merchant account guide
TRANSCRIPT
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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/ -
8/12/2019 Merchant Account Guide
13/13
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
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.
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