The Merchant Processing Guru

The Merchant Processing Guru Tip#16: Standalone credit card processing terminals and PCI Compliance

I am hearing of cases where a processor is forcing merchants to upgrade their terminal because their terminal is not PCI compliant. Standalone credit card processing terminals are not affected like PC based processing solutions as standalone terminals do not store credit card numbers. However if you run debit cards through a terminal under the pin-based debit option and you are using your terminals internal pin-pad, that is the portion that may not be PCI compliant. There is a very easy and simple way of getting around that issue, just get an external pin-pad from your processor to plug in to your terminal that is PCI compliant. A pin pad needs to be Triple-DES encrypted (3DES) as these pin-pads store the pin numbers that are entered into them by your customers.

This brings me to the issue of equipment altogether. There is absolutely no reason to lease or even purchase credit card processing terminals, for the most part, any longer. I typically will provide my merchants with equipment for as long as they process with me. I still find cases where merchants are paying between $50.00 & $150.00 a month on a lease for 48 months which is robbery on behalf of the company that set them up, as far as I am concerned. The merchant ends up paying between $2,400 to $7,200 for a piece of equipment that may have cost $250 to $350. The worst thing about this type of lease is that they are “Ironclad”, there is no way to break them. You are stuck with paying the entire amount you owe, including a buyout at the end of the lease which is typically 10-15% of the original value of the equipment. Leases may have had their place several years ago, when done properly & they can still be used in some cases as long as they are beneficial to you and on equipment that is just too expensive to purchase up front, but not for just a simple counter top terminal, that’s ridiculous.

To avoid ever getting into a lease like this again or paying outrageous fees for processing your credit cards, consider this. It has been my goal the past 6 years to always provide those who choose to work with me, the most cost effective solution for them and their business. I believe that in doing so I will build a long lasting business relationship with each and every person I work with. If you believe this is something you would like to have in your relationship with a credit card processing provider then get in touch with me today and I will show you how much I value your business.

theGuru@theMerchantProcessingGuru.com

The Merchant Processing Guru Tip#12: Credit Card Processing with Mobile Solutions continued – Virtual Terminal with a Mobile computer. The virtual terminal gives you the ability to process credit cards anywhere in the world as long as you have an internet connection and a computer. This is why I have included it as one of the available mobile solutions. A really good terminal will allow you to add a USB “Mag Swipe” so you can swipe cards on a laptop anywhere as long as you have an internet connection.

The virtual terminal has fast become a popular alternative to a traditional terminal in many office environments as it is so easy to use and there are no equipment or software costs. Another reason this has become a popular option recently is because of new PCI compliance requirements, certain software versions have become obsolete as they are not PCI compliant and the cost of upgrading to a newer version is quite high in comparison to getting set up with a virtual terminal. While some virtual terminals have setup fees, some will be free to set up. You will have what is called a gateway fee each month in addition to any other monthly fees of approx. $15.00 – $25.00 per month so keep this in mind when considering this option.

The Merchant Processing Guru Tip#12: Credit Card Processing with Mobile Solutions continued – Dial Pay & iPhone apps. “DialPay” is a term used in the industry for processing cards from your cell phone or even from home or office phone. This is usually an automated system that you call into using an 800# and punch in the card & sale information and get an approval # or a decline on the spot. It is a little time consuming to punch in all the information but for the occasional sale it is a great solution and a very cost effective one. One thing a lot of people don’t realize is that you MUST GET A MANUAL IMPRINT OF THE CARD with this solution. This is to avoid “chargebacks” or at least give you the proof of a legitimate transaction with the customer’s signature and imprint of the card. ANY TIME YOU DO NOT SWIPE THE CUSTOMER CARD YOU SHOULD HAVE WRITTEN PROOF OF THE SALE, a manual imprint in this case gives you that. You do not need to do anything with the slip accept hold on to it for your records and give the customer their copy.

This solution is perfect if you only have a few transactions a month but you want to offer your clients the option to pay by credit card so you do not turn away any sales. Great for service people like Electricians or independent Carpet Cleaners who may have a transaction once or twice a week…

The iPhone credit card processing app. If you own an iPhone then this may be a good solution for you instead of the “Dial Pay” option. Basically this application allows you to access a Secure Gateway “Virtual Terminal” just like the ones you would access anywhere from a computer, in fact you can still access your Virtual Terminal from a computer in the same way you can from your iPhone. So even if your iPhone is not working, as long as you have access to a computer you can continue to accept credit cards…

There are at least 15 iPhone apps. for processing credit cards last time I counted. Choosing the right one can be a little daunting, I have tested a couple and found 2 that I would recommend for most processors out there. Absolutely terrific solution for someone who has, takes or has the potential to take a good number of card payments in and out of the office!

The Merchant Processing Guru Tip#12: Credit Card Processing with Mobile Solutions continued – wireless terminals. I do not suggest buying a used system or even a new one from anyone other than the processor you intend to use for the service as they will be the one to program your terminal and if anything is different at all with the machine from what they are used to then you could have warranty issues to deal with. This is one area where it is always better to pay a little more than to save a buck today and have potential issues that could end up costing you in the long run.

Does it make sense to use a wireless terminal in your business you ask? Great question! Here is my general rule of thumb:

You must process at least $3-5,000 a month to even consider a wireless terminal. (more is preferable)
Your transactions must almost all be swiped to take advantage of the system.
The higher the volume of sales the more this will make sense. Let me explain: If your business is lower ticket items but high volume of sales like a food vendor at a farmers market where you have people standing in line for your products, you will want the speed of a terminal that gives you quick transaction & approval times. If you have high ticket items and process a high dollar volume throughout the month, you may want to consider this option because the swiped rate could make the additional wireless fees worthwhile and to have peace of mind that your transactions are approved and that you have a customer signature on the receipt.

The costs associated with owning a wireless terminal:

First of all the purchase of a wireless terminal may disqualify many and make it cost prohibitive. A wireless terminal will generally cost anywhere from $600.00 – $1,800.00 and up. You should not need to spend more than $1,000.00 on the right terminal.

You will typically find that there is always a wireless set up fee, generally around $50.00. This is a one-time fee to set up the account with a wireless service provider. Then you will have a monthly wireless service fee of approximately $20-$25.00 per month.

With the additional monthly fee you may not save enough money with retail rates to make the additional cost worthwhile. You would need to process approximately $5,000.00 per month or 500 transactions to just break even. This is approximate but a good rule of thumb. Tune in next time when I will talk about the “Dial Pay” option.

The Merchant Processing Guru Tip#12: Credit Card Processing with Mobile Solutions. If your business is mobile or your have mobile reps out in the field and you want to or already accept credit cards for payment, you may want to read this post and consider your options for “processing on the go”.

Firstly, it is important know that there are many mobile options and choosing the right one for your business is sometimes not all that easy. Here is a list of the major mobile options that you can look at:

• Wireless Terminal
• “Dial pay” with manual imprinter
• iPhone app.
• Virtual Terminal with a Mobile computer

The wireless terminal option: This is the most prestigious of these options but can be costly to purchase. Some processors may give you a wireless terminal for “free” but be careful, nothing is free in this life. This is a costly device no matter how you look at it and a processor will have to recoup his investment somewhere.

The history of wireless processing units has been rocky at best. Wireless service providers have come and gone like the seasons and financing companies are still very wary to lease these machines as a result of being burnt due to service being cut to these devices in the past. Today, most of the service providers that have remained are well established as they have stood the test of time and are here to stay… I still suggest being careful who you use though. Also, you want to be careful which network you choose for your wireless service as well as the wireless terminal itself, there are some out there that just don’t work well and your service will be very splotchy. Try to get a terminal and wireless service from a company that has had good experience with the system and service in most parts of the country or at least in a major metropolitan area. I will have more about wireless terminals in my next post.