Some of the worst decisions we make for our businesses are the ones that we make out of desperation and in haste. We often make these because we find out when it is too late or need a product or service as a stop gap measure. Most times, the daily business of your business consumes so much time that doing the proper research to educate yourself on really important issues just doesn’t happen. As a merchant, your funds’ transactions are the lifeblood of your day to day business and more. Your merchant account may be an overlooked area where your business loses money, unnecessarily. Here are some things we think you should know about your merchant account and merchant service provider.

Let’s start with the easy stuff, so we can build on that for later. The most important and never out of sight fee that merchants incur is the Discount Rate. The Discount is charge that you, the merchant pays on each transaction. It’s a percentage of the total ticket amount. These rates vary depending on what kind of business you are and how you process your credit card transactions. If you’re processing cards as a Card Not Present vendor, then that means that your customers are not present to swipe and sign their receipts when they purchase items or services that day. Chances are that you’re Discount Rate is a little higher than other vendors that are Card Present Vendors; where their customers are there to swipe and sign their receipts. Rates depend on a number of things from business longevity, personal credit or backing, funds’ security and the type of business that you operate. These are risks that banks take on you, the vendor. While a Card Present Transaction is pretty safe, in that there’s less of a chance of fraud, theft or a chargeback; and yes, these merchants get better rates, the other half is losing out lately and here’s why. As businesses have been losing customers to online vendors and, more importantly international online vendors; local business owners are closing the doors, launching websites or both to compete with this trend. I guess, at the end of the day, this is great for banks, as they can charge higher rates for. Which now happens to be quite an acceptable risk for the right price.

Every day, you’re going to tab how much you made…or lost sometimes and that’s an exciting time. If you currently take cards, go to the next paragraph, if not, continue to read. So how do you turn all those transactions to zeros in your bank account? You need to batch. Batching is just summing all of the days’ electronic payments transactions and sending them to the bank for settlement. It’s that easy, and from there account information is justified and within a couple days, you are wired the money for that day’s business.

Two very similar, but very different terms in merchant service processing are Terminals and Virtual terminals. This is how the information is compiled for batching; Terminals or card swipers are small computers that read cards to transfer and compile information for monetary exchange. Virtual Terminals are a little different and are becoming more mainstream. As with ecommerce becoming more mainstream, Online Virtual Terminals are just as popular as regular terminals or card swipers. An easy way for a small or medium size business owner to operate one of these is on a PC. Your merchant service provider can set up a link for you to charge and capture money from your customer’s, or just put a hold and capture later, once the bank has verified customer information. Again, the problem is that banks tend to charge a bit more for these types of transactions.

Well, that’s it for now. As I know a lot of you are well informed, bringing these subjects up from time to time, makes merchants more diligent about their ecommerce banking services and the charges they incur. This is the first part of a couple glossary or “Terms” articles that we’re publishing.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

In September 2006, the 5 major credit card companies in the world- MasterCard, Visa, American Express, Discover Financial Services and JCB came together to form an organization that would create, disseminate and regulate the standards by which each member of the payment cards industry would need to comply. The organization would be called the Payment Cards Industry (PCI) Security Standards Council. The key theme behind the PCI council is the DSS or Data Security Standard, which is a set of compliance requirements to be met by each entity in the process of credit card processing, who maintains, processes or stores credit card information. The current version of the Data Security Standard is 1.1 adopted with effect from December 31, 2006.

The PCI consortium is basically aimed at providing security to customers in the e-commerce environment, by ensuring that the merchant or acquirer who is handling the credit card information has sufficient security checks and facilities in place to prevent fraudulent activity. PCI compliance is a mandatory requirement for any merchant, third party credit card processor or acquirer, who is storing, processing or receiving credit card information in any form. By the end of 2007, PCI compliance was made mandatory for any organization that accepts credit card payments. In case such a merchant or acquirer is not PCI compliant, the PCI council is empowered to levy fines (upto $500,000) and take regulatory action, in some cases even permanently prohibit the entity from credit card activity. However, it is important to note that PCI compliance is mandatory for only those parties who are in possession of the Primary Account Number (PAN), or the full 16-19 digit credit card number. Technically, if the merchant or acquirer in question does not store, process or receive the PAN, then the said party would not need to comply with PCI rules.

To be PCI compliant technically means that at the time that an authorized PCI auditor audits a merchant or acquirer’s systems, the said party is in 100% compliance with the PCI rules. This practically means that as long as the merchant can show compliance at the time the audit is conducted, he or she does not need to stay compliant throughout- this is obviously a regulatory issue which may need to be sorted out with time. In any event, being PCI compliant would mean that each of the 12 requirements of the PCI DSS 1.1 standard is met by the merchant or acquirer in question. Most of these requirements revolve around access control and network protection. In addition, proper monitoring and regular security checks are mandated. The PCI DSS can be divided into 6 basic sections to aid understanding:

1. Network Security
2. Protection of Credit card information
3. User and group level access control
4. Organizational level information security policy
5. Protection against vulnerability and business risks
6. Regular monitoring and maintenance of security infrastructure.

The PCI council, prescribes these rules in the context of merchant levels (1, 2, 3, 4), which have different levels of required compliance and corresponding fines and levies. Merchants are classified into levels 1, 2, 3 and 4 based on their volume of transactions and whether or not the merchant has had any data breaches in the past. For instance, Level 1 merchants are those that have the highest volume of transactions, upwards of 6 million a year currently, as well as the merchants who have experienced a breach of sensitive data in the past. It is important to note that the DSS 1.1 standard is more focused on Level 1 and Level 2 merchants, as they are more prone to credit card fraud than the other levels. Furthermore, MasterCard doesn’t have any specific requirements for a merchant to fall under Level 4, whereas Visa has different categories in some geographic regions. While MasterCard suggests that level 4 is for merchants who are not in Level 1, 2 or 3, Visa goes a step further and has level 4a and level 4b categories as well.

Becoming PCI compliant will not be free, as putting in place both organizational as well as technical measures will involve investment in terms of both time and money. It is estimated that a Level 1 merchant would need to spend nearly $700,000 in order to implement PCI compliance. The costs would be lower for lower level merchants- for instance, a Level 2 merchant may spend only half the amount of a Level 1 merchant. However, this is not taking into account the fact that non-compliance could lead to huge fines and sometimes a revocation of the right to accept credit cards.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

A multi-currency merchant account allows a merchant to accept payments in multiple currencies and currencies other than his home currency. This can be an excellent advantage in the given scenario of globalization which has provided an internet merchant access to a global market for his or her products. With a multi currency account, a retailer can provide the customer the ability to pay in their own currency, while still receiving remittances in the home currency. In case an international merchant account is used, a number of different currencies are available to the merchant in which to settle funds. For instance, a buyer in New Zealand can buy products from a US merchant and still pay for it in New Zealand dollars. At the same time, the US online merchant will receive remittances in US dollars.

Any e-business today will be hard pressed to survive without international sales or an online presence. People in major emerging economies such India and China are increasingly interested in products from developed countries such as the US and the UK, as these countries are renowned for their high quality, which is often not available in developing nations. However, as is the case with many of these countries, the government imposes a restriction on currency exchange and their own home currencies are not freely convertible. By offering a multi-currency option, an e-merchant can not only gain a wider market access, but also gain a competitive edge in the e-tailing marketplace. An added benefit with some merchant account providers who have multi-currency capabilities is that they are able to provide localized web pages in the reader’s language that makes it even more user friendly.

There are many merchant account providers out there who offer to credit card acceptance in most global currencies, sometimes ranging from 120 to170 currencies around the world. It is important to note, however, that for the merchant, the currencies in which funds are made available finally, are more limited to the better known currencies, usually 15 major global currencies including UK Pound Sterling, US Dollars, Euro, Canadian Dollar, Japanese Yen, Swiss Francs and Australian Dollar. Foreign exchange rates are provided daily by the merchant account provider. The multi currency merchant account provider will indicate currencies on the monthly account statement.

While it is obviously beneficial to provide multi currency facilities, it does not come free, and adding more currencies will increase both monthly maintenance fees as well as monthly and set up fees. Some provides will usually provide a default currency at no additional charge and an incremental fee for each progressive currency added. In addition to the wider market access that comes with multi-currency acceptance, an online merchant may choose to maintain multiple accounts for each different currency. For instance, if an US based online merchant receives several orders from the UK, it may be wise to set up a separate Pound Sterling account offshore to maintain funds in the same currency. Conversion charges can be saved significantly using this technique, and many e-tailers opt for it. This insulates them substantially from currency exchange rate fluctuations.

While multi-currency merchant accounts increases market access available to an online merchant, it also increases exposure to credit card fraud, especially since the foreign buyer is not regulated,  and in case of a problem, the local government may not be able to provide any suitable protection. According to a survey conduct by the Merchant Risk Council, online credit card fraud causes losses of upto USD 50 million each year. In most cases, credit card fraud originates from the less developed nations, primarily the following (actual rankings differ as per different surveys):

The Ukraine
Indonesia
Yugoslavia
Lithuania
Egypt
Romania
Bulgaria
Turkey
Russia
Pakistan
Malaysia
Israel
Venezuela

In order to minimize potential losses due to such fraud, it is important for an online merchant to ensure that the merchant account provider has taken the necessary steps in terms of verification, particularly fraud scrubbing. In addition to CVV and AVS verification, a good fraud scrubbing software can be instrumental in weeding out potentially loss making sales. However, the merchant must remember that the process is not perfect, and it is likely that along with fraudulent transactions, a small percentage of legitimate sales may also be lost.

For more information on multi-currency merchant accounts.   please visit www.stradafee.com!

Check 21 or the, “Check Clearing for the 21st Century Act” is a regulation that enabled electronic check collection, processing and clearing between banks in the United States. The Federal Reserve had been investigating electronic check processing since the year 2000 with a focus on speeding up check processing and reducing transportation related delays. Through the collective efforts of industry officials and Federal Reserve staff, the act took shape and was presented before the US congress in the year 2002. The act, though signed in 2003, came into effect only from October, 2004. This act has brought in substantial changes, not only in the conventional method of check processing in United States, but also in the electronic payments industry, which was so far dominated by credit cards. The act is aimed at reducing both time and costs of physical transportation and processing of checks by using electronic images which are delivered electronically through a nationwide network of banks called ACH or Automated Clearing House. Compared to the previous standard of 3 days for a local check and around 14 days for out of town checks, a check now deposited at day 1 can be processed and cashed by the end of day.

In addition to being time consuming and expensive (considering the additional cost of transportation, particularly in outstation checks), physical transfer of paper checks is relatively more prone to theft. Check 21 Act has allowed ‘check truncation’ which means that the physical check is no longer required and an electronic substitute in the form of a digital image of the front and back of the check can be used for processing and payments, and is just as good as the original paper check. Such substitute digital images are also referred to as Image Replacement Documents (IRD) or echecks (electronic checks), though the term ‘echecks’ also encompasses several other payment options nowadays. However, to qualify as a valid e-check, the digital image has to comply with certain requirements of the Check 21 act. The substitute check must have an additional statement added to it saying, “This is a legal copy of your check. You can use it the same way you would use the original check.” In addition, the substitute check must identify the account holders name and address, check number, transit code, bank information, 9 digit routing number and checking account number. Image file size of the substitute check is a critical consideration, as with the sheer number of checks in processing due to its growing popularity, banks will have to store a large number of check images for their records. In addition to storage, a larger file size will also lead to slower transmission and consequently slower processing. Banks may thus be compelled to lower the image file size, thereby lowering resolution and image quality, which may cause problems with validation of electronic checks and consequently security of the processing system.

Quicker processing will mean that there will be a much shorter time lag between the payee depositing the check and the funds clearing from the payer’s bank account. Hence, “Float” may not be available, implying that the payer’s funds have to be in place before the payee deposits the check. In case funds are insufficient, either party can face penalties and fines, as per the provisions of Check 21. Check 21 also provides protection to customers, in case of double deposit (where paper and electronic copies are deposited), or in case funds are deposited to or withdrawn from the incorrect account. In such cases, Check 21 provides the customer the right to have funds re-credited upto USD 2,500 per check, within 10 business days until the investigation is completed. However, this benefit applies to only those cases, in which a customer possesses a valid “substitute check.” The right to recover losses due to error or fraud covers not only the amount withdrawn, but also the fees, dues and/or penalties associated with the respective transaction. Check 21 provides these rights in view of potential problems associated with electronic check processing, such as the ones mentioned above. In addition, sometimes the digital image may not legible, causing transactional errors.

While Check 21 has increased the speed and efficiency of check processing, it has also increased the chances of check related fraud. As physical checks are minimized in electronic processing, it is harder to detect fraudulent deposits or payments. For instance, a digital image does not have the benefits of watermarks or chemically reactive paper, which are used to detect and minimize fraudulent checks. However, it has breathed new life in the usage of checks, which were on a constant decline, and created new demand for electronic checks, which are becoming increasingly popular, and are viewed by many as an excellent and low risk substitute for credit cards.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

Every business has to have an online payment system in today’s e-commerce driven marketplace. When it comes to making a payment online, several methods are available, including credit cards, debit cards, e-wallets, and echecks, which are fast becoming popular and taking a chunk of the market away from credit cards. An e-check is an electronic check processing option that works like a physical check- instead of transferring sensitive credit card information online, which is prone to security breaches, an e-check simply transmits the check information along with some other details, thereby keeping sensitive credit card information safe. While an e-check is not perfectly secure, it does offer some benefits related to security, especially when compared to a credit card.

Making payments or accepting checks online is relatively straightforward. There are two basic ways to accept check payments online. In both methods, a customer completes an order by checking out much the same way as in the case of a credit card transaction. The difference comes in when payment information has to be entered. In the first method, instead of filling in credit cards numbers, expiration dates and verification codes, a user will need to enter the information on the physical check (which is in the customer’s possession). This information will then be processed through the ACH network and upon approval, the check information is transferred to the seller, who can then take a physical printout of the check and deposit it in his or her local bank. The critical component here is the software that processes the check information and provides an electronic version of the check that can be printed out by the seller at his own location.

This can be accomplished via e-checks or electronic checks. In a typical transaction, instead of providing credit card details, the customer will enter bank routing information and check number. Echecks are essentially a replacement for paper checks, as far as the buyer is concerned. The seller may still have to print the physical checks and deposit them with the bank at periodic intervals. However, services are available whereby the printing can be outsourced to a processor and the payment is directly deposited into the seller’s account.

In the second method, the need to take a print out for deposit is eliminated, as the check gets directly cleared online and is settled by both payer and payee banks directly. In this method, an online payment gateway which has check processing facilities will collect bank account, routing and other information and transmit funds through the ACH network.
Also, check payments are contingent upon funds being cleared by the payer’s bank. This method is called ichecks or internet checks. This method completely removes the role of physical checks and the processing is

In order to start accepting checks online, a merchant will need to sign up with a check processing service, which will provide a payment gateway software to process check payments via the internet. This payment gateway will collect the necessary information including bank information routing number as well as the check number. It will also be responsible for processing the payment via the ACH network. Typical fees associated with such accounts include set up and transaction fees. There may also be check guarantee and verification fees as well as reserves, depending on the chosen provider.

A key benefit of accepting checks online is that nearly everyone is familiar with checks and transacting check payments and receipts involves much less training, compared to credit cards. Hence, a new e-commerce customer will find it much easier to just go in and input check information on a payment gateway, rather than enter credit card information, CVV and other numbers. In addition, check processing fees are typically lower than credit card processing fees. The obvious drawback is that a check is not cleared instantaneously, and most sellers will only ship the item once the funds clear. Hence, there will be a longer waiting period for a buyer, compared to if he or she conducts a transaction through a credit card. This is where check guarantee and verification come in. Many service providers will provide either seller protection terms or check guarantee and verification, within the processing function.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

The use of plastic money or credit cards is fast becoming the preferred mode of payment for all kinds of purchasing activities, not just in the developed world but also in emerging economies. Two key factors are contributing to this trend:

1. Convenience and Security: Credit cards mean that hard cash does not have to carried around in large quantities for high value purchases. Credit cards also carry the convenience of remote purchasing and instant payment delivery, unlike in the case of pay orders or banker’s cheques, which involve extra fees, delivery charges and the logistical time lag.

In addition, there is a security feature attached to credit cards, and generally speaking, a credit card loss does not always mean an immediate loss of money.

2. E-commerce: with the growing prevalence of electronic purchasing options such as online, TV and telephone and growing adoption of the convenience factor, credit cards are becoming the only practical choice for payments.

Merchant accounts are accounts which enable acceptance of payments through credit cards, cheque cards and debit cards. A retailer can obtain a merchant account with a bank or through an independent merchant account provider, who specializes in setting up and maintaining merchant accounts for miscellaneous business entities. The procedure for applying for and obtaining a merchant account is relatively simple and can be viewed http://stradafee.com/merchant-enrolment.php

There are different types of merchant accounts available depending on retailer needs and the nature of business. For instance, for an internet retailing business, an internet merchant account is used, whereas a swipe based physical terminal is used for a brick and mortar retail business. Most merchant accounts can however, be classified as:

1. Swipe based: These merchant accounts depend on a physical terminal connected to a phone line. The credit card needs to be swiped through this terminal to initiate, process and complete a payment transaction. In the case of check verification, there will be a check reader, acting as the swipe terminal.

A new innovation in the swipe based processing segment is the wireless merchant account terminal, in which instead of a regular phone line, is connected wirelessly using cell phone technology. The advantage of this technology is that a merchant or e-tailer will not be limited geographically for accepting payments. For instance, at a retail exhibition, a merchant can easily set up without wires, a payment system for walk-by clients to submit credit card payments.

2. Non swipe based: These include all those methods of payment which require credit card information but the credit card itself does not need to be swiped. This also includes merchant accounts for online check payments and clearance. Some of the common non-swipe merchant accounts include:

a. Internet Merchant Account: This type of account is used by internet based retailers. Credit card payments are processed after receiving electronic credit card information received through a web-based form and transmitting it through a payment gateway. This type of merchant account is a very popular merchant account, particularly due to the substantial growth of the e-commerce industry.

b. Online cheque acceptance (e-checks): This type of processing utilizes cheque payments without actually having to receive a cheque by mail. The customer can provide cheque information on the physical cheque, such as depositor name, account name, cheque number and so on, and the retailer can, using a cheque processing solution, verify and receive a cheque via online submission or phone/fax or email. Using the special software, the cheque can then be printed remotely and submitted by the retailer in physical form.

c. Telephone order merchant account: Using a touchtone telephone, this type of account receives information about the credit card using the telephone keypad. This account is suitable Telephone Order businesses which have a substantial business coming in through the telephone.

An important factor to remember with merchant accounts if fees; merchant accounts involve a number of fees to run and maintain, including setup, monthly/annual, statement fees (which are fixed) and a number of variable fees such as discount rate, rolling reserve, per transaction fees and address verification (AVS) charges. The actual cost of setting up, running and maintaining a merchant must be understood and compared to actual business requirements, such as volume and frequency of transactions, nature of business and track record. Selecting the right merchant account provider will be critical from the cost-feasibility point of view as well as smooth transaction processing of credit card payments.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

In this day and age of electronic commerce, the decision to open a credit card merchant account is relatively undisputed. The actual process of opening an account should begin with the retailer identifying certain key parameters about the retailer trade the merchant requires the merchant account for. The selection of an appropriate vendor for the merchant account should be the first step in the cycle, which is usually followed by an application on a prescribed form. If and when approved, certain information and documentation such as financial statements will need to be furnished to the merchant account provider. One approved, the provider will supply the equipment or in case it is an online merchant account, the retailer’s website will need to embed the merchant account software in the e-commerce website and integrate the shopping card software supplied by the merchant account provider.

Selecting a merchant account provider should take into account the volume and value of proposed transactions, nature of business, history and track record and identification of specific needs, if any apply, of the retailer. The volume of transactions and nature of business proposed to be conducted via the merchant account will have a significant bearing on the available options to choose from. For instance, if a retailer expects a high volume of transactions, a merchant account for that specific purpose will need to be obtained, which frequently fall in the high risk category. Such high risk businesses may not be able to obtain a merchant account onshore, and may need to opt for an offshore merchant account. The history and track record with a merchant account may come into question in case of a domestic account provider. In case a retailer is unable to meet certain basic requirements, for instance, if a retailer has been in business (online) for less than 2 years, the merchant account provider may ask for a cash bond (as indemnity) along with a business plan, which will further need to be approved.

In addition to choosing between an offshore or onshore provider (which in some cases may not present a choice), an e-tailer will be well advised to do some extensive number crunching when choosing a merchant account provider. Today, there is available, an extensive list of provider to choose from, with varying fees, minimum requirements and transaction fees. While intense competition has caused many providers to lower their fee structures, a merchant must beware of hidden fees and charges that may not be presented initially by providers offering ‘ZERO SETUP FEE!’ and similar catch phrases to capture attention.

The actual application process begins with filling in an online form (in case of internet merchant account) or a physical form, available through your local bank, in the case of a domestic merchant account. Many offshore account providers can be located by simply searching the internet. The application form is then screened by the merchant account provider, in order to assess feasibility, primarily from a risk point of view. As mentioned before, a high risk vendor will probably be out of favor for a domestic provider without the furnishing of a substantial indemnity bond. The provider will then approach the merchant for further documentation. Such documentation will mostly include:

? Registration certificate, incorporation certificate, memorandum and articles of association (in case the retailer is incorporated), partnership deed (in case of partnership) and other organizational material.
? Details about the directors or partners including name, place of domicile (with proof), contact information, etc.
? Identification proof of the directors, managing partners.
? Business plan and financial documentation.
? Full history with a previous merchant account along with detailed information about chargebacks.

In addition to the submitted information, the merchant account provider will typically conduct its own background checks including a credit history and rating verification, as well as a detailed analysis of the retailer’s proposed business model and revenue potential. Assuming that all is satisfactory, the provider will obtain an approval from an acquirer bank that it has a relationship with (many big banks have their own acquirer bank units). Once approved, the retailer will have to purchase a credit card terminal and in many cases, a dedicated telephone line for processing needs. In case an internet merchant account is applied for, the software is the key to operations. While many merchant account providers have their own shopping cart software, they also provide a compatibility list of 3rd party software. Such 3rd party solutions are often favored by retailers due to the usability, features and ease of management.

A final point to be noted in case of an offshore merchant account- while it is possible to go directly offshore, set up and incorporate a company in a foreign land, and do the necessary paperwork yourself, it may be more convenient and practical to approach a third party merchant account provider such as Stradafee, which specialize in providing merchant accounts and have the necessary infrastructure in place to make the whole process even easier.

In this day and age of electronic commerce, the decision to open a credit card merchant account is relatively undisputed. The actual process of opening an account should begin with the retailer identifying certain key parameters about the retailer trade the merchant requires the merchant account for. The selection of an appropriate vendor for the merchant account should be the first step in the cycle, which is usually followed by an application on a prescribed form. If and when approved, certain information and documentation such as financial statements will need to be furnished to the merchant account provider. One approved, the provider will supply the equipment or in case it is an online merchant account, the retailer’s website will need to embed the merchant account software in the e-commerce website and integrate the shopping card software supplied by the merchant account provider.

Selecting a merchant account provider should take into account the volume and value of proposed transactions, nature of business, history and track record and identification of specific needs, if any apply, of the retailer. The volume of transactions and nature of business proposed to be conducted via the merchant account will have a significant bearing on the available options to choose from. For instance, if a retailer expects a high volume of transactions, a merchant account for that specific purpose will need to be obtained, which frequently fall in the high risk category. Such high risk businesses may not be able to obtain a merchant account onshore, and may need to opt for an offshore merchant account. The history and track record with a merchant account may come into question in case of a domestic account provider. In case a retailer is unable to meet certain basic requirements, for instance, if a retailer has been in business (online) for less than 2 years, the merchant account provider may ask for a cash bond (as indemnity) along with a business plan, which will further need to be approved.

In addition to choosing between an offshore or onshore provider (which in some cases may not present a choice), an e-tailer will be well advised to do some extensive number crunching when choosing a merchant account provider. Today, there is available, an extensive list of provider to choose from, with varying fees, minimum requirements and transaction fees. While intense competition has caused many providers to lower their fee structures, a merchant must beware of hidden fees and charges that may not be presented initially by providers offering ‘ZERO SETUP FEE!’ and similar catch phrases to capture attention.

The actual application process begins with filling in an online form (in case of internet merc

hant account) or a physical form, available through your local bank, in the case of a domestic merchant account. Many offshore account providers can be located by simply searching the internet. The application form is then screened by the merchant account provider, in order to assess feasibility, primarily from a risk point of view. As mentioned before, a high risk vendor will probably be out of favor for a domestic provider without the furnishing of a substantial indemnity bond. The provider will then approach the merchant for further documentation. Such documentation will mostly include:

? Registration certificate, incorporation certificate, memorandum and articles of association (in case the retailer is incorporated), partnership deed (in case of partnership) and other organizational material.
? Details about the directors or partners including name, place of domicile (with proof), contact information, etc.
? Identification proof of the directors, managing partners.
? Business plan and financial documentation.
? Full history with a previous merchant account along with detailed information about chargebacks.

In addition to the submitted information, the merchant account provider will typically conduct its own background checks including a credit history and rating verification, as well as a detailed analysis of the retailer’s proposed business model and revenue potential. Assuming that all is satisfactory, the provider will obtain an approval from an acquirer bank that it has a relationship with (many big banks have their own acquirer bank units). Once approved, the retailer will have to purchase a credit card terminal and in many cases, a dedicated telephone line for processing needs. In case an internet merchant account is applied for, the software is the key to operations. While many merchant account providers have their own shopping cart software, they also provide a compatibility list of 3rd party software. Such 3rd party solutions are often favored by retailers due to the usability, features and ease of management.

A final point to be noted in case of an offshore merchant account- while it is possible to go directly offshore, set up and incorporate a company in a foreign land, and do the necessary paperwork yourself, it may be more convenient and practical to approach a third party merchant account provider such as Stradafee, which specialize in providing merchant accounts and have the necessary infrastructure in place to make the whole process even easier.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

On Jan 17th, 2008 a sting operation in Vancouver, BC thwarted a ring of credit card counterfeiters living the life of luxury entirely funded with other people’s credit. The goods hauled away by police filled several 3 ton moving trucks and values were estimated between $70 000 and $100 000 dollars. The perpetrators had used stolen and manufactured identities to finance everything from high end cameras, televisions, and jewelery to automobiles and a multi-million dollar home. Accounts seized were valued at over $10 million dollars.

Credit card fraud is a multi-billion dollar crime in North America. It is becoming an increasingly popular form of identity theft because of advances in printing technologies and it can be done anonymously with little or no risk of prosecution even if it is discovered. Often card numbers are used to make purchases over the phone or internet, but sometimes advanced schemers may create an actual copy of your credit card complete with magnetic stripe, signature, and security features.

Scam artists have dozens of ways of gathering your information. It may be as simple as convincing an employee at a restaurant, or gas station to copy down credit card numbers throughout the day, or as advanced as planting a bug on point of sale equipment, or even unplugging and replacing a card reader right off the checkout table in a retail outlet. Skimming is the most common and fastest way schemers collect credit card data. The individual carries a small box the size of a pager or cell phone. In the past you had to make a skimmer yourself, however now they can be purchased various places online. By swiping your card the device pulls all data required for counterfeiting right off the card, which can be later downloaded to a computer. Often the data is sent overseas to factories that produce high quality fraudulent cards by the thousands. Cards are then sent out to crime rings throughout the world.

Some of the standard security features found on most types of cards include embossing, micro printing, and printing only visible under black light or ultraviolet light. As technology improves, so does the need for increased security features. Some cards now contain a microchip inside of them which is almost impossible to replicate. Countries that have implemented this system have seen a reduction of this type of credit card fraud reduced by as much as 80%. Some countries also require a PIN number be entered at the time of credit card processing as well. It is the responsibility of store managers to implement procedures to protect customer’s information.

Credit card providers, such as Visa and MasterCard have security procedures and protocols businesses must abide by in order to safeguard both the merchant account and the individual. If you do notice someone has skimmed your card during a transaction call the provider and put a hold on the account. Make a mental note of the individual’s physical description, such as height, weight, hair or eye color, skin tone, and what clothing they are wearing. Immediately report the suspicious individual to law enforcement.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

Having trouble managing the plethora of financial accounts you’ve acquired over the years? Tired of sorting through check books and online accounts to figure out which bills you’ve paid and which ones are about to be late? These days it is not uncommon for individuals to be faced with 20 to 30, or even more separate accounts to keep track of. Even with online access to all your bank accounts, credit cards, investment accounts, cell phone, cable, utility bills, mortgage, and auto loans it becomes a task can eat up hours of your time. With everything spread out it can be maddening to wrap your brain around your financial position. Unless you are Warren Buffet, this is where online aggregator accounts can save you the aggravation.

Account aggregation is an accounting method of showing many different types of accounts in one place. Logging into one system can give you a bird’s eye view of your financial situation. These systems utilize “screen scraping” to compile data from each of your accounts and will display them on one page for you to review.

Various types of account aggregation solutions are available. With client based systems you download an application that runs from your computer. This type is more secure because all the financial data is stored on your computer. Server based systems store the data on web servers. While less secure you can access the data from anywhere in the world. Some companies offer a hybrid solution. Mobile systems download the data to a portable USB drive you can plug into a computer anywhere you go. Just don’t lose it!

Some people are concerned about possible security risks of these systems, however it may not be as great as one might suspect. Most financial institutions have rigid procedures in place for transferring money out of an account. In the rare circumstance someone is successful in initiating this type of transaction; in most cases it will not take place instantaneously. With regular use of your account aggregator you will most likely notice it before it is processed and be able to cancel it. The reality is that there is more risk handing your credit card to a dishonest store employee than someone accessing your aggregated accounts. The greater risk is to your privacy rather than financial damage.

While account aggregators still need to be setup and managed as well it is far less difficult than dealing with each account on its own. For small businesses that rely heavily on credit card processing there are professional services through internet merchant account providers that can custom tailor a plan that best meets your specific needs.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

Selecting point of sale, or POS, equipment is a critical decision for any small business owner. This is the gateway of financial interaction between your business and its customers. POS equipment is the hardware and software that handles customer transactions and communicates them with merchant account providers if needed. Without them it is impossible to process debit and credit transactions. In today’s marketplace where fewer people than ever carry cash, it is an essential tool for any growing business. These systems include barcode scanners, pin pad entry points, signature stylus, credit card readers or swipers, keyboards, computers, printers, touch screen displays, fingerprint ID’s, and cash registers. A software component that manages user interface and hardware integration is another major factor in the equation.

Choosing specific point of sale components is not as simple as it sounds. A thorough evaluation of you business structure is essential to developing a custom tailored POS system that can carry your business forward. A wireless system is great for mobile vendors or restaurants, while emphasis on customer display may make smoother transactions in a retail outlet. Like the automobile industry, most POS equipment is sold through resellers rather than then manufacturers. Expect to pay between $2000 and $8000 for a high quality custom system fully with a service agreement. While used systems may be less expensive, you may have to install and service the system yourself. Software costs could easily overrun any savings benefits of a used system. Price should not be a major concern in your decision making process. A substandard setup means decreased efficiency, which could cost your business thousands per day in lost revenue. A malfunction at peak hours could run cashier lines out the door, some customers never to return.

POS equipment is divided into two major categories: Hospitality and Retail. Retail systems are less complex as most transactions are done instantaneously. These systems may integrate peripherals such as weigh scales and pole displays to keep the customer informed as items are scanned. Other features could include security features, such as fingerprint ID’s for cashiers. Smooth interface and speedy communication with merchant services is the goal of these systems. Management and organization is the emphasis in the Hospitality sector. In a restaurant setting these systems need to be able to relay orders to a kitchen or bar, manage open accounts as new items are ordered, and track server table responsibilities.

Spend some time analyzing service agreements. Will you receive regular software updates at no additional charges? Will you have to pay for hardware upgrades as your business grows? What is the reputation of the proposing vendor? You need to know if they are going to take care of you when you need it the most.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!