I remember when I first looked into accepting credit card payments I was overwhelmed by all the terminology and accepting payments online was even more complex! But I firmly believe that accepting credit card payments can help sales and if I can use Intuit for merchant services then I have integration with my QuickBooks so I don’t have to spend time entering data and trying to match my bank deposits with the merchant service statements and my sales.
Learning the Lingo
Regardless of how you accept credit cards, you’ll need to understand a few basic concepts about card processing. Here’s a brief rundown of the most common ones:
Merchant Service Provider: Sets up your online connections and serves as the intermediary between you as the merchant and all of the financial institutions involved
Merchant Bank: Supplies the actual merchant account and manages acceptance and payment of transactions
Issuing Bank: The financial institution that issues a line of credit to your customers
Interchange Fees: Charges assessed by major card associations like Visa and MasterCard that cover the transmission of money; usually a percentage of the total transaction plus a flat fee (American Express and Discover have their own fees)
Rates: Fees assessed to the merchant for the moving of funds
- Qualified rate is the percentage charged when the physical credit card is present (generally the lowest)
- Mid-qualified rate is the percentage charged when a card is not eligible for the lowest rate (for example, when the merchant types the number into a terminal instead of swiping a card)
- Non-qualified rate is the percentage charged when a customer’s card doesn’t qualify for the two lower rates (examples would be government and corporate credit cards, or customer address isn’t verified or there’s missing information)
- Rates are frequently set based on your volume. When you’re a new business, you usually receive general rates because you have no history. But once you’ve been up and running for a few months, you might want to have your rates re-examined – sometimes you can get a lower rate :-)
Authorization Fee: Charged to the merchant for address verification when the customer and card are not physically present
Downgrade: Occurs when, for example, there is corrupted swiped data or a transaction isn’t settled within two days of authorization
Chargeback: The process set in motion when a customer disputes a transaction; merchant gets a retrieval request and possibly additional charges from the issuing bank.
Other aspects I like about the Intuit merchant services, besides the integration are:
- Simple statement. I find many merchant service providers may have a lower rate, but there are extra fees so the statement isn’t so simple AND your total cost can be higher than Intuit.
- No cancellation fee, so you can try and if you’re not happy, it’s easy to leave.
This month there are a few merchant service specials that are available through our office as an Intuit Premier Reseller. The specials vary depending on the type of merchant service product you need (such as QuickBooks or Point of Sale or Mobile or web….). Contact our office so we can let you know what the special deals are from Intuit and from us!