Merchant Account Blog - Straight Pass Through » Qualification

Why You May Need Multiple Merchant Accounts

Robb Lejuwaan — Fri, 12 Dec 2008 15:58:34 +0000

From time to time I review the search terms and phrases that being people to this blog to get ideas for posts. Today one of the first search phrases was “are you allowed to have two merchant accounts?” So here is a quick answer to that question – yes.

We have many clients that have multiple merchant accounts. For example, wineries typically have at least two accounts, one for their tasting room set up as a retail account and the other account for their wine club set up MOTO (mail order telephone order). Occasionally they will have a third account for their website, which is set up as a ecommerce account. We set them up this way because it helps them track distinctive parts of their business and most importantly, it saves them money.

Each type of merchant account (Retail, MOTO, Ecommerce, Restaurant, etc.) has different guidelines and rates. So if you have a retail merchant account setup for your website, your transactions will not meet the guidelines of a retail account, resulting in being downgraded which results in a higher rates. I am not going to into specific examples n the post but if you want to see an example of how this works read this post: What is EIRF?

Bottom line: Yes you can, and sometimes should, have multiple merchant accounts. Also, make sure your account is set up correctly to match the environment your transactions are being accepted in.

10 Things Supermarkets Need to Know about Merchant Accounts

Robb Lejuwaan — Thu, 18 Sep 2008 06:37:26 +0000

Do you or one of your clients operate a supermarket? Is so, there are a few things you should know that could result in some significant savings on merchant account fees. Here is the list:

1. Visa has lower Interchange rates for consumer cards used at a supermarket:

TRANACTION TYPE	RETAIL	SUPERMARKET
Swiped Consumer Card	1.54% + $.10	1.24% + $.05
Swiped Debit Card (Less than $19.41)	1.03% + $.15	1.03% +$.15
Swiped Debit Card (More than $19.41)	1.03% + $.15	Flat $.35

2. MasterCard has lower Interchange Rates for consumer cards used at a supermarket:

TRANACTION TYPE	RETAIL	SUPERMARKET
Swiped Consumer Card	1.58% + $.10	1.48% + $.05
Swiped Debit Card (Less than $19.41)	1.05% + $.15	1.05% +$.15
Swiped Debit Card (More than $19.41)	1.05% + $.15	Flat $.35

3. Discover has lower Interchange Rates for consumer cards used at a supermarket:

TRANACTION TYPE	RETAIL	SUPERMARKET
Swiped Consumer Card	1.62% + $.10	1.40% + $.05
Swiped Debit Card	1.02% + $.16	1.02% +$.16

4. Pin Based debit network fees are lower for supermarkets; here are a few examples:

DEBIT NETWORK	RETAIL	SUPERMARKET
Interlink	.75% + $.15 (Capped at $.50)	$.24
Star	1.25% + $.03 (Capped at $.45)	$.24
Pulse	.65% + $.10 (No cap)	$.21

5. If a merchant account for a supermarket is not set up with Interchange Plus pricing the merchant will not receive these special, supermarket rates. In other words if the merchant account has rate tiers such as “qualified”, “mid-qualified” and “non-qualified” then they are not receiving the benefit due them.

6. To received these lower supermarket Interchange rates the merchant account must be set up with very specific details when it is created. So make sure you are using a merchant account provider that has experience in this area.

7. The acceptable MCC Code required for these rates is 5411.

8. Some banks still require supermarket merchants to register with Visa and/or MasterCard as supermarkets. To do so questionnaires must be filled out with questions like, “how much of the floor space is used for perishable items?” And “How many register lanes do you have?” If you are asked to complete these registrations ask the person you are working with at the merchant account provider if you will pass the tests for certification. If you don’t you may waste a lot of time filling out forms and fielding questions from Visa and MasterCard.

9. If you do not want to go through the process of being certified keep searching for a different merchant account provider that does not require the registration; there should be plenty of them out there.

10. Supermarkets often have fairly sophisticated Point of Sale Software they are using. Make sure your POS Software is certified with the merchant account provider you are planning to use. I have seen many occasions where a supermarket chose POS software only to find out they would have to switch merchant account providers in order to use the new software.

BOTTOM LINE: If you are a supermarket know that you should be receiving lower rates than other retail merchants and find someone who knows how to set you up correctly to recieve these better rates.

If you have any questions about supermarket Interchange rates or anything else to do with merchant accounts feel free to contact me anytime.

What is Straight Pass Through – Video

Robb Lejuwaan — Tue, 29 Jul 2008 08:32:04 +0000

If you would like to lower your merchant account fees by switching to a “straight pass through” account go here, fill out the short form and we’ll have you saving money in no time.

If you would like us to analyze your current merchant account and show you how much a “straight pass through” merchant account can save you go here, and we’ll have the numbers back to you with in 24 hours.

Robb Makes it into US News and World Report!

Robb Lejuwaan — Mon, 07 Jul 2008 22:17:49 +0000

I received a call from a reporter at US News an World Report two weeks ago. His name was Matt Bandyk, a business writer for the magazine. He had found me through my other blog straightpassthroug.biz and he had some questions about how businesses could lower their merchant account processing fees. We talked for over a half hour and the I provided him contact information for two of my favorite clients who he also interviewed for the article. That is enough of my story, here is a link to the article:

How to Deal With Credit Card Mumbo Jumbo

Discover Card Transactions and CVV Codes

Robb Lejuwaan — Thu, 22 May 2008 18:16:22 +0000

I know a few posts ago I wrote there was no effect on your discount rate whether you enter the CVV2 code or not. That is true for Visa and MasterCard but does not appear to be the case with keyed in Discover Card transactions. I just reviewed a Discover statement for a mail order company and they were charged $.50 for every transaction with a missing or incomplete CVV2 code. On this particular statement that wonderful extra fee cost the company an extra $24! So please make sure your employees enter the CVV2 code when prompted and your shopping cart and payment gateway are capturing and transmitting that information.

Let’s Get Rid of Your EIRF!

Robb Lejuwaan — Wed, 23 Apr 2008 13:30:45 +0000

If you are seeing a Visa transaction category named “EIRF” on your merchant account statement you are probably paying much more in discount fees than you need to. If you do not know what EIRF is, read this post and then come back: What is EIRF?

So how do we get rid of EIRF? Here are some options:

1. Make sure your merchant account is set up correctly – I just reviewed a merchant account statement for a 100% “card not present” merchant. They have over 95% of their Visa transactions going to either EIRF or EIRF debit. Why? Their account was set up retail which means their address verification service (AVS) guidelines require an exact match for zip codes from the customers issuing bank.

Solution: Have your merchant account changed to a MOTO (mail order telephone order) account. If you do this, as long as there are any numbers populated in the street number and zip code areas, your EIRF will will pretty much disappear. MOTO accounts do not require the matching address information that a retail account does.

2. Make sure your employees never skip a terminal prompt and set up your software or payment gateway to require the appropriate fields to be entered. If one of these is skipped, you may have yourself an EIRF transaction.

Solution: Train your employees and/or make sure your payment gateways require this information to be entered.

3. Batch your transactions every 24 hours. If a transaction is authorized and does not batch with in 24-hours you will have an EIRF downgrade.

Solution: See if you can set up your terminal, software or payment gateway to auto-batch at the same time every day. Call your merchant account provider to see what time they suggest for this.

Give these solutions a try, if they don’t work feel free to write me . I will be happy to work with you find another solution.

Interchange Compliance – Guidelines

Robb Lejuwaan — Fri, 28 Mar 2008 01:03:29 +0000

Rules. It seems like we have more rules in our lives every day doesn’t it? I am writing this post to make you aware of some more rules. These rules are for merchant accounts and if you don’t follow them you will you will be fined! Well maybe not fined but you will end up paying more for your merchant account.

It would be real nice if these rules were posted for all merchants to see and then follow. However, that is not the case. Finding what these rules are, even in this age of the internet, is extremely hard to do. That is where I come in. I may not be an interchange compliance expert but I do know the key rules that apply to most of my clients.

Let’s look at how this system of rules (guidelines) work. Here are a few examples:

Example one: You own a book store and you have 34 transactions in one day, all swiped and face to face. You have a new point of sale (POS) system that unbeknown to you was not set up to auto batch at night. The result? Your authorized transactions just sit there, they don’t batch and no money is deposited into your bank account. Best of all of the Visa transactions that do not settle with in 24 hours will be downgraded to a card category named EIRF . Cost of the fine – .76% increase to your discount rate and that is if you have straight pass through . If you have tiers on your merchant account statement like “mid-qual” the penalty will probably be much worse, even up to 2.0% or more!

Example two: You own a B2B cigar distributorship, so most of your transactions are with business or commercial cards. You were set up with a payment gateway like authorize.net when you opened your merchant account. When you login in to the gateway to enter a transaction you are not asked for a tax amount. This is results in a downgrade to a card category named Commercial Card Standard. Cost of fine – .85% increase to your discount rate if you have straight pass through.

How is a merchant to know if these downgrades are happening to them? Would your monthly statement tell you? Maybe, but have you tried to read one of those lately? How about your merchant account sales rep? Maybe, but I have spoke to many that did not even know there were more categories than “qualified,” “mid-qualified” and non-qualified” (I am not exaggerating at all!). So what are you to do? Find somebody who knows this stuff. Whether it is me or someone else does not matter just find someone and have them review your merchant account statement. You will be happy you did.

To help you along with this tomorrow I will be writing part two of this post and will provide you with a list of the 10 most important interchange guidelines to know about. In the mean time if you would like me to review your merchant account statement you can fax it to my attention at (714) 624-3833 or fill out the form here .

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.

Business and Corporate Card Prompts

Robb Lejuwaan — Tue, 26 Feb 2008 21:30:25 +0000

Each month I review my client’s merchant account statements. I want to make sure they are saving at least as much money I promised and are having their transactions qualify for the lowest rates.

I just got off the phone with a new client of mine; a winery in St. Helena, CA. They are using a Omni 3750 terminal in their tasting room and had a few corporate card transactions downgraded resulting in some higher discount rates.

I thought I would share with you what I told my client. First of all never skip a prompt on your terminal when entering a transaction, a skipped prompt almost always results in a transaction downgrade and a higher rate for that transaction.

Second, on business or corporate transactions you should be prompted for two bits of information you are not for other transactions:

1. Customer number or code – You may have an internal account number assigned to the customer, and if you do, enter that number. If you don’t have such a number make one up! I generally use 001.

2. Tax amount – always enter a tax amount according to the guidelines below, with out exception, even if you are not charging tax! The amount you enter will not increase the amount of the sale or appear on the customer’s receipt.

Visa: Sales tax amount must be between .01% and 22%.

MC: Actual sales tax amount or you can enter $0.

In some cases you can enter more information than above and further reduce your fees. If you would like more information on this e-mail me asking for more information about “Level III.”

Eight Ways to Save Money – Method #8 – Capture Level II and III Data

Robb Lejuwaan — Wed, 23 Jan 2008 17:12:21 +0000

Capture Level II and III Data on Corporate Card Transactions

Visa and MasterCard business, commercial and purchasing cards are used just like personal credit cards. However, these cards have higher interchange rates because they offer businesses high value (and costly) features such as enhanced reporting, consolidated billing for multiple cards and statement enhancements.

The general rule with these types of transactions is the more data collected the lower the discount rate is. Just by entering in the Level II data noted below you can cut your rates by up to .60%. So this is definitely worth looking into if your business has a high volume of business/corporate card transactions

To receive Level II rates here is what information needs to be included:

Visa: Sales tax amount (must be between .01% and 22%)
For purchase cards – a tax indicator and customer code

MC: Sales tax amount (can enter $0)
For purchase cards – a tax indicator and customer code

To receive Level III rates include everything listed above and the following:

Visa: Discount amount, freight/shipping amount, duty amount, item commodity code, item descriptor, product code, quantity, unit of measure, unit of cost, discount per line item and line total.

MC: Product code, item quantity, item description, item unit of measure, extended item amount, debt or credit indicator.

What You Can Do

Check your terminal and POS software to make sure your employees are being prompted for level II data when ever a commercial card is used.

Make sure every employee handling merchant account transactions knows to enter in the Level II data on every commercial card transaction.

Contact your merchant account provider to discuss if the cost and effort of entering Level III data is worth it.

Merchant Account Blog - Straight Pass Through » Qualification

Why You May Need Multiple Merchant Accounts

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10 Things Supermarkets Need to Know about Merchant Accounts

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Robb Makes it into US News and World Report!

How to Deal With Credit Card Mumbo Jumbo

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Let’s Get Rid of Your EIRF!

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Interchange Compliance – Guidelines

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What is a Merchant Account Downgrade?

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Business and Corporate Card Prompts

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Eight Ways to Save Money – Method #8 – Capture Level II and III Data

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