed on the card brand websites. By contrast, interchange tables are readily available at the Visa and MasterCard websites.
  • You can’t call the card brands and ask about the fees. You’ll be redirected right back to your own MSP to answer any questions. It’s incredibly frustrating that we can’t rely on the card brands to disclose these base costs, and instead must rely on processors and MSPs to be honest when they pass the fees through.
  • Multiple fees may apply to the same authorization or transaction. For example, transactions paid with a foreign-issued card incur separate international surcharges on top of the regular assessment that’s applied to all your transactions.
  • The fees change (usually increase) over time. And not all at once. While they’re rarely decreased, sometimes particular fees are eliminated and/or replaced with others. Occasionally, a completely new fee is instituted, to which the only fitting response is…

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  • Many of the fees are known by multiple names and abbreviations, and it’s often difficult to match the names on your own statement with any established names.
  • Two or more fees may be combined into one on your statement, making them hard to identify and verify.
  • The fees can be spread throughout multiple sections of your statement — not grouped all together or even labeled properly — just in case you weren’t already driven bonkers by this stuff. Often, I’ve seen them buried inside “interchange” or “authorization” sections.
  • Brazen processors or MSPs may add their own markups to card brand fees without telling you. Or, they may invent fees and give them card-brand-sounding names. Yuck, right?
  • Most of the fees are small, so can be overlooked as inconsequential. They can still add up quite quickly, but the real issue at stake is the overall honesty and transparency of your provider. Regardless of whether an extra fee or markup here and there isn’t costing you that much, wouldn’t you still rather know about it?

How To Stay On Top Of Card Brand Fees

It’s a shame that merchants can’t rely on Gandalf’s wizardry for this quest. Instead, we suggest you follow our tips for navigating these fees:

  • Be aware that you may be charged only some, or even none, of these fees. This depends on several factors, including 1) your pricing model, 2) what your MSP decides to pass through versus absorb, and 3) what happens with your transactions and authorizations in a given month. With many blended, tiered or flat-rate plans, all or most of the card brand fees are absorbed into the overall cost of your account instead of itemized and passed through to you. There are no guarantees with any pricing model, however, so check your statements anyway!
  • Obtain a list of card brand fees from your merchant account provider. If they’re passing these fees through to you, they should provide a detailed list with the specific names and abbreviations they’re using.
  • Use a secondary, neutral source to confirm fee amounts. Our list below is a great place to start.
  • Keep a running list of the card brand fees you’ve seen on your own statements, along with the amounts. Reference lists are handy, but a personalized list is easier to use and track over time than a litany of every possible fee for every possible circumstance.
  • Processors shouldn’t mark up these fees without clearly informing you. And really, they should leave these fees alone completely. If the fee is charged at all, it should be passed through at cost.
  • Trust the amount more than the name. Identifying a fee on your statement is often more about looking at the rate or amount charged, as well as the specific number/volume/type of transactions to which it was applied. The process of elimination can be very effective here.
  • Definitely be suspicious if you spot extra fees that aren’t on the reference list, any that seem like duplicates or that can’t be matched with established values, or those that look too high. Don’t worry too much if a fee seems too low; it’s possible your processor is just absorbing or redistributing some of the cost.
  • Be on the lookout for fee change notifications. October and April are common transition points, but the fees can change at any time. Good processors will notify you (sometimes on the statement itself) when a card brand fee is set to increase or change. If your processor doesn’t fall in this camp, it’s all the more important that you bookmark this article.
  • Ask before you sign. If you’re just signing up for an MSP or changing providers, ask how it handles card brand fees in addition to interchange costs. Be very clear that you know the difference and want the specifics. Remember, not all customer service reps are created equal in their knowledge of this topic. Ask to be transferred up the chain if you’re not satisfied.

Final Thoughts (Let’s Crowdsource This!)

As merchants, you are on the front lines for tracking card brand fees. We believe your input will be key in keeping our reference list up to date. Some of you have processors who actually do a good job organizing and displaying card brand fees on statements, as well as notifying you of any upcoming changes. Is a fee on our list is no longer accurate? Are we missing a new, legitimate fee? Together, we can also help other merchants whose processors are abysmal at communicating fees, or even cheating business owners. Let’s all team up on this — leave a comment below!
International Service Assessment (ISA)

  • Surcharge owed on transactions that are processed in the US on a card issued outside the US.
  • 1.20% – International Service Assessment (ISA) – Non-US currency
    • Same fee as above, but incurs this higher rate when the transaction is settled in the cardholder’s local currency.
    • 0.45% – International Acquirer Fee (IAF)
      • Applies in same circumstance as the International Assessment above.

    Per-Item:

    • $0.0195 – Acquirer Processing Fee (APF): Credit
      • Owed on all credit transactions for US-based businesses, irrespective of where cardholder/issuer is located.
    • $0.0155 – Acquirer Processing Fee (APF): Debit
      • Owed on all debit transactions for US-acquired businesses, irrespective of where the cardholder/issuer is located.
    • $0.0195 – Credit Voucher Fee (Credit)
      • Owed on all refunds issued in the US via credit card.
    • $0.0155 – Credit Voucher Fee (Debit)
      • Owed on all refunds issued in the US via debit card.
    • $0.0018 – System File Transmission Fee / Base II Fee
      • Owed on all authorized transactions submitted for settlement (in addition to the above transaction fees). Base II refers to Visa’s settlement network.
      • Outdated Visa settlement fees:
        • $0.0025 – Settlement Network Access Fee. Base II fee may still be called by this name but should be $0.0018.
        • $0.0047 – Kilobyte (KB) Access Fee. Should not be charged in addition to the above.
    • $0.10 – Transaction Integrity Fee (TIF)
      • Owed on a debit or prepaid Visa transaction that fails to meet CPS requirements (e.g., not settled in 24 hours, no AVS submitted on a keyed transaction).
    • $0.09 – Misuse of Authorization Fee
      • Owed when a transaction is authorized, but not followed by a matching cleared transaction, or when a canceled or timed-out authorization is improperly reversed.
    • $0.20 – Zero Floor Limit Fee
      • Owed when the merchant submits a settlement transaction without an authorization.
    • $0.025 – Zero Dollar Verification Fee
      • Owed when the merchant verifies a cardholder’s information (e.g., AVS, CVC2) without authorizing a transaction.

    Other:

    • Varies – Fixed Acquirer Network Fee (FANF)
      • A flat fee based on your volume per month, type of business (Merchant Category Code or MCC), number of locations, etc. Typically charged quarterly or monthly. Learn more about the FANF here.

    MasterCard Network Fees

    Volume-Based:

    • 0.12% – Assessment / Acquirer Brand Volume Fee – Transactions <$1,000 and all Signature Debit
      • Owed on gross commercial and consumer credit transactions less than $1,000, as well as all signature debit.
    • 0.14% – Assessment / Acquirer Brand Volume Fee – Transactions >$1,000)
      • Owed on gross commercial and consumer credit transactions exceeding $1,000; excludes signature debit. Note: May be listed as 0.02% surcharge over the above assessment.
    • 0.0075% – Acquirer License Fee (ALF) / License Volume Fee 
      • Owed on gross transaction volume. Increased from 0.0045% Oct. 2017. Note: sometimes combined with the above assessments, bringing the totals to 0.1275% and 0.1475%, respectively.
    • 0.60% – International / Cross-Border Assessment Fee (Domestic)
      • Surcharge owed by US-based merchants on transactions on a card issued outside the U.S. settled in USD. (Similar to Visa’s ISA.)
    • 1.00% – International / Cross-Border Assessment Fee (Foreign)
      • Same fee as above, but incurs this higher rate when the transaction is settled in the cardholder’s local currency. (Similar to Visa’s ISA.)
    • 0.85% – International Acquirer Program Support Fee
      • Applies in same circumstance as the Cross-Border Assessment above. (Similar to Visa’s IAF.)
    • 0.01% – Digital Enablement Fee
      • Owed on all card-not-present transactions for signature debit, consumer credit, and commercial credit cards.
    • 1.57%Global Wholesale Travel Transaction B2B
      • Owed instead of regular assessments, international surcharges, and NABU fees when the MasterCard B2B (MSB) card product has been used. Applies to a specific set of Merchant Category Codes (MCCs) in the travel and entertainment sector.

    Per-Item:

    • $0.0195 – Network Access and Brand Usage Fee (NABU Fee)
      • Owed on all US-based authorizations, regardless if settled. (Similar to Visa’s APF, Discover’s Data Usage Fee.)
    • $0.0044 – Kilobyte (KB) Access Fee
      • Owed on each authorized transaction submitted for settlement. Note: we’re in the process of checking to see if it’s still charged.
    • $0.01 – AVS Fee (Card-Not-Present)
      • Owed on card-not-present transactions processed using Address Verification Service (AVS). Often shows up on a statement under “Authorizations.”
    • $0.005 – AVS Fee (Card-Present)
      • Owed on Card-Present transactions processed using AVS. Often shows up under “Authorizations.”
    • $0.0025 – Card Validation Code Fee
      • Owed on all transactions involving CVC2 authorization.
    • $0.025 – Account Status Inquiry Fee
      • Owed when a merchant verifies AVS or CVC2 without authorizing a transaction.
    • $0.03 – SecureCode Transaction Fee
      • Owed on all MC SecureCode verification attempts (SecureCode service requires merchant signup).
    • $0.055 – Processing Integrity Fee
      • Owed for transactions that do not comply with best practices for transactions (i.e., not properly cleared/settled/reversed within MasterCard’s time frames for the type of transaction). Below are similar fees for other types of authorization integrity issues:
        • $0.045 – Processing Integrity Fee, Pre-Authorization
        • $0.045 – Processing Integrity Fee, Undefined Authorization
        • $0.040 minimum, or 0.25% – Processing Integrity Fee: Final Authorization
    • $0.012 – Processing Integrity Fee Detail Reporting
      • Owed on any authorization that generates a processing integrity fee for pre-authorization, undefined authorization, or final authorization.

    Other:

    • $1.25/mo. ($15 per year) – Merchant Location Fee
      • $15 annually for each location with traditional MSPs/processors ($3 annually for payment facilitators like Square). Not applicable to merchants processing under $200/month, nor to charitable or religious organizations.
    • $500 – Yearly Registration Fee
      • For online e-cigarettes/vaping businesses.

     Discover Network Fees

    Volume-Based:

    • 0.13% – Assessment
      • Owed on gross transaction volume.
    • 0.55% – International Processing Fee
      • Owed on US-based transactions processed with a card issued outside the U.S.
    • 0.80% – International Service Fee
      • Applies in same circumstance as the International Processing Fee above.

    Per-Item:

    • $0.0195 – Data Usage Fee
      • Owed on all authorized transactions. (Similar to Visa’s APF and MasterCard’s NABU Fees.)
    • $0.0025 – Network Authorization Fee
      • Owed on all authorized transactions. Replaced the Data Transmission Fee in 2013, which only applied to settled transactions.

    American Express OptBlue Network Fees

    American Express OptBlue

    Volume-Based:

    • 0.15% – Assessment
      • Owed on gross transaction volume.
    • 0.40% – International Assessment / Inbound Fee
      • Surcharge owed on transactions involving a card issued outside the US.
    • 0.30% – Card-Not-Present Surcharge
      • Surcharge owed on any transactions considered CNP, including keyed and ecommerce transactions.
    • 0.75%Technical Specification Non-Compliance
      • Owed on transactions that do not meet Amex standards, such as an authorization not obtained at the same time as a sale. Much rarer than Visa and MasterCard fees for transaction integrity problems.

    Per-Item:

    Rose Holman

    Rose’s eclectic professional background includes teaching, research, retail, non-profits and music. Upon returning to her Pacific Northwest roots following a four year stint in the tiny country of Luxembourg, she immediately applied her innate curiosity and lifelong love of explaining stuff to the world of merchant accounts. Her hobbies include devouring podcasts, practicing minimalism, and singing four-part harmony with her husband and two kids.

    Rose Holman

    “”

    Merchant’s Help guide to Stopping Card-Present Fraud

    Charge card fraud, for most of us, invokes 1 of 2 scenarios. First, you will find data breaches à la Target or Lowe’s, where thieves connect to the system and steal charge card figures, names, along with other data. Beyond that, you may consider online card fraud, where shady people use stolen card figures (sometimes acquired in data breaches such as the formerly pointed out ones) to purchase a lot of stuff online. Even though you start digging into ways retailers can safeguard against card fraud, the overwhelming quantity of sources are directed at eCommerce an internet-based transactions, and the ways to prevent fraud there. There isn’t many details whatsoever about card-present fraud — that’s, transactions which are still not legitimate but occur inside a store, in which the card is swiped or dipped.

    Overall, card-present charge card fraud is really a smaller sized bit of the cake than online fraud, that is likely why there is a disproportionate quantity of sources regarding internet-based cons. But it’s still necessary that retailers take each step they are able to to safeguard themselves. Which includes being aware of what risks you face within the brick-and-mortar atmosphere.

    Table of Contents

    Understanding the kinds of Charge Card Fraud

    I’m penning this mostly to describe how to prevent fraud. I shouldn’t enter into all the various scams and methods that fraudsters use because you can write a little ebook about them. But generally, all charge card fraud (or bank card fraud) falls into 1 of 3 groups:

    • Cloned/Counterfeit Card Fraud: This is a kind of card-present fraud in which the fraudster forges a card with another person’s username and passwords and uses it inside a brick-and-mortar storefront.
    • Lost/Stolen Card Fraud: This kind of fraud is most familiar to consumers, and sure concern for a lot of retailers: a fraudster using another person’s card to create a transaction (frequently a really large one). This could happen online or perhaps in a store.
    • Card-Not-Present Fraud: Any kind of fraudulent online transaction falls into this category, simply due to the credit card not swiped or dipped. While there are several tools retailers may use to mitigate this risk, generally, it’s the easiest kind of fraud to commit. CNP fraud comprises nearly all card fraud, especially as EMV makes it harder to clone or counterfeit cards.

    It is also important to note there’s a couple other kinds of fraud retailers have to be cautious about:

    • ATM Fraud: Scammers uses a couple of different tactics to obtain either money or card data from ATMs, including installing card skimmers (we’ll discuss individuals inside a bit) or deliberately blocking the money distribution mechanism. For those who have an ATM on-site at the business, be familiar with it as being a possible target.
    • Check Fraud: Checks are certainly decreasing. Actually, based on the Fed, the entire quantity of check payments produced in the U.S. fell typically 6.2 percent each year from 2000 to 2012, and from 2012 to 2015, fell by typically 4.4 % yearly. In 2015, consumers authored as many as 19.4 billion checks, that was a complete loss of 3.1 billion over 2012 figures. However, the Given also reports that the need for the checks risen has elevated — and therefore while individuals are writing them less often, they have a tendency to create them for more and more bigger purchases. Check acceptance isn’t universal, however if you simply do accept checks, utilizing a digital service for example Telecheck to instantly convert payments and flag dangerous transactions is a great way to safeguard yourself.

    I am not likely to really enter into CNP fraud, as the majority of it requires running an eCommerce store. This short article won’t cope with ATM or check fraud in-depth simply because they don’t affect nearly all retailers. Our focus is particularly card fraud at brick-and-mortar stores, whether it is debit or charge card related.

    The Charge Card Fraud Game-Changer: EMV

    Before the EMV liability shift required place, fraud experts were predicting that CNP fraud would increase with a tremendous amount in america because other nations that implemented EMV observed an identical pattern, and individuals predictions have held true. Credit monitoring agency Experian reported a rise of CNP fraud totaling 33% when compared with 2015.

    One of the reasons for elevated CNP fraud may be the development of shopping online. As increasing numbers of use online, the entire amount of charge card fraud is likely to increase. However, the rollout of EMV can also be playing a job within the increase of card-not-present fraud.

    Particularly, the chips in EMV cards tend to be harder to repeat and reproduce than the usual magstripe card (which is dependant on technology straight from the 1970s). So rather, scammers are switching to purchasing online, where you can find no techniques to physically authenticate the credit card. Rather, most security checks depend around the CVV or AVS checks to recognize suspicious transactions.

    That’s not saying cloned or counterfeited cards aren’t an issue whatsoever. They’re. EMV market saturation in america isn’t 100%, as well as if consumers have nick cards, that does not mean retailers are outfitted to simply accept nick cards. As well as if counterfeited card fraud is decreasing, there’s still lost/stolen card fraud to bother with.

    6 Methods to Reduce Charge Card Fraud in Brick-and-Mortar Stores

    So, your house you need to antiques store. Someone is available in to purchase some furniture for his or her new house. Two days and a few 1000 dollars later, you discover the card used would be a stolen card. The cardholder has filed a chargeback, meaning the entire transaction amount continues to be deducted from your bank account and put on hold pending analysis. Not just that, but you’re the actual merchandise, effectively doubling whatever is lost.

    Regrettably, this could and does occur to retailers. Although some industries are much more likely than the others to become victims of card fraud, any and each business should know the potential risks and take safeguards.

    Which industries are most in danger? Based on an american Bank presentation, a few of the MCCs (merchant category codes, accustomed to identify the kind of services or products a business offers) which are most focused on fraud range from the following:

    • 5411: Supermarkets and Supermarkets
    • 5732: Electronics Stores
    • 5812: Dining Establishments and Restaurants
    • 5999: Miscellaneous and Niche Stores
    • 4722: Travel Agencies and Tour Operators
    • 5311: Shops
    • 5661: Shoe Stores

    Exactly what do you need to do to safeguard yourself? To begin with, you should know of whether you’re in the kind of industry that’s enjoy being focused on card-present fraud. A dry-cleaning business or perhaps a cafe? Most likely less. An gallery, a furniture or electronics store, or other business where consumers can drop hundreds or 1000s of dollars all at once? Most certainly a target.

    Second, make certain you implement procedures and policies that will help mitigate fraud. We’ll begin with a very fundamental one, that we suspect lots of retailers overlook:

    1. Check Network Guidelines for Card Acceptance

    I mention mtss is a lot — by a great deal, I am talking about in nearly every review I write — but READ YOUR CONTRACT. Understand what you’re signing and just what rules and needs you’re being certain to. It’s important to maintain your credit card merchant account open so that you can keep accepting cards. But it’s also wise to consider the merchant guidelines the various card systems (Visa, MasterCard, American Express and Uncover) offer. They often cover guidelines for example displaying marks of acceptance, surcharging, and minimum/maximum transaction amounts. Hidden in individuals guidelines will also be policies which cover safety measures you’re likely to take and list of positive actions if you feel a card is fraudulent or even the transaction otherwise seems suspicious.

    To help you get began, I suggest checking the Visa card acceptance guidelines, in addition to MasterCard’s rules.

    2. Secure Your POS and Hardware

    What is POS

    In addition to the threats resulting from counterfeited or stolen cards, it’s also wise to be familiar with the opportunity of an information breach. If a person has the capacity to access the body and compromise your customers’ private information, it may be devastating for both you and your business. Data breaches can occur in lots of ways.

    Among the apparent ones is skimming, in which a fraudster installs a tool over your terminal or pin pad that captures the credit card data and stores it. Skimmers may take only seconds to set up and therefore are difficult to place unless of course you are aware how to acknowledge the twelve signs. Scammers may also result in a data breach by using adware and spyware in your POS system or else hacking it. They are more complex techniques in most cases directed at high-value targets, but they’re possible you should know of, particularly if you store any type of customer data.

    PCI Compliance: What you ought to Know

    Technically, PCI DSS compliance (usually just known as PCI compliance) isn’t just about POS systems. Sturdy your hardware, too. More often than not that’s lumped along with your POS, though, particularly if you come with an integrated solution.

    PCI DSS means Payment Card Industry Data Security Standard. It’s a unified policy indicating the steps retailers have to take to secure their transaction data through hardware and also the POS system, laid by the PCI Security Standards Council. Retailers are sorted into certainly one of four levels with respect to the type and number of transactions yearly. Most small companies are Level 3 or Level 4, that have the least steps to consider to keep compliance.

    There’s an excellent chance that, should you didn’t construct your system yourself, you’re already PCI compliant. Software and equipment vendors will need to go via a certification process when they handle payment card information. However, should you store any customer data (particularly in a database you develop and keep yourself) or route it via a website you maintain yourself, that won’t function as the situation. You need to speak to your credit card merchant account provider or software vendor by what steps are needed to make sure your compliance. You might be needed to accomplish quarterly scans or self-assessments.

    PCI compliance could be summarized into 12 points of action lumped into six groups. The reason here is obtained from the PCI SCC Quick Reference Guide.

    Build and keep a safe and secure Network
    1. Install and keep a firewall configuration to safeguard cardholder data.
    2. Don’t use vendor-provided defaults for system passwords along with other security parameters.

    Safeguard Cardholder Data
    3. Safeguard stored cardholder data.
    4. Secure transmission of cardholder data across open, public systems.

    Conserve a Vulnerability Management Program
    5. Use and frequently update anti-virus software or programs.
    6. Develop and keep secure systems and applications.

    Implement Strong Access Control Measures
    7. Restrict use of cardholder data by business have to know.
    8. Assign a distinctive ID to every person with computer access.
    9. Restrict physical use of cardholder data.

    Regularly Monitor and Test Systems
    10. Track and monitor all use of network sources and cardholder data.
    11. Regularly test home security systems and procedures.

    Maintain an info Security Policy
    12. Conserve a policy that addresses information to safeguard all personnel.

    For retailers, I believe the important thing takeaway is the fact that PCI compliance (and knowledge peace of mind in general) isn’t a one-and-done type deal. You have to positively take preventive steps and monitoring the body, from updating software and firmware when updates seem to watching the employees and ensuring they’re educated on card security issues and proper procedures to handle.

    Beyond PCI Compliance: How to maintain your POS (and knowledge) Secure

    Learning all the intricacies of PCI compliance is most certainly challenging for anybody, the experts! However, since, data security isn’t something take proper care of once rather than consider again, you need to certainly take a moment to discover security.

    Two big terms at this time are file encryption and tokenization. PCI DSS signifies that the POS and hardware should secure transactions. There’s two major kinds of file encryption, point-to-point and finish-to-finish.

    Tokenization isn’t yet a business standard, though it’s increasingly common, mostly because of NFC/contactless payments. Tokenization generates a 1-time-use card number and substitutes it for that actual card number. Even when information is breached and decrypted, that tokenized number is useless to scammers. That’s just how Apple Pay and Samsung Pay and Android Pay keep the card data secure: Your card number is kept in a cloud vault which your phone have access to. Your phone generates the token and passes it to the system, which verifies the amount.

    If you would like to understand more about how you can secure your POS, check out our POS 101 article around the subject, in addition to PC Mag’s article regarding how to place skimmers.

    3. Capture Signatures, Even on Low-Value Transactions

    accept mobile credit card payments

    Credit (and debit) cards possess a space around the back for customers to sign them because, theoretically, retailers are meant to compare that signature towards the one around the receipt as a way of verification. The truth is couple of or no retailers really do that.

    Within the interest of speeding along transactions, particularly in environments where customers be prepared to be interior and exterior the checkout fairly rapidly, the credit card systems have relaxed their guidelines with no longer need a signature on all transactions. Low-value transactions (under $25 or $50 with respect to the network) frequently waive the signature requirement.

    mPOS systems — Square, PayPal Here, SumUp, etc. — plus some POS systems frequently allow retailers to disable signatures on low-value transactions. For mPOS systems, the brink is generally $25. For full-fledged POS systems, that threshold may also be in the merchant’s discretion.

    Realistically speaking, quick-serve cafes and restaurants, supermarkets, etc., where you’re likely to encounter low-value transactions, aren’t an enormous risk. And also the losses, unless of course you’re experiencing a huge string of fraudulent transactions, are minimal. It isn’t that you simply absolutely must enable signatures on all transactions to safeguard yourself. That’s not true. However if you simply want to maximise your protection out on another mind the additional time to gather a signature throughout the checkout phase, you are able to enable them.

    For top-value transactions, you need to absolutely be collecting signatures on everything. Actually, for large transactions, signed invoices are an easy way to safeguard your company and reduce the chances of chargebacks.

    4. Request Customer Identification

    Some consumers, rather of filling out the backs of the cards, decide to write “SEE ID” for the reason that space. This informs retailers they ought to request a photo ID and compare it towards the name around the card.

    A great practice. Not every retailers get it done, especially with increasingly more consumer-facing PIN pads and terminals in which the cashier never handles the credit card.

    But there’s only one small problem:

    A merchant can ask to determine a photograph ID for any transaction, but legally, the customer isn’t obligated to supply it. Visa’s guide, 5 Important Visa Rules That Each Merchant Ought To Know, explains it such as this:

    “A Merchant may request cardholder identification inside a face-to-face atmosphere. When the name around the identification doesn’t match the name around the card, the merchant could decide whether or not to accept the credit card. When the cardholder doesn’t have, or perhaps is reluctant to provide, cardholder identification, the merchant should recognition the credit card should they have acquired evidence of card presence, a legitimate authorization, along with a valid signature or PIN.”

    Therefore if a person provides an ID that does not match the name around the card, the merchant can pick to say no the transaction. When the customer will not offer an ID or doesn’t have one, Visa’s rules condition that you ought to process the transaction, provided you will find the card in hands plus they sign or enter their PIN.

    That stated, requesting ID continues to be generally a great policy. Just be familiar with the credit card systems acceptance rules (see point #1 above).

    5. Avoid Keyed Transactions

    It’s story time!

    A lengthy, lengthy time ago (OK, a lot more like eight years back), after i labored like a cashier somewhere that shall ‘t be named, I recall from time to time getting to place a card inside a plastic grocery bag and swipe it to obtain the POS to see it. I’m still unsure why this labored, however it did. Them which had this issue were usually old and worn — sometimes worn to the stage the elevated figures weren’t as elevated because they must have been, and also the whole card appeared thinner, even extended. They often left worn-lower, overstuffed wallets, therefore i just generally assumed the put on evolved as the result of in which the card was stored. Sometimes, though, even that didn’t work, since the card might have a split inside it within the magstripe or it simply wouldn’t read. In individuals cases, I could (and did) by hand go into the card.

    I do not determine if the cards I processed by doing this were fraudulent, but I know since it was a danger. Card network guidelines, in addition to other security experts, suggest that you inspect the physical card for indications of damage or tampering before you decide to process a transaction. Broken cards — particularly if it normally won’t swipe — can (but don’t always) indicate counterfeit or cloned cards. Entering the transaction means the POS does not have to physically look into the card, because it’s treated like a card-not-present transaction.

    First, keyed transactions always are more expensive than swiped or dipped ones. PayPal and Square both charge 3.5% + $.15, that is well over the 2.7% and a pair of.75% (correspondingly) they charge for swiped or dipped transactions. Traditional merchant services may also assess a greater fee, although it varies more.

    Second, getting a lot of keyed transactions is frequently a warning sign for a free account provider. It shows that someone may be processing cards that aren’t even physically contained in the shop, that is, clearly, a large no-no. A particular quantity of keyed transactions should be expected, but a lot of can result in a hold, freeze, or termination.

    So your very best to prevent entering card information, because this will safeguard your company. Most security experts also recommend searching at the processing background and making note associated with a patterns — whether these transactions happen in a particular time consistently, or maybe one cashier is much more vulnerable to keyed transactions than the others.

    6. Change to EMV Acceptance

    EMV credit card terminal

    Should you not curently have a POS and hardware that accepts EMV transactions, it’s about time you are making the switch. No exceptions, no excuses. Yes, it may appear costly, you will find, the EMV rollout continues to be rather slow partly due to the backlog on hardware and software certifications. But there are many EMV-certified hardware and software open to retailers. If you were postponing the switch, just start it already. It’s probably the most important methods for you to safeguard your company from charge card fraud.

    Like I stated earlier, it’s a great deal harder (not possible, but very, very hard) to repeat a nick card. That is why many scammers are relocating to CNP fraud. On October 1, 2015, liability for fraudulent nick card transactions shifted in the banks to “the least-secure party,” which within this situation means retailers who aren’t outfitted to simply accept EMV.

    Remember the instance I began with, using the antique furniture. Repeat the person purchasing the products have a counterfeit nick card. However, you, the merchant, have only a magstripe readers. If you’d had an EMV readers, it could have been in a position to identify the card was fraudulent. But rather, you processed the magstripe transaction — which leaves you entirely responsible for the entire mess.

    The problem could be different when the fraudster were built with a stolen EMV card and tried on the extender in an EMV terminal. For the reason that situation, the liability would fall around the card provider.

    Should you haven’t already, get EMV-capable card-readers and make certain your POS is EMV certified, too. It’s absolutely worthwhile, and every one of our top-rated merchant providers offer EMV acceptance, just like our top-rated mPOS providers.

    Conclusion: How Large a danger is Card-Present Charge Card Fraud?

    Realistically, retailers who sell online face an even bigger threat than brick-and-mortar retailers. That’s largely because of the EMV liability shift and rollout of nick cards. Unfortunately, even nick cards can’t safeguard against stolen or lost card fraud. And until EMV market saturation hits 100%, there’s still a danger of accepting counterfeit cards.

    Fortunately, you are able to take measures to safeguard your and yourself business. Understanding is power, especially within the payments industry. So review your processing contract, the credit card networks’ laws and regulations, and also the legal matters affecting your industry. Make certain that you simply keep the POS secure, out on another overlook simple defenses for example collecting signatures or requesting IDs, and keeping keyed transactions low. Applying EMV, should you haven’t already, is among the most critical methods for you to safeguard your company.

    If you have questions, we’d like to respond to them! Take a look at our comment guidelines by leaving your question inside a comment. Thanks for studying!

    Melissa Johnson

    Melissa Manley is definitely an independent author and editor who loves e-commerce, internet marketing, technology, and social networking. Not so long ago, she earned a journalism degree, but she continued to uncover that they could work at home, researching, editing, and covering the items she found most fascinating. When she’s not associated with her laptop, Melissa usually can be based in the kitchen, studying a magazine, or doing something from the nerdy persuasion.

    Melissa Johnson

    “”

    What’s Visa’s Worldwide Service Assessment Fee?

    Visa’s International Service Assessment Fee credit card image

    Nobody likes having to pay extra charges, especially retailers who need to pay them included in maintaining a free account so their clients may use charge cards. Extraneous, poorly-disclosed charges would be the bane from the processing industry, also it appears such as the various entities involved with charge card processing think of a new method to take some more income from your pocket each time your monthly statement is available in.

    In the following paragraphs, we’re likely to discuss one of individuals annoying charges – the Visa Worldwide Service Assessment (ISA) fee. You may think that, like a US-based merchant, you do not need to bother about this charge. However, you may still finish up having to pay it even though you don’t conduct business outdoors from the U . s . States. Actually, this fee applies clearly to transactions that occur within the united states, but they are compensated for having a Visa-branded debit or credit card from an overseas bank.

    Table of Contents

    Just When Was the Visa Worldwide Service Assessment Fee Billed?

    Any transaction from a US-based merchant along with a non-US-based card provider is susceptible to the Worldwide Service Assessment fee. The charge applies whether a debit or charge card can be used, and if the transaction is card-present (i.e., retail) or card-not-present (eCommerce or by hand joined). If you are an eCommerce merchant, you will be billed the ISA fee once your foreign customers buy something using cards issued within their home countries.

    For retail retailers, the most typical illustration of the use of this fee could be whenever a foreign tourist going to the U . s . States uses their charge card to buy. However, the citizenship from the customer is not an issue in figuring out whether this fee applies. While generally individuals have cards from banking institutions found in the same country they live in, there are more options. Here’s a good example: Your house a united states citizen resides and dealing in Germany. He’s cards from both an american bank along with a bank in Germany. If he makes use of the credit card in the German bank to buy from the US-based merchant (either personally or online), the ISA fee is going to be billed because Visa needs to coordinate using the German bank to process the transaction.

    Just How Much may be the ISA Fee?

    When Visa first started charging the Worldwide Service Assessment Fee (ISA) in April 2008, it set the charge in a flat .40% if there wasn’t any foreign exchange involved. Having a foreign exchange, the charge was bending to .80%. Observe that this really is additionally towards the standard interchange rate that will affect the transaction. On April 18, 2015, Visa elevated the ISA fee considerably. With no currency conversion, the charge has bending to .80%. Having a conversion, it’s now 1.20%.

    Visa’s rationale with this fee was it needed extra effort to process a transaction via a foreign bank than via a domestic one. While this can be true, the actual reason behind the additional fee is more prone to function as the additional risk connected with transacting having a foreign bank. Let’s be obvious: this isn’t always a legitimate concern. Yes, lots of banks all over the world aren’t as stable and secure as individuals within the U . s . States. However, there are lots of more – specifically in Europe, Canada, and Australia – which are controlled just like strictly (or even more so) as individuals in america. Naturally, it’s simpler for Visa to use a blanket fee to any or all affected transactions instead of singling out individual countries or banking institutions based on the actual risk.

    How About the Visa Worldwide Acquirer Fee (IAF)?

    Yes, actually: you will find really two extra charges that Visa charges for implementing an overseas-issued card in america. The Visa Worldwide Acquirer Fee (IAF) was initially implemented in 2009, also it applies under the very same conditions because the Visa Worldwide Assessment Fee. This fee is bound at .45% and is additionally towards the regular interchange rate and then any other charges that could apply.

    So, for those who have an affected transaction, you will probably see both charges put into your processing costs. Since Visa always charges a typical assessment fee of .11%, you will probably pay yet another 1.36% (.11% + .45% + .80%) on all affected transactions, despite no currency conversion. Having a conversion, you’ll pay an additional 1.76%.

    Who Pays the Worldwide Assessment Fee?

    From the merchant’s perspective, it could appear fair for that customer to need to pay this extra processing cost. Sorry, retailers, existence isn’t fair – nor is that this fee. Since Visa doesn’t have method of billing you directly for that ISA fee, you pay it for your processor rather. In many, although not all, cases, your processor will pass the price onto you, and it’ll appear like a separate charge in your monthly credit card merchant account statement. Passing the cost onto you is determined by two factors: 1) which kind of prices plan your processor uses, and a pair of) whatever policy your processor has regarding additional charges that do not affect most transactions.

    If you are with an interchange-plus prices plan (which we advise generally), you’ll spend the money for ISA and IAF charges on the top of both standard interchange rate and whatever markup your credit card merchant account provider bills you for every transaction. Because interchange-plus minute rates are generally low, these charges can greater than double the price of processing a transaction.

    Tiered prices plans work just a little differently. Your processor might pass the charges on at cost, or they may downgrade your transaction and ask you for a nonqualified transaction rate. You are able to bet when they pick the latter method, it’s since it can lead to a greater overall processing cost. Quite simply, they’ll really create a slight profit from the fee that they’re creating for you. This is among a lot of reasons why we advise you avoid tiered prices plans if possible.

    In case your provider utilizes a flat-rate prices plan (for example Square) or perhaps a subscription-based prices method (for example Fattmerchant), there is a decent chance that you simply won’t be required to pay another fee for worldwide transactions. And should you choose, it will likely be handed down at cost, with no additional markup. The easiest method to learn how your provider handles these kinds of charges would be to talk to your contract documents. Your liability for worldwide transaction charges like the Visa ISA fee ought to be typed in the Conditions and terms part of your contract. Bear in mind, however, there may not be a particular reference to the Visa Worldwide Service Assessment fee. Rather, you will probably find a clause proclaiming that “other fees” might be forwarded to you in the provider’s discretion.

    Final Ideas around the Visa Worldwide Service Assessment Fee

    In situation you haven’t already observed, we currently reside in age a globalized economy, where technological advancements (such as the internet) have damaged lower most of the barriers that formerly limited worldwide commerce. Transactions between US-based retailers and worldwide banking institutions have become more prevalent constantly, which trend is only going to keep growing later on. Extra charges for processing card transactions across national borders are, regrettably, most likely not going anywhere soon also.

    In evaluating the fairness from the Visa Worldwide Service Assessment fee, we’ve arrived at the reluctant conclusion that, yes, this fee most likely is justified through the additional risk connected with worldwide transactions. However, we feel totally strongly the current amount that Visa is charging is disproportionately high with regards to the particular worth of the service provided. We think that charging two separate charges (the ISA and IAF charges) for the similar factor can also be essentially unfair to retailers.

    Regrettably, there isn’t any good way to avoid having to pay this fee generally. eCommerce retailers depend on worldwide customers to increase their sales, and would most likely shed more pounds money by cutting them off compared to what they would save by staying away from this fee. Retail retailers, who generally will just spend the money for ISA fee from time to time, are unlikely to keep yourself informed that they’re accepting an overseas-issued card during the time of purchase. Visa isn’t the only real card association charging extra for worldwide transactions, either. MasterCard charges a Mix-Border Fee underneath the same conditions, and yet another major charge card brands also charge similar charges.

    So, basically we don’t like Visa’s Worldwide Service Assessment fee, we must admit that it is yet another “cost to do business” that you will need to pay for everyone an worldwide clientele. For more information around the various interchange charges that Visa charges, browse the current form of their interchange reimbursement charges document.

    “”