Merchant Account Blog - Straight Pass Through » eCommerce

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.

Free Authorize.net? You Got It!

Robb Lejuwaan — Wed, 27 Aug 2008 06:13:57 +0000

That’s right I, Robb Lejuwaan, have chosen to give away authorize.net for nothing! My company has been charging a small fee of $25 up to this point but I just realized with a free authorize.net account I make more money!! That’s right more money for me if I give you authorize.net for free. Here is a table that shows my original and new authorize.net fees:

Fees	Original Offer	Free Authorize.net
Setup Fee	$25	$0
Gateway Fee	$12.50	$15.95
Transaction Fee	$.05 after first 250 transactions	$.09 from the first transaction

So lets say you process 200 transactions a month and you keep your account for 12 months, how would these two offers differ?

Fees	Original Offer	Free Authorize.net
Setup Fee	$25	$0
Gateway Fees	$150	$191.40
Transaction Fees	$0	$216
Total Fees	$175	$407.40

See what I mean? If you take my free authorize.net offer I make an extra $232.40! The problem is you pay an extra $232.40.

So maybe you are wondering where I am coming up with the free authorize.net numbers. I’ll tell you where from – www.freeauthnet.com. Their gateway and transaction fees are right on their website.

You also may be wondering if I am being serious about offering free authorize.net and I am; however my transaction fee will stay the same as it was originally which is $.05 after the first 250 transactions. Yes the gateway fee will be the same as freeauthnet.com but I am paying the setup fee out of my own pocket so I need to make sure I at least break even. On the other hand, if you want my original offer you are free to choose that as well.

Oh there is one other thing you will not receive if you sign up for my “free” authorize.net account, that is a merchant account with hidden fees inside the famous tiers of “mid-qualified” and “non-qualified.” In other words we will set you up with a straight pass through merchant account.

I wrote this to show you that when the word “free” shows up in any marketing, at least in the merchant account industry, that is code for “your overall cost will be much higher than if you just paid for what you were receiving”. This applies to free terminals, gateways and anything else that has a real cost to it. So beware of the word “free” and use your brain to figure out what the real cost are. If you’re lazy and just want the easiest path to take, contact me and I’ll get you your stuff for free and I’ll let you know what “free” is going to really cost you.

Authorize.net – Moving in the Right Direction?

Robb Lejuwaan — Wed, 20 Aug 2008 18:37:49 +0000

I just got off a conference call with authorize.net and a new client of mine. Our mission was to switch their merchant account provider within their authorize.net account. I happy to say the whole process took about five minutes and was almost painless (the hold music was brutal!).

I have previously written on this blog that the weakness of authorize.net was their customer service. I believe I even mentioned 30-45 minute hold times for customer service calls. Well I know this call was only a single experience with them but they sure seem to be moving in the right direction.

Thank you Brian of authorize.net you did a good job today!

Note: I feel I need to note that my company is an authorized reseller of authorize.net.

Update: I had three more calls to authorize.net for this particular client of mine; each of them also went well. On one call the authorize.net agent, Irwin, was on the phone with us for over 30 minutes and ended up fixing our problem. So now I have a total of four calls that confirm what I wrote above – that you can expect quality customer service from authorize.net.

How Do Merchant Accounts Work?

Robb Lejuwaan — Wed, 16 Jul 2008 17:27:06 +0000

Credit card processing seems simple enough. However, there are lots of moving parts behind the scenes. Here is a simplified, step by step list that reveals the whole process:

Authorization

1. Your customer presents their credit card (or the card number, expiration date and security code) to you or your employee.

2. You swipe the card or key in the credit card data using either a credit card terminal, a POS system communicating over the Internet or. If this is an online transaction, a payment gateway will capture that data. Irregardless of the method, the data is sent to the merchant account provider.

3. The merchant account provider communicates the card information to the VISA or MasterCard network. Usually this is done via an intermediary, a larger Payment Processor. In our case this is usually First Data or TSYS.

4. MasterCard or VISA asks the cardholder’s bank (issuing bank) if the funds are available. If the funds are available, the transaction will be authorized and the funds will be placed on hold in the customer’s credit or debit card account.

5. The issuing bank informs MasterCard or VISA of the result of the authorization attempt (either authorized or declined).

6. MasterCard or VISA communicate the results of the authorization attempt back to the merchant account provider.

7. You receive the results of the authorization attempt. If the authorization was successful you provide the goods or services to the customer they just paid for.

Settlement

8. At the end of the day you “batch out” the day’s transactions to the merchant account provider. If you are using an Online Gateway or an IP-based terminal the batching is most likely happening automatically. If you’re not set up this way you might want to request “auto batching” from your current merchant account provider. If you are using an older dial-up terminal may have to hit a special button to initiate this process but “auto-batching” should still be available to you.

9. The merchant account provider sends the results to MasterCard or Visa.

10. The Issuing bank adds the transaction amount to the cardholder’s bill and you no longer need to be concerned about whether your client pays their credit card bill or not. Of course there are the issues of chargebacks or a refund that could pop up later. Bottom line: collecting the transaction amount from your customer is the issuing bank’s job.

14. The Issuing bank transfers the money to the Merchant Account Provider, using an ACH (Automated Clearing House) transfer.

15. Your Merchant Account Provider deposits the proceeds into your business checking account.

And so goes the journey of a credit card transaction. Believe it or not, there is more detail I could have added above. However, the list above give a good simplified view of the whole process. Questions? Leave a comment below and I will answer you back or drop me an e-mail.

Best Web Based Solution

Robb Lejuwaan — Sun, 08 Jul 2007 01:03:20 +0000

Have you ever considered switching to a web based or virtual terminal? I know it sounds complex but if you can purchase a book at amazon.com then you can use a virtual terminal.

http://www.skipjack.com/merchant/demos/solutions/

Merchant Account Blog - Straight Pass Through » eCommerce

Why You May Need Multiple Merchant Accounts

Related Posts

Free Authorize.net? You Got It!

Related Posts

Authorize.net – Moving in the Right Direction?

Related Posts

How Do Merchant Accounts Work?

Related Posts

Best Web Based Solution

Related Posts