How to be Safe from Being Ripped off By Credit Card Processors

As a high risk merchant account holder, you know the importance of selecting a good service provider so that your business doesn’t face a setback with surplus charges from an ineffective high risk merchant account processor. 

In order to remain safe against ripping off by credit card processors, here’s a few tips.

Get Rid Of Cancellation Fee

High risk merchant account processors have a certain clause in their agreement on cancelation fee. This fee is marked as loyalty from the account holder towards the processor and can range from few hundred to several thousand dollars. However, this additional fee clause can be ignored with certain advices from the service provider.

Don’t Lease Your Processing Equipment

Although, processing equipments are really affordable, leasing them to another party can prove to be a big mistake in term of surplus credit card processing. Leased processing equipment can be easily traced by the service provider and as a result they can charge higher rates for processing.

Fair Interchange plus Pricing

Interchange is the common processing fee that goes Visa or MasterCard as the fairest form of pricing structure. Therefore, having a pay structure with interchange fees and service charges guarantees no hidden costs or redundant fees.

Different Merchant Account Fees You Should Know About

Before selecting a merchant account service provider, you need to know about the different fees that are generally applicable. The information should help you plan your budget well or you may end up counting the money you will actually have to pay to a payment processor! 

·         Initial fee is the most common type of one-time fee that a service provider will ask. Payment processor might quote it as a setup fee or an application fee. Basically, this is the fee which service providers charge to get started with a low or high risk merchant account. 

   

·         A service provider can also ask for a monthly fee; it is often christened as a statement fee or report fee. This fee is charged to keep the account available.

·         Discount fee is one common percentage that service providers charge on the transactions. However, the percentage can be a function of the type of credit cards used or the method of payment processing.

Transaction fee is charged during card swipes as cushion (for fraud transactions and different risks involved in high risk payment transactions through high risk merchant accounts).

Card not present frauds: How Cards May be Compromised

CNP fraud basically implies that the card holder’s details are used without his knowledge, for a transaction. The transaction can happen online or at a merchant location, without his knowledge of the card being invalid.

1. Presence of the card holder or card

The card can be used to do an illegal transaction without the actual possession of the card and only its details. The customer finds out about it only when he sees the charge in the monthly statement.

2. Online CNP transactions

Such transactions generally take place virtually, where the criminals have got hold of these details through a call centre or via mail. The merchant could be a high risk merchant, releases the goods or services without realizing that the card has not been authorized by the holder.

3. Two categories

US law has set a limit for losses incurred by a consumer towards credit card fraud at $50. For the purpose of deciding as to who should bear the losses of an unauthorized credit card transaction, two main categories have been formed-

·         Cases where the card is actually presented

·         Card not presented and used over the net or on the phone