Why accept credit cards ?

Accepting credit cards provides you access to funds within 24 to 48 business hours, depending on where you bank.

• Increases Sales
  Consumers spend more when they're not constrained by cash on hand. You may see increased purchases of higher-margin products as well as specialty items. And customers may visit your store more often.
• Customer Satisfaction
  Your customers will appreciate the fact that you allow them the flexibility to pay the way they want to pay - including by credit or debit card. Happier customers are more loyal customers.
• Speeds Checkout
  You'll speed your customers through checkout with rapid electronic payment. No more counting change or waiting while customers write checks.
• Greater Efficiency
  Card transactions today are conducted electronically. These paperless payments can save you time and money by minimizing cash handling and payment reconciliation, giving you more time to do more important things - like managing and growing your business.
• Safety
  With lower volumes of cash, you're less vulnerable to theft and pilfering.

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Why do I need a terminal or software to process?

Using a credit card terminal or software is the most efficient and cost effective way to process a credit card transaction.  Swiping the credit card insures that you will qualify for the lowest discount rate.  Transactions are generally completed in 12 seconds and you have a written record of what transpired. 

You can process transactions without a terminal, however, you pay an additional $0.65 per transaction and your transactions will downgrade to the 2^nd highest rate.  You dial a toll free number and punch in your merchant number, card number, expiration-date, and dollar amount.  The transaction time is significantly longer.

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Why do I have to pay more for some transactions than others?

The rate you pay depends on the type of card presented to you at the point of sale and how it is processed.  The rate changes based on the cost structure of the processing industry, called Interchange & Assessments.

If you take the time to understand the basics of Interchange, you will become more profitable. 

Interchange is that portion of the discount rate that must be collected and paid to the cardholder’s issuing bank.  In addition to Interchange, there are Assessments.  Assessments are like a franchise fee.  Visa® receives 0.0925% and $0.01  for each transaction and MasterCard® receives 0.095%.  Collectively we refer to them as I&A.

In order to compete with American Express (because American Express pays banks more), Visa and MasterCard have introduced additional card products.  There are now 4 main card types.  They are:

1. Check Card/Offline Debit:  This is a card product that has the Visa or MasterCard logo on it and is tied to a bank account.  It offers the lowest discount rate.  There is no PIN number required.

2. Credit Cards:  This is a consumer credit card that is based on a credit line.  This is the traditional type of credit card.

3. Rewards Cards:  This card product gives points or miles back to the cardholder.

4. Corporate Cards:  These are cards issued in the name of the business and the cardholder.  There are business cards for “everyday” expenses and Purchasing Cards are used for procurement in large entities.

Business and Rewards cards have a higher Interchange rate.  It is our opinion that these products were introduced to compete directly with American Express®, which as you know has a higher discount rate..  Some processors take the opportunity to add extra to that cost and fail to educate merchants.

The way you process transactions also affects the rate you pay.  Keying a transaction, skipping address or tax prompts will cost you more.

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What is a check card vs. a debit card?

Check Card/Offline Debit:  This is a card product that has the Visa or MasterCard logo on it and is tied to a bank account.  It offers the lowest discount rate.  There is no PIN number required, it is processed like a credit card.

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My Bank/Warehouse Club can give me "cheaper" rates, why should I sign with Capital Q?

It may appear to be a cheaper rate, but when you read the details of the actual contract that is signed it is NO DEAL.

 Many processors will take the various levels of Interchange, over 100 of them, and will create 3 to 5 buckets often referred to as Qualified, Mid-Qualified, Qualified Rewards or Non Qualified.  They lead with a low rate but do not pass through the total savings on Check/Offline Debit cards. 

 And, when a transaction is a business card or is hand keyed, they surcharge the actual cost differential over Interchange.  So instead of paying 0.36% more for a business card, you may pay 0.85% or 1.50% more, depending on the processor.

 That is why it is so important to understand how Interchange works.  Many merchants are seeing a larger percentage of business cards.  These “cheaper” companies surcharge those transactions and you end up paying more in the long run.

 At Capital Q, we’ll take the time to educate on Interchange and the best processing methods to qualify for the best rate available.  We don’t try to hide anything.  There are No Pricing Games, No Hidden Fees, and No Surprises.

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Why do I have to fill out an application and why do they check my credit?

There are two reasons: 

1. Merchant processors are banks that are insured by the FDIC.  Federal Regulatory Rules require that banks complete their due diligence on any type of account that represents a risk to the bank.  Merchants receive their money in advance of cardholders receiving their statements and the Fair Credit Reporting Act provides certain chargeback rights to cardholders when they purchase something on credit.  Merchant processors are providing funds in advance on the good faith that the transactions presented are valid.  Merchant accounts are treated as an unsecured loan for the dollar amount that is processed over a certain time period.
    
2. Effective October 1, 2003 the Customer Identification Program (CIP) of the USA PATRIOT ACT went into effect. What that means is for anyone opening a new account or requesting credit (including merchant accounts) we are required to verify the identities of each principal completing the application.
   
   The CIP section of the USA PATRIOT Act Notice reads as follows: To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each individual or business that opens an account or requests credit.
   
   What this means for individuals:  When an individual opens an account, or requests credit, we will ask for their name, address, date of birth, Social Security Number and other information that allows us to identify them. We may also ask to see their driver’s license or other identifying documents.
   
   What this means for businesses:  When a business opens an account or requests credit, we will ask for the business name, business address, Employer Identification Number, and other information that allows us to identify the business and signatories. We may also ask to see other identifying documents showing existence of the business.
   
   12 CFR Part 21; USA PATRIOT Act, Section 326; Customer Identification Program 10/01/03

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