My Merchant Account Blog

Electronic Funds Transfer

Tuesday, March 29, 2011

A way of performing financial transactions electronically. The Pulse and Star networks are examples of EFT systems. It is a system of transferring money from one bank account directly to another without any paper money changing hands. One of the most widely-used EFT programs is Direct Deposit, in which payroll is deposited straight into an employee's bank account, although EFT refers to any transfer of funds initiated through an electronic terminal, including credit card, ATM, Fedwire and point-of-sale (POS) transactions. It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments.

Electronic Payment Gateway Set Up Fee

Saturday, March 26, 2011

This is the fee charged for the creation and setup of a new gateway account.  It is a one-time fee assessed by the gateway itself.  When setting up a new gateway contract, merchants should really read the fine print.  Some gateways do not disclose this fee outright but rather add it to the first monthly statement. 

This fee ranges from $0.00 to $1000.00.

Draft Laundering

Wednesday, March 23, 2011

When a merchant processes sales through his or her merchant account on behalf of another merchant. Laundering violates the terms of merchant agreements.Also called draft laundering and factoring. Credit card factoring, also known as credit card laundering, or even money laundering, can exist in many forms. The most basic form of factoring would be a business processing transactions for another business. Another common case of factoring is when a business opens a branch, DBA, or sub-business and attempts to process through the central company’s merchant account. This case is often seen when a business starts a website, and tries to process credit card transactions without opening a separate merchant account for their website.

Discount Rate

Thursday, March 17, 2011

The percentage of card sales acquirers collect from merchants for transaction authorization, settlement and so forth.The same as interest rate; the term "discount" does not refer to the common meaning of the word, but to the meaning in computations of present value, e.g. net present value or discounted cash flow.

Demand Deposit Account

Wednesday, March 16, 2011

A checking account with a financial institution. An account from which deposited funds can be withdrawn at any time without any notice to the depository institution.This account allows you to "demand" your money at any time, unlike a term deposit, which cannot be accessed for a predetermined period (the loan's term). Most checking and savings accounts are demand deposits, accessible by the account holder at any time.

Debit Cards

Tuesday, March 15, 2011

Issued by financial institutions and tied to cardholders' DDAs. Debit cards come in online/offline and offline-only versions. Online in this context means able to interface with the card brand networks for authorization at the POS. Debit cards can be co-branded with Discover, MasterCard or Visa. Online debit requires customers to enter PINs; offline debit card payments are authorized with cardholder signatures.

Going Back to the Dark Ages

Saturday, March 12, 2011

A few years ago, I remember talking with others about designing a website in a static layout, focusing on a 1280X800 resolution.  Some webmasters would do a fluid layout, giving up on some layout properties.  Throughout all these years, the first number (1280) is the width and the second number (800) was the height.  This was really never an issue for webmasters - the layout was always in a landscape mode.

Now with smartphones and iPads, things have changed.  Landscape has become portrait.   It almost like webmasters are starting over.  A lot of companies and webmasters are offering a mobile version for their users.  Maybe a year ago, this might mean less images or even none - since mobile carriers would charge the user for data usage.  Now, most carriers are offering a flat rate for data usage and the networks are getting faster. 

iPad Resolution

If a user is holding the iPad like a book, it is in portrait mode.  This means, the resolution is 768X1024.  A little over one year ago, about 1% of users were still using a screen resolution of 800X600.  Now, less than 1% is using this resolution, since monitors are getting cheaper and can also function as a television.

When the user turns the iPad, it is now in landscape mode and the resolution is 1024X768.  In January 2010, about 20% of web users had this resolution.  This decreased about 6% in January 2011, but it will probably increase as iPad users upgrade and sell their "old" iPads.

Mobile Versions

Some webmasters will add code to their website to help determine if a user is viewing the website on a mobile phone.  This might work, but keep in mind that Microsoft threw a cog in this function in Windows Mobile 7 phones.  A user can change the settings on Internet Explorer to use a Mobile or Desktop Version.

While there are good reasons to use a static or fluid layout, webmasters are usually controlled by the client who wants it a certain way.  Personally, we just try to offer the choice between a mobile and full version on our websites. 

Mobile Virtual Terminal

In keeping with the theme of this blog, we would like to remind our readers that the Quantum Gateway offers a virtual terminal for the mobile phone (or smartphone).

NSF Charge

Friday, March 11, 2011

Credit card processors will charge a fee if a card is rejected, i.e., the amount of the charge was unable to be collected by the processor.  This fee is generally $25, but that does not include any fee your bank may charge. When this happens, merchant account providers typically will hold future batches until the money they are owed is collected; this can mean financial trouble down the line for the merchant, especially considering an electronic payment can be presented up to three times (unlike a paper check, which can only be presented twice) for collection.

Data Breach

Wednesday, March 09, 2011

The capture of sensitive payment card data by an untrusted party.Other terms for this phenomenon include unintentional information disclosure, data leak and also data spill. Incidents range from concerted attack by black hats with the backing of organized crime or national governments to careless disposal of used computer equipment or data storage media.

Credit Cards

Can be issued by banks and nonbanks and are associated with such brand names as AmEx, Discover Financial Services, MasterCard, JCB International Co. Ltd. and Visa. It is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.

Chargeback

Monday, March 07, 2011

When a cardholder's bank (issuer) reverses all or part of a card transaction back to the merchant bank (acquirer), which typically kicks the transaction back to the merchant's account, leaving the merchant financially liable for the payment and subject to fines.

Chargebacks can be initiated by customers or by cardholders' banks (for example, due to procedural errors). Chargeback Ratios that exceed 1 percent of monthly sales generally are considered excessive.

Types of Chargebacks

Chargebacks are currently divided into

• Non Receipt of Goods or Services Chargeback Codes
• Cancelled or Returned Chargeback Codes
• Authorization Error Codes for Chargebacks
• Fraud Codes for Chargebacks
• Non Receipt of Information Chargebacks

Closed-Loop

Sunday, March 06, 2011

Cards (such as retail gift cards) issued by a single corporate entity. Such cards can only be redeemed within that entity or within a series of entities that have agreed to take the cards.

Check Scanner

Saturday, March 05, 2011

A counter-top device used to scan images of checks, according to legal specifications, for electronic clearing and settlement. Some of it offers new innovative features, the highest MICR accuracy available and the quality and reliability.If your business takes in less than 50 checks per day, a single-feed check scanner will probably be adequate.

Electronic Payment Gateway Fee

An electronic gateway fee is a monthly fee which applies to merchants using an internet payment gateway.  It is usually billed by the gateway provider but it can sometimes be billed through the merchant account.  This fee can run anywhere from $10 to $100 per month. 

Additionally, there can be a per-transaction fee the gateway provider charges, on top of any fees charged by the merchant account provider.

Certificate Authority

Friday, March 04, 2011

An e-commerce service that validates Internet parties to an online transaction. If the user trusts the CA and can verify the CA's signature, then he can also verify that a certain public key does indeed belong to whoever is identified in the certificate.