Frequently Asked Questions

For many merchants, the world of merchant accounts and credit card processing can be confusing, with myths and even intentional confusion abound.  At Merchant Solutions, we’re here to clear the air with real, honest answers to your questions to guide you to informed decisions.

Here are just a few common frequently asked questions. If there are any others you’d like to see on here, we’d like to know!  Email us at contact@merchantsolutionsllc.com.

As this is meant to be a high level Q&A, feel free to contact us at 866.326.3480.  Many of these questions don’t have clear cut answers, and anyone claiming they have a one size fits all solution is Our particularly knowledgeable staff is more than happy to provide in depth explanation.

What’s your rate?

What’s your rate, what does it cost, what your fees…these are usually the number one concern of most merchants.  Many account providers like to just give you a qualified rate and per transaction charge, particularly to new merchants that don’t understand how processing works.   However, there is much more that goes into your rate than that.  We do not list an “advertised rate” on our site.  We commonly see advertised rates as low as 1.09% that result in effective rates over 4%.   Rates vary vastly based on business type, method of acceptance, average ticket, and monthly volume.

What’s a qualified rate?

A qualified rate is defined as the rate prescribed to transactions that meet your qualified method of acceptance.   So for retail accounts, this means swiped transactions.   For MOTO / E-commerce accounts, this means transactions with a CVV code match and an AVS (Address Verification System – in English, billing zip code) match.  Qualified rates typically do not apply to rewards cards or business cards either.   What is the qualified rate?   We offer highly competitive qualified rates for all merchant types.

What is the best type of merchant account?

The best pricing method for merchant accounts is always either tiered or Interchange Plus (IC+).  Typically for startups, or E-Commerce, tiered pricing is most applicable.  For accounts with higher monthly volumes ($30K-$60K, depending on merchant type), or any account with average ticket of under $12, interchange plus is typically the best pricing system to keep rates down.   Other pricing systems, such as ERR or billback rates are just this side of a scam, and should ALWAYS be avoided.  How to tell if you are being quoted one of these scam rates?  They tell you all your transactions are at the same rate.

How do I get the best rates on credit card processing?

How to get the best rates depends on a number of factors.  For instance, for the majority of retail merchants, PIN debit is going to help you save money each month on your processing.  However, for certain low average ticket / high volume merchants, adding PIN debit can actually result in higher effective rates.  If you are a MOTO or E-commerce merchant, things like AVS charges, per transaction and fixed costs for gateway services, and getting a CVV and AVS match are big factors in getting the best rate.  We’ll be more than happy to walk you through that and more.

What is required to establish a merchant account?

Establishing a merchant account is actually a lot less headache than most merchants think.  The general application is 4 pages, of which the merchant fills out one and signs two others.  This is submitted back along with a voided check, W9 form, and either the last two months of processing statements (for established merchants), or 2 months bank statements (for new merchants).  Beyond that there can be additional requirements, such as sample marketing materials or sample sales contracts, depending on merchant type.  From submission to approval is typically 24-48 hours.

Can I get a merchant account?

Sure…see above .  Merchants in open bankruptcy, on the TMF (Terminated Merchant File), or that do not have a US based business entity or are not US citizens are not eligible for merchant accounts.  For new businesses, personal credit is often reviewed if there is no business credit history against which to underwrite the account.  There are as well certain business types we cant work with, however,  as long as you meet the above criteria we are happy to discuss and work out options for you.

How does credit card processing work?

 Any credit card transaction involves multiple parties.   To begin, the merchant accepts a credit card transaction from their customer at the point of sale.  This transaction then travels via a secure network to the acquirer.  The acquirer verifies with the issuer – almost instantly – that the card number and transaction amount are both valid, and then processes the transaction for the cardholder. After the transaction is authorized it is then stored in a batch, which the merchant sends to the acquirer later to receive payment.  The acquirer sends the transactions in the batch through the card association, which debits the issuers for payment and credits the acquirer. In effect, the issuers pay the acquirer for the transactions.  Finally, once the acquirer has been paid, the merchant receives payment. The amount the merchant receives is equal to the transaction amount minus the fee merchant pays the acquirer for processing the transaction.  The buyer is then issued a statement for their credit card transactions, and thereby repays the issuing bank.

What is a merchant account?

A merchant account is a relationship entered in to by a merchant and a merchant account provider (acquirer) to allow for the acceptance of credit cards and debit cards via a terminal, virtual terminal or over the internet.  This is typically facilitated by a local sales office for merchants under $5M annual volume.  Beyond that volume, direct settlement is typical, but the volume and technical requirement s to allow for direct settlement are prohibitive for small to medium sized merchants.

What other services does a merchant account provider offer?

Beyond traditional credit card processing, Merchant Solutions offers debit card acceptance, we have gift and loyalty card programs, terminal and processing hardware and software, we facilitate POS system integrations, merchant account management tools, and offer merchant cash advance services, just to name a few.  Important too, we offer all the free consultation on your various options and what you can do to help lower your overall processing costs and increase your transaction efficiency.   Any credit card processor can sell you a merchant account, but the ability to analyze your situation and options are part of what we do here at Merchant Solutions.

What is a merchant cash advance?

I merchant cash advance is an option by which merchants can gain funding (cash in hand) based on an analysis by Merchant Solutions of their projected future credit card receivables.  We then purchase from you those future receivables at a discounted rate and net the repayment off your credit card batches. Or, in plain English, we give you cash now and take it out of your future credit card deposits.  Merchant cash advances are a great option for merchants that need funding but either do not qualify for bank loans, do not have the time for a

How long does it take to get funded on credit card transactions?

The funding timeframe is the amount of time from when you batch out your terminal to when you receive the deposit of those funds to your bank account.  Funding timeframes vary based on merchant type.  The longest funding timeframes are for internet and card not present merchants, and high risk merchant categories, in which funding is usually 48 hours from batch.  For most retail merchant types, its 24 hours from batch.  At Merchant Solutions, we also have overnight funding available for qualified merchants.  This means if you batch your terminal this evening, the funds are available tomorrow morning.  Restrictions apply, but if you feel overnight funding may help your business, contact one of our service representatives here for more details.

How much does a credit card terminal cost?

For a standalone credit card terminal, for a new PCI compliant terminal, prices are generally under $200 for a dial up, between $200 and $350 for high speed terminals, and  wireless are generally $350-$600+.  However, at Merchant Solutions, most merchants will qualify for free terminal placement.  If you have a POS system, we can often work with you to cover a portion or sometimes all of the cost of conversion.  And if you are an internet or other card not present merchant that is better served with an internet gateway / virtual terminal, we have options as low as $39.

What is a monthly minimum?

A monthly minimum is .  For many merchants, they don’t even know to ask about the monthly minimum.  For start up merchants, this means that the first few months of your business you could be saddled with additional charges for NOT accepting credit card transactions, which is a highly frustrating experience.  Many established merchants don’t think about a monthly minimum if they process volumes far in excess of where a monthly minimum would come in to play.  However, a monthly minimum can still come back to haunt you.  If you ever decide you want to change processors, you will then be caught in the catch 22 of either having to pay a cancelation fee, or having to pay a monthly minimum + other fixed monthly charges for the duration of your contract, which can often exceed the cancelation fee!   At Merchant Solutions, we do not penalize you by imposing monthly minimums.   Most merchant types qualify for accounts with no monthly minimum charges.

How to accept credit card payments on my I-Phone, Android or BlackBerry device?

Many businesses, on the run business owners, on site sales professionals and many others are now using their I-Phone, I-Pod, I-Pad, Android, BlackBerry or other smart phone devises to accept mobile payments.  The ability to do so via an internet portal / keyed transaction has been available for some time, but now the ability to take swiped transactions via magnetic strip readers has opened up a whole new level of utility.  For higher volume merchants, such as mobile food vendors or booths at fairs, the ability to take a swiped transaction makes these devices viable alternatives to costly wireless terminals.  For onsite sales professionals, service technicians, or food delivery services, this allows them to get the better swiped transactions rates, and as well not have to write down card numbers where you have the chance of losing them.  For more information on compatible equipment and services for your device, contact us today.

What is an effective rate?

A qualified rate is what you’re quoted, an effective rate is what you pay.  Your effective rate is the rate after you’ve factor in all charges.  For instance, lets say someone is quoting a lowball qualified rate of 1.5% (which is below cost).  If you process $10,000 of transactions, that doesn’t mean you pay $150.  The effective rate is the total processing charge divided into the total processing volume.  This rate then accounts for per transaction charges, mid and non qualified rates, batch charges, statement charges, and whatever other miscellaneous charges, valid or fabricated, you pay.  Effective rates can vary greatly even for two merchants that sign the exact same processing agreement, based on factors such as average ticket, method of acceptance, diligence in PIN debit, CVV codes, and other various procedural matters often times within the merchants control.  If you’d like a free, no commitment rate analysis, contact us today.

How do I tell if my merchant account provider is lying about their rates?

Good question.  Simple easy quoting one rate quote is a sure you’re dealing with a sales rep that is not interested in looking out for you, just in getting another account on their books.    If it doesn’t take 5 minutes to explain the quote, what it means, and what you as a merchant need to do to qualify at the various price levels within that quotation, they are simply telling you what you want to hear to try to get your business.  As well, any merchant account provider who is simply quoting you a rate in an email without providing a contract and breakdown of the charges in plain English is likely doing you the disservice of oversimplifying things to get you to sign, and then burying the charges in the fine print.  If you’d like a side by side review of the terms of your contract vs. what we offer, let us know.  We believe in full disclosure – no hidden surprises. 

What is the cost of credit card machine for company who is not processing?

Most merchants will qualify for a free terminal placement.  The terminal itself is yours free of charge as long as you should process with us.  We as well have options for virtual terminals and gateway services. 

Are there any monthly/yearly cost involved?

At Merchant Solutions, there are no application fees, we charge no set up fees, no monthly minimum fees, and no annual fees.  Our business model is based on long term processing relationships with no unnecessary fees and very competitive rates, not sticking in fees to try to make money in the short term.   After all, we know you’ve got plenty of choices out there! 

What steps need to be taken to set up processing for new company?

First step is we’ll send a proposal and application.  You fill that out and submit back along with a voided check, business license, and depending on business type, we may require a couple additional documents, such as terms of sale, sample contract, etc.  Approval can be same day for certain merchant types, but typically is 24-48 hours.

With free terminal placement:  Once approved, we’ll download and ship the terminal out to you.  All you need to do is plug it in and you’re ready to start taking transactions!

Virtual terminal: Once approved, we’ll set up the online account and map the processing to it.  We’ll send you a temporary log in ID and password.  Log in, update the password, and you’re ready to start taking transactions!  

Gateway: Once approved, we’ll set up the online account and map the processing to it.  We’ll send you a temporary log in ID and password.  Log in, update the password.  You then map the gateway ID into your shopping cart, and you’re ready to start taking orders!

Existing equipment: Once approved, you can call in and you’ll be walked through how a terminal download.  It should take maybe 10 minutes or so to complete.  You just go into the terminal, change a couple numbers, and select “download” and it will pull down the new file.  Once it does, the terminal will restart, and you’re now processing with us!

POS system: Once approved, we’ll send the parameters to your POS system vendor.  You’ll then need to contact them to set up a time with them for their service tech to come in and re-map the processing.  

How long does it take to get started?

For certain merchant types, same day approval is available (typically already processing merchants, or low ticket / retail merchants with good credit).  Most merchants are approved within 24 hours, unless there is a high average ticket amount requested, chargeback issues, or the like.