Next Seminar is on Friday, August 27th

Most small business cannot afford to pay $200 or more per month to build their online presence through social media. It would take you hundreds of hours to learn what you will take away from this seven hour hands-on social media training. Download the brochure.

Why is this seminar important? In this new economy, social media is available 24/7/365. It’s where your customers are looking for you and learn about you. It’s why Amazon is king and Borders falls way behind. It’s the new way to market. It’s all about growing your business. Social Media is not about the technology. It’s all about people and processes.

Social media is more than just doing tweets, writing on a person’s wall or connecting with 1000s of other business people. It’s a strategy.

When you analyze the most common traditional marketing from bulletin boards to direct mail to newspaper ads, it could cost a business thousands of dollars per month. Social media costs your time. It’s available 24/7 and pulls people to you, rather than traditional marketing that relies on interrupts to the brain.

You will gain an understanding of the power in each of these online tools. You will learn how to integrate the tools by posting one time, while having your message go to many sites. During this seven-hour seminar, you will better understand how to use the power of Twitter, Facebook Business, Linked-In, YouTube, Blogs and much more! Lunch is included.

Social Media helps find jobs, connect people, and provides a medium to share and discuss information. Business owners trying to use traditional marketing approaches with social media will fail. Learn how to setup and Manage Social Media on 30 Minutes a Day.

Due to personalized attention and research, registration is limited to 25 and there will be no cash refunds.

The price for this class is $295. If you are a graduate of New Quest (or Project New), the cost is $195. Held at the La Mancha Business Center, 2701 W Berry St, Fort Worth TX 76109, Building #1.

Special for previous attendees.  If you previously attended the Social Media Seminar and would like to attend again, the cost is $99.

If you are a NW Tarrant Chamber member, your cost is $195 with 25% going back to your chamber.

This seminar helps fund entrepreneurial businesses in North Texas by giving back 25% of all proceeds to the non-profit business assistance center, Knowledge for Success.

Call us today at 877.577.3779 to setup your secure gateway.

eProcessingNetwork is helping merchants realize unlimited business opportunities and profits with the continued expansion of the Internet marketplace, enabling merchants with an Internet presence to process online credit card transactions automatically and in real-time, using a secure Web page accessed directly from the merchant’s existing Web site.

Added Convenience

The latest, most sophisticated digital encryption is used to transmit information between the customer’s browser and the eProcessingNetwork Secure Credit Card Transaction Processing Server. Direct communication lines are used to obtain real-time authorizations from the processor. Plus, merchants get the added convenience of having funds directly deposited to their bank account.

Added Security

Secure order forms are tailored to match the design of the merchant’s Web pages and automatic e-mail messages are sent to the merchant, as well as the cardholder, confirming each transaction. Real-time communication between eProcessingNetwork and the processor helps ensure the accuracy and validity of each transaction.

Added Fraud Protection

Address Verification and Card Verification Value (CVV2) Services are performed to reduce the chance of fraud and charge-backs. Open batches are automatically closed daily so merchants no longer need to purchase additional software to reconcile their transactions. Merchants can limit the number of times a customer can attempt a transaction, and can configure their eProcessingNetwork account to accept transactions only if the customers’ AVS and CVV2 data was entered correctly.

Simple and Secure

Integrating eProcessingNetworks credit card transaction processing service is easy to do. Here’s how it works:

When the merchant’s customer is ready to buy, they are linked to the eProcessingNetwork Secure Payment Information Capture Form on the eProcessingNetwork Secure Transaction Processing Server. This page matches the design of the merchant’s Web page, and the customer is given visual clues of the forms Secure Socket Layer (SSL) encryption.

Once the customer submits payment information, the eProcessingNetwork Transaction Processing Server processes the transaction and gives the customer immediate transaction status – approval, decline or other status indication.

If the processor approves the transaction, an e-mail message containing the customer’s mailing information and order summary is sent to both merchant and customer. Credit card information is never e-mailed, sold or distributed to third parties.

The entire process is simple and convenient to use. eProcessingNetwork offers reliable and secure credit card transaction processing services and professional support every step of the way.

Jon Perry

You may be wondering, “Is my credit card terminal compliant?” Compliance referring to the Payment Card Industry (PCI) standards. The short answer is “probably”. An area of focus within PCI Compliance is PIN (Personal Identification Number) entry devices and their encrypted security from the point of sale through the approval process.

From Visa, “To ensure the highest possible PIN security standards in the electronic payments industry, in 2005, Visa announced a global mandate for Triple Data Encryption Standard (TDES) usage and established July 1, 2010, as the date for global compliance. This mandate requires that all cardholder PINs be TDES protected from the point of transaction to the issuer.”

While there are older models of external PIN pads that are or will not be compliant, those are easy to deal with.  They are cost effective to swap out.  It is the credit card terminal that uses its internal PIN pad that is more of a challenge.  The internal PIN pad will need to be deactivated and an external PIN added, where the terminal’s PIN pad is deemed not compliant.

Let’s say you have a Verifone 3750.  It’s a great credit card terminal.  You should get many years of work from this product.  But this terminal’s internal PIN pad is not going to be compliant come July 1, 2010.  The most cost effective measure is to add an external PIN pad to the device, such as the PP1000SE, which is compliant (as seen here on Visa’s website).  Hopefully, your processor is going to know the hardware you have at your merchant location.  However, should they not reach out to you, here’s what you can expect.

A PIN pad is encrypted for the processing platform you are on.  Examples of platforms are Paymentech, First Data and Heartland.  If you need a new PIN pad and your processor is going to charge you for it, then this is a great time to shop your merchant services rates.  If you are going to pay for a PIN pad, then move to cost effective processor.

A PIN pad retails for approximately $129, including encryption.  That is far less that replacing your Verifone 3750 with its new brother the VX 570 that has a compliant internal PIN pad.  Be wary of eBay or flea markets looking to save a few dollars.  Encrypted devices should only be purchased through reliable and trusted merchant services companies.  PIN pads have been tampered with to allow skimming.  If that occurs from your flea market PIN pad or terminal, you the merchant will be liable for the losses.

How do you know if your PIN pad or terminal will be out of compliance?  Give us a call and we’ll look it up for you.  Or do it yourself at the Payment Card Industry’s Security Standards website.

At Merchant Services Inc, we will provide you with a free, encrypted, compliant, external PIN pad.  Call us today at 877.577.3779 or fill in the simple contact form below.

Merchant Services Inc and Equity Commerce are full service payment providers of credit and debit cards, gift and loyalty programs, ACH and check guarantee products. Equity Commerce’s Hospitality Division was created to specifically focus on the hospitality industry and its unique needs and requirements. Our sales professionals have long, established tenure in the payment processing industry and are responsive to your point of sale needs. At Equity, you don’t call an anonymous “800” number, you speak directly with your dedicated Sales Support Executive. We built our Companies to be the best payment providers in the industry by providing superior customer service and competitive pricing. From top to bottom in our organizations we operate on the basic fundamental of always doing the right thing in all situations, no matter what.

We know each of our merchants personally and have established long term relationships. If an issue should arise, you will have instant access to your dedicated Sales Support Executive. Your Executive is backed up by 24/7 technical support. We provide processing for all credit card types and can utilize dial up or high speed IP connectivity. We will provide Shift 4 software at no cost when you establish a relationship with us.

Equity Commerce is headquartered in Hagerstown, MD (only minutes from Choice Hotels International Corporate offices) and has offices in Palm Springs, Los Angeles, Grand Rapids, Chicago, Dallas/Ft. Worth, Derry NH and San Diego. We look forward to meeting you in person at your offices as well as at regional and national shows.

Call us today at 877.577.3779.

As a franchise owner, you leverage the marketing of your parent organization to increase your visibility and acquire new business.  We do the same for your merchant account and credit card machine through our Franchise Payment Network™.

We provide cost effective pass through pricing, which can save you hundreds, if not thousands of dollars on your annual merchant services fees.  Three tiered pricing with a qualified rate is old school and costs you more! Our Franchise Payment Network™ puts more of your money in your pocket.

At Merchant Services Inc, depending on your franchise, our rates are 5 to 20 basis points over cost!  That’s right.  With a debit card interchange of 1.03%, you could be paying as low as 1.08% on swiped debit rates!*

Our Franchise Payment Network™ solutions provide you with low cost merchant accounts, credit card machines, computer hardware and Point of Sale software. If we can help you be more successful, then we become more successful with you.

Need help with leasing or financing?  We have cost effective solutions and some of the best industry partners.

Call us today for more information at 877.577.3779!

*Does not include, if any, Dues and Assessments from card companies.

Visa and MasterCard have a four party system.  They do not issue any credit cards.  Rather, they license their payment brands to Issuers and Acquirers.   Issuing banks are the entities that provide you, the consumer, with the credit cards in your pocket.  Acquirers are the entities that process the transactions.  We are part of the acquiring side.  As a registered Independent Sales Organization (ISO) of Visa and MasterCard, we pay them thousands of dollars a year for the privilege of using those brands.

Transaction Process

As shown in the Transaction Process above, unlike the three party system, Visa and MasterCard do not approve transactions.  The bank that issued your credit card approves the transaction.  The issuing bank takes on the risk that you as the consumer will pay them back for the items you purchase.  In turn, the issuing bank get paid Interchange.

The cost of interchange depends on the card type that is presented.  A debit card, which is tied to your checking account, is a low risk, low cost interchange.  If you don’t have money in your checking account, the transaction is declined.

Corporate, government and foreign credit cards are high risk.  They have the highest interchange rates.  You may ask why.  Simply, if someone from a foreign country buys an item here but refuses to pay for it later, perhaps because of a dispute, it is very difficult, sometimes almost impossible to get that money back.  Also, people in corporations and government make purchases that are not authorized by higher management.  If they quit or are terminated, these entities will often dispute the charges as unauthorized.  This makes these three card types high risk.

Interchange is not voodoo or secrative.  Interchange is clearly posted and updated on the internet (Visa Interchange rates and  MasterCard’s Interchange Rates).

Why is Interchange Important?

According to the Board of Governors of the Federal Reserve System in their June 2009 Report to the Congress on the Profitability of Credit Card Operations of Depository Institutions, there are 565 million general purpose credit cards labeled Visa or MasterCard.  There are another 111 million general purpose credit cards provided by American Express and Discover.

The population of the United States approximates 300 million ( 307,047,313).  That means every infant, child, adult or infirmed, would possess 2.34 credit cards per person.

Five years ago, the average male, 35 years of age an under, carried less than $20 cash.  They used their debit cards.  These males are now 40 and have taught their children by using debit cards instead of cash.  It is estimated that the vast majority of transactions between $5 and $60 are paid with debit cards.

In our article Debit Card use Surpasses Credit Cards, for the first time in Visa’s history, debit card use surpassed Credit Cards in the fourth quarter 2008.  On page 14 of Visa’s Form 8-K, filed on April 29, 2009, U.S. debit card volume was $206 billion, versus a credit card volume of $203 billion.  The growth of debit cards was up 5.5%, while credit cards were down 6.9%.

So, what does all this mean?  It means the market, specifically consumers, have chosen plastic over cash and checks to pay for their purchases.  They have voted on it with over 600 million credit cards issued to a population of 300 million.

Efficiency and Total Costs

Businesses that accept only cash payments do not have costs associated with credit card processing.  However, they often lose more money than they would have through credit card processing because of employee skimming and theft.  A cash only business is serious temptation to an employee earning minimum wage.

When you take into account your bank charges and fees, trips to the bank to deposit cash and checks, and ancillary overhead such as bookkeeping, ACH rejects and cash management, the cost to a merchant for a grocery store transaction of $54.24 is:

• $0.72 if paid by credit card
• $1.11 if paid by cash
• $1.21 if paid by check

Source: Page 188 of Daniel D. Garcia-Swartz, Robert W. Hahn, and Anne Layne-Farrar, The Move Toward a Cashless Society: A Closer Look at Payment System Economics, Review of Network Economics, Vol. 5, Issue 2.

According to MasterCard, in 2008 their average interchange rate was 1.85%, which is paid to the banks that issued the credit card.  On the flip side, issuing banks had credit losses as a percentage of transaction volume of 4%.  This indicates that issuing banks lost more money than they made in interchange. As the economy continues to struggle, these issuing banks will continue to see their losses climb.

Bottom line:  The merchant gets paid, even if the issuing bank does not.

Three Parts of Merchant Fees

Interchange is paid to the issuing bank.  There are approximately 200 Interchange rates, depending on the card type (e.g. debit card, corporate card). This is a variable that changes.

Dues and Assessment.  A question often presented is, “How does Visa and MasterCard make money if they don’t issue credit cards?”  Visa and MasterCard has Dues and Assessments, which is 9.25 basis points (.000925) they receive per transaction.

The acquiring bank charges a small fee for the processing of the transaction, ensuring the merchant gets their money, as well as providing monthly statements, 24/7 support and terminal troubleshooting.  This fee gets locked into your agreement.  For example, let’s use 30 basis points.

For a debit card merchant fees would be:

• Issuing bank:  1.03%
• Dues and Assessments .0925%
• Acquiring Bank: .30%

Your total percentage fees for a $100 transaction would be $100 x (1.03%+.0925%+.30%) or $100 x 1.42%, which equals $1.42.

The Dues and Assessment along with the Acquiring Bank fee would not change if you are using Interchange Plus pricing.  The only variable that changes is Interchange to the issuing bank.

Conclusion

Interchange is the lubricant to the gears in the transaction process.  Interchange rates are based on risk.  Debit cards have lower risk, corporate cards have higher risk.

Not accepting credit cards will have your customers buy from your competitors that do accept multiple forms of payment.

Consumers using credit cards buy more than customers with cash. With cash, you can only buy with what you have in your pocket.

Merchants accepting cash only have a higher risk of pilferage by employees.  There are some merchants that do NOT accept cash, simply for that reason.

The cost of managing cash and checks, which include bank fees, trips to the bank, etcetera, all have implicit costs attached to them.  Consider if you would an office manager that makes $16 per hour.  Each day the office manager puts together the cash and checks along with the deposit slips.  It takes them 15 minutes a day to accomplish this task. Each day they drive to the bank. It takes another 15 minutes in round trip drive time and dropping off the bank deposit.  If your employee does this task three days a week, 30 minutes per day, 50 weeks per year, they are spending 75 hours per year on non-value added work.  At $16 per hour, that’s $1,200 per year.  What else could they work on if they didn’t need to do these tasks?  Even if you still had to make trips to the bank, but could reduce the preparation time from 15 minutes to 5 minutes, that save you $400.

Understanding interchange makes you a more savvy merchant. It helps you understand when you are negotiating your merchant account what fees can be adjusted and which cannot.

If you would like more information concerning Visa MasterCard Interchange or establishing a merchant account, please call us at 877.577.3779.

Jon Perry

Jon Perry is the CEO of Merchant Services Inc. He is a speaker, writer and columnist for one the payment industry’s leading magazines.  You can connect with Jon on LinkedIn, follow him on Twitter or learn more about him on Facebook.

Sign up for credit card processing through Merchant Services Inc, Fort Worth TX and receive a FREE credit card terminal.

Use the full capacity of your high speed internet and save on the cost of a dedicated telephone line.

Call us today at 877.577.3779, option 1 and ask for the Free Wimax Credit Card Terminal.  Inventory is limited and this offer may be retracted without notice.  Please, no dealers or resellers.

Jon Perry

Visa payment transactions are down 2.5% and cash transactions down 10.9% in the United States.  While fairing well in Central and Latin America, it appears that the state of the U.S. economy can be partially seen in these numbers.

This would imply that Americans are tightening their belt, especially on cash advances.  In a previous article, we reported that for the first time in history, Visa’s Debit Card usage exceeded Credit Card usage in the 4th Quarter, 2008.  In that Form 8-K Visa filed with the SEC,  it broke out Debit and Credit cards separately. In the current Visa Earning Results, Debit and Credit cards are lumped together.

Visa has solid earnings, with 19% and 16% growth in Central America and Latin America respectively.  Visa projects in its earning report, “Annual net revenue growth of high single digits in 2009 and at the lower end of the 11% to 15% range in 2010, given certain economic recovery assumptions.”

What is very interesting in the report is Visa’s strategic alliance with Monitise UK.  Montise, a leader in payments through mobile devices, is coming to America.  The United States is behind the power curve when it comes to payments using your telephone.  This has been around a long time in the Pacific Rim and Europe.  Monitise is looking for banks.  On Montise’s website it states, “We’re working with our partners to expand our services one financial institution at a time.”

I would expect to see earlier adoptors by banks, jumping on this band wagon.  Imagine buying your next soda using your cell phone.  In fairness, Nokia has been testing this in the U.S. for at least five years.

For more information about this article or setting up a merchant account, please call 877.577.3779 or email us at savings at merchantservices.cc.