Merchant Accounts

If you are a new or existing business looking for a merchant account you have come to the right place. We have the ability to get you signed up and accepting credit and debit cards in your business. If you are unsure which type of merchant account you need, click here to learn more.

• Merchant Services Quote
• What is a Merchant Account?
• How does a Merchant Account work?
• Advantages of a Merchant Account
• Understanding Rates and Fees
• Understanding Terminology

What is a Merchant Account?

A merchant account allows businesses to accept credit and debit cards as payment for goods and services provided.

How does a Merchant Account work?

Card payment transactions are entered through a terminal or software, the information is then sent to the processing bank and credit or debit card network for approval. The approval is returned to the merchant’s terminal or software and the sale is completed. After the sale, the customer’s credit card or bank sends the money through the credit/debit network where it is routed into the designated deposit bank account associated with the merchant account.

Advantages of a Merchant Account

We want to educate you so you know you are making the right choice to sign up for a merchant account.

It is more and more common to find people who do not use cash or checks to make purchases. An ever increasing number of people are embracing credit cards and check debit cards as a preferred method of payment. People want to use cards for a variety of reasons, e.g. accumulate rewards such as cash-back or airline miles, buyer protection and tracking spending.

Allowing your customers the option to purchase goods and services from you with their credit or debit cards means more sales for you. Only accepting cash and checks may seem like less hassle for you and a merchant account may seem like an extra operating cost.

But the cost in lost sales by not accepting credit cards for payment will be far more than the small percentage it costs to accept cards.

• Increase your average sale amount, customers aren’t limited by the cash in their wallet
• Promote customer satisfaction and confidence by allowing them to choose how they want to pay
• Speed up checkout time by eliminating counting cash and returning change or waiting for customer to write out a check
• Simplify accounting and reduce errors and theft by not having large amounts of cash

As business changes, merchants must find ways to adapt and be profitable. Accepting credit and debit cards will aid your business and we are here to help you.

Understanding Rates and Fees

When you start shopping for a merchant account you will mostly hear about qualified rates and transaction fees. There is more to the picture than that.

Basically every card transaction is charged an Interchange rate, also known as a discount rate, which is a percentage of the actual transaction amount. The second fee that every card transaction has is a transaction fee or assessment fee. This is a flat fee that depends on the type of card and the card brand, i.e. Visa®, Mastercard®. There are many card types but in general you have standard credit cards, rewards cards, corporate cards and debit cards as well as government cards. Debit cards must have a Visa® or Mastercard® logo on them.

Three Tier Pricing

Since there are literally hundreds of card types each with their own Interchange rate, the merchant service industry has simplified the rate structure by grouping Interchange rates into a three tier system consisting of qualified, mid-qualified and non-qualified rates.

Qualified rates are the lowest since they carry the least risk and lowest processing cost. A standard credit card swiped, signed and batched or settled (transmitted to processing bank) within 24 hours will be charged a qualified rate.

Mid-qualified rates are higher due to the increased processing fees or higher risk associated with the card or transaction type. A swiped and signed rewards card, settled within 24 hours will be charged at the mid-qual rate.

Non-qualified rates are the highest since they have a higher risk with card type and transaction type like an internet based sale. An online sale transaction without a CVVS code will be charged as a non-qual card.

Be wary of low qualified rates, you must look at the quoted mid and non-qualified rates as well. Many customers now use rewards cards to accumulate cash-back dollars, airlines miles and points for shopping which means you may actually process more mid and non-qualified cards than qualified cards.

Interchange Plus Pricing

Some merchants may qualify for or be presented with Interchange Plus pricing. This means that all cards types will be charged according to their specific Interchange rate and assessment or transaction fee plus an additional percentage. This pricing allows merchants to see the exact costs and markup for their processing.

Additional Fees

In addition to the discount and transaction fees on your sales volume, you may pay statement fees, online batch access, gateway fees, and a PCL fee. Discount fee minimums are generally imposed, only very low volume merchants will be affected by a minimum fee.

Understanding Terminology

When you start shopping for a merchant account there are many terms that may be new to you or you don’t quite understand. Look through the list below to get an understanding of the merchant account industry terminology.

ACH

Automated Clearing House is an electronic funds transfer network which enables participating financial institutions to make debits and credits to and from each other.

Bank Card

Card issued by a bank for use in electronic payment transactions.

Discount Rate

Percentage of transaction amount that is charged to the merchant to use card networks.

Debit Card

Card issued by a bank that allows holder to withdraw and make payment from a checking account, this is not a credit card.

Dues and Assessments

The percentage rate and transaction fees paid to card networks.

Interchange

The fee that a merchant’s bank pays a customer’s bank when a merchant accepts cards using Visa® or Mastercard® networks.

Internet Gateway

A gateway which allows a website or virtual terminal to connect to the payment card network to complete transactions via the internet.

Keyed

Refers to the method of typing in a card’s 16-digit number into a machine or internet site to enter the card data to initiate a sales transaction.

Mid-qualified

Refers to the second lowest rate to process a credit card, this is a slightly more risky transaction since it does not meet all the standards to achieve the qualified rate, this rate is higher than the qualified rate.

Non-qualified

Refers to the highest rate to process a credit card, this is the most risky or costly transaction due to rewards or card-not-present status.

PCI

Payment Card Industry. This organization sets standards for the credit card processing

POS

Point Of Sale computer system with a touch screen monitor, cash drawer and card reader that enables cashiers to complete sales transactions.

Qualified

Refers to the lowest rate to process a credit card because it meets all the standards to qualify for the best rate, this is the least risky card transaction type, and thus its fees are the lowest.

Rewards Card

Card issued by a bank that allows the holder to accumulate points or rewards on qualifying purchases. Points can be used for airline miles, products, cash-back, etc.

Swiped

Refers to the method of physically swiping a card’s magnetic strip through a card reader to transmit the card data to initiate a sales transaction.

Virtual Terminal

Web-based credit card software that transmits sales via the internet instead of a standard phone line.

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