Do You Process Credit Cards the Old-Fashioned Way?
Copyright 2014 by Virgo Publishing.
By: Claudia Miller
Posted on: 05/01/2006



 
Processing credit card transactions through a conventional retail merchant account could be costing your storage business in unnecessary fees and putting your business and customers’ security at risk.

Many credit card transactions in the storage industry are not face-to-face swipe transactions and will cost you more in non-swipe fees. The old-fashioned way of setting up a conventional retail-swipe merchant account may not take this into consideration. Do you really need to be paying more for these transactions?

In addition, processing cards through a credit card machine by keying in the recurring monthly transactions may be putting your business at risk. You need to follow required security guidelines for handling and storing credit card numbers to protect the cardholder’s data.

Account Flexibility

Today more than ever, it’s important your merchant-services provider be flexible in designing accounts to meet your needs, whether you use swipe or non-swipe transactions. Look for merchant accounts that reflect the way you are processing transactions. For example, you can virtually eliminate the expense of purchasing a credit card machine by opting for today’s innovative kiosks, payment gateways and management-software payment modules. This saves you from the tedious job of manually entering card numbers into a machine for monthly credit card payments. It also reduces the risk your business has in storing cardholder data. Further, it provides your business with a way to assure all cardholder data is encrypted, creating a database so monthly transactions process automatically.

Decisions, Decisions

Did you know that non-swipe rates in a conventional retail swipe merchant account are substantially higher than those in a mail order-telephone-online (MOTO) account? You have the choice to be set up with either or both, based on your needs. A conventional swipe account can appear to have attractive rates. However, business owners sometimes don’t realize they may be paying the higher non-swipe fees most often.

To make sure your customers are confident every time they make a payment, find a Payment Card Industry (PCI) compliant provider. PCI is the card association program for jointly managing cardholder security for Visa, MasterCard, American Express and Discover. To better understand this system, you can view VISA’s overview at http://usa.visa.com/business/accepting_visa/ops_risk_management/
cisp.html?it=search

The Setup

There are two ways credit card merchant accounts can be set up based on your facility’s number of swipe vs. non-swipe transactions.

First, with credit card transactions for retail accounts (where 51 percent to 100 percent of transactions are swiped) the card is present at point-of-purchase. This type of merchant account is needed for processing through a credit card machine, kiosk or mini-swipe card reader attached to a PC.

Second, fees for MOTO non-swipe merchant accounts (where 50 percent to 100 percent of transactions are keyed) are designed for businesses that don’t make many swipe point-of-sale transactions. Typically, these businesses use payment gateways or management-software payment modules to process monthly payments or payments by phone.

In general, a storage business processes a greater volume of non-swipe transactions than swipe ones, unless it sells numerous moving supplies. By setting up two merchant accounts—retail and MOTO non-swipe—you will receive the lowest non-swipe rates available. In addition, many merchant accounts are designed to default to the address verification system. This is a service in which the merchant verifies the card-member’s address, thereby lowering the risk of the transaction and reducing fees for the business. 

Claudia Miller is president of C&A Solutions LLC, which offers a full suite of electronic-payment solutions, including: e-Pay Manager, a virtual-terminal gateway with side-by-side ACH/credit-card processing; automatic bank drafts; credit/debit card services; online payments for checks and credit cards; payment kiosks; electronic-check conversions for point-of-sale, phone and accounts-receivable; and electronic NSF recovery. Merchant services are provided by The CASHLINQ Group, a registered ISO/MSP with Bank of America NA. For more information, call 512.255.6961; e-mail claudia@casolutions.net; visit www.casolutions.net