Right Connection | Your home for everything that is Internet Business

The real truth about credit card processing ...

Are you a little confused? Viewed too many sites? Seen many offers and still don't understand what is REALLY going on with accepting credit cards on your website? We are here to help!

To begin with, we feel it's necessary to explain the basic plan of how this Credit Card Merchant Account operates. There are a lot of fingers in this pie, so you really need to understand the flow of things.

The basic elements are:

1) A Business Bank Account This can be your regular business bank account, opened by you in your business name. Yes, this IS necessary to obtain a Credit Card Merchant Account (CCMA). MasterCard/Visa wants to work with businesses ... so you need to look and operate as a legitimate business entity.
You must also be a United States Business, with a United States Business Account and Social Security Number to gain the CCMA Account.

2) A Credit Card Merchant Account Here is where the confusion begins. The Credit Card Merchant Account is granted by a bank(generally called the Acquiring BanK), but not necessarily your business bank. The CCMA is the banking instrument that allows you to move funds from the customers credit card account into your business bank account. Everyone needs their own merchant account. Rates and acceptance depend on your credit rating.

You are probably wondering why the bank needs to check your credit to accept credit cards? After all, you are receiving money into their institution ... right? Right and wrong. Credit Card charges can be disputed by the credit card holder for 180 days from the date of transaction. (it may be changed to one year) The funds are deposited into your business bank account within 48 hours of the closing of your daily charges (batch). The 48 hours comes from the bank's computer updates only taking place at midnight each night. Two banks ... two updates ... 48 hours.

Now who would "be on the hook" if you were to sell thousands of dollars in goods and services, remove your money from the bank in 48 hours and go out of business? The bank has no idea the customer never received their goods, and probably won't find out for 45 - 60 days later. You see, the bank is actually "lending" you the funds created by your sales, even though the time has not lapsed whereas the customer can reverse (ChargeBack) the transaction. Remember, the customer can reverse this charge for six months (180 days). For this service, the bank charges you a percentage (discount rate). Why they call this a discount, when it's actually an expense to you is beyond us.

So you can see. The bank really needs to know who they are doing business with. It could cost them MILLIONS ... and it does! Many merchants before you have gone out of business, cheated customers, and submitted fraudulent transactions. Now every new merchant will feel the pressure in obtaining a new CCMA. So be patient and "go with the flow." 99.5% of our applications are APPROVED. Some take a little longer, some have higher charges (adult), but almost all of them get approved in some manner.

And yes there are gateway fees, bank fees, transaction fees, statement fees ...don't sweat the small stuff. If you are not planning on your internet business venture making you enough money to pay a $25.00 min monthly service charge, go back to work and save your time and money. Most business people spend more at happy hour or one business lunch than most credit card charges. It's all part of doing business, go with it.

Don't be fooled by "Third Party Billing Systems." In many cases, that is a fancy word for Credit Card Factoring. (using your account to accept charges for others) Credit Card Factoring is illegal in most states and some countries ..and supposedly, against MasterCard rules and regulations. Large dollar figures may cause temporary blindness here. If you get caught accepting transactions for other merchants, you will instantly be placed on the Terminated Merchant List (TML) and never be able to open another CCMA. But if you are doing millions per month in transactions, they seem to look the other way as they do with these 3rd Party Billing companies.

Come on, let's face it. If you went into the corner electronics store and told the owner you want to accept all of his credit card purchases … hold the funds for 45 days … then send him a check less 15%, he would throw you out. That is just not a legitimate way to do business. Do business like millions of other legitimate merchants ... get your own Credit Card Merchant Account!

3) A Processing Method
Now you have your Credit Card Merchant Account and you are ready to make the big bucks on the Internet. Your choices here are simple:

Buy a credit card machine - You know these devices. You have worn out the magnetic on your card plenty of times one "swipe" at a time. The machine reads your card information, the merchant enters the purchase amount and the money is taken from your account (added to your credit card bill)
You can also perform manual entry transactions with this credit card machine. You can depress the "1" key and manually enter the card number, expiration, address and Zip Code (required for Internet transactions) What a pain .. one key can be three different letters! Then what if the information is wrong? Customers reverse numbers all the time by accident.
To make matters worse ... you will have to gain a full-time connection to the Internet and stay up all night waiting for orders (or hire three shifts), entering them, asking for better information until you are stressed to the maximum. Yes, that would be considered "real-time." Real-time antiquated way of doing business. Maybe a few call-in orders yes, but real business flow, no way!

Buy computer processing software - The only real difference between the machine and the software, is the information is much easier to enter on your computer than messing with those "alpha keys" on the credit card machine. The same dilemma exists …you have to manually do all of the data entry, go back and forth with customers to get information right (especially credit card billing addresses), and hire 24 hour employees (unless you are up all night).

Internet Payment Processing Company (Gateway) - Of course we believe this is the better solution. Right Connection interfaces with your website in a matter of minutes by inserting a few lines of unique code generated by our "code wizard" after answering a few questions about your products.
Once the customer "clicks" on the "buy this item" button, they are taken to a Secure Commerce Server, a page tailored to look like it came from your website. This secure page collects sensitive card holder information and processes the transaction in a matter of seconds, returning the customer to your web site. It's quick, simple and easy to install and operate our remote control payment processing system.
Right Connection REPLACES the credit card machine and 24 hour employees by interfacing with your web page and prompting the customer to enter the correct information. The Approval happens while the customer is still on-line, not the next day when "buyers remorse" might set in.

Isn't it worth a few cents per transaction to have someone there for you 24 hours per day, seven days per week, while you're asleep and on vacation? Could you possibly hire a 24 hour employee, pay for a full-time Internet connection and purchase software less expensive than the small cost of a transaction fee.

LEASE - LEASE - LEASE

What is all the talk about leases, monthly payments and such? It's NONSENSE! With the record number of new merchants flocking to the Internet to increase their sales, or have a business for the first time, it is a virtual candy store for people taking advantage of these merchants. Some agents will try and hook you on four-year leases for equipment you really don't need, software you won't use, or in some cases "right to use." (air in our book) Other agents will just get you what you need, a Credit Card Merchant Account for a small (less than $100.00) fee for their services.

With your Right Connection Payment Processing Account, you get FREE use of a "Virtual Terminal." (manual transactions for call/fax orders) Why would you need to buy or lease anything? A Virtual Terminal makes a credit card machine out of your home or business computer. Do your transactions right on your computer screen.

With your Right Connection Payment Processing Account, you get full access to IPPS, our On-Line Payment Processing software. So why would you need to lease "air," or some software package you will never use?

What is happening here is you are being exposed to the ways of the past. Merchant operating from real store fronts in your local city needed these machines and software to accept credit cards, but the Internet is a whole new arena for business. Unfortunately, the old ways of some of these sales people don't change with the times. Whereas street merchants need machines, stickers for the windows, business card holders and closed signs … Internet merchants don't need these things! So why sell them? PROFIT - PROFIT - PROFIT

You don't need anything except a Credit Card Merchant Account and Right Connection to do business on the Internet. We supply you use of all of the software, shopping carts, password management systems, virtual terminals, complex searching and reporting of all transactions, fraud filters, Address Verification Service (AVS) and much more for just transactional fees!

So don't get caught up in those four-year lease deals ... you simply don't need them.

All you need is a Credit Card Merchant Account. Currently, we have alliances with ISO Bank Agents that will write you a CCMA for under a hundred bucks. High-volume accounts are even free of set-up charges. No lease, nothing to buy, no commitment time ... nothing. They will have this account approved within 24 hours (sometimes the same day) and operating in a couple of days.

Yes there are FEES for Credit Card Merchant Accounts. Remember, they charge a percentage to cover their profits for floating you money during the 180 "chargeback" period. This is a VERY competitive market. The agents can make money from you in two ways. They can get you for a huge up-front fee ($899.00), sign you on a lease ($800 profit), or make a profit on the percentage rate. The higher the percentage rate the more profit they make as long as you're in business. Current competitive Internet fees are: 2.29% transaction discount .30 per transaction fee- $10.00 statement fee -$25.00 minimum monthly service charge. (if you are only paying the minimum, go back to your day job)

These are Internet Rates, called Electonic Transaction (ECI) and Mail Order, Telephone Order (MOTO) rates. They are higher than machine "Card Present" rates because the credit card is not present (card not present transaction).

The transaction fee is because the bank doesn't process their own transactions. They are processed by large "clearing houses" (back-end processors) The .30 transaction fee is their payment for handling the transaction.

Now many people share the 2.29% The card issuing bank, MasterCard/Visa and the CCMA bank all split this fee up. This is where they make their money. And technically ... it's worth every penny you pay them for this service. Without them, you would loose thousands/millions.

So the bottom line is you only need a CCMA account ... nothing else. Then if you desire, Right Connection can process your transactions 24 hours per day, 7 days per week for a small transaction fee (much less than an employee/lease).