The Difference Between Chargebacks and Refunds

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Various types of high risk merchants need to be aware of the difference between chargebacks and refunds. The best high risk processors will offer high risk merchant accounts that acknowledge these kinds of risks but still treat them fairly. First, let’s start from refunds. Chances are you already have a good idea of how refunds work, since most of us have had to ask for one from a business at some point in our lives:

Refund – A refund occurs when a customer asks for funds to be returned to the customer’s credit card and the merchant agrees. This usually occurs when the customer returns goods, or the merchant fails to provide goods or services for which the customer has paid.

Partial refunds typically occur when a customer has been provided goods or services, but is unhappy with them, or a particular element was never provided.

Chargeback – A chargeback happens as a result of a dispute. Typically, the cardholder disputes a charge on their credit card statement with the bank that issues the card. This can happen as a result of:

  1. Fraud: The card was used without the customer’s authorization.
  2. Failed Refund: The customer attempted a refund through the merchant, but the merchant either failed to respond or refused to provide the refund.
  3. Inaccuracy: The goods or services that were provided were misrepresented to the customer.

What are High Risk Merchants?

Many types of high risk merchants must pay particular attention to these elements because they can reduce the number of processors willing to give you a good deal on your payment processing.

Businesses that see a high number of refunds and especially a high number of chargebacks can very quickly be labeled high risk by payment processors. This is because chargebacks serve as a red flag that a business is either failing to provide refunds or is misrepresenting their goods or services.

There are many high risk merchant accounts, but they’ll often charge you much higher rates and fees than you should be charged. The best high risk processors will reduce these rates as much as possible, and will specialize in these types of accounts.

With more than thirty years of payment processing experience, Y2Payments can help you save some of that money from your current statements and have it go directly to your bottom line! Contact us today to learn more.

What are Credit Card Surcharges

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Credit card surcharges involve the addition of a small fee added to a transaction. They’re added to cover the cost of processing a credit card transaction. This is why businesses often have a minimum purchase amount if you intend to pay with a credit card. Credit card surcharges are often unfair to the consumer, and surcharge models are always unfair to businesses.

Surcharge Structures Overwhelm and Confuse

Credit card surcharges are often modeled to unfairly qualify some businesses with high processing rates and fees. This means they either have to absorb these fees or punish their customers with higher costs – which can lose customers. There are hidden fees, tiered pricing systems, and other elements that can make it confusing to understand just what your business is signing up for.

Many of these cost elements have a legitimate foundation, a reason for existing. As they become overwhelming, many are in there simply to make businesses throw their hands in the air and figure this is the best surcharge situation they’re going to be able to get.

Many Businesses Need an Alternative

You can choose a more modern alternative. Credit card surcharges subscribe to a model of end-point sales that hasn’t really caught up with today’s market of online sellers, referral services, small-cost marketplaces, or even the business-to-business economy as it’s evolved. Because of this, surcharges and fees can grow to high-risk territory for businesses that just aren’t high-risk.

If your business sells a low volume, you shouldn’t be punished so that you make even less from it. If you rely on high-cost sales, you shouldn’t have a chunk of that taken out. Neither should you have to pass costs on to customers that risks them going elsewhere. The old surcharge model has not adapted quickly enough to the way the world works today. It’s fallen behind for too many who are working too hard.

Interchange Plus Pricing

Interchange plus pricing is a more reliable and predictable model for many who fall into these categories, or who just don’t find credit card surcharging fair. You know your fees up front. There are no hidden fees or added rates. There’s no three-tier structure for punishing hard-working businesses. It’s simple, easy to implement and engage with, and it’s client-oriented.

You have options beyond simply signing up with the least damaging processor. It’s worth it to investigate what else is out there. Contact Y2Payments today at 888-693-1850 for a free no risk statement review & audit!

Streamline For Better Payment Processing

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Credit card processing fees aren’t always fair. Payment processing can seem limited, and built to punish small businesses, low volume sellers, and the business-to-business industry. These businesses need better payment processing options that can fully cover a range of payments, including ACH/EFT payments.

Better Credit Card Processing

The solution is interchange plus pricing. This model is less complicated and more straightforward than traditional credit card processing. It’s also more flexible in terms of satisfying many modern requirements that businesses have.

The best approach is to compare the two options. For many large volume sellers or large franchises, they see beneficial credit card processing deals with friendly rates. Their payment processing options are beneficial to them because processors want to secure their business long-term.

Even Footing for Small Businesses

For most businesses outside this range, they just don’t see the same benefits offered to them. Processors are less confident in these businesses and so they look to make more money out of them in the short-term, unconcerned with the impact on a long-term partnership. This benefits them, but not your business.

Interchange plus pricing is an approach to credit card processing that relies on giving you the information you need to make a decision up-front. You can even see an audit of your current fees and compare these to what they’d look like under Y2Payments.

Y2Payments Conduit

Our platform is called the Y2P Conduit, manages these payments. It’s fully PCI DSS compliant. You can securely run transactions across six payment channels. This includes payments made by internet or phone, by mail, or at point-of-purchase, whether it’s through credit, debit, or ACH. Reporting according to your organizational structure is rolled into this. This allows you the benefit of increased analytics and reduced risk on purchases, transactions, and chargebacks.

With the Y2P Conduit, you don’t have IT implementation expenses or changes in how your staff performs their jobs. Other credit card processors aren’t concerned with your quality of service.

The Y2Payments method of better payment processing, payment structures and the Y2P Conduit’s ability to quickly reduce transaction fees, gives you more control over your business and gives your business a better deal than with other processors.

Contact Y2Payments today at 888-693-1850 for a free no risk statement review & audit!

The Different Types of Credit Card Processing

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No matter what the industry, you need a fast, convenient way to accept credit card payments. These days, almost everyone carries a credit or debit card, and whether you’re working online or you have a brick and mortar location, customers expect the ability to pay with their cards.

Businesses that don’t accept cads lose a huge chunk of the market. Nearly half of all transactions last year involved a card, and those are sales numbers you don’t want to ignore.

For example, Visa has done studies where they conclude a merchant will experience a 30-40% sales increase merely by accepting cards as payment. When it comes to credit card processing, though, what are your options?

Take a look:
– A Standard Terminal:  This is the type of credit card processing almost everyone considers. It’s typically a cash register with a credit card machine build into it. The payments industry refers to this as the Card Present environment. This is the best option for business owners who have a physical location and do plenty of credit card sales each day. Most of them are equipped with swipe and chip capabilities. This means additional payment options for customers. The technology can be an expensive investment, but it can also be worth it if you know you’re going to have customers who need your services and products, and you know they’re coming to you to get it.
– A Mobile POS System:  Mobile phone technology has been nothing short of amazing for business owners, and it’s developed to the point where you can now use your phone to process payments. If you have a smaller business, or you do quite a bit of trade show business, this is the best option for your company. It’s small, inexpensive, and you can literally turn any of your devices into a credit card processor instantly.
–  E-Commerce Processing:  Doing quite a bit of business online? You’ll still need to accept credit cards, but you’ll need to do it virtually instead of swiping the card. E-commerce is a great way to reach customers who can’t make it to your location, but they’re still interested in your goods and services. Here the industry identifies this as Card-Not-Present (CNP) since your sales staff does not make visual contact with the cardholder. As one would expect, CNP fees are more expensive than their Card Present cousins. The best credit card processor will often help you navigate the murky waters of privacy legislation, even if you’re accepting cards online.

No matter what type of credit card processing you want to do, we can help. Contact us today to learn more about our merchant services and payment Conduit.

How to Manage Chargebacks Better

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It’s happened again. You get yet another alert that a credit card chargeback has occurred. Now your funds are tied up until the dispute process is complete. You might win the process, you might lose the process. Either way, though, you’re dealing with a frustrating situation that you shouldn’t have to fight. It impacts your business, and it could hurt your customer base. How can you manage chargebacks better and get your business back on the road? Take a look.

Understanding the Process
What are chargebacks, exactly? A chargeback occurs when a customer is unhappy with the charges on his or her card, and contact the card company. The funds are debited from your account, then held in escrow while the investigation takes place. You’ll be asked to take a closer look at the order in dispute, then provide any evidence that the chargeback is not valid.

Customers typically file a chargeback if they didn’t receive the product or service, the product or services weren’t as described, or they claim the transaction was fraudulent for one reason or another or the cardholder may simply want to avoid accepting his or her financial responsibility and blatantly defraud the business. As the merchant, you have to decide whether to fight the chargeback or give the customer his/her money back.

End the Chargebacks
Obviously no business wants to deal with or manage chargebacks, but there are a few things you can do to help eliminate disputes.

First, start by creating a process your employees can follow easily that helps to reduce any potential errors on your end. For example, something like processing a transaction more that once or entering the wrong amount can cause a chargeback.

Educate your employees so they know how to use the system well. You’ll also want to know and understand the signs of credit card fraud. While this can be a bit tougher if you work with a digital system or phone-based sales, but developing a program to help educate your employees to spot and deal with fraud can help immensely.

Finally, keep your focus on your products and services. Answer customer questions promptly. Make sure your advertising matches your products, and follow your industry regulations carefully.

Chargebacks are never a fun process, but we can help to simplify things a bit. To learn more about how Y2Payments handles chargebacks, contact us today.

What Are Common High Risk Merchant Industries

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Ever been denied the opportunity to work with a credit card processor because you’ve been deemed a high risk business? You’re not alone. Many companies deal with the same label every single day, and often it’s a label that comes with very high fees and frustration. Wondering why you’re considered a high risk merchant account? There could be a number of different reasons, but in some cases, it’s the industry in which you work. There are a number of high risk merchant industries.

What Are High Risk Merchants?

Generally credit card processors consider industries high risk if their services or products have a history of excessive charge backs. Similarly, industries with services or products that have longer chargeback liability periods, like annual memberships, end up with that same high risk label. Sometimes, it’s just the reputation of the industry. Take a look at a few types of high risk merchant industries:

• Nutraceuticals
• Timeshare and Travel
• Gambling
• Firearms and ammunition
• Adult Products
• E-cigarettes

There are other risk factors as well. If you do business outside the United States routinely, for example, you may end up with a high risk label. If you’re not in a high risk industry, but you work with high risk clients, that could also mean a similar label. Bankruptcy attorneys, for example, often end up with a high risk label, as do bail bondsmen.

You Can’t Change Industries, So Now What?

If you love what you do, and you don’t want to change industries, you’re not out of luck just yet. There are still a few things you can do to get great rates. The single best first step you can take, though, is to contact us. Y2Payments offers processing services to companies in a variety of industries, even those deemed high risk by so many other companies.

To learn more about what we can do to help, give us a call at 888-693-1850.

Should I Accept ACH/EFT Payments?

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If you’re like many merchants today, you may be searching for one more way to allow your customers to pay for your goods or services. Offering your customers an extra option or two can sometimes mean the difference between completing a sale and losing out to another merchant. ACH/EFT payments are one choice to consider adding to your current payment processing menu.

What Are They?

First, it may help a bit if you learn more about this type of payment. ACH stands for Automated Clearing House. It’s a system of moving money between banks, and it is federally regulated. It began as a system to replace paper checks, and sometimes, it’s called an e-check. Employers use it to directly deposit payments to an employee account.

This type of payment can be used, though, to move money from a customer to a business in almost any industry. EFT is an acronym that is used almost interchangeably with ACH, and for good reason. EFT stands for Electronic Funds Transfer, and  it’s a broad idea that includes any type of electronic payment, including ACH.

The Benefits of ACH Payments

Besides offering your customers one additional payment choice, there are a number of reasons to consider accepting ACH payments. It’s typically fairly quick, but you can also set up recurring billing cycles with ACH payments. More than that, though, it’s also quite a bit cheaper to process this type of payment versus a credit card payment. While the exact amount depends on your card processor, it usually ranges from about .5% to 1% of the overall transaction. Sometimes, it can be as low as $0.25 per transaction.

Not all potential customers have a valid credit card account, but most of them will have a bank account. If that’s the case, they may choose your company over another if you offer ACH payment processing.

Learn more about our ACH/EFT payments service and how we can help you. Contact Y2Payments today.

Why Does Swiping Lower Merchant Fees?

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Read almost any blog about lowering your credit card processing merchant fees, and you’ll quickly discover that one of the top tips is to swipe a customer’s card over keying it in. Why the simple act of swiping a card versus keying in the numbers is a mystery to some, but the explanation is fairly simple.

Risk Averse

Credit card processing companies tend to be fairly risk averse. In other words, they don’t want the merchants they work to be part of an industry that may be dangerous, they don’t want them working with customers who may not be legitimate, and they generally don’t want to associate with merchants who will cost them any extra money. Credit card fraud is at an all-time high today, and processing companies are sometimes held responsible for that fraud. As a result, they’ve developed a method of business that can only be described as awful.

The Swiping Debate

So, why does it matter if you swipe a card or key it in? Swiping is a safer method of card entry. Card numbers can be bought online in bulk. Physical cards, though, are harder to come by. Because card companies are so risk averse, they would rather have you swipe a card than key it in. If you’re swiping a physical card, the chances are far lower that you aren’t dealing with a stolen card, and because of that, they can offer lower merchant fees and rates to companies that choose to swipe over keying them in.

Other Ways to Lower Processing Costs

If you’re a company that can’t swipe a card, though, that doesn’t mean you don’t deserve low rates. instead, you simply have to choose a processor like Y2Payments that can help you get the pricing model similar to the rates government agencies — you deserve that.

To learn more about how we can help you deal with high processing costs, contact us today.