Not too sexy is it? If you go with Cocard Synergy you would save a whopping $41.40 per year. It’s a good thing that is not where the savings stops! When we compare the merchant accounts offered by both companies the savings jump up.

As you can see from the chart above the Base Discount Rates differ greatly. Freeauthnet.com uses tiers for their price model, Cocard Synergy uses “straight pass through.” If you do not know the difference between these two price models check out this short video that explains it all – What is Straight Pass Through.

Because I do not know what freeauthnet.com charges for their "mid-qualified" and "non-qualified" tiers I cant figure out the price difference. What I can tell you is it is extremely rare a tiered rate program is cheaper than a straight pass through program. On top of that Cocard Synergy does not have any of the following:

• Minimum monthly fee
• Annual fee
• Early termination fee

Again, I am not sure if freeauthnet.com has any of these fees or not. However, typically when a company chooses to give their customers tiered pricing they have all three of those fees.

Bottom Line: I believe Cocard Synergy has the best free authorize.net program available in the market place today. If I am wrong please leave a comment and let me know; I always invite opposing opinions on this blog.

Related Posts

• Make Some Money and Feel Good Doing It!
• Free Authorize.net? You Got It!
• Authorize.net – Moving in the Right Direction?
• What is a “Third Party Processor?”
• How Do Merchant Accounts Work?
• Merchant Account Compliance Fees – Legit?
• Introducing the iPhone Virtual Credit Card Terminal

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.

Related Posts

• Introducing the iPhone Virtual Credit Card Terminal
• What is a “Third Party Processor?”
• More on Free Authorize.net
• Free Authorize.net? You Got It!
• How Do Merchant Accounts Work?
• Make Some Money and Feel Good Doing It!
• Video: Merchant Accounts – What to Look For and Ask About, Part 2

-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.

Related Posts

• Authorize.net – Moving in the Right Direction?
• More on Free Authorize.net
• Introducing the iPhone Virtual Credit Card Terminal
• What is a Credit Card “Processor?”
• Make Some Money and Feel Good Doing It!
• Video: Merchant Accounts – What to Look For and Ask About, Part 2
• Suggested Read: PCI DSS Blog

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.

Related Posts

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• Mid-Qual and Non-Qual Typically Means Hidden Fees
• Video: Merchant Accounts – What to Look For and Ask About, Part 2
• Video: It’s Time to go Interchange Plus! (October Rates Changes)
• Where do Processing Fees Come From? Pt. 2
• Who Get’s Your Merchant Account Fees?
• Interchange Compliance – Guidelines