Square Credit Card Processing Raises $100 Million

The NYT is reporting that the mobile credit card processing company "Square" has raised a whopping $100 million in in a financing round led by Kleiner Perkins Caufield & Byers. As part of the deal, Mary Meeker, a partner at Kleiner Perkins, will join Square’s board.


“Square has a great product with extensibility which we believe has the potential to have a lasting impact on how people make payments,” Ms. Meeker said in a statement. “Square’s product is fast, easy and fun for both consumers and vendors; a small business can be up and running within minutes.”


There is little doubt that although this space within the merchant service industry is getting a bit crowded, Square is a force to be reckoned with. As I've mentioned the problems with square is that many don't fully comprehend it's limitations. They are great for someone with a very small side business but for serious vendors a traditional merchant service company is what they need.

Credit Card Processing at Hotels: Is it Safe?

Evidently any time you have a point-of-sale system that is computer based there is a potential for problems. As long as that computer is connected to the internet it has the ability to be hacked and have credit card information stolen from it. The story surrounding Destination Hotels is proof of just that: Guests who recently stayed at 21 of the resort's 30 hotels may have been victimized by the scheme, which appears to have compromised point-of-sale systems. The company refused to release many details of the incident -- citing an ongoing investigation by the U.S. Federal Bureau of Investigation -- but in a note posted to its Web site said that it had "uncovered a malicious software program inserted into its credit card processing system from a remote source."

Makes you think twice about giving your credit card information at a hotel doesn't it?

Vermont Setting to Legalize Minimum Credit Card Purchases

The State Senate approved a bill allowing Vermont retailers to have a minimum charge on credit card purchases. Although many small retailers currenlty request a $10 minimum for purchases with credit cards, it is actually against their merchant account contract with Visa and Matercard. The Senate bill was actually altered from it's original version to allow for quicker passage through the House. The original version would also have allowed retailers to refuse credit cards that are assoicted with higher fees to the merchant i.e. reward and corporate cards. If the bill passes the house, it will  need  the Governor's signature to become law. Last year, 7-Eleven stores delivered 1.66 million customer signatures from a petition campaign urging Congress to stop unfair credit card fees. It was the most signatures ever delivered to Congress on a policy issue in American history. There has been a constant struggle between Visa/ Mastercard and merchants regarding interchange fees. The merchants claiming that these fees are simply raising their products pricing while the banks claim to providing a service and that the merchants are smply looking for more profit that customers will never see.

With Merchant Services It's Not Always About The Rate!

It's important for small businesses to remember that when it comes to credit card processing, the discount rate may not be the most important factor. Depending on how much you actually process, it may ultimately be the fees, i.e. various monthly and miscellaneous fees could cost you more than another company with slightly higher discount rates but feature lower fees and don't nickel and dime you to death. always ask for a comparison to your current provider before you make the switch. If you have never accepted card before, read through this blog carefully before you get started.

The problem with PayPal : Reasons for a Merchant Account.

Although PayPal has certainly made it easy for online merchants to accept credit cards, it is not without it's share of problems. If you are going to accept credit using PayPal it would be a good idea to sign up through a separate bank account. Pay Pal has a history of siding with the customer much more than a bank would with a traditional merchant account. Reading through PayPal's agreement may surprise you ( and not in a good way) and few ever do. This way if they Pay Pal decides to debit your account they won't get much until the issue is resolved. I have heard many horror stories about PayPal freezing funds for a merchant for several months. Although this could certainly happen with a traditional merchant account (i.e. if you did something that would raise a red flag for fraud) it seems to happen a lot more often with PayPal. Another problem many client's tell me is that it's very difficult to get anything resolved with PayPal when things go wrong. Many credit card processors have 24/7 customer service so should an issue arise you can always get a live person on the phone.

What is a Downgrade? How can I avoid them and save money?

People who accept credit card now or plan to in the future, should be aware of the various surcharges and markups that can occur. Some can be easily avoided ( i.e. Interchange plus pricing VS Tier Rate Pricing ) while others can not (i.e. higher risk cards are always more expensive to process). The question is: what is a downgrade? Can I avoid downgrades on my merchant account? Downgrades refer to a card that has a higher cost associated with it (i.e. reward or corporate cards). There are other things that can cause downgrades which are easily avoidable such as batching out within 24 hrs. If you fail to batch out within a 24 hr period, in most instances your rate will jump automatically to "non-qualified" status and you will pay the highest rate category for that card processed. An easy way to avoid this problem is to set your merchant account to "auto-batch". This will allow the merchant account to check and see if anything needs to be "batched out" and you can set up the time for the batch beforehand.

Twitter: Breaking Into the Merchant Service Industry?

Jack Dorsey, co-founder of Twitter is looking at the credit card processing as his next innovation. He's looking to target the mobile merchant service industry by developing a new piece of hardware called square. This hardware would connect to the jack of an iphone, balackberry or other mobile device and allow it to accept credit cards. Here is a video with Jack Dorsey discussing this new innovation:

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Merchant Accounts & Search Engine Optimization

A Merchant Account is a very important aspect of your business as is having a website and good search engine optimization. The common denominator among these ideas: they help expand your business. accepting credit card for your business will help it several ways:

1. People are not limited to the amount of money they have on hand
2. It allows them them to pay for your product or service over time
3. They are more likely to by more since they don't have these restrictions
4. If you advertise the fact that you accept credit cards you will most likely get more interest

In today's economy more than ever people are relying more on credit even for small purchases. Why else would 7-11 accept credit cards for everything from milk to chewing gum?

Getting back to your website and SEO: these are other ways for people to find you. The first thing is you need to build a website and as I mentioned that is a very inexpensive venture to start. Now once you have a website you want people to find it. Of course you can always start an online ad campaign like google word ads and use various keywords to get traffic. There are free ways to drive traffic as well. If you are just starting out it's very difficult to get listed in the top 10 on major search engines because you are most likely fighting many other sites nationwide for those very same spots. The easier more cost effective methos is working on local seo. After you have submitted your website to all the major search engines like Yahoo, Google, Bing etc. you need to check out local business litings on sites like Google and Yahoo. These websites can give you great exposure and it's free. You also want to list your website on all the online yellow pages such as superpages.com, yellowpages.com and others.The next step is to have your website listed on all the major local listing websites like Yelp, Best of the Web, Kudzu and others. Stay tuned for more ideas....

What is a Merchant Account?

Many people wonder just what is a merchant account? How can I obtain one? A Merchant Account is an agreement between a retailer, a payment processor for the settlement of credit card and/or debit card transactions. You don't have to open a special type of bank account with the processor to get started. You can use a personal bank account if you are a sole proprietor and if you are a corporation or LLC you must have a business account. In order to open up a merchant account and start accepting credit cards as a form of payment you can only use a checking account. Savings accounts won't work. There is usually a verification process in order to prove your existence to the bank ( not all that different from a loan application requirement). Many processors will require some of the following documents:

1. Driver's license (proof of signature)
2. Business License or Sales Tax ID ( sole prop could use a utility bill etc.)
3. Printed voided check ( or bank verification letter)
4. Marketing materials (i.e. website, brochures, business cards etc.)

Understanding Credit Card Processing Rates & Fees

This video is a tutorial into understanding some of the rates and fees and fee structures associated with a merchant account. It can be confusing to understand but if you listen carefully you will certainly gain some insight as to how pricing policies work to some extent and how risk is associated with the rate you pay.

It explains the following fee structures:

1. 3-Tier Pricing
2. 6-Tier Pricing
3. Interchange Plus Pricing
4. Bill Backs

How To Choose a Credit Card Processor

Welcome to our new blog.

We hope to provide you with content you will find valuable and informative. The world of credit card processing can be a very confusing one. There are many things to be aware of when choosing a credit card processor and here are just a few things to watch out for:

1. Rates that are really introductory
2. Rates that apply only to debit cards no credit cards
3. Companies that have a history of misguiding customers ( you can check websites like ripoffreport.com)
4. Hidden fees and surcharges buried in pages of fine print
5. Bill Back- A practice of billing you on one statement and hide the surcharges on the next month's bill