merchant account processing Archives - The Future of Payment Processing is Here!

January 9, 2020December 16, 2019

Which Merchant Account Services Provider is Right for You?

You want your business to do well in the upcoming year, and one area you might be able to improve upon is merchant account services. Confused? Think higher profit margins and lower costs are the only way to change the equation? Think again. Finding the right merchant account services provider can not only make your life a lot easier in the coming year, it can also help your business’ bottom line.

Understanding the Power of Merchant Account Services

Anything that deals with the hardware, software, services, or financial side of things you need to accept and process credit and debit cards and e-checks falls under the heading “merchant account services.” There are thousands of entities that call themselves service providers, but knowing which ones you want to work with and which ones will truly benefit your business is the only way to turn the tables in your favor.

Choosing the Right Provider

With so many different providers out there, it can be easy to get overwhelmed. You may think the easiest route to go is to select the provider with the cheapest fees, right? Think again. There are so many different factors involved in the decision, you’re going to have to roll up your sleeves and do a little research before you make a choice. Start With The Track Record: The first step you may want to take is to look at the history of the business. You want a team that’s been working with companies in your industry for the past several years. A startup’s offerings may sound fantastic, but at the end of the day, they could cost you quite a bit of money.

*Look to Support: Merchant account providers offer varying levels of support. Some have resource libraries packed with videos and articles to guide you through any problem you might have. Others have around the clock support provided over email. Still others have 24/7 support from a live person via phone or chat. Your support needs depend extensively on your level of technical knowledge. Some business owners won’t need a lot of support, and thus they don’t want to pay for an extensive amount of support. Other business owners, though, need a bit of extra help to get through those rough patches.

*Consider Transaction Types: What kinds of business do you do now? If you’re not online yet, and you think you might be in the next few years, you’ll want a merchant account provider who offers to process both on and offline transactions. As your business grows, you’ll want your provider to be able to help you no matter which direction you go.

*Think Safety: Fraud protection is a must, so find out whether the provider you’ve chosen is PCI-Compliant and offers additional fraud protection measures to help protect you and your customers. From tokenization to encryption to the many other technologies out there, you want to be sure your provider is onboard with the latest ways to protect consumers.

*Ask about Processing Time: How soon can you get your money? You need to know how long it takes from the time a customer swipes his or her card to the time the money hits your bank account to understand what your cash flow might look like with that provider. Knowing in advance how long it takes those funds to clear can help you decide how to pay for supplies, handle payroll, and much more. Every provider is different, and there’s not always a right answer, but understanding what to expect is incredibly important.

*Know the Fine Print: What’s the length of the contract you’ll be signing? Will you have to pay a cancellation fee if you need out early? Are there additional fees? Find out what you’ll be paying outside of the transaction fees and rates.

*Research the Costs: Merchant account providers have lots of different cost and fee structures. Learn more about the kinds of fees you’ll be paying every time a customer uses his or her card. Try to think about all of the pieces involved, not just what those overall rates look like.

The right merchant account services provider can mean so much to your business. Make sure you have a perfect match so you can grow well into the coming year. Contact Y2Payments at 888-693-1850 to learn more about our merchant account services for your company.

July 11, 2019July 11, 2019

How Credit Card Processing Works

To a customer buying an item from you with a credit or debit card, paying is a fairly simply idea. The customer swipes, and the transaction is complete. For a business accepting that credit or debit card, though, the process is not quite that easy. It’s not as if the card is swiped and the money lands in your business’ bank account. Instead, it’s a pretty complex process.

The key to understanding how credit card processing works behind the scenes is understanding exactly who is involved. First, you have the cardholder. Then there’s the merchant (that’s you). Beyond that, you have the acquiring bank, which is the bank responsible for getting the payment authorization request from the merchant and sending them to the acquiring bank or processor. That bank/processor (sometimes called a merchant services account provider) is the company you contract with to accept credit cards. It sends those details from the swipe to the credit card network, then back to the acquiring bank. The credit card network is the card company itself (like Visa, MasterCard, and others). The issuing bank is the organization that gave the card to the consumer. Some good examples of this are Capital One or Bank of America.

Now that you know who is involved, it may be a little easier to understand what happens when a customer swipes a card or enters that card information. The first step is the actual authorization. Here, a customer swipes his/her card at a terminal or enters it into a website. The card’s details – which typically include the card number, expiration date, billing address, CVV, and payment amount – are sent to the acquiring bank. The acquiring bank sends the details to the credit card network. The card network sends it on to the issuing bank asking for authorization. At that point, the issuing bank works to authenticate the transaction. It ensures the credit card number is valid and that the customer has the funds available to make the purchase. The purchase is then approved (or declined), and it’s sent back through those same channels – to the credit card network, then the acquiring bank, then the merchant itself.

When a purchase is declined, it can happen for a number of reasons, and the merchant doesn’t always understand why. It’s possible the credit card number was entered wrong. The expiration date could also have been entered wrong. The customer could have insufficient funds in his or her account. It’s also possible that the customer made too many purchases at once, and the issuing bank was concerned about fraud. Finally, technical issues within networks do happen, so that could also be behind a rejected charge. In the event your customer’s charge is rejected, you may have some technical support within your merchant services account to rely on to help your customer understand why it happened.

If a payment is authorized, the issuing bank places a hold on the funds in the cardholder’s account. At the end of the day, the merchant’s software pushes the approved authorizations in one big batch to the acquiring bank. That bank then sends it on to the credit card network. The card network sends the information to the issuing bank, and they then send the funds back to the network. Before that happens, though, they deduct an interchange fee that is then shared with the credit card network. The card network pays the acquiring bank, and that bank credits your merchant account for the final total (minus fees from the acquiring bank). Those fees can vary widely depending on the type of purchase and the players involved.

The result? The customer pays his or her bill with the merchant, and the merchant (eventually) gets paid. The good news, though, is most of this happens within just a few seconds. Maybe the slowest part is waiting for the funds to arrive in your business’ bank account, but that can vary depending on the merchant account provider with whom you work.

Processing credit cards is an absolute must for businesses today, but it’s not quite like accepting cash. Understanding how it works can give you an advantage as you try to find the right merchant services account company. For information on Y2Payments Merchant Accounts, give us a call today at 888-693-1850.

August 16, 2018September 4, 2018

Not All Credit Card Processing is the Same

Have you ever seen those commercials where customers are paying with a particular credit card and the store they’re buying from runs like clockwork? Then one customer comes up with cash, fumbles around with it as if they just learned how to use their hands, and throws the whole process off. The ads talk about how credit card processing is so much smoother than traditional payment methods, but it doesn’t take high risk merchants into account.

What Does This Say about High-Risk Merchants?

What’s funny is that this doesn’t hold true for high-risk merchants. Sure, the retail industry is catered to because there are alternatives out there.

Merchants who rely on credit card payments and don’t have those alternative options of payment? They aren’t always offered the smooth side of the credit card processing industry. They’re offered increased rates by services that have spent the last few decades updating technology to meet old philosophies that no longer serve high-risk merchants. At the same time, they cut costs everywhere they can, including and especially customer service and customized reporting.

This approach is bad enough when it’s aimed at customers. When this approach is aimed at high-risk merchants, it falls apart. High-risk merchants are the ones who need responsiveness and customization in payment processing the most. They need new philosophies based on new technology from their merchant account processor.

The rest of the industry wouldn’t want to admit it, but high-risk merchants. . . they’re the ones who take the risk to pioneer new payment processing territory that will become mainstream down the road. They should be given the most dynamic tools available, not treated like an afterthought.

The Y2Payments Difference

High-risk merchants shouldn’t have to take on additional risks at unreasonable costs. Some cost increase compensates for the risk. That’s reasonable, it comes with the possibility of hazards. At the same time, that territory and cost should bring better tools, technology, customization, and reporting to the table. You ought to get something more for that cost, not something less. You’re in a business that is deemed risky – sometimes unfairly – but your money shouldn’t be worth less when you work with a merchant account processor.

If you pay more because of those perceived dangers, you should also get more. You should get benefits like training, integration with your technology, customized reporting, fraud and chargeback protection, interchange pass-through pricing, and more. There should be a difference.

Cooperation, not Competition

Moreover, that’s not an empty promise. If you’re a merchant account processor who works with high-risk merchants, you should want to see them do well. The better they do, the more stable and flexible you can make them, and the more loyalty and business they give you in turn.

High-risk merchants have to remain on their toes because of their industries, but this doesn’t mean they can’t be supported by businesses built to serve them. If Y2Payments can make your business more capable, both parties benefit and make the other side of the fence a little less dangerous.

Want to learn more about our credit card processing? Contact Y2Payments today!