Charge On Phone Accept Credit Cards by Phone!

If you have ever set up processing through Discover in the past, you know that you had to apply for a Discover account which was separate from your Visa/Mastercard merchant account.  It was also billed differently, usually at a higher rate than your other transactions.  But recently, this year, that has all changed.

Discover is now mostly hands off when it comes to setting up on your merchant account.  Now, you acquire it by simply checking off the little box on your merchant application.  But what about the rates?

More good news!  The rates are now exactly the same as your discount rate and transaction fee.  Also, there is no longer an activation fee for your first transaction.  This means more savings for you and probably more business for Discover since more merchants will be signing up for their service.

What about American Express?

Currently American Express still charges its own rate and transaction fee and also requires a $25.00 first time activation fee.  However, it appears that it will be following suite with Discover to at least some degree in Fall of 2008.

So what does this mean to you?

This means you should definitely heck off the discover box on your merchant application.  It is at no extra expense to you and will only increase the payment options of your customer base.

Many merchants don’t even think about the fact that there can be serious consequences for careless management of your merchant account.  You may be thinking, “What do you mean?  After all, don’t I just take the customer’s credit card and do the transaction?  And doesn’t the credit card processor make more money the more I do transactions and for higher amounts?”

The answer to that question is yes, but if you are a bigger risk than they accounted for and something goes wrong, they are left holding the bag.  In fact they are responsible for each transaction you make for up to 6 months.    But let me tell you, I see it happen all the time.  Here are a few examples of what will get a merchant in trouble with their processor…

1. Excessive monthly sales volume

2. Going significantly over the agreed average ticket size

3. Excepting a transaction for a product that would be listed under a different business   type or (SIC) code

4. Getting an excessive number of chargebacks

5.  Breaking apart a transaction for a single purchase over a period of days or weeks.

The above scenarios can all be managed and should be in order to prevent your funds from being held up to six months or worse yet, having your account shut down and being placed on a TMF list (like a black list that prevents you from applying with any processor until your situation is resolved to the satisfaction of your first processor).

For numbers 1,2 and 5 above, simply stay within your agreed to limits and require your customers to pay by cash or check for amounts that exceed those limits. If you have a good record in this regard, I would suggest applying for a limit increase every 6 months.

For number 3, if you want to sell items from a completely different business type, fine.  Open up another merchant account specifically for those items.

For number 4,  you can avoid chargebacks by always having a clear return and or refund policy which does not include a “no refund policy.” Provide good support to your customers and always deal honestly with them.  This wil help prevent excessive chargebacks.

Keeping your merchant account in good standing is essential for the success of your business.  Make sure you treat it that way!

The only thing between you, the Massage Therapist, and your next client are two things; the ability to afford your services and time to schedule your services.  With the right type of merchant account you can overcome these obstacles with ease.  What type of merchant account would this be?

A Dial Pay merchant account would fit this mold perfectly.  Simply stated, this way of accepting credit cards is done through any regular phone or cell phone.  You can charge your clients card anywhere and at any time as long as you have your cell phone with you.  This is great for house calls.   And of coarse the simple fact that you accept credit cards by phone means that you now have a form of payment you are providing your clients that allows them to pay you even if they are short on cash.

Another added benefit to you is that you can also use it to collect payment on some repeat clients that may be a bit behind on their payments to you.   If they are short on cash, no problem!  Just tell them to pull out their credit card.

With all of this flexibility and the fact that Dialpay accounts require no expensive monthly fees, it is definitely a must for every massage therapist!

In one word.  Yes!  Most merchants that are applying for a merchant account are not aware of this however.  Once they find out their application is pended, or worse yet declined, they of coarse want to know why.  The second question asked is, “Why does it matter?”

To answer that, the first thing you have to recognize is that your processor is responsible for every transaction you make for up to 6 months.  What that means is that if you make some bad transactions and then go out of business, your credit card processor has to eat the refunds if they cannot get a hold of you.  So as you might expect, they want to make sure you are somewhat trustworthy.

Some business types are less risky than others though.  If you are a restaurant merchant, credit is not so much of an issue.  If you are a contractor in the construction or remodeling fields, you are classified as a higher risk, especially since your transaction sizes are much larger. A larger transaction size can leave the processor responsible for a larger possible refund or charge-back.

So what can you do?

If you have weak credit and are not a high risk merchant, there are a few things you can do…

1.    Submit 3 most recent month’s business bank statements. (Note that you will need to have a reasonable balance at the end of each month)
2.    Have a strong co-signer.
3.    Request a rolling reserve on your transactions.

With today’s gas prices on the increase, shipping prices have also gone through the roof.  That being said, it is essential to know how to cut down on shipping costs.  Below are 5 ways for your small business to save on these costs…

Order shipping supplies from an online supplier

If you do a little shopping around online you can find a good shipping supplies supplier that offers these items at cheap prices, some of which even include free shipping.  If your business requires a large volume of shipping supplies you may want to consider buying overseas from another country such a China. Either way, you are not only getting these supplies at a cheaper price, you are also saving money on gas.

Download postage to your computer and save on gas

If your business is relatively far from where you buy your postage, this is a great way to save money on gas with prices being so high these days.  With this service you can download postage to your computer and print right to your envelopes.  If you use UPS, you can get a printer to print shipping labels and download software to your PC to set up each shipping label.

Schedule package pickups and save more gas money

Any one of the major shipping services will allow you to schedule package pickups at your location.  Again, this keeps you from having to drive to a delivery station saving you both money and time.

Use the same box

Of coarse this is common sense but just take it as a reminder.  If you have customers that make multiple orders with you, be sure to send as many as you can in one box instead of sending out each item in a different box.

Avoid Expedited shipping whenever possible

How can you do this?  Make sure to be on top of your orders so you don’t fall behind.  If you fall behind, call your customer and see if 2 or 3 day shipping is acceptable.  And be sure to always watch where your package is going.  If you are in California and need to ship to a customer in a hurry who is also in California, don’t ship overnight!  If you send it by ground, it will still get there in 1-2 days anyways.  So the moral of the story is always check shipping times to different regions from your location.

There are many different business types that accept credit cards and each one should be sure to have the appropriate corresponding merchant account to fit your needs.  Having the wrong fit could not only cost you more in processing fees but also cause you to lose customers.

Accepting credit cards by phone is a perfect example.  This type of service allows you the merchant to use your cell phone at any time and any place to do a credit card transaction.  So of coarse that is an immediate advantage over a typical land-line merchant account.  Not to mention the savings in credit card machine costs and so forth.  But, are their disadvantages?

There are if this is not a good fit for your business.  If you have a large business or a business that needs to run a large number of transactions each day, then you will want a physical terminal, whether it be a wireless terminal or land-line unit, to keep pace with a large number of customers.

So, what kind of businesses would benefit from having DialPay type of account?  Below is a list of just a few.  There are many more but these may give you an idea of what makes a good match…

Contractors
Attorneys
Taxi Drivers
Flea Markets
Consultants
Small home based businesses
Websites that want to sell some items offline on occasion
Crafts Sales
Moving Companies
Vacation Home Rentals

As you can see, these are small business that do relatively few transactions each day and can also benefit from accepting payment in different locations.  If your business is similar to one of the ones listed above, it would be good to consider the cost savings and added sales opportunities that go along with this type of small business merchant account.

As a small business owner in today’s difficult economy with rising gas prices and growing inflation, you may be wondering, “should I take the leap and get a merchant account or should I continue to accept cash and checks only?”

It is an important question to consider. One the one hand, you want to expand your customer base to those who only use or strictly prefer credit cards. On the other hand, you wonder if you will only be allowing the majority of your customers to pay with their card and thus cause you to pay expensive transaction fees that you otherwise wouldn’t have to. These types of accounts also increase your profitability by allowing you to accept payment out in the field with your customer thereby increasing your closure ration significantly.

It is true that credit card processing fees can be expensive. But I have found that the key is to find a cheap small business merchant account for those who are just getting started. Finding them cheap is not always easy. If you only accept a few transactions each day, accepting payment over your cell phone is simply the easiest and cheapest method. No expensive equipment is needed, no expensive monthly fees or monthly minimums. No annual fees and no early termination fees should you need to close your account within the first couple of years.

These types of accounts also give you the flexibility to accept payment from any location as long as you have cell phone reception.

In a down market you ultimately want to do whatever you can to increase your customer base. By starting to accept credit cards you are taking a solid step in the right direction and should no doubt make it easier for more customers to come your way.

A merchant account is an account  that allows you to accept credit cards from your customers and then deposits the sales amount (minus processing fees) into your own bank account.  There are different types of merchant accounts to accommodate different business types.  Below is a basic overview of what a merchant account involves and how one works.

What Are The Different Types Of Merchant Accounts?

There are a number of different types of accounts.  There is a small business merchant account that uses Dial Pay (just a cell phone) to process credit cards.  This is especially good for mobile merchants as well.  There are also wireless merchant accounts that are used with wireless terminals.  You can also find accounts that are specialized for businesses that do a very large volume of transactions and transaction sizes. 

Even within the above mentioned accounts there are variences.  Retail accounts are ones that do face to face card transactions.  Mo/To  or Mail order Telephone order accounts are for cardholder not present transactions.  These could be orders taken over the phone or internet or Dialpay.

How Your Funds Are Deposited

With most merchant accounts you will receive your funds into your bank account within 2 business days.  Funds are normally not deposited on the weekends or holidays.  In some instances it may take up to 5 business days to deposit for accounts that are considered a higher risk due to poor credit issues.  Some merchant service providers extend the deposit time like this for merchants that would otherwise would not have been approved.

On the other hand, many processors will allow you to have what is called a “zero day hold” or as some call it “next day funding.”  In such a case you will receive your funds the very next business day.      

Should I Accept Credit Cards?

The answer to that is almost always yes.  You simply cannot afford to lose out on customers that do not have cash on hand to purchase your goods or services.  Having one also gives your business a basic level of professionalism.

Are There Any Risks To Having A Merchant Account?

The risks are small but there are some things to keep in mind.  When setting up your account, make sure the provider is legit.  There are some bad people out there doing whatever they can to get there hands on your hard earned cash.  Be sure to do a little background checking before committing your personal information. 

There is also the risk of losing your merchant account.  Be sure to always provide exchanges or refunds and have that policy be very clear to your customers.  Excessive charge-backs can cause your account to be terminated and no credit card processor will be willing to approve of your account if you try to go elsewhere.  You also want to be sure to stay within the transaction size and monthly estimated volume that  you agreed to when you applied with your provider.  Going over these can cause your funds to be held for up to 6 months and even account termination. 

There are many types of credit card machines out there for you to pick from. All you need to have is a little basic knowledge about these machines and about your business to figure out which is the perfect fit for you.

1. Standard Retail Merchant Accounts. The basic credit card machine is needed for a standard retail establishment that uses a regular phone line hook up includes terminals like the Nurit 2085, Omni Vx570, Hypercom T7Plus and the First Data FD-50 terminals. These all have built in printers and are the most common terminals used today.

2. Non-Face-To-Face Merchant Accounts. All of the afore mentioned terminals can be sued, but for a cheaper solution the Tranz 330 with an external p250 printer will suffice.

3. Wireless Accounts. Most commonly used wireless machines include the Verifone Vx610, Way Systems, and Commerciant Mobilscape terminals. All three of these machines are excellent for mobile merchant accounts and have a proven track record or reliability.

4. Dial Pay. An alternative to using a wireless terminal is to get a Dialpay account. No extra equipment is needed. You just need to have a cell phone that you can use to do transactions with by simply dialing an 800 number and entering in the credit card payment by phone.

If your processor has sent you a notice requiring you to pay for a PCI compliance service, there are a number of things you can do to reduce or even eliminate the costs. First of all, merchants that are required to have this service are merchants that use software for their POS or that use an internet gateway and shopping cart that are not PCI compliant.

1. Make sure your internet gateway is PCI compliant. Many of the most widely used internet gateways are already PCI compliant. If yours is and you still received a notice, be sure to inform your processor and ask what steps need to be taken to provide proof of compliance.

2. Make sure your shopping cart is PCI compliant. Your internet gateway may be compliant but if you use a third party shopping cart you will need to verify that it is also PCI compliant. Otherwise, you will need to pay for a scanning service. As an option, you may want to change your shopping cart to one that is compliant and avoid additional charges altogether.

3. You have options, choose the cheapest one. If you have to pay for PCI scanning to remain in compliance below is a list of the cheapest services available.

http://www.hackerguardian.com/hackerguardian/learn/pci_free_scan.html. It’s free for 90 days and only $79 per year after that. (much cheaper than $20 per month as some scanning services charge.)

A good site that lists a large number of scanning services that you can compare rates with is https://www.pcisecuritystandards.org/pdfs/asv_report.html.