Accepting Credit Cards

The enrollment procedure to start accepting credit cards is much simpler than it once was.  Total Merchant Services only requires a completed application form and a voided business check on the deposit account in most cases.  If you are already accepting credit card payments though another processor link than a copy of your most recent statement is also required.  The basic qualifications are, you must be running a business, even if it’s a home based operation; you must be US based; you must be 18 years of age or older and your business must not be listed as a Prohibited Businesses.  Once you submit your information to Total Merchant Services your account can be approved for accepting credit cards in two business days or less.

Once you are approved for accepting credit cards you will have the privilege of taking your customers credit or debit cards and processing them as a means of paying for the goods or services you sell.  But in turn for privileges and services associated with accepting credit cards, Visa and MasterCard will require you to pay certain fees.  The fees are based on something called interchange which is the costs charged from the acquiring bank.  In addition the merchant service provider charges fees in order to maintain your account and equipment.  The following is an explanation of several of the fees you may be obligated for:

• Qualified Discount Rate:  That is the rate you pay for a standard, swiped Visa or MasterCard transaction.
• Communication Fee:  The fee charged by the processing network for using their network
• Interchange & Access Fees:  The charges Visa and MasterCard require on each transaction
• Batch Deposit Fee:  This is a fixed charged that usually is a fee charged once per day on any day you processed transactions.
• Monthly Service Charge:  This is maintenance fee for servicing your account for accepting credit cards and providing customer service and terminal assistance.
• Compliance Fee:  This is the fee associated with the cost of making sure your account meets the Visa/MasterCard PCI/DSS data security program standards.  (TMS does not charge PCI/DSS fees for the first year of your agreement.)
• Monthly Minimum:  This is not an actual fee, it is a minimal fee requirement.  It simply means you have to process a certain minimum amount each month or pay the difference.

These are the normal and customary fees associated with accepting credit cards, however you may also be charged a “per occurrence” fee if specific events occur.  Here are some examples:

• Voice Authorization:  If for some reason you are away from your terminal and need to call in for a transaction approval you will be billed a voice authorization fee.
• Voice AVS:  If you are calling in for a transaction authorization and you also want to verify their address you will be charged this fee.
• Retrieval Request:  One of your customers has questioned a charge on their statement and contacted their card issuing bank to track it down.  This will prompt a retrieval request.
• Chargeback:  This occurs when one of your customers disputes a charge and you were unable to resolve the dispute with the customer.  The customer has contacted their card issuing bank for further assistance.
• ACH Reject/NSF:  This occurs if your merchant service provider attempts to charge your bank account for your fees and you have insufficient funds in the account to cover these fees.
• ACH Change:  This occurs if you have changed your bank deposit account to a different bank.
• Wireless Per Transaction Fee:  If you are using a wireless terminal you will be charged a per item fee for usage of the wireless network.
• Wireless Service:  This is the fee for using the wireless network if you are using a wireless terminal.  It is similar to the fee you pay for using your cell phone.
• Internet Gateway Per Transaction:  If you are using an internet gateway like authorize net the gateway provider may access a per transaction fee if you process over a certain number of transactions per month - usually 250. 
• Internet Gateway Fee – If you are using an internet gateway you will be charged a fee for using the gateway from the gateway provider.

While there are obvious costs associated with accepting credit cards, it must be realized that the cost of NOT accepting credit cards is much greater.  In fact by not accepting credit and debit cards from your customers, the average business will lose as much as half or more of their potential sales!