Selecting Credit Card Processing Software

More and more merchants are taking advantage of the powerful credit card processing software products available to them. These are systems for virtually any type of processing environment from retail stores to websites.

All have their advantages, but selecting the right credit card processing software for your business is very important. Before making a decision merchants should ask themselves a few questions:

Will you be accepting credit cards over the Internet?

Selecting Credit Card Processing Software

All have their advantages, but selecting the right credit card processing software for your business is very important. Before making a decision merchants should ask themselves a few questions:

Will you be accepting credit cards over the Internet?

How many credit card transactions will you need to handle at any one time?

Will you be charging the same customer’s cards on a regular basis?

If you have any further questions regarding credit card processing software, please feel free to contact our sales team for information and advice on selecting software by calling the number at the top of your screen.

Thinking about adding electronic processing capabilities? Here are some statistics on the benefits of accepting credit and debit cards. We have also included some of the card types, how processing works, and some of the standard fees.

Thinking about adding electronic processing capabilities? There are countless reasons why a business should add credit card and electronic payment processing capabilities – transactional speed, convenience, increased customer satisfaction, improved cash flow, views into sales data; and more. But perhaps the most important consideration is the sheer volume of consumers who use non-cash methods as their primary form of payment. Here are some statistics on the benefits of accepting credit and debit cards. We have also included some of the card types, how processing works, and some of the standard fees. In 2007, Americans racked up slightly more than $2.2 trillion in purchases and cash advances on their major credit cards (Visa, MasterCard, American Express, & Discover) according to CardTrak.com. Ten years ago U.S. consumers ran about $885 billion through their general purpose credit cards. Approximately 51 percent of the U.S. population has at least two credit cards. (Source: Experian national score index study, February 2007) At the end of 2007, there were 420 million cards on the market, up 7.6% from a year earlier (Source: CNN/Money May 13, 2008). Fifty-six percent of undergraduates get their first card at age 18 and 91% of students have at least one credit card by their final year, Nellie Mae reported. By graduation, 56% of students carry four or more cards (Source: CNN/Money, July 14, 2008). “With credit cards, consumers spend 30% more (on purchases) than with cash,” [Credit expert Howard] Dvorkin said (Source: CNN / Money, October 22, 2008). Certain sectors are experiencing growth in credit and debit payment usage. For example, U.S. consumers racked up nearly $63 billion worth of fast food on their personal credit and debit cards in 2007 according to CardTrak.com. The average QSR credit card ticket is about $12.65. Americans spend about $170 billion per year at quick service restaurants. After McDonald’s began accepting credit and debit in 2004, diners who paid with plastic spent $7 a visit on average vs. $4.50 when they paid in cash. A 2003 survey of supermarket receipts found that credit-card shoppers rang up 30% bigger bills than and carted out twice as much in nonessentials as cash buyers did. (Source: CNN/Money, June 17, 2008). So while the reasons for adding payment processing are clear, understanding all your options and which are right for your business is far more complex.

Card Types

Below are some of the credit and debit cards that you might come across.

General Card Types:

• Bankcards; Travel & Entertainment (T&E); Non-Bankcards

Specific Card Types:

How Payment Processing Works

Some form of the modern credit card has been in use since the late 19th century, mostly as department store charge cards representing lines of credit. Things have changed and today, the step a merchant needs to take in order to accept credit card payments is to establish a merchant account with a bank or third-party payment provider. Once your account is live, the transaction process generally works as follows:

• 1. A customer presents a credit card for payment.
• 2. By swiping the credit card through an electronic point-of-sale (POS) transaction terminal, typically provided by the bank or payment provider, an electronic request is submitted to the processing network for authorization.
• 3. The processing network receives your electronic request and determines if the cardholder’s account is valid and if the funds are available. If so, a response called an “authorization code” is transmitted, guaranteeing your access to the funds.
• 4. A receipt is then printed for the customer using the POS terminal or your computer. The customer then signs the receipt and, for their part, the transaction is complete.
• 5. At the end of the business day, a merchant will electronically submit a final request to the processing network to “capture the funds” for all authorized transactions in a given day. This process is referred to as settlement. Once approved, a response is generated to your electronic terminal or computer.
• 6. From there, the funds associated with the batch you settled are deposited electronically into your business bank account, usually within 48 to 72 hours. Typically, the rate and any fees paid to your merchant account provider are deducted from your account at the end of the month.
• 7. At the end of the month, your merchant account provider will send a statement to you, detailing the credit card activity for the month and the associated fees you’ve been charged.

Some Standard Fees

Now that you know how processing works and what the available options are, you’re probably wondering how much all this will cost. While service fees and rates vary from provider to provider, “bundled” pricing is the most common type of agreement used in determining which per-transaction rate applies to which type of merchant. In the simplest terms, pricing is based on risk: the higher the risk involved in the transaction, the higher the rate the merchant will have to pay.

• Inquiry Fee – A fee that is assessed on the number of credit card transactions a merchant has.
• Monthly Minimum – The minimum that a processor dictates a merchant must incur on a monthly basis in Discount Fees and Inquiry Fees (in other words, a minimum usage fee for accepting credit cards).
• Statement Fee – Monthly statement reporting fee.
• Chargeback Fee – A flat fee charged to the Merchant in the event a chargeback is incurred.
• Transaction Fee – A flat fee charged to the Merchant every time a payment is processed.
• (Discount) Rate – A percentage of the purchase transaction charged to the Merchant every time a payment is processed based on card type, risk, and payment method (in person, over the phone, etc.).

Again, these rates are used to determine the cost to the merchant on a per-transaction basis. There are additional costs associated with payment processing, including start- up fees, equipment costs, charge back fees and more.

Credit card fraud has been a thread to the merchants all over the world,  and the electronic commerce has made it even worser. Hence online fraud protection has become integral part of any successful web business. Credit card fraud protection measures protect merchants and customers against unencrypted personal information falling into the hands of fraudsters. The process ranges from installing firewall, using anti-virus software, to more advanced measures like monitoring transactions and validating all information before shipping.

The major components of fraud protection are pre-transaction filters, post-transaction analysis and PCI Compliance

Pre-transaction filters

Credit card fraud protection starts with pre-transaction filtering methods like AVS, CVV2, CVC2 and 3-D Secure.

AVS (Address Verification System) is a system used to verify the address of a person claiming to own a credit card. The system will check the billing address of the credit card provided by the user with the address in the database at the credit card company.

CVV2/CVC2 is a 3 – 4 digit number printed on the credit or debit cards. The number is neither printed on the magnetic stripe nor appear on the sales receipt. CVV2 (Visa) / CVC2 (Mastercard) validates if the card is in possession of the card holder or if the account is legitimate. It is generally required in card-not-present (CNP) transactions on the Internet

3D Secure is a technical standard created by Visa and MasterCard to further secure CNP (card-not-present) transactions over the Internet. It’s an added layer of security for online credit and debit card transactions. MasterCard version is called as ‘MasterCard SecureCode’ and Visa version is called ‘Verified by Visa’. 3D Secure payment security creates a trust chain throughout the transaction, changing the liability for fraud from the merchant to the card issuer, under certain conditions.

Post-transaction analysis

Post-transaction analysis include fine tuning billing methodologies, request card issuing bank to make a courtesy call to the customer to verify the charge or call  customer phone number directly to verify the purchase, lookout for suspicious customers from the negative history database before shipping the product.

In addition to all, merchants should develop custom rules and filters to stop or flag specific suspicious orders


PCI Compliance

Merchants can reduce the risk of fraudulent transactions by becoming PCI compliant. PCI Compliance is adherence to Payment Card Industry Data Security Standard (PCI DSS), administered by the Payment card industry security standards council (PCI SSC), which provides technical and operational environment for storing, processing and transmitting credit card information. The requirements are designed to reduce payment card compromises and data theft by helping merchants secure their sensitive information and reduce their vulnerability to attacks.

All these tools, combined with security best practices, protect merchants against online transaction fraud.



Following are the preventive process, procedures and warnings that merchants should be aware to minimize credit card fraud. These process minimize fraud while maximizing transaction throughput. (Click here to download in .doc format)


Address Verification System

The Address Verification System (AVS) is a system used to verify the address of a person claiming to own a credit card. The system will check the billing address of the credit card provided by the user, with the address in the database at the credit card company. AVS verifies only the numeric portion of the address.

Anonymous and Open Proxy IP Addresses

Organized credit card fraudsters often use anonymous proxies, which hide their true location. The IP address sent by their computer can be a open proxy IP address instead of real IP address.

Authorization

Authorization approval indicates that at the time the approval was issued, the card hasn’t been reported stolen or lost and the card limit has not been exceeded.

Bin Check

Bank Identification Number is the  first 6 digits of a bank card number. Credit card bin help to identify the credit card holder, issuing bank and the location. Customers sometimes use credit cards issued from another country. The bin database site will provide bank name, card type, and a 3 character code for the country when the Bank Identification Number is entered.

Calling the Card Issuing Bank

The merchant can request card issuing bank to make a courtesy call to your customer to verify the charge. In such case the merchant needs to provide his merchant id , phone umber, customer name, address and phone number to the issuing bank.

Calling the Customer

This is an excellent way to detect fraud. The telephone call also gives the merchant an opportunity to welcome the customer, answer their questions and build solid relationship. Sometimes the fraudster will submit the actual phone number of the person whose card was stolen. If the card holder did not authorize the charge, then should call their credit card issuer to report the card theft.

Card Verification Method

The CVM response provides information that might help you decide whether or not to ship goods to the customer. CVM uses a 3 digit security code that is appended to the credit card account number but not printed on the magnetic stripe. Online Merchants prompt customers to provide the CVM value along with credit card number and expiration date. The CVM value has become part of the authorization request to the payment processor.

Credit Reference Agencies

Merchants can use credit reference agencies like Equifax, Experian, and Trans Union for high value transactions. The customer would be asked to verify some specific information such as the mother’s maiden name or their social security number. This process can be expensive and moreover time consuming.

Fax Orders

When an order is received by fax the merchant should request fax copies of both the sides of the credit card. This proves that the customer has possession of the credit card at the time of the order. The merchant should also request a copy of state-issued id or drivers license from the customer which provides additional proof, preventing a chargeback.

Fraud Scoring Systems

Fraud scoring system is used by payment processors to identify the high risk transactions in card-not-present environment that require additional verification. An efficient scoring model use software techniques to capture patterns of fraudulent activity, and to differentiate these patterns from legitimate purchasing activity. Scoring models typically assign a numeric value that provides the probability that a transaction may be fraudulent

Fraud Screening Organizations

The Merchants should attend seminars offered by credit card companies and card processors to educate themselves. Some merchants are joining fraud-screening organizations and beginning to use extra security software that determines the risk assessment. The merchant can decide to accept the card number or not, based on that fraud rate value. Some organizations such as antifraud.com offer tips, databases of stolen credit cards, and web look up tools.

Free Email Accounts

May businesses refuse to accept orders from any free email accounts or any non isp email domains. The fraudsters use free email addresses to remain anonymous. Most businesses purchasing a business product would not use a free email address. Pl note that many legitimate customers also use free email addresses.

Internal Merchant Rules

This method is ideal to catch online transaction frauds. The Merchant sets up rules to stop or flag specific orders from specific IP or country or if the transaction amount is bulk or huge, or if product is often shipped to a specific address. This method reduce repeated or pattern specific frauds.

International Orders

The merchant must weigh the financial benefits of accepting international orders against the possibility of fraud. Merchants cannot always refuse foreign orders since he could be missing potential good sales. However the merchant needs to perform various checks before orders are shipped. Request the credit card processor to provide a list of high risk countries. The high risk countries include Indonesia,Nigeria,Pakistan,Egypt and most African nations. Placing an international phone call to the issuing bank is recommended in case of large orders.

Merchant Rules

Merchants should follow the procedures recommended by the payment processor and the credit card companies. If a merchant suspects a fraudulent order,should contact the registration service to cut reduce the total number of chargebacks

Negative History File

The merchant should keep a database of problematic customers, prior fraud attempts, chargeback records. The record should include customer name, billing address, phone, email and IP address. Incoming orders can be searched for matches in the database. This method reduce the incidence of repeat offenders.

Other Preventive Measures

Always check the data to determine if the buyer is a real person. Check if the zip code really exist  and the email is formatted properly.

Pattern Detection

Pattern detection checks if multiple orders are placed to a specific shipping address with different credit cards. It checks for unusual purchase of a single item since fraudsters may have access to several stolen card numbers. It identify users who repeatedly submit same credit card number with different expiry dates. Since fraudsters will have only credit card numbers, they will just keep submitting that number with different expiration date until they match.

Payer Authentication Program

Payer Authentication program is an optional process to increase the payment security and reduce the risk of fraud. The process verify the cardholders identity directly with the card issuer in real-time.The card issuer remain liable to some losses for the online fraud which was generally borne by merchants.

Processing Orders

The merchant should have a policy of not shipping any order until the charge can be verified by their additional checks. The merchant can send an immediate email confirmation of the order, and explain additional checks are being performed to reduce fraudulent orders. The additional checks may take 30 minutes, or can take days if telephone and email exchanges are necessary. The processing delay may cause the fraudster to hide themselves. Many fraudsters want instant gratification, and wish to remain anonymous, so they will not reply to your emails requesting additional information.

Realtime Authorization

Authorization is a request send by the merchant to the card issuing bank to determine if sufficient money is available for the payment or if the credit card has been reported as stolen or lost. This process takes less than 5 seconds for the approval to take place.

Shared Negative History File

Merchants can exchange their negative historical database. Since this database has fraud data from several merchants, using this file should reduce pattern specific frauds. However a bad customer for one merchant may be good for another.

Data breach happens when a person’s identity information such as name, email, social security number, driving licence number or credit card data is put on risk either electronically or on paper. Electronic data breach can be of various forms like hacking, malware, spyware, phishing, or even insider breach. Eventhough the type of data breach vary, they all have one thing in common: Unencrypted personal identity information falling into the hands of fraudsters. The cost of data breach as a result of malicious attacks can be huge and severe.

Ponemon Institute March 2011 report says that the cost of a data breach has increased  from $6.75 million to $7.2 million with an average of $214 per compromised record which is higher compared to $204 in 2009. The Ponemon Data Breach report is based on the actual data breach experiences of 51 U.S. companies from 15 different industry sectors. The annual U.S. Cost of Data Breach Study tracks a wide range of cost factors, including expenses incured on outlays for detection, notification and response,legal, investigative and administrative expenses, customer defections, penalties, opportunity loss, reputation management, and costs associated with customer support such as information hotlines and credit monitoring subscriptions.

The best practices to protect your system against a data breach are:

Penetration Test

Penetration test implements a ethical hacking strategy to identify the vulnerabilities in your data security and the extent to which these vulnerabilities can be exploited by hackers. Several tests are run on software and devices to inspect web applications and databases to search malicious intrusions, such as adware and spyware. Tests are also performed on firewalls and intrusion detection systems.

PCI Complaince

Adhere to the Payment Card Industry Data Security Standard (PCI DSS). PCI compliance standards protect personal information and ensure security when transactions are processed using a credit card. All members of the payment card industry must comply with these standards to accept credit cards.

Firewalls

Install a hardware and software firewall to monitor any suspicious external connection to the network. Firewalls prevent unauthorized Internet users from accessing private networks connected to the Internet.

Anti-Virus

Use regularly updated anti-virus software, install  services, security patches, update virus database and operating system security patches periodically.

Check URLs

Always check the website URL and security certificate before entering your personal information since phishing sites are becoming increasingly sophisticated and identical to the original site and can easily steal confidential data. Host your own secure payment form and submit transactions using an end-to-end secure sockets layer (SSL) connection.

Non Compliant Terminals

Do not use noncompliant or obsolete terminals as they no longer meet the standards for regulatory compliance. Such terminals pose the highest risk for security breaches and subsequent fines.

Intruder Detection tools

Businesses should strive for the tightest security possible against fraud and other data breaches by using standard and advanced detection tools

Third Party processors

Web based centralized payment processing system such as certified TransAction Central integrated shopping cart technology offers merchants comprehensive, flexible and user-friendly processing solutions and maintain the strict security standards for submitting transactions.

Training & Awareness

Training and awareness programs will have positive effect on employees’ sensitivity and awareness about the protecting the personal information.

Self-Assessment

Merchant should learn about PCI compliance and best practices. Self-Assessment Questionnaire’s can help businesses in self-evaluating their compliance with the PCI DSS.

Passwords

The passwords should be strong enough to resist brute force attacks. Using strong passwords lowers overall risk of security breach. Change your user account password, along with your secret question once in every 45 days.

Monitoring

Monitor your transactions from abroad, particularly those from Nigeria, Pakistan and Indonesia, since such transactions are potential fraudulent practices. Be suspicious if the number of transaction is higher than usual or if the transaction amounts or order is huge.

Storing

Store confidential information such as credit card numbers separate from Web servers in an encrypted database that is not connected to the network. Share access to network drives only when it is absolutely necessary. Never send confidential information such as a Social Security number or credit card number in a nonsecure format or through email.

Contact the authorities

If you’ve been the victim of an identity theft, contact the credit card authorities as soon as possible.

Call Merchant Industry representative for more information about data breach protection.

ABA Routing Number

The ABA Routing Number or Routing Transit number was developed by the American Bankers Association (ABA) in 1910.The routing transit number (RTN) is a nine digit bank code which appears on the bottom of negotiable instruments such as checks identifying the financial institution on which it was drawn. The ABA Routing Number helps identify the specific financial institution responsible for the payment of a negotiable instrument.

Acquring Bank

An acquering bank or merchant bank is a licenced member of a card association such as visa or mastercard which accepts card payments on behalf of a merchant.In other words it is an institution that serves as a merchant service provider maintaining a direct relationship with the merchant.

Address verification system

The AVS is a security system priovided with any credit card device to verify the address of a person claiming to own a credit card. The system will check the billing address of the credit card provided by the user.

Application fee

An application fee is a fee paid by merchat who is applying for a merchant account to process with credit cards.

Authorization code

Authorization code is the response code from the issuing bank returned to the merchant at the time of authorization. This code is usually 6 or 7 digit number designed to prevent fraudulent or unauthorized transfers. It is generally printed on the receipt. When doing a phone or voice authorization, the merchant should record the authorization code for reference.

Authorization fee

It is a transaction fee charged to a merchant account each time a transaction happens between the point of sale terminal and the authorizing network.The communication generally use a leased line and an internet ip address.For each transaction an authorization fee will be levied.The transaction can be a normal sale transaction,refund or a force post authorization transaction.

Authorization response

An authorization response is generally merchant bank’s electronic message reply to an authorization request.The reply can approval or decline or pending transaction.If the transaction is pending the merchant should call the toll free authorization phone number providecd by tthe merchant bank

Authorized cardholder

An authorized card holder is a person who claims to own a credit card account and signs for a particular credit card

Automated Clearing House

Automated Clearing House (ACH) is a secure payment transfer system that connects all U.S. financial institutions. The ACH network acts as the central clearing facility for all Electronic Fund Transfer (EFT) transactions that occur nationwide.ACH processes large volumes of credit and debit transactions in batches.

Average Ticket size

Average Ticket Size is the average amount of the credit card transaction that a merchant anticipates or processes over a certain period. It estimates how much an average customer will spend through the merchant for goods or services over the course of time.

The anticipated average ticket size is always requested by a bank when a merchant opens a merchant account. If the business doesn’t process credit cards, then it is appropriate to simply make an estimate of what the amount of the average credit card sale will be. Generally credit card transactions are higher than cash transactions. However If a merchant processes credit cards, then the merchant divides his monthly credit card volume amount by the total number of credit card transactions to arrive at the average ticket size.

Average Transaction amount or Average transaction value

An average transaction amount is the monthly volume or value of credit card transaction amount divided by total number of credit card transaction.

Basis Points

A basis point describe the percentage charged on a credit card transaction. One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form.

Rate of 1.55% = 155 Basis points

Batch Processing

Batch processing refers to closing or settling the entire batch of transactions at one time. The credit card terminal can be set on manual batch close or automatic batch close.During manual batch close, the merchant will have to batch out at the end of each day which sends a command to the processor to settle all transactions that have been entered. Once a batch is settled, a report is usually printed showing the transaction totals in the batch.

In automatic batch close, no manual intervention is needed by the merchant. Instead the terminal will automatically settle the transactions at a certain time each day.It is advisable for most businesses to be setup on automatic batch close. Many processors will charge a small fee, usually equal to a single transaction fee, at the time when the batch is closed.

Chargeback fee

A chargeback fee is a “penalty” levied on a merchant account when a chargeback has occured or when someone successfully disputes a charge you make.

Credit Card Authorization

Credit card authorization is a validation of a credit card transaction for a merchant or business unit. When a credit card is produced for payment the merchant will typically contact the transaction processor, which pings the card issuer to confirm if there is sufficient credit to cover the purchase. When the card issuer approves the transaction, it creates an authorization on your account. This means that, while the money has not actually been paid to the merchant yet, your available credit is reduced by the amount of the authorization, so that the credit is set aside and cannot be spent at another merchant.The transaction is complete only when the transaction slip that you signed is received by the card issuer, and the fund is transfered to the merchant’s bank account.

Credit Rating

Credit Rating is a assessment of the credit worthiness of a card holder. Credit ratings are determined by credit ratings agencies.

Electronic deposit

Electronic deposit is a method by which the credit card association sends fund to the merchant account when the credit card is authorized and the goods delivered.

Encrypted transaction

Encryped transaction is a secured transaction where in a merchant sends an encrypted credit card information to the processing network for approval.

Issuing bank

The issuing bank assumes primary liability for the consumer’s capacity to pay off debts they incur with their card.In the case of credit cards, the issuing bank extends a line of credit to the consumer. Liability for non-payment is then shared by the issuing bank and the acquiring bank, according to rules established by the card association brand.

Keyed credit card

The credit card is not present and the merchant keys in the required information from the credit card into the POS terminal.

Mail Order/Telephone Order (MOTO)

Credit card transactions initiated via mail or telephone. It is also known as card-not-present transactions. A MOTO (Mail Order/Telephone Order) account is perfect for a business that wants to accept credit cards by phone. However accepting credit cards by phone or mail order has never been a simpler process or secure.

Member Alert To Control High-Risk Merchants (MATCH)

Member Alert to Control High-risk (Merchants) system, provides acquiring banks with the opportunity to develop enhanced or incremental risk information before entering into a merchant agreement.It lists merchants that have been terminated for reasons like excessive chargebacks or fraud.The account may not be approved by the processing bank if it is on this list. To get the name removed from the list the merchant must resolve all the outstanding issues.

Merchant agreement

Merchant agreement is legal contract that outline the terms of working relationships between merchant and a the bank or credit card processor. A merchant agreement is necessary to establish a merchant account which allows the merchant to accept credit cards as payment for customer purchase.

Merchant bank

A merchant bank is a financial institution which provides capital to companies in the form of share ownership instead of loans. A merchant bank also provides advisory on corporate matters to the firms they lend to.

Merchant Identification Number (MID)

A merchant identification number (MID) is a unique number assigned to a merchant account, that helps identify the specific account throughout course of processing activities.Generally a merchant account comprises a merchant identification number (MID), one or more terminal identification numbers (TID), and a gateway identification number (GID).

Monthly statement or service fee

The monthly statement fee is generally fixed irrespective of the number of transaction occured. The fee is charged by the processor or merchant service provider.

Monthly Volume (MV)

Its a maximum monthly volume a merchant can process a Visa or Master-Card transactions.
The monthly volume that a merchant processes is important for underwriting consideration and also helps to determine exactly what type of documentation will be required in the merchant’s file. Transactions with American Express, Discover, Diner’s Club and the other major credit card brands are not included into the calculated monthly volume.

Personal Identification Number (PIN)

A Personal Identification Number is a code used by an individual to access his/her bank account at an ATM machine.PINs were first used for ATMs and have since been applied to many other technological developments to keep sensitive information secure. PINs can be used to verify debit card purchases, or as part of a login process for websites, cell phones, or other devices.

Pinpads

A PIN pad is an electronic device used in a debit or smart card-based transaction to input and encrypt the cardholder’s PIN. PIN pads are normally used with integrated point of sale devices in which an electronic cash register is responsible for taking the sale amount and initiating/handling the transaction.

Point of banking

Point of banking allows merchants to accept credit/debit cards without having to pay the processing fees, using only standard credit card terminal.The approved transaction is charged only a small convenience fee which is added to the transaction amount being charged.

Point of Sale (POS) Termnal

A point-of-sale (POS) terminal is a preferred way of processing credit cards, debit cards, checks, and other electronic transactions. The merchant will swipe the customer’s card through the terminal and key in payment information.The terminal reads customer’s bank’s name / account number and contact the bank.Based on the fund availablity bank transfers the customer approved amount to the seller’s account, and prints a receipt.

Purchase Cards

The purchase cards or Procurement Cards allows goods and services to be procured which streamline the traditional purchase and payment process cutting the cost and time of acquiring routine goods and services. Purchasing Cards can also be used for business travel and accommodation expenses

Qualified Discount Rate

A Qualified Discount Rate is the rate a merchant is charged when a retail transaction is card-swiped and the merchant batch out at the end of the day. (Keyed/Internet merchants can still archive Qualified rates by obtaining an AVS response plus order number, plus batching out.) A Mid-Qualified Discount Rate is charged when a retail merchant keys a transaction or does not batch-out at the end of the day. A Non-Qualified Discount Rate is charged when a merchant keys a transaction and does not batch out at the end of the day.

Refund Policy

A refund policy illustrates how a merchant and to what extent will the merchant guarantee products or services sold to a customer.The refund policy determines the number of charge-backs a merchant receives.

Reserve account

The credit card processing company sets up this account to protect themselves in case of losses due to chargebacks or if the merchant defaults on their merchant account.

Settle batch

Is the process by which the retail merchant sends all the credit card transactionsof a particular day to the credit card processor.

Standard Industry Code/Merchant Category Code (SIC/MCC Code)

The Standard Industry Code is a four-digit numeric identifier of merchant business type used by IRS, processing banks and other institutions. A Merchant Category Code (MCC) is again a four-digit number used by the processing banks to specifically classify suppliers into various market segments.

Swiped credit card

The credit card is present and the merchant physically runs the consumer’s credit card through the credit card terminal

Terminal id

A terminal id is a number provided to a merchant by a credit card processor to uniquely identify the credit card terminal.The terminal ID is otherwise called as the terminal number. A credit card processor may assign several terminal Id’s to a merchant’s terminals although that merchant has a single merchant ID with that processor.

Transaction fee

A transaction fee is a fixed amount charged every time you process a credit card payment on some small business Web site or a business store. Transaction fees vary according to the merchant account provider.