Merchant Account Blog - Straight Pass Through » Non-Qualified

Video: It’s Time to go Interchange Plus! (October Rates Changes)

Robb Lejuwaan — Fri, 22 Aug 2008 00:15:10 +0000

Watch this video to learn about changes to Interchange coming in October and why, if you have a merchant account with tiers (qualified, mid-qualified and non-qualified), it is time to switch your account to an Interchange Plus price model.

Check back here in the next few days for more specifics on the coming changes to Interchange.

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.

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 .

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.

Eight Ways to Save Money – Method #7

Robb Lejuwaan — Thu, 17 Jan 2008 16:31:40 +0000

Obtain Authorization/Settlement Mismatch Exemptions

In general, any variation between authorization and settlement amounts cause downgrades for merchants, which always results in higher fees. However, certain industries are allowed some authorization/settlement leeway due to the nature of their business. For example a restaurant; because an authorization will not include a figure for a tip the guidelines from Visa and MasterCard allow for a limited variance between the authorization and settlement amounts without the merchant experiencing a downgrade. This applies to other industries that commonly accept tips such as taxi cabs and limousines, restaurants, bars, taverns, and cocktail lounges, beauty and barber shops as well as health and beauty spas.

What You Can Do

Talk to your merchant account provider to confirm your industry classification exempts you from a mismatch downgrade, and ask them to make sure your account is properly coded to allow for this exemption.

If this is a little confusing to you feel free to e-mail me with any questions you may have.

Merchant Account Secrets – Eight Ways to Save Money

Robb Lejuwaan — Mon, 19 Nov 2007 16:07:09 +0000

I know the word “secrets” could be construed as an overstatement. However, I talk to merchants from all over the country every day and most of them do not know one thing about how to keep merchant account fees as low as possible.

Why is there a general ignorance about these methods? It is simple, the information is in the hands of companies that make more money if you don’t know this information. No, I am not saying there is some dark, industry wide conspiracy to keep merchants in the dark. I am just saying the motive to share this information is not present. Can you imagine a gasoline company coaching people how they can increase their gas mileage? So it is with many merchant account providers.

So why am I sharing this information? The way my company is set up, we do not profit from you making mistakes with your merchant account. Therefore, we are motivated to inform you, the merchant, so we can stand out above our competition.

What are these eight ways to save? We’ll get started on my next post.

What is EIRF?

Robb Lejuwaan — Fri, 09 Nov 2007 15:47:56 +0000

No, EIRF is not a cousin of the once popular Smurfs. In fact EIRF is not any where close to being a nice, soft, smiling, blue cartoon character. On the contrary, EIRF is disagreeable, hard, frowning and black! If you have it you most certainly are wondering what it is, how you got it and how you can get rid of it.

EIRF is an acronym for Electronic Interchange Reimbursement Fee. On first glance the name looks like if you have EIRF you should be expecting to be reimbursed for some fee you already paid – WRONG!

EIRF is a surcharge category for Visa Interchange resulting in a much higher rate for certain merchant account transactions. Visa mandates that any transaction that falls into the EIRF category will incur a surcharge of .76% for retail accounts and .45% for Card Not Present or E-Commerce accounts.

How does a transaction fall into the EIRF category?

Retail Account (Mostly card swiped environments)
There are three main ways for a transaction to fall into EIRF on a retail account:

1. Transaction not batching with in 24 hours (Is your terminal set up to auto batch?)
2. Authorization and settlement amount not matching (Debit cards only)
3. Key entering a transaction with the incorrect billing address zip code.

Any of the above scenarios will result in a minimum of a .76% increase in your rate.

MOTO or E-Commerce Account (Mostly card not present environments)
There are four main ways for a transaction to fall into EIRF on a these type of accounts:

1. Invoice or order number not entered (skipped terminal prompt)
2. Not entering the billing address street number and zip code (do not need to match)
3. Authorization and settlement amount not matching
4. Transaction not batching with in 24 hours

Any of the above scenarios will result in a minimum of .45% increase in your rate.

What if your rates are higher than these?

The surcharges listed above are the actual rates from Visa. If the rate you are paying for EIRF is higher that the ones noted above, your surcharges are being padded for profit by your merchant account provider. If this is the case with your merchant account chances are your surcharges for other transactions categories are being padded as well.

Would you like to lower your merchant account costs by removing all the padding on your surcharges? If so go here to see how much a Straight Pass Through merchant account can save you.

Lessons From Being Lost – Swipe That Card!

Robb Lejuwaan — Sat, 27 Oct 2007 17:32:47 +0000

Yesterday I had a scheduled appointment with a winery here in Southern California (Temecula, CA). A very rare thing happened on the way there – I got lost! I mean really really lost; I arrived at the winery over 1.5 hours late! Turns out there are two streets of the same name with freeway off ramps four miles a part. I took the first exit an I should have taken the second.

When I arrived at the winery the gentleman I was to meet with was gone. By the way did I mention I had left my cell phone at the office? Any way, I went into the tasting room to drop off a folder. Once inside I realized it would be foolish, after such a stressful and long drive, to not at least taste the wine at this beautiful winery. So that is exactly what I did; tasting six wines and soaking up the peaceful aura of the place near sunset.

Each time I went to the tasting bar to refill my class a nice and knowledgeable woman named Vicki would educate me on the the various wine clubs they have. She started high with their VIP club and then working her way down to the least expensive club. By the time I was through, I had signed up for one of the clubs and left with three bottles of wine.

While going through this process I was closely watching how the transaction was occurring. Was Vicki going to enter all the data that would give the winery the lowest rates for credit card processing? Sadly the answer was no. I filled out a paper form for the club and she keyed in the transaction instead of swiping my credit card! Not a big deal for one transaction; it cost an addition $.17 (there is a .31% surcharge for keyed in credit cards). However, if you multiply that times 1000 you have an additional $170 a month in fees and over $2000 for the year. It does not stop there; if the zip code I wrote in the form did not match what my bank had on record this transaction would have gone to a category call EIRF and raised the fee .76% or $.41.

With all these numbers I am throwing out I am assuming there merchant account is straight pass through . If they have “mid-qualified” and “non-qualified” categories on there merchant account the extra fees would be much more than above.

So I learned two lessons from my adventure to Temecula, CA:

Read your directions and maps throughly before heading out on a journey – even if you have only been lost once in the last five years.
Make sure your merchants are swiping credit cards whenever possible. Never assume they are have the rules of credit card qualifying down pat.

Well that is my story for the day; you have yourself a wonderful weekend.

Oh, I almost forgot, if you would like to see the area I just wrote about here is a website to visit: Temecula Wines.

Link Nom

Merchant Account Blog - Straight Pass Through » Non-Qualified

Video: It’s Time to go Interchange Plus! (October Rates Changes)

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What is Straight Pass Through – Video

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Let’s Get Rid of Your EIRF!

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Interchange Compliance – Guidelines

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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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Eight Ways to Save Money – Method #7

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Merchant Account Secrets – Eight Ways to Save Money

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What is EIRF?

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Lessons From Being Lost – Swipe That Card!

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