ONBOARDING BLOG SERIES 3 - New Merchant FAQ

Accepting Credit Cards can be an intimidating task for any business, and is bound to come with many questions. In order to help you decide if becoming a credit card merchant is a good fit, we have included some common questions and answered them below. These questions deal with three areas new merchants often have questions about: price, compliance, and e-commerce.

The Cost of Doing Business

Estimating how much you will be paying for processing and deciphering statements can be tricky. Below are some common questions surrounding credit card processing costs.

What are interchange fees?

Interchange fees are transaction-related costs that the processor pays to the card issuing bank. These fees are established by the card brands and are based upon how a transaction takes place and in what type of industry. Post 2 (LINK) of this blog series goes in depth on interchange fees.

How do the card brands set interchange?

Interchange is set in response to market forces. Several factors affect what the interchange rate will be. Some include the type of merchant, cost of sale, payment product type, card present or not present, and processing technology the merchant uses.

How do I pay for credit card processing?

Fees are generally debited from your proceeds on a daily or monthly basis, depending on the company and your setup.

Will I receive a statement?

Yes. Every month, usually by mail and/or email, you will receive a statement that details all your transaction information for the month, including deposits into your account, your total sales volume, and the charges for the month.

Why is a credit check necessary?

Credit checks and business underwriting are required by some payment networks and are necessary to determine if the business and business owners are financially responsible.

How long does it take to get money from credit card purchases?

This varies, but is generally 2 days. Some processors have options for next day settlement.

Compliance

PCI compliance can be intimidating for inexperienced merchants. Below are some basic questions related to PCI compliance.

What is PCI?

The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that ALL companies that accept, process, store or transmit credit card information maintain a secure environment.

What are the PCI compliance ‘levels’ and how are they determined?

All merchants will fall into one of the four merchant levels based on Visa transaction volume over a 1 year period. Transaction volume is based on the aggregate number of Visa transactions, including credit, debit, and prepaid, from a merchant. The higher level merchant you are, the more rigorous your compliance process will be.

Do organizations using third-party processors or gateways need to be PCI-DSS compliant?

Yes, using a third-party company does not exclude a company from PCI DSS compliance. It may reduce their risk exposure and subsequently reduce the effort to validate compliance. It does not, however, mean they are exempt from PCI-DSS compliance.

What is the PCI DSS Self-Assessment Questionnaire (SAQ)?

The PCI Data Security Standard Self-Assessment Questionnaire is a validation tool intended to assist merchants and service providers who are permitted by the payment brands to self-evaluate their compliance with the Payment Card Industry Data Security Standard (PCI DSS). Eligibility for an SAQ is determined by your organization’s PCI merchant level.

E-Commerce

Accepting credit cards online through your website is a great way to maximize customer convenience. Below are common questions that come with accepting online payments.

What is a payment gateway and how does it work?

The payment gateway is a link between your website (or the website hosting your goods or services) and your Payment Processor. When your customer makes an online purchase, the information from your website must be sent through a payment gateway to obtain an authorization and for a payment card transaction to be completed. Payment gateways like CBOSS work with a variety of service providers and web developers.

What is a virtual terminal?

A Virtual Terminal is a web application to process payments over the Internet through a web browser. This feature allows you to accept cards from customers over the phone, fax, or mail. Orders are placed by manually entering card transaction data into the Virtual Terminal.

What is AVS?

If you sell via mail order, telephone order, or the internet, you don’t want to send a product to a false address and have a risk of receiving a chargeback. The Address Verification System (AVS) lets you enter the customer’s home address and compares it to the address on file with their credit card company. If someone uses a stolen card, and wants products shipped to a false address, AVS will detect this for you.

What is CVV/CVC?

The CVV/CVC code (Card Verification Value/Code) is located on the back of your credit/debit card on the right side of the white signature strip; it is always 3 digits in case of Visa, MasterCard, and Discover. For American Express, this is a 4 digit code on the front of your card. The CVV is an additional identifier  that adds another layer of security to your credit card information.

Why do I pay more interchange for e-commerce transactions?

All transactions that are not conducted in person are considered card-not-present. Card-not-present transactions are seen as a greater risk for fraud by the card brands, and thus have a small premium attached.

If you would like to learn more about credit card acceptance, feel free to visit our website (LINK) and learn more about payment acceptance and CBOSS.