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 Online Debit Card Processing   Not all debit card transactions are the same! For those merchants able to use a PINPad along with a credit card terminal, online debit card processing can offer a big savings. The difference between “online” and “offline” debit card transactions is that “online” requires the merchant to input their 4 digit PIN number and have their card swiped while “offline” functions exactly the same as any credit card transaction.

So why is does online debit card processing have such potential savings? Consider the bank’s perspective. When a customer presents their card for payment and then enters a PIN number manually, the chances of fraud are extremely small. Because if this, the costs for pin based, transactions, or online debit card processing, can be much lower.

When conducting pin based transactions, merchants are charged a flat fee for each order instead of a percentage rate (discount rate) plus transaction a fee. Assuming a merchant takes 100 debit cards over the course of a month (about 3 per day) and averages $85 per sale, a conservative cost analysis shows that a merchant could save over $100 a month, or $1,200 a year.
 		  Online debit card processing can save your business money through the use of a PINPad. This article explains the savings and usefullness of online debit card processing. 
 Debit Card Processing   While most merchants know they should accept debit cards, it is not always easy to understand how to take full advantage of debit card processing. Merchants can do debit card processing in one of the following two ways:

Offline Debit Card Processing
The most common way to accept debit cards is an "offline debit transaction." In this type of sale the merchant accepts a debit card the same way in which they would accept a normal credit card. The card is swiped through the terminal and the customer signs the receipt. As far as the merchant is concerned, there is no difference in the way a credit card or an off-line debit card is processed. The one thing merchants must remember is that the debit card must have a VISA® or MasterCard® logo on it. Cards that do not bear the Visa or MasterCard logo can not be processed off-line and will not be approved.

Online Debit Card Processing
A potentially cheaper and more secure, method for accepting debit cards at the point-of-sale is called an "on-line debit transaction." In this type of sale the card must be swiped through the terminal and external or internal PIN Pad is used to enter the merchant’s four digit PIN. The terminal will pass the encrypted number to the bank for verification. The merchant will then be paid for the transaction in the same manner and time frame that they would be paid on a credit card sale. The cost of this type of transaction is potentially lower due to the way in which the merchant is charged by the processing companies. Rather than paying a flat fee and a discount rate, or percentage of the transaction, as with a credit card or offline debit transaction, there is only a slightly higher flat fee.
 		  While most merchants know they should accept debit cards, it is not always easy to understand how to take full advantage of debit card processing. This article gives an overview of debit card processing. 
 Visa® & MasterCard® Rules and Regulations   As a merchant accepting MasterCard® and Visa®, there are basic card acceptance rules that you must follow. By adhering to these rules, you can increase customer satisfaction and ensure that you do not run into compliance issues, which may put your continued ability to accept credit cards at risk. The following are some of the rules outlined in the Visa and MasterCard manuals:

Card Logos & Acceptance: You must display the appropriate card logos for any card types that you accept and advise your customers of their payment options. You must honor all categories of cards (credit, debit, rewards etc.) within each card type that you accept.

Dollar Minimums and Maximums: You may not impose a minimum or maximum amount for any transactions. If you do not accept a customer charge, which is below a certain amount that you specify, the customer can notify Visa and/or MasterCard, who will take the appropriate steps to see that you understand and adhere to the card acceptance rules and regulations.

Surcharges: All credit card transactions must be treated like any other transactions. You may not impose any surcharge on a transaction because your customer is using a credit card. However, you may offer a discount to your customers for paying in cash provided the offer is clearly disclosed to your customers and the cash price is a discount from the standard price charged for any other type of payment.

Laundering: You may only process transactions for your own business. Processing transactions for a business that does not have a valid merchant agreement is called laundering and is considered a form of fraud.

To learn more about the rules and regulations of accepting Visa and MasterCard cards, please contact us or see the Visa and MasterCard guides available through the Visa and MasterCard websites.
 		  As a merchant accepting MasterCard® and Visa®, there are basic card acceptance rules that you must follow. This article talks about some of the rules and regulations outlined in the Visa and MasterCard manuals. 
 How to Avoid Downgrades   Whether you are currently accepting credit cards, or plan on doing so, it is important to know how to save money by avoiding downgrades whenever possible.

A downgrade simply means that you are being charged a rate increase because the type of card your customer is using has a higher processing cost or because a transaction was processed incorrectly by you, the merchant.

You can’t always prevent downgrades from happening, but this article will show you what you can do to keep your transaction costs as low as possible.

As an example, for a Retail or “Swiped” Account where the customer is handing over their card for processing, a transaction will get the Qualified Discount Rate (lowest rate possible) only if the card is swiped, the cardholder is present, and the card is a standard consumer credit card. If any of these criteria are changed, the account will “downgrade” to either the “Mid” or “Non” qualified level. These levels are each associated with a greater cost of processing.

Here is a more detailed description of what can be done to avoid many downgrades, and also what happens if certain criteria are not met.

Retail/Card Swiped Accounts

Qualified Rate

The Qualified Discount Rate is charged when all of the following occur:

Standard consumer credit card is used
Card is swiped accurately and data properly obtained
The customer’s signature is captured
The transaction is “Batched” or “Settled” within 24 hours
Mid-Qualified

The Partial/Mid Qualified rate will be applied when any of the following occur:

The card info is manually entered, or “keyed” & all AVS info is entered
The consumer uses a Rewards card
Transactions are not settled/batched within 24 hours
Non-Qualified

If any of the following situations occur, a Non-Qualified rate will be applied to the transaction.

Card is manually entered with no AVS info entered
The consumer uses a Corporate, Government or International card
Authorization code is manually keyed in to your processing terminal.
Transactions are not settled/batched within 48 hours
Keyed “MOTO” or Internet Accounts

For these types of accounts, the merchant manually enters credit card information into a credit card terminal or software after the order is placed or is collected through an online payment gateway.

Qualified Rate

The Qualified Discount Rate is charged when all of the following occur:

Standard consumer credit cards are used
All required Credit Card information is entered including AVS (address verification) for VISA® transactions.
The transactions are “Batched” or “Settled” within 24 hours
The order/invoice Number entered
Mid-Qualified

For MOTO/Internet Accounts, rates usually fall directly to Non-Qualified, not mid-qualify, but these are the possible reasons why a merchant may be charged a Mid-Qualified Rate

AVS information is not entered
Transaction/Batch is not settled within 24 hours
Card is a Rewards or Business card
Non-Qualified

If any of the following situations occur, a Non-Qualified rate will be applied to the transaction.

Any of the required card or transaction information is not entered
The consumer uses a Corporate, Government or International card
Authorization code is manually keyed in to your processing terminal.
Transactions are not settled/batched within 48 hours
As you can see, there are many factors involved in determining which rates are assessed to your transactions. Follow the tips above, and you will keep your processing rates as low as possible. A Terminal sales representative is always available to answer any questions or concerns you may have.
 		  Whether you are currently accepting credit cards, or plan on doing so, it is important to know how to save money by avoiding downgrades whenever possible. 
 What to Expect in Your Monthly Merchant Account Statement      Merchant account statements can sometimes be confusing, especially for new merchants. Generally, questions and concerns pertain to the charging of monthly fees and the timing of account statements, so we hope that this article will help to explain some of these confusing aspects.
 
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