Why Settling your Day's Transactions is Important

You may choose to settle or "batch" your terminal once a week or every other week because you wish to be efficient. While this may save a few seconds each day, the consequences of not settling your terminal can be costly and result in issues between you and your customers.

First, the only way that funding is initiated from a credit or debit card transaction is when the terminal is settled. Therefore, if you do not settle your terminal, you simply will not get paid for any of the credit or debit card transactions in your terminal.

Second, the major card networks and issuing banks do not like to have "open" transactions for an extended period of time. To encourage merchants to settle their terminals in a timely fashion, they will surcharge transactions within that terminal once they do settle. For example, a 1.49% transaction if not closed in a timely fashion could downgrade to a higher rate of 2.95%

Third, not settling promptly can create problems for your customers. Keep in mind that nothing happens in terms of you getting funded or your customer's card being charged until you batch. So, let say you wait 2 weeks to batch out your terminal. That means that your customer's card will be charged 2 weeks after the actual transaction at your store. Your customer may end up disputing the charge and initiate whats called a chargeback. A chargeback will cost you up to $35 per occurrence.

The bottom line here is settle those terminals! It's good for your cash flow, saves you money and good for your customers' peace of mind.

A Message to New Business Owners

In posting these blogs, my hope is to educate people particularly business owners on merchant services. Entrepreneurs open businesses every day in America and represent a large segment of today's economy. Many of you have experience dealing with merchant service providers, but a greater percentage of you do not.

What I am going to say is very important. Do not lease a credit card terminal unless you absolutely have to because the financial repercussions that are irreversible can be a contributing factor in a businesses’ failure.

There are people selling merchant services who are leasing equipment for over $50 per month for 60 months. A quick calculation shows that a merchant will ultimately pay $3,000 for a terminal that can be purchased on the market for under $300. What’s more, contrary to popular perception, leased equipment is no more protected against damage than purchased equipment. Here’s something else for you to consider. A rep looking to lease you equipment will earn about $2,000 of your money up front from the lease company if they are successful in leasing you equipment. That means that once they enroll you in a lease, they will disappear when you require service. Why? Because they already made their money from you and their model is not to provide continuous service. Their scheme is to lease you equipment and quickly move on to the next new business owner.

Our view of leases is reflective of our outlook on merchant services as a whole. It is our goal to give merchants the best rates on processing and a fair price on equipment. We are in this for the long haul and want to build a relationship with you that will be built on a foundation of trust and exemplary service.

Who do you trust?

There seems to be an overwhelming tendency for merchants to default to their bank when they need to set up a merchant services account. After all, merchants trust their bank because they keep their money safe and allow them access to their funds 24 hours a day. However, a merchant services account is an "add-on" for banks meaning that they don't have to be competitive. And when that merchant needs service, they are calling a service center many miles away from their store. We do the majority of our business and service calls in person.

Case in point, I recently spoke to a retail merchant who opened her store 2 years ago. When she went into her bank (one of the largest banks in the nation) to open her business checking account, she was offered a merchant services account. Her bank went on to sell her a Hypercom T7-Plus terminal for over $500, then over charged her on her processing fees. We sell this terminal for less than $300 and use the same processing networks as her bank does. We also have one of the most reputable financial banking institutions standing behind us, so merchants can be assured that they will always be funded in the most timely manner.

The bottom line here is that we do it better than banks at a price point that is less, far less than what a merchant's "trusted partner" does it for.