Accepting Credit Cards Without A Website

How To Accept Credit Cards Online Without A Website

I didn’t even realize that I could accept credit cards online without even having my own website.  I happen to have one but I was intrigued about how this could be.  What is actually happening is that we are just credit card processing over the internet and having the ability to get rid of our land lines and outdated terminals.  It is even more secure than processing over vulnerable land lines.
This type of online credit card processing is based on an internet connection to a centralized payment gateway which handles the transactions.  Needless to say, an online gateway operates 24 hours a day and 7 days a week and has more flexibility.  Why?  Because you can process credit cards with all the functionality you are used to with your terminal but you do not have stand there to do it.  Even though most merchants would not need to process a transaction remotely from anywhere in the world, they could.  This has enormous applications for mobile commerce and lifts the restrictions from only being able to process during your store’s operating hours and only taking payment on site.
In general a payment gateway will end the need to be dependent on a phone line and feature complete wireless processing.  Understand that it is not just to accept credit cards.  You should always be able to process debit cards, do returns or voids and even handle check imaging by a virtual terminal.
Even if you already have an online store or any type of website, you can easily integrate a new or existing shopping card software or pluggins into most of these gateway processors.
The features, which have come a long way since inception, allow networking so you can access processing for multiple store location, handle batch processing, set up automatic or recurring payments and do just about every type of reporting you can think of.  Software is about efficiency and as we undoubtedly move to more of this in the merchant services industry, merchants will be able to integrate even more accounting features into their payment processing.
I suppose an obvious question is how do you get payment from your customer into your account.  The procedure is not that different from the process you are used to, just more secured and efficient.  Customer swipes card, or types in information in the case of a website transaction, the data is encrypted before it is sent, the payment gateway will verify payment information and make sure their is enough money in the account in the case of debit or make sure there is sufficient credit available to cover the purchase price.  Then there is a prompt for the customer to authorize the transaction and a receipt is generated to verify the transaction.  The payment center then holds the information until the issuing bank sends funds which are ultimately placed in your merchant account.
So the concept of payment is very similar to traditional terminal transactions but human error is virtually eliminated from the equation and encryption makes the information secure.
Isn’t it time for you to harness the power and speed of the Internet to work for your business? Accept credit cards online and see what a difference it can make for your operation!  The real beauty of this technology is you can accept credit cards without even having a website but keep in mind that you will need some sort of merchant account in order to process credit cards. So this is not a solution for individuals to accept credit cards just a business with at least a minimal sales volume to offset merchant account costs.

Bad Industry For Credit Card Processing

A Bad Industry For Credit Card Processing

You would not think there were industries out there which were bad for credit card processing but anything questionable to the United States Government is a good place to start.  Things like online gaming or overseas pharmacies might come to mind but as laws change regarding the use and sale of medical marijuana, the subject of credit card processing becomes a point of contention.
Let us first start by mentioning that to date there are sixteen states and Washington D.C. that all the use of Medical Marijuana.  This may be news to some people but America seems to be changing and regardless of how we may feel about it, if it is for sale, how is it paid for.  A medical marijuana dispensary is much like a regular pharmacy except they only sell one thing.  True there are different varieties and interesting products but these businesses distribute medical cannabis to patients with their State’s written permission to purchase it.  The problem is that for the dispensaries to accept credit cards for payment using traditional credit card processing is becoming more and more difficult.
The reason stems from the fact that the federal government is not making it so easy on the States which have passed legalization legislation to have total control over its sale and distribution.  It’s a slippery slope which leaves businesses owners as the unwilling pawn in this political game.  The Feds say that any business that accepts credit cards in this industry is supporting activity which is against Federal Law.  But in truth, credit card processing for these businesses operating in State’s where the sales are legal, have not violated any State Law.
So there we have it.  It is really nothing more than the Federal Government looking for ways to circumvent State’s rights and pushing back against the Country’s desire to at least open the debate for Federal decriminalization of marijuana.  The result has not been a ban on credit card processing for these marijuana collectives, but more of an unwritten rule. Banks providing merchant services for dispensaries so they can accept credit cards from their patients now feel like a target for federal regulators.  Even if nothing officially happens to these banks, many feel that it is not worth hanging around the wrong neighborhoods and inviting trouble.
This seems to be an effective ploy for Government so far but it will not last for long. Truth be told, marijuana collectives would rather not accept credit cards from customers because they have to pay transaction fees which dip into the profits when compared to cash.  Business owners in general accept credit cards as a convenience for customers and in competitive industries it is just the cost of providing good customer service.  But this new industry has little competition right now that makes large scale credit card processing worth the trouble for management.
The funny thing is that the real loser here is the Merchant Services Providers who are, of course, the banks.  When banks see profits being lost it won’t be long before they set their lobby loose on Washington and the pressure to relax Federal regulations will be in the form of holding back campaign contributions for elected officials.  This is when we will see changes in credit card processing for medical marijuana.

NFC Credit Card Processing

NFC Credit Card Processing

Credit Card Processing technology is seemingly changing by the minute and both merchants and consumers alike wonder how they will accept credit cards in the future. Mobile devices are the hottest talk in the industry and Square has been making a lot of news lately but before this, NFC, or Near Field Communication devices were expected to be the main method of credit card processing in the future.
But as technology changes, so do the certainty of certain technologies cornering the market.  While everyone agrees that mobile credit card processing will allow more businesses to enter the market, nobody is sure how to best accept credit cards.  The fact remains that no matter how many people are set up to accept credit cards on the go with their smartphones, the vast majority of both merchants and consumers still feel most secure with real plastic credit cards.
Near Field Technology would actually be used to allow devices to communicate with each other at close range.  So merchant and customer would not have to physically handle cards if they had built in NFC chips in their cellphones or had one of the many NFC accessories on the market.  Even though the transfer of data can only be done at close range, NFC security is not yet that safe and can be breached by hackers.  It is certainly not the norm but as with many newer technologies the bad element always seems to find a way in.
The credit card processing for those will to accept credit cards this way is very cool.  Basically a customer with credit card information stored on an NFC type chip in their phone can simply wave their phone over a receiving device located near a merchants terminal.  In completely mobile transactions, the devices would simply need to connect or wave in some manner.
A lot of the major players in technology have invested heavily in seeing that NFC becomes a mainstay of future eCommerce with many of the major Cell phone manufactures already making NFC equipped phones. The potential to streamline credit card processing for point of sale transactions is one thing, but using the technology for ticketing, boarding passes, coupons, rental cars and hotel check ins also have others interested in pushing the technology.
Companies like Square plan to make sure that both mobile and stationary payments are equally serviced to accept credit cards because they are not sure that NFC will be the best solution for credit card processing and do not want all their eggs in one basket.  Traditional transactions have been ingrained into people for the last 40 years and won’t easily change over the next generation.

Credit Card Processing Loophole In CA

Credit Card Processing Loophole In California

Recently we discussed how Anthem Blue Cross in California cannot charge the $15 convenience fee to accept credit cards from policy holders to pay their premiums.  It is a violation of California law for private businesses to charge credit card processing fees to their customers to accept credit cards instead of cash.  The can discount amounts if a someone uses cash or check but cannot make it more expensive to use credit.
They attempt to do this to make up for lost revenue for the merchant account fees they must endure for providing the ability to accept credit cards as a form of payment.  In the past it was something that companies were willing to write off but in tough economic times it doesn’t sit so well.  In Anthem’s case they tried to charge what they call a “convenience fee” and it was a miserable failure.  They were negligent with their attempts to inform policy holders and many on autopay plans ending up $15 short on their premiums and lost coverage.
The fee has been done away with but many wonder how Anthem could get away with this in California and the truth is they cannot.  But others can.  There is definitely a credit card processing loophole in the State and here it is.  Private companies cannot charge a premium for credit card users but public ones can.  A college like UCLA, for instance, charges a 2.75% fee for allowing students and parents to pay with a credit card.  Certain counties are charging an extra fee for Credit Card Processing on property taxes and California utilities companies can also charge for the convenience.
In the broadest sense of the word none of the above are considered retailers by State Law and therefor exempt for laws governing retailer’s charging above the price the credit card processing.  Utilities are not, however, allowed to collect any more than the actual cost of their actual merchant costs due to tougher regulations but others can.  UCLA says it spends over $6.5million in merchant account fees and now by passing them on to students, they save that money.  It is unclear whether UCLA is profiting by charging a flat 2.75% fee.
For most of us, the best example of two tier pricing is at the gas pumps but the standard party line on this from the oil industry is that they are offering a discount for cash or check and this discount is offered to all customers.  If they admitted to raising the price for credit this would be against California’s credit card processing laws.

Credit Card Processing Lobby

Credit Card Processing Lobby In Washington

In one of the most interesting news stories about credit card processing this year, what I had long suspected turns out to be true.  It has to do with the credit card processing and their strong lobby.  It is important to know what goes on in Washington and how it affects small business.
This story in particular focuses on American Express and how they spent over $600,000 in the second quarter of 2011 lobbying Washington in an effort to ease regulations regarding credit card processing and, more specifically, debit card fees.  As many of us already know, new legislation was passed which regulates the amount of fees a merchant can be charged for accepting debit cards on a per transaction basis.
This type of legislation has been a long time coming and is an attempt to keep merchants who accept credit cards from being victimized by enormous fees for offering a service that customers have come to expect, and expect it at no additional cost to them.  Merchants are forced to declare minimums when they accept credit cards for small purchases because their profits may actually go straight to their merchant account providers and theoretically they could lose money on every purchase.
In a lot of cases maximum amounts are also be because the percentage fee from a transaction may represent far more than any credit card processing company deserves just because a transaction is so large. With regard to debit charges, the new law states that a merchant can only be charged 21 cents plus 5 basis points times the amount of the transaction.  A great deal for merchants and terrific news for consumers, but the banking industry is upset about this.
Issuing banks will need to make up this lost revenue somewhere and of course, customers will have to pick up the bill.  Free checking will completely disappear, if it hasn’t already, and debit rewards loyalty programs have disappeared almost faster than they hit the seen a few years ago.  The winners and losers will really be determined after consumers change their spending behavior at the credit card terminals but the banks want to make sure that they are somehow the winners in all of this.

Should There Be A Credit Card Processing Lobby?

The interesting thing about the American Express lobbying spend during this time was that American Express does not even issue debit cards and are not directly affecting by the new rules.  However, they clearly see the writing on the wall and probably fear the consequences of how these new laws can now regulate Interchange which is an amount that banks can charge each other for credit card processing.  American Express also lobbied other legislation regarding customer tracking and tighter privacy protections and their position, as with most banks, does not bode well for the consumer.
Change in the credit card processing industry, and banking in general, is costly.  New technologies which constantly need to be upgraded to protect against vulnerabilities require massive capital and are never ending so it is understandable that these industries resist change.  But is it for the right reasons?  These moves are clearly an attempt to protect their bottom lines and show little concern for transactional safety and the price merchants must pay to accept credit cards to compete at a customer service level.  The Lobby was originally developed as an organized way for the people to talk to Government but it has evolved as a way for big businesses to slow down Government by filling the pockets of voting legislators.
Credit Card Processing should only get better, more efficient and less costly for both merchants and consumers but if issuing banks have their way, it will be anything but.

Bank Of America $5 Debit Card Fee

Bank Of America $5 Debit Card Processing Fee

Well we in the credit card processing world new it was coming before October 1st and Bank Of America has fired the first shot.  Bank of America is introducing a $5 debit card free which will undoubtedly anger its customers.
For those that do not already know, The Durbin Amendment which places a cap on what issuing banks can charge merchants to process debit cards.  Credit Card Processing can be very expensive for merchants and this is why you see minimums in some stores in order for them to accept credit cards from customers.  The legislation is good for small businesses and in turn will benefit consumers.  But what about the banks?  Are they the victims here?
Well if you follow credit card processing news headlines you would think they are being driven into bankruptcy.  Their credit card processing revenue has been estimated at near $19billion per year and they are out to recover their potential losses any way they can.  The announcement from Bank of America to charge a $5 a month debit card fee has been the most notable attempt so far.  Other banks have already done so but BOA has the most depositors and is a giant in the industry.
The fee is not as bad as it sounds because the $5 fee will only be assessed as a monthly charge is someone uses their debit card during the month and it is not a per transaction fee.  Transaction fees will be capped at 21 cents plus 5 basis points times the amount of the transaction and will be charged to the customer by the merchant.  At the point of sale this is a much better deal for consumers than they currently face.
The way to avoid the fee with BOA is quite obvious.  Don’t use your debit card.  It sounds a bit harsh but the truth is that these new bank fees will change the way consumers behave in the market place.  This fee will be imposed on top of any other checking account fees already in place.  Free checking accounts have all but disappeared as a precursor to this new legislation and bank customers have to pay more attention to their accounts than ever before if they hope to avoid the pitfalls of a la cart banking but perhaps this is something good.
The incentive here is to become more reliant on cash and let the big monster mega banks know how you feel by avoiding their credit card processing fees as best you can.  But for individuals who make lots of debit card transactions over the month, the $5 fee may prove to a blessing in disguise as they realize more savings at the point of sale.  We will have to wait a few months to see how this all shakes out but one thing is for sure, things are going to be different as far as credit card processing is concerned.

Use Credit Cards Instead Of Debit

Bank of America’s announcement to charge a monthly debit card fee last week has turned the credit card processing world on its head.  But for industry insiders this move has long been expected as banks try to recover the lost revenues no longer available to them as a result of the Durbin Amendment.The credit card processing industry will survive and somehow manage to find a way to become even more profitable.  It is consumers who are most bent out of shape by this move yet they shouldn’t be.  The big problem is that the banking industry has spent years teaching the public to become reliant on their debit cards but it was a mistake for consumers from the get go.

At first nobody really understood the differences between the debit and credit card processing fees and cost.  They only saw that banks were using gimmicks to encourage use and if done correctly, users made out like bandits.  There were no real debit card fees for most point of sale transactions but they were loaded with reward points which quickly added up to extra cash.  Some users earned hundreds of dollars per year using their card the same way they would use cash.  It made no sense to use anything but debit.
I myself chose to use a debit card to pay for dental surgery and received $53 back from my issuer at the end of that quarter which effectively gave me a discount off of my procedure.  Throw in groceries, gas and utilities and I was a debit card junkie.  Then came the increase in fees from merchants for credit card processing on small items like chips and gum.  It was then that I noticed there was a significant cost to using debit cards.
Now that rewards programs have come and gone, and the banks can no longer charge high fees for POS transactions, they are resorting to monthly charges on checking or savings accounts with debit cards tied to them, and turning to tricks buried in the fine print of their terms of service agreements to generate higher fees to replace lost revenues. Consumers need to be aware of this and stop using their debit cards when credit is an option.
Debit transactions are immediately taken from a users account which makes fraud a lot more difficult to deal with from a consumer’s standpoint.  Traditional credit card processing provides a much better challenge process and is much safer than using debit.  For someone who pays off their credit statements monthly so they don’t accrue interest charges, there are still plenty of cash back programs which make using credit extremely attractive.
Speaking of cash, why not use that? Cash still spends and many merchants offer discounts for its use because they pay no fees what so ever.  Cash may not be the safest thing to carry but using it is your least expensive option.  The real point here is that smart consumers need to be aware of the current, and upcoming, changes in the credit card processing industry