Merchant Account Guide

8/12/2019 Merchant Account Guide

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Copyright 2011, PayByWeb, Inc. All Rights Reserved. May not be copied or disseminated without express permission of PayByWeb. This guide

is for information purposes only and does not guarantee approval with any merchant service provider. www.PayByWeb.com

ProducedbyPayByWeb. OntheInternetathp://www.paybyweb.com
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Theprocessofopeningamerchantaccountcanseem

veryconfusing. Withsomanyprocessorsoutthere,

andeverymerchanthavinguniqueissues,thereare

manyoptionstoconsider.Onewronganswerona

merchantaccountapplicationcanmakeahugeimpactonyourbusiness.This

guidewillexplaintheintricaciesofamerchantaccount. Wellexplaintheterms,giveyoutipsongettingyourapplicationapproved,whattodoandnotto

do,andmostimportantlyprovideyouwiththeinformationyouneed,tokeep

yourmerchantaccountopenwithlittleornoeffort.Wehopeyoufindthisguide

useful.

Introduction............................................................................... 2

WhatisaMerchantAccount....................................................... 3

MyCreditisNotanIssue,Isit?................................................... 4

TerminatedMerchant/MatchFile................................................ 5

GettingApproved.................................................................... 67

GlossaryofTerms.................................................................... 89

PCICompliance......................................................................... 10

FrequentlyAskedQuestions(FAQ)............................................ 11

Never...EVER!........................................................................... 12

AvoidingtheSecurityDepartment............................................ 13

TheAuthor............................................................................... 13
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AmerchantaccountisVIRTUALaccountheldwithabank,used

toprocesscreditcardtransactions.Unlikearegularbankac

count,youcannotaccessyourmerchantaccounttowithdraw oraddfunds. Creditcardtransactionsareprocessedusingatermi

nal,whetherwireless,desktop,mobile,orvirtual(usingapay

mentgatewaysuchasAuthorize.net).

Oncetransactionshavebeenprocessedandthedailybatchhas

beensettled,theMerchantServiceProvider(MSP),thecompany

thatmanagesthemerchantaccount,willeitherdepositorwithdraw funds fromthemer

chantaccounttothemerchantsdepositorybank.Deposittimescanvarybasedonthe

MSPstermsandtypeofaccount. Forexample,fundsaregenerallydepositedsignificantly

earlierforaretail/swipeaccount,thanforanInternet/phoneaccount.ThisisduetoRisk

issues,whicharediscussedinthisguide.

Onceamerchantaccounthasbeenapproved,amerchantnumberorMerchantID(MID)

issuedbytheMSP.Thiscanbeasmanyas16digitsandisuniquetoeachaccount.The

MIDcangenerallybefoundonthemerchantsmonthlystatement. MostMSPsprovidea

monthlystatementdetailingthetransactionsandfeesassessed.Thiscanbedeliveredvia

emailorreg.mail,generallyatthemerchantsselection.

Themerchantaccountagreementtypicallywillcontainalltermsoftheagreementbe

tweentheMSPandthemerchant,includingbutnotlimitedtoAvgtransactionvolume,

Maxtransactionvolume,descriptionofbusiness,creditinformation,businessandperson

alinformation,termsoftermination,andfees. Invirtuallyallcases,themerchantagree

mentisabindinglegaldocumentbetweenamerchant,theMSP,andthebankthatser

vicestheaccount,regardlessofthemethodusedtoobtainthemerchantssignature.

Oncethemerchantaccounthasbeenapproved,itistimefordeploymentoftheterminal.

Whetherusingadesktopswipe,wirelessmobile,orInternetvirtualterminal,thisissetup

oncethemerchantaccounthasbeenapproved.Oncetheterminalissetupandactivated,

themerchantcanbeginprocessingcreditcardtransactions.


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Oneofthemostcommonlyaskedquestionswereceivehastodowith

theapplicationprocess,namely,Whyismycreditchecked?Manymer

chantsunfamiliarwiththeworkingsofamerchantaccount,donotbe

lievethattheircreditshouldhaveanybearingontheirabilitytoobtainor

maintainamerchantaccount...theyareTOTALLYWRONG. Heresthescoop!

Believeitornot,amerchantaccountissimilartoaloan.

Withamerchantaccount,youaregeneratingsalesandbeingpaidbyyourMerchantSer

viceProviderinanywherefrom15daysfromthetransactionsettlementdate. Letssay

thatyouhaveamerchantaccountwithanavgsaleof$200andamonthlyvolumeof

$100,000. Rememberthatmostcreditcardholdershaveupto30daystogettheirnext

creditcardstatement,withanadditional30daystopaytheirbill.Withyouraccount,dur

ingthefirst60days,youcouldgenerate$200,000insalesforwhichfundshavebeende

positedintoyourbankacct,BEFORECARDHOLDERSHAVETHEIRBILL.

Mostcompaniesthatoperatelegitimately,thereisnoproblem.Whatabouttheothers?

Theycouldprocessthousandsofdollarsinfraudulenttransactions,getpaidthefundsand

bythetimethecardholdersseethefraudulentchargesontheirstatementandreport

them,themerchantacctholderstakethefundsfromtheaccountanddisappear,leavingatremendouslosstothebanks.

Inordertomitigatetheriskassociated,MSPsreviewcreditandothercriteria.Weall

knowthattheremaybereasonsbeyondonescontrolthatcan

negativelyimpacttheircredit. However,fromanMSPsper

spective,ifyoudonttakeresponsibilityforyourowncredit,you

maybetoohighariskforamerchantaccount. Whilecreditis

usuallynot

asole

reason

to

be

turned

down

(except

for

an

open

bankruptcy),itisvirtuallyalwayscriteriausedtosomeextentin

themerchantaccountunderwriting/approvalprocess.


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Whenconsumersdonothonorthetermsoftheircreditagreements,thecreditormayreportthedefaulttoacreditreportingagency.Iftheconsumerappliesforadditionalcredit,

thenewcreditorobtainsacreditreportandlearnsabouttheconsumer'sprevioushistory.Themerchantprocessingbanks(alsoknownas"acquiring"banks)donothaveasimilar

creditreportingagencyavailablethatcanreportinformationaboutthewaythatabusi

nesshandlesitsmerchantprocessingresponsibilities.Thecardassociations,instead,useafileknownas"MATCH."TheMATCHFileisadatabasefile,previouslyandmostcom

monlyknownastheTerminatedMerchantFile"TMF."ThisTerminatedMerchantFileisusedbyMasterCardandVisaprocessingbankstoidentifyspecificmerchantsandprinci

palswhohavealreadybeenterminated.Onceamerchantisonthislist,itishighlyun

likelythatfuturemerchantaccountapplicationswillbeapproved.The"TMF",or

MATCHlist,isessentiallyaBLACKLISTfromwhichitisalmostimpossibletobere

moved.

HowexactlyistheMATCHfileusedwhenIapplyforaMerchant

Account?

Yournewmerchantacquiringbankmustqueryeverymerchantaccountapplication

againsttheTerminatedMerchantFiletodeterminewhetheracompany,oritsprincipals,

hasbeenterminated.Ifyournewacquirerreceivesaresponseindicatinga"possible

match"againstamerchantorindividuallistedonthefile,theacquirermustdoublecheckandmakecertainthelistedmerchantorindividualistrulythesameastheoneforwhichtheinquirywasgenerated.Ifso,theacquirermustcontactthelistingbanktodetermine

whythebusinessorindividualwasaddedtothefile.

Ifapreviousacquirerlistedyourbusinessoryourname,thatdoesnotmeanyouareprohibitedfromobtainingmerchantprocessingprivilegesinthefuture,however,beingon

theTerminatedMerchantFilemakesitVERYunlikelythatyouwillbeapprovedforamerchantaccountwithmostMSPs.Thenewacquireristobaseitsapprovaldecisionon

completeinvestigationandtousetheTerminatedMerchantFileasaninformationaltoolinthedecisionmakingprocess.Someacquirerswillissueanapprovalconditioneduponhavingthelistingremovedbythepriorprocessorwhileotherswillreviewthecircumstancessurroundingthelistingandmakeaninformeddecision.
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DoIneedtoenteralltheinformationrequested? CanIusemyPOBoxad

dress?Doweneedtobeincorporated? Somanyquestionsherearesometipstohelpyoucompleteyourmerchantaccountapplication.Whilethey

wontguaranteeyourapproval,theywillprovideinsightonwhatMerchant

ServiceProvidersarelookingfor.

SOCIAL SECURITY NUMBER/TAX ID NUMBERMake sure you enter your SSN or EIN correctly. This is VERY important. If this is not en-tered correctly, virtually every application will be pended or declined immediately.

HOME BASED BUSINESSES

If your business is in your home, be sure to enter the same information for home and busi-ness address. DO NOT USE P.O. BOXES. ALWAYS PROVIDE YOUR PHYSICAL AD-DRESS.

BANKING INFORMATION

A valid checking account is required for a merchant acct. The Merchant Service Provider(MSP) will use that account to deposit your funds, and to debit their fees, as applica-ble. Make sure your banking information is correct. Do not use a deposit ticket to provideyou with your account information, as the numbers on most deposit tickets are NOT thesame.

INTERNET BANKS ARE A NO NO!!

They may be convenient, but if you bank with an Internet bank such as MetaBank, you arevery likely to not be approved. MSPs accept financial institutions that accept ACH debit/

deposits and almost always reject merchants who use Internet Banks. In todays world, itis just as convenient to go online and open a checking account with a REAL bank.

AVERAGE MONTHLY LIMIT

This is a VERY important issue. It's important that you enter the correct Average Monthlylimit. This is how much you expect to process in Visa/MC sales each month. Be realisticwith this number and it is best to keep under $35,000. If your business is just starting upand you are not sure, be conservative. You can always contact your MSP and request anincrease, if necessary. Most small businesses or startups enter between $3,500 and $15k

for this field. With most MSPs, what you enter here will become your monthly l imit !

AVERAGE SALE (TICKET)Your average sale is very important. This is the average total of most of your sales. Be very

careful not to enter $2500 when you

Getting Your Application Approved - cont.


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mean $25.00. This may cause your application to be placed on hold forreview. Keep in mind, the higher your sale amount, the greater therisk to the bank. Keep it reasonable and accurate. Average sale/ticket over $200 will likelyresult in your application being pended for review. High average ticket amounts may resultin you being requested to provide invoices, financial statements, bank statements, tax re-turns, etc. showing these amounts being charged to other customers.

AVERAGE TICKET VS. MONTHLY VOLUME

Don't make your average sale and total monthly volume similar. Youcan't process $6,000 a month with a $3,000 average sale, unless youonly plan to process 2 sales a month. There should be a goodspread between the two. For example: $5k monthly and $100 persale.

COMPANY EMAIL ADDRESS IS ALWAYS BETTER

While virtually everyone has a gmail, Hotmail, or Yahoo email, it is always better to have anemail address in your business or domain name. Example: If you are trying to setup a mer-chant account for your business: BEST TOYS which has the domain www.besttoys.com, it is

better to use an email such as [email protected] than [email protected].

PROVIDE COMPLETE INFORMATION

The MSP does NOT know you. When asked for your name, don't justenter BOB. Enter area codes with phone numbers. Enter completeand correct information. If you don't, your application will likely bePended for more information or declined.

PRODUCT/SERVICE OFFERED - BE CLEAR!

On your application, clearly and descriptively explain what product or

service you offer.ENTER This:"We sell tools, computers, and electronics, via our website."NOT This:"sell stuff"

SIGN THE APPLICATION

Regardless of whether the merchant account application requires a hard (real) signature ordigital, perhaps a signature you draw with your mouse, if you dont sign the application, it willnot be submitted properly or approved. A merchant account agreement is a legal documentthat will not be approved without the applicants signature.

Whilethesetipsarenotaguarantee,theywillprovideabetteropportunitytoget

yourmerchantaccountapproved.Ofcourseapprovalisjustthefirststep. Properly

maintainingandmanagingyourmerchantaccountwillprovideyearsofcreditcardacceptanceandagoodworkingrelationshipbetweenyourbusinessandtheMer

chantServiceProvider.A merchant account application is an agreement betweenyour business and a Bank! Dot your i's and cross your T's.

A complete and thorough application willexpedite you through the application process.


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AVS(AddressVerificationService)

AsystemdevelopedbytheCardIssuerswhichmatchesthecreditcardtothebillingaddressonfile.

Thesystemtakesthehousenumberandzipcodeandkeepsthisonfile.Whenatransactionissubmitted,thetransactiondata,whichshouldincludethecardholdersbillingaddressisinstantly

scrubbedagainsttheAVStodeterminethevalidity. Ifthebillingaddressonthetransactionmatch

estheAVSinformationonfile,thetransactionpassestobeauthorizedforpayment. IftheAVS

fails,thetransactionmay/maynotbedeclined,basedonthemerchantssettingsintheirpayment

gateway. FailuretocapturebillingaddressorbypassAVSmayresultinthetransactionbeing

downgradedfromqualifiedtomidornonqualified. Thismayresultinhighertransactionfeestothemerchant.

DDADepositoryBankThisisthebankaccount,usuallychecking,usedbyamerchantforfundsfromcreditcardtransactionstobedeposited,as

wellasfeestobedebited.

InternetMerchantAccount

Alsoknownas:MOTO(mailorder/telephoneorder),&eCommercemerchantaccount. Thisisatypeofmer

chantaccountforallNON facetofacetransactions. Ifamerchantisnotphysicallyswipingthecreditcard,this

typeofaccountisgenerallyused. Rates/feesareminimallyincreasedfromaretail/swipemerchantaccount,due

totheinherentriskissuesinvolvedwhenrunningatransactionwithoutcreditcardinhand. Theruleofthumbis

thatifyouarenotswipingatleast85%ofthecreditcardsbeingprocessed,anInternetmerchantaccountismost

applicable.

ISO(IndependentSalesOrganization)

MerchantServiceProvidersgenerallydonotcommunicateormarkettoprospectivemerchants. Marketingand

accountsetupistypicallyhandledbyISOsandAgents. Therearesignificantdifferencesbetweenthetwo.

Mainly,prettymuchanyonecanbecomeanAgent. SignanagreementwithaMSPandyoucanstartreferring

merchantaccounts. TobeanISO,youmustbecomeregisteredwiththecardissuers,Visa/MasterCard. Initial

registrationcostsapproximately$10,000withannualrenewalsofaround$4,500. Asignificantamountofpaper

workanddocumentsarerequired andtheprocesstakesmonthstocomplete. ISOsarepermittedtomarket

creditcardsusingtheirownbusinessnameandidentity,whileagentsmustusethenameoftheMSPfortheir

marketing. Example: Paybyweb,Inc.isaRegisteredISOsoitmaymarketcreditcardmerchantaccountsas

Paybywebviahttp:www.PayByWeb.com. AnagentwouldhavetouseanamesuchasFirstDataIndependent

Salesor

other

MSP,

on

their

website.

While

both

are

knowledgeable

and

able

to

set

up

merchant

accounts,

ISOshavesignificantlymoreserviceandpricingoptionsavailable. Theycanprettymuchsettheirownpricing

structurewithmoreflexibilitythananagent,whoisboundbythetermsandpricingoftheMSPtowhichtheyare

registered.

MerchantServiceProvider(MSP)

Thisisthecompanythatmanagesthemerchantaccount. Amerchantagreementisbetweenthemerchantand

MSP.
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PaymentGateway

APaymentGateway,suchasAuthorize.net,PlugNPay,PayProFlow,providestheconduitbetweenthemerchant

accountandmerchant. Itprovidesintegrationforamerchantaccounttoworkwithashoppingcartorwebsite,as

wellasavirtualterminalformanualcreditcardtransactionentry. Typically,thepaymentgatewaysprovidedetailedreportsoftransactionamounts,cardtypes,andcustomers,makingitrelativelysimpletorevieworaccess

specifictransactions. SomegatewaysprovideadditionaltoolssuchasRecurringBilling,FraudDetection,and

more. PaymentgatewaysareREQUIREDwithInternet/MOTOmerchantaccounts. Theybillseparatelyandfees

varybyprovider.

PCICompliance

PCI(PaymentCardIndustry)DSS(DataSecurityStandards)wereenactedtoprotectcreditcardholdersdataand

createstandardsfortheindustryandallwhoacceptcreditcarddata.MoreinfoonPCIisfoundinthisguide.

Retail/SwipeMerchantAccount

Thisisatypeofmerchantaccountforfacetofacetransactions. Transactionsmayberunusingadesktop,wire

less,&mobileterminal. Rates/feesarelowerthannonswipeaccountsbecausethereislessriskinvolvedwhen

physicallyswipingacreditcard. Theruleofthumbisthatifyouareswipingatleast85%ofthecreditcardsbeing

processed,anRetail/Swipemerchantaccountismostapplicable.

RiskDepartment

ThisoneofthemostimportantareasoftheMSP. Theydecidewhichmerchantsmeetordonotmeetthecriteria

tocontinueprocessingtransactions.Whenamerchantaccountredflags,thisdepartmentassessestheissueand

respondsaccordingly. Itmaybeassimpleascontactingcardholderstoverifytransactions,requestingcopiesof

signedcreditcardslips,oraskingamerchantforinvoicestosupportcardholdercharges. Ifamerchantprocesses

outsidetheirpresetlimits,theriskdepartmentisgenerallythenextcontacttothemerchant. Theyhavethe

abilitytoclosevirtuallyanymerchantaccount,forvirtuallyANYreason. Ifariskadvisorisuncomfortablewitha

merchant,youcanprettymuchbesurethatthemerchantwillbelookingforanewMSP. Therearetipstokeep

ingyouraccountoutofthesecuritydepartment. Youwillfindtheminthisguide.

UnderwritingDepartment

ThisistheMSPsdepartmentresponsibleforreviewingincomingmerchantaccountapplications. Itistheirjobto

determinewhetheramerchantshouldbeapproved,declined,oriffurtherinformationneedstobeprovided. The

underwritingdepartmentistypicallykeptatarmslengthfromotherdepartmentstoensureproperconductand

ensuretheirjobisdonetoexactrequirements. AtsomeMSPlocaons,underwritershavetheirownentrance/

exitsanddonotcominglewithotherdepartments. Inmanycases,merchantswillneverknowtheirrealnames,as

manyunderwritersusepseudonymsinordertoprotecttheiridentyandprivacy. Theyarenotalwaystheeasi-

esttoworkwithanditisalmostalwaysinamerchantsbestinteresttocomplywiththeirrequests. Theymay

workcloselywiththeRisk/SecuritydepartmenttoprotectMSPsfromfraudulentmerchants.

Glossary of Terms - cont.


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ThePaymentCardIndustry(PCI)enactedstrictstandardsforkeepingcardholderpay

mentdatasafeandsecure. RegardlessofwhetheryouareaFortune100orsmallInter

netstartupcompany,compliancewiththePCIDataSecurityStandard(DSS)isNOTop

tional. Withgoodreason. Letsfaceit,weallareatriskofcreditcardfraudand/ormisuseofpersonalinformation.Manypeoplehavehadtheirpersonalcreditcardinfor

mationstolenbythosewhohavebreachedsecurityofcompaniesthoughttobesafe. Evenbankshave

beencompromised. Thesestandardsaredesignedtoensurethatthecarddatafromconsumers,likeyou,is

keptsecure.

Compliancecomesatacost...ordoesit.

TRUEorFALSE:MostprocessorschargePCIcompliancefeestotheirmerchants,whethermonthlyoran

nually? TRUE!

TRUEorFALSE: Thereisawaytogetoutofpayingthosefees? TRUE!

DidyouknowthatmanymerchantsdontnecessarilyhavetopayPCICompliancefees? Theprocessto

havethosefeeswaivedissimpleandtakesjustafewmoments. AlwayscheckwithyourMerchantService

Providertomakesureoftheprocessrequired:

1. CompleteaSAQ(SelfAssessmentQuesonnaire

2. Uponcompleon,assumingthatyouAREPCIcompliant,youwillbetakentoacerficate.

3. ProvidethecerficatetoyourMerchantServiceProvider. Inmostcases,yourPCICompliancewillbe

waivedforthelengthofmecoveredonthecerficate.

TRUEORFALSE:OnceIrunSAQandshowthatIamcompliant,thereisnothingfurtherneededinthefu

ture? FALSE! Asthepaymentindustrymakeschanges,businesseschangetheiroperations,andgovern

ancewithregardstofinancialserviceschanges, compliancewithPCImustberechecked. Complianceisa

continualprocessthatmustbetestedatregularintervals.

PCIInformaonprovidedbyPCISecurityStandardsCouncil. Visitthemonthewebatwww.pcisecuritystandards.org

Quick Guide to the PCI Data Security Standard How to Be Compliant

Self-Assessment Questionnaire (SAQ) PCI News & Events

Approved Companies & Providers PCI FAQ
http://www.paybyweb.com/http://www.paybyweb.com/http://www.pcisecuritystandards.org/http://www.pcisecuritystandards.org/https://www.pcisecuritystandards.org/documents/PCI%20SSC%20Quick%20Reference%20Guide.pdfhttps://www.pcisecuritystandards.org/merchants/how_to_be_compliant.phphttps://www.pcisecuritystandards.org/merchants/how_to_be_compliant.phphttps://www.pcisecuritystandards.org/merchants/self_assessment_form.phphttps://www.pcisecuritystandards.org/merchants/self_assessment_form.phphttps://www.pcisecuritystandards.org/news_events/index.phphttps://www.pcisecuritystandards.org/approved_companies_providers/index.phphttp://selfservice.talisma.com/userSetSession.aspx?c=58&cpc=MSdA03B2IfY15uvLEKtr40R5a5pV2lnCUb4i1Qj2q2g&cid=81&t=http://selfservice.talisma.com/userSetSession.aspx?c=58&cpc=MSdA03B2IfY15uvLEKtr40R5a5pV2lnCUb4i1Qj2q2g&cid=81&t=https://www.pcisecuritystandards.org/documents/PCI%20SSC%20Quick%20Reference%20Guide.pdfhttp://selfservice.talisma.com/userSetSession.aspx?c=58&cpc=MSdA03B2IfY15uvLEKtr40R5a5pV2lnCUb4i1Qj2q2g&cid=81&t=https://www.pcisecuritystandards.org/news_events/index.phphttps://www.pcisecuritystandards.org/merchants/how_to_be_compliant.phphttps://www.pcisecuritystandards.org/approved_companies_providers/index.phphttps://www.pcisecuritystandards.org/merchants/self_assessment_form.phphttp://www.pcisecuritystandards.org/http://www.paybyweb.com/


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I f you have quest ions on M er chant

Accoun ts, accept ing cr edi t car ds,

or other payment issues, we ar e

here to help. W i th over 19 years

in busin ess, PayB yWeb has

th e AN SW E R S you need!

Call us anytime at 727.289.7009

Or

Email - [email protected]

WhatisaPaymentGateway?Agateway(authorize.net,Linkpoint,Paypro,etc.)providesalinkfromyourwebsiteorshop

pingcarttoyourmerchantaccount.Italsoprovidesavirtualterminalthatcanbeusedtomanuallyentercreditcardtransac

tionsviatheInternet.AnInternet/MailorderPhoneOrdermerchantaccountdoesNOTworkwithoutagateway.

HowLong

Does

itTypically

Take

To

Receive

Funds

in

My

Bank

Acct?

For

Retail/Swipe

merchant

accounts,

many

proces

sorsdepositfundswithin12businessdaysaftersettlement. Internet/Phone/MailOrdermerchantsgenerallytake35busi

nessdays.

DoMerchantAccountsOfferRecurringBilling?Generally,recurringbillingorsubscriptionfunctionalityifofferedbythe

PaymentGateway. Forexample,Authorize.netofferstheAutomatedRecurringBilling(ARB)serviceforanadditional$10/

month.

EvenThoughitCostsMore,ShouldIAcceptAmex? Absolutely! Amexofferscardholdersconsiderableincentivestouse

theircards.ManycardholderswanttouseAmextocapitalizeonthoseincentivessuchasMILESandbonuses.Onaverage,

acceptingAmexcostsaround1%morethanVisa/MasterCard/Discover. Thatsaid,ifitcostsyou1%moretoearnasmuchas

25%+additionalbusiness,doesthatmakesense?Webelieveitdoes.

WhatisthedifferencebetweenQualified,MidQualified,andNonQualified?Wecouldliterallytakeawholepagetoan

swerthisquestion...butletsnot. Inanutshell,Visa/MChasthreemaincategoriesoftransactions:Qual,Mid,&NonQual.

MosteverydaytransactionsforastandardcreditcardwillbeclassifiedasQualified. Inmostcases,MasterCardRewards,

VisaWorld,Corporate,Government,etccardsmaybeclassifiedasMIDQual. Internationalcardsaregenerallyclassifiedas

NonQualified.UsinganInternet/MOTOacct,notcollectingAVS(AddressVerificationService)candowngradethetransac

tiontoaMidorNonqual.WithaRetail/Swipeacct,notswiping(manuallykeying)acardcandowngradethetransactionto

MidorNonQual. Typically,thefees forMidQualandNonQualconsistofanadditionalrateofanywherefrom.5%to2%.

MostMSPdonotadvertisethesefeesontheirsitesbecausethebasicfeestructureisconfusingenoughandaddingthisin

themixwouldmakeitnearlyimpossibleformanyprospectivemerchantstofigureout.

WhatisCVV(CardSecurityCode)? TherearedifferenttypesofCVV (cardverificationValue)includingCVV1whichhasdataencodedinthecreditcardsmagstripe,CVV2whichisthe3digitcodeon

thebackofVisa/MCor4digitcodeonthefrontofAmex,andCID(cardidentificationnumber)usedwithDiscover. Requestingthecardsecuritycodefromacardholderhelpsensurethatthecardisin

handatthetimeofpurchase. Itmayhelpinachargebackdisputeaswell.


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TherearecertainthingsyoushouldNEVERdowith

regardstoamerchantaccount.Herearejustafew:

1. NEVERgooveryourpresetlimitsforavgticket,maxticket,monthlyvol

umewithoutfirstnotifyingyourMSPandgettingpriorapproval. Exceed

ingtheselimitsarealmostcertaintocauseyourmerchantaccounttobe

placedwiththeSecurityDepartment...orbeclosed.

2. NEVERcloseyourdepositorybankaccountbeforeestablishingthenewaccount. Example:ifyouwantto

changebanks,setupyournewaccount,providetheDDA(bankinfo)toyourMSP,andmakesureyouseede

positsintothenewaccountbeforeclosingtheoldaccount. IfyourMSPattemptstodepositorwithdrawfunds

fromaclosedaccount,thenextmerchantaccounttobeclosedwilllikelybeYOURS.

3.NEVER

leave

your

MSP

with

abalance

due.

Simply

put,

ifyou

owe

your

MSP

money,

or

leave

them

unable

to

debitfeesdue,theywilllikelycloseyourexistingaccount,and/orplaceyouontheTMF(terminatedmerchant

file).

4. NEVERemailcorrespondencewithoutincludingyourcompleteinformation. Thisisjustageneralpetpeeve.

Whenwereceiveanemailsuchastheonebelow,wejustwanttoscream:

DearPayByWeb,

Weappliedyesterdayforanaccountandwanttoknowthestatus.

Thanks,

Bill

Whoareyou? Forwhattypeofaccountdidyouapply? Includeyourfullname,businessname,andcompletecon

tactinformationinallcorrespondence.MSPshaveTensofThousandsofmerchants. Someasmanyas2million

currentlyprocessingatanygiventime.Wecantlocateyourinformationbyyourfirstnamealone. Imaginecon

tactingyourbankandsaying,Hi,thisisbill...canIhavemybalance?Nuff Said.

=19

YEARS

IN

BUSINESS

+
http://www.paybyweb.com/http://www.paybyweb.com/http://www.paybyweb.com/http://www.bbb.org/west-florida/business-reviews/payment-processing-services/pay-by-web-in-pinellas-park-fl-18002232#sealclickhttp://www.paybyweb.com/


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DavidWeisshasbeeninthemerchantaccountandpaymentindustrysince1992,whenhefoundedChekDEBIT,a

pre-authorizedcheck(checkdra)prinngcompany. In1994,respondingtotheFTCsproposaltobancheck

dras,Mr.WeissfoundedandorganizedtheNaonalAutomatedPaymentAssociaon(NAPA),whichcomprised

ofcheckdra andelectronicpaymentcompanies. OnbehalfofNAPA,Mr.Weisswashand-pickedtositatthe

round-tablediscussionswiththeFTC,RegulatoryandLawEnforcement agenciesinpromulgangwhatcameto

becalledTheTelemarkengSalesRule(16-CFRPart310). NAPAwasinstrumentalindevelopingthelanguagewhichcametobe

includedintheLaw.Mr.WeisswasalsoinvitedtotesfybeforetheUnitedStatesHouseofRepresentavesSubcommieeon

Banking&FinancialServices,withregardstocheckandcreditcardfraudissues.

In1998,ChekDEBITbecamePayByWebandfocusedonprovidingfinancialservicesintheInternetspace. Today,PayByWebisa

leadingproviderofmerchantaccountsandotherfinancialservices.Mr.WeissconnuesonasPayByWebsPresident.

TheSecurityDepartmentischargedwithprotectingtheMerchantServiceProviderfrom

potentialfraudulentactivity,aswellasmisuseofmerchantaccounts.

Ifamerchant

account

has

been

referred

to

the

Security

Department,

there

isgenerally

agood

reasonforit.MSPshavemanytriggers,alongwithchecksandbalancestoensuresafeandap

propriatetransactionprocessing.Whenanaccountsetsoff atrigger,theSecurityDepartment

takeschargepromptly. Dependingonthetriggerorsituation,theymayclosethemerchant

accountimmediatelyORrequestinformationfromthemerchant. Forexample,itisnotuncom

monforthesecuritydepartmenttoverifysaleswithcardholdersorrequestinvoices&signed

creditcardslipsfrommerchants. Whatmanydonotknowisthatlegitimatemistakesbymer

chantscanbeEASILYavoided.HerearesometipstohelppreventbeingcontactedbytheMSPsSecurityDepart

ment:

1. GOODCUSTOMERSUPPORT

Answeryourphones(aliveperson)duringnormalbusinesshoursandcontactyourcustomersbackpromptly.

Complaintscancauseyour

2. GIVEREFUNDS/AVOIDCHARGEBACKS

Merchantswhodonotissuerefundsthatarelegitimatelyduearesusceptibletochargebacks. Doesthismean

thatyouarerequiredtogiverefunds?No! Ifyourrefundpolicystatesnorefunds,youmaynotbeobligatedto

doso,butVisa/MCallowsupto1%chargebacks. Anymorethanthatandyouraccountissubjecttoreferralto

theSecurityDepartment orbeingclosed.

3. STAYWITHINYOURLIMITS

Ifyouarepermittedtocharge$10k/mo,dontgooverthatamountforANYreasonwithoutpriorauthorization

fromyourMSP. Ifyourmaxsaleis$250,dontrunasalefor$500. Basicstuff.

Documents

Merchant Account Guide