Merchant Account Blog - Straight Pass Through » Key Phrases

Video: Are Early Termination Penalties Really That Bad?

Robb Lejuwaan — Fri, 22 Aug 2008 00:37:48 +0000

Watch this video to here a different poi of view on merchant account early termination penalties. Let us know what you think by sharing your thoughts in the comment section below.

What is a “Third Party Processor?”

Robb Lejuwaan — Wed, 20 Aug 2008 15:01:39 +0000

A Third Party Processor is an independent processor that is contracted with by a Acquiring Bank or Processor to conduct some part of the transaction processing process.

-Some of these Third Party Processors specialize in running and hosting networks of Point Of Sale (POS) terminals connected to their Host via dial out modem; they produce the software in the POS terminals as well as in their host, and route authorization requests to Visa or MasterCard as needed (MAPP, MDI, FDR, for example).

-Other Third Party Processors specialize in the Settlement of credit card transactions with Visa and MasterCard so that merchants can be paid (FDR for example).

-In the world of Internet Credit Card Processing, the Secure Payment Gateway Provider, such as authorize.net, is another type of Third Party Processor.

Video – BE WARNED! Early Termination Fees and Auto-Renewal

Robb Lejuwaan — Fri, 15 Aug 2008 22:00:24 +0000

Watch this video to be warned about the dangers that lurk in many merchant account contracts. The focus of this lesson is on early termination fees and contract auto renewal. If you heed these words you can save yourself a lot of money and suffering.

What is a Credit Card “Processor?”

Robb Lejuwaan — Fri, 08 Aug 2008 15:08:30 +0000

A Processor is the company that actually routes an Authorization Request from a Point of Sale device (such as a Verifone credit card terminal) to Visa or Master Card, and then arranges for Fund Settlement to the merchant. Such processors are traditionally accessed via direct dial out modems connecting to their system.

-Processors need to have a Sponsoring Bank in order to gain access to the Visa and Master Card networks. When a Processor or other entity has made such an arrangement with a Sponsoring Bank to resell their services, they are called an Agent of that bank.

-Any entity that sells Visa or Master Card must disclose themselves as an Agent of their Sponsoring Bank. Such sales entities may be a Processor, or an ISO/Agent of the Processor or Processor/Bank alliance.

-Some banks are also their own processors, while other banks will use a Third Party Processor to handle this processing for them (in their own brand name in some cases).

What is a “Sponsoring Bank?”

Robb Lejuwaan — Sun, 20 Jul 2008 15:19:30 +0000

A Sponsoring Bank is a Chartered Bank or Savings & Loan that has obtained membership in Visa or Master Card in order to allow a Processor access to the Visa and Master Card networks (in order to process these types of transactions).

-Since only a Bank may join Visa or Master Card, many Processors make deals with a Sponsoring Bank in order to gain access to the Visa and Master Card networks.

-Because these Sponsoring agreements are usually like a partnership, the line between the Sponsoring Banks and their Processors is not always clear; sometimes the partnership is referred to by the name of the bank, while other times they are referred to by the name of the Processor.

Who is the “Issuing Bank?”

Robb Lejuwaan — Mon, 12 May 2008 17:24:57 +0000

The Issuing Bank is the financial institution that extends credit to a card holder through credit card accounts. The financial institution issues a credit card and bills the card holder for purchases against the bankcard account.

Here is wikipedia’s defenition for Issuing Bank .

Who and What is the “Aquiring Bank?”

Robb Lejuwaan — Sun, 04 May 2008 21:37:05 +0000

An acquiring bank (or acquirer ) is the bank or financial institution that accepts payments for the products or services on behalf of a merchant. The term acquirer indicates that the bank accepts or acquires transactions performed using a credit card issued by a bank other than itself.

The acquiring bank’s contract with the merchant is referred to as a merchant account. Under the contract, the acquiring bank exchanges funds with issuing banks on behalf of the merchant, and pays the merchant for the net balance of their daily bankcard activity: gross sales, minus credits, interchange fees , and acquirer fees.

For more details on merchant account fees read Who Get’s Your Merchant Account Fees?

What is a Merchant Account Downgrade?

Robb Lejuwaan — Sun, 09 Mar 2008 04:01:49 +0000

A downgrade occurs when a transaction fails to meet certain pre-defined criteria from Visa or MasterCard, and an additional charge is added to the discount rate for processing the transaction.

What Does the Term “Settlement” Mean

Robb Lejuwaan — Thu, 06 Mar 2008 03:19:42 +0000

The term “settlement” describes the process of sending a merchant’s batch (set of authorized transactions) to the network for processing and payment. The acquiring bank pays the merchant (less applicable fees) with funds from Visa/MasterCard. The bankcard issuer then bills the card holder for the amount of the sale. Capture is another word used to describe the same process.

Other definitions:

Bankcard Issuer – The bank that issued the credit card to the customer.

Merchant Account Blog - Straight Pass Through » Key Phrases

Video: Are Early Termination Penalties Really That Bad?

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What is a “Third Party Processor?”

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Video – BE WARNED! Early Termination Fees and Auto-Renewal

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What is a Credit Card “Processor?”

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What is a “Sponsoring Bank?”

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