QSR Magazine
In the January 2008 (c.29, 425) edition of QSR Magazine, Merchant Warehouse President, Henry Helgeson, comments on the evolution of point-of-sale (POS) systems as a result of the expansion of consumer payment methods and the operational needs of QSR businesses in today’s fast-paced world.
The article, titled “More Than a Cash Register,” highlights the progress, functionality, and future of quick-serve POS systems, and also speaks to the growth and beneficial implementation of contactless payment technology within quick-service environments.
“Contemporary POS systems have evolved into complete business management solutions that help improve operations and service, enhance efficiency and convenience, and create a more enjoyable customer experience,” stated Helgeson.
Nevertheless, as new consumer payment methods develop and quick-serve business structures change, POS systems must continue to adjust and advance accordingly. In fact, the solutions of today have already upgraded in capabilities and modified in price to meet the needs of various business types. As each new generation of POS systems declines in price and offers more features and intuitive usability, merchants who formerly did not have the funds to own or the skill-set to operate such systems are now embracing these comprehensive tools.
The newest device, referred as “contactless payment technology,” also offers significant advantages, especially for quick-serve merchants, yet very few have implemented the systems thus far. “Slow adoption of contactless equipment may be partly due to a shortage in the number of contactless cards being issued, which in turn, causes a lack of consumer knowledge and use. I’m confident that it will gain popularity in the future, as awareness of and accessibility to the technology expands,” suggests Helgeson.
With so many affordable, sophisticated solutions now available to QSRs, many anticipate that electronic card processing and POS System integrations will soon wholly administer the quick-serve market.
QSR Magazine Highlights Merchant Warehouse’s Revolutionary MerchantWARE Payment Processing Solution
At the National Restaurant Association’s (NRA) Restaurant & Hotel-Motel Show on May 17th, 2008, QSR Magazine columnist, Deborah L. Cohen, reports on Merchant Warehouse’s revolutionary payment processing solution that ensures total transaction data security and prevents theft vulnerabilities.
The report, “From the Floor: Merchant Warehouse Ensures Safer Credit Card Encryption,” highlights Merchant Warehouse’s MerchantWARE® solution, which locks down transaction data at the point-of-capture (i.e. the card reader’s read-head) and protects the information throughout system networks, where it would otherwise be susceptible to intrusions.
MerchantWARE’s safeguard features go above and beyond PCI data security standards, and Merchant Warehouse president and Co-CEO, Henry Helgeson, explains how: “What PCI mandates is that merchants secure their networks and encrypt any data transmitted through public networks. The problem is that there’s no surefire way to fully secure the private networks, so there’s always a risk of being hacked. Using MerchantWARE, unencrypted data is never stored or transmitted, so all valuable [credit card] information is completely inaccessible.”
Merchant Warehouse’s ground-breaking MerchantWARE solution was the buzz of 2008’s NRA Show, and will surely resonate throughout the nation since it is expected to transform the payment processing industry and change the way businesses manage and secure credit card data.
ComputerWorld Magazine Introduces Merchant Warehouse’s MerchantWARE
On May 20, 2008, ComputerWorld Magazine presents the latest security tools to help merchants prevent “data-in-transit thefts” from stealing sensitive transaction information, which includes Merchant Warehouse’s MerchantWARE solution.
The article, titled “New Attack Trend Pushes POS Encryption to the Fore,” introduces the top three vendors (the 2nd being Merchant Warehouse) who have assumed proactive roles in helping to battle the data security crisis that has disturbed retailers nationwide, and highlights their data-shielding products.
As cited in the piece, Merchant Warehouse’s MerchantWARE aims at securing payment card data within the POS environments by scrambling or, encrypting it directly at the card reader device so when in-transit, hackers can’t decode it. “By encrypting the [credit card] data instantly upon swiping the card, it’s transmitted safely and securely throughout both private and public networks. Essentially, we remove the valuable data from vulnerable systems, so there’s nothing left for crooks to steal,” explains Henry Helgeson, President & Co-CEO of Merchant Warehouse.
With so many breaches concerning small and large businesses alike, it is essential for merchants to encrypt payment card data within their private networks by installing encryption technologies, such as MerchantWARE, for the utmost level of protection.
Debit Card Processing
While most merchants know they should accept debit cards, it is not always easy to understand how to take full advantage of debit card processing. Merchants can do debit card processing in one of the following two ways:
Offline Debit Card Processing
The most common way to accept debit cards is an “offline debit transaction.” In this type of sale the merchant accepts a debit card the same way in which they would accept a normal credit card. The card is swiped through the terminal and the customer signs the receipt. As far as the merchant is concerned, there is no difference in the way a credit card or an off-line debit card is processed. The one thing merchants must remember is that the debit card must have a VISA® or MasterCard® logo on it. Cards that do not bear the Visa or MasterCard logo can not be processed off-line and will not be approved.
Online Debit Card Processing
A potentially cheaper and more secure, method for accepting debit cards at the point-of-sale is called an “on-line debit transaction.” In this type of sale the card must be swiped through the terminal and external or internal PIN Pad is used to enter the merchant’s four digit PIN. The terminal will pass the encrypted number to the bank for verification. The merchant will then be paid for the transaction in the same manner and time frame that they would be paid on a credit card sale. The cost of this type of transaction is potentially lower due to the way in which the merchant is charged by the processing companies. Rather than paying a flat fee and a discount rate, or percentage of the transaction, as with a credit card or offline debit transaction, there is only a slightly higher flat fee.
Factors to Consider When Choosing a Merchant Account
There are several factors to look at as well as traps to avoid when choosing the best merchant account for your business. This article should help guide you in making the best choice for your business when choosing a merchant account.
Suspiciously Low Rates
- Make sure the rate you’ve been quoted is for the type of transactions you’ll be processing. For example, many mail order merchants have mistakenly signed up for a retail merchant account with low rates and found themselves getting charged much higher fees because they were not swiping their customers’ cards.
- Ask whether the rate you’ve been quoted is an introductory rate. Some processors automatically raise your rates after an initial period, resulting in unexpected credit card processing costs down the line.
Average Ticket and Monthly Volume
- Every processor will ask you to estimate your average sale and monthly credit card volume. This, in part, allows the processing company to determine the level of risk they are taking by extending you a merchant account. If you estimate far too low, you may run into trouble, as you are now a higher risk than the processor initially estimated. On the other hand, if you guess far too high, you may be required to file some extra paperwork and provide significantly more business or personal credit-related materials. Talk it over with your account representative; he or she should have plenty of experience estimating volumes and average tickets.
Understanding Fees
- When you first get a quote for merchant accounts, some fees may seem a bit confusing. Take the time to go through your application and ask questions about the fees you don’t understand. Taking the time to go through the fees may prevent unpleasant surprises when you get your first merchant statement. Remember, a quote is not the same as a statement of fees. Many quotes do not list all possible fees, so make sure to do your homework and get the statement of fees.
Contracts & Cancellation Fees
- Before you even set up a merchant account, ask for details on how you would go about canceling. Is there a termination fee or time commitment? Some processors may have contracts for their merchant accounts that automatically renew if you don’t give written notice more than a month before your contract expires. Also, beware of claims such as “even though you have a fee in your contract, we never charge it.”
- Not all processors require a contract, so unless there are some special circumstances, it is usually best to go with a company that is flexible and doesn’t require you to make a long-term commitment. Think of it this way: if you can cancel your merchant account at any time, a good company will work hard to keep you a satisfied customer.
Customer Support
- Many companies use the same employees for sales, account service, and technical support, or worse, don’t even have an internal support staff. A company that has dedicated departments for each will be able to offer you expert help, whether you have questions about your statement, or need to get your terminal back up and running in a hurry.
- A processor that offers 24 hour support will be there whenever you need them, meaning you won’t be at the mercy of someone else’s business hours. 24 hour support is also a good indicator of the company’s commitment to its customers beyond the application process.
Find more information about merchant accounts in our Merchant Account Resource Center.
Defining the Different Merchant Account Types
In the payment processing industry, every merchant is classified into a specific “merchant account type” category, based on how they collect card information and conduct transactions. To learn which category your business is classified under, we have defined the characteristics of each merchant account type in this article. There are two main merchant account type categories, “Swiped” and “Keyed,” which reflect the basic methods used to capture card information. Within these main categories are sub-categories, broken down according to the business environment and processing technique.“Swiped” or, “Card Present” merchants directly interact with their customers face-to-face and capture card information by physically swiping cards through a terminal or point-of-sale system. The sub-categories within this group include:
- Retail Merchants: “Retail” merchants typically conduct business in a storefront or office where they interact with their customers face-to-face and physically swipe cards through a terminal or Point-of-Sale system.
- Restaurant Merchants: “Restaurant” merchants require the ability to add tips to their charges (Note: Restaurants that do not process tips are still considered “Retail” merchants in this industry). Using a special tip function, they authorize a customer’s card for a certain sale amount and then settle that authorization with an adjusted price to include the tip amount.
- Wireless/Mobile Merchants: “Wireless” or “Mobile” merchants need to accept and authorize cards wherever they are located, which is usually on the road. Using a portable wireless terminal, these merchants process on-site, real-time transactions at their customers’ locations.
- Lodging Merchants: “Lodging” merchants (e.g. Hotels, Motels, and Bed & Breakfasts) authorize a customer’s card for a specific sale amount and, depending on the customer’s length of stay, will adjust and settle out that authorization a day or more later to include additional fees such as taxes, etc.
“Keyed or, “Card-Not-Present” merchants indirectly collect their customers’ card information, and, depending on the business environment and technology used, can process transactions in various ways. The sub-categories within this group include:
- Keyed Face-to-Face Merchants: “Keyed Face-to-Face” merchants eventually meet their customers in person to deliver the product or provide the service, but they don’t actually collect card information with the customer or card present. Generally, they take orders over the telephone, via fax, mail, email, or the Internet, and then manually key-enter card information into a terminal, software, payment gateway, or other point-of-sale system.
- Mail Order/Telephone Order (“M.O.T.O.”) Merchants: “M.O.T.O.” merchants rarely, if ever, meet their customers face-to-face. Instead, these merchants collect orders and card information over the telephone, by mail, fax, or via the Internet, and manually key-enter transactions through a terminal, software, payment gateway, or point-of-sale system. Then, once payment for an order is confirmed, the product is shipped for future delivery.
- Internet or E-Commerce Merchants: “Internet” or, “E-Commerce” merchants conduct all business through a website, so all card information is collected and transactions are processed online, in real-time, using a payment gateway that’s built into their website’s shopping cart. So, once the order/sale is confirmed, the card is charged instantly and the product is shipped for future delivery. (Note: This merchant type does not apply to businesses that only market on the Internet, but do not immediately process payments via their website, upon order confirmation.)
For more information about this or any other topic, please contact Customer Service at (800) 941-6557.
Merchant Warehouse Provides Solution for Major Flaws in PCI Compliance
Merchant Warehouse, a premier provider of merchant accounts and credit card processing solutions for small- and mid-sized businesses, today unveils a solution that greatly reduces the possibility of cardholder data loss in the event of a network security breach. The new product, MerchantWARE, also makes complying with the payment card industry data security standards (PCI DSS) much simpler and more affordable.
As part of the regulations, PCI DSS mandates that sensitive personal data, including credit card numbers, be encrypted when stored or before being transmitted over public networks. Despite this, savvy thieves can, and have, found ways to steal unencrypted card information while transmitted within the store’s internal networks or point-of-sale (POS) hardware — a vulnerability not addressed by the PCI DSS guidelines. An especially susceptible point in the process is when card data is sent from a card reader to the POS or POS to in-store database.
Merchant Warehouse’s MerchantWARE solution encrypts the data at the card reader, completely eliminating this threat. With MerchantWARE, merchants never actually store or transmit any unencrypted credit card information. By taking this one simple step, small- and mid-sized merchants will eliminate the sensitive data that five of the 12 most intensive and costly PCI DSS requirements seek to protect.
“PCI DSS standards are a great starting point, but there is a major flaw in that they fail to address the issue of unencrypted card information on private networks. In fact, recent high-profile data breaches likely could have been avoided had the data been protected at the point of the card swipe,” said Henry Helgeson, President and Co-CEO of Merchant Warehouse. “Instead of building a bigger wall around the data ‘vault’ with expensive hardware and data security systems, the MerchantWARE solution simply removes everything of value to a thief. With no data to be hacked, the PCI compliance process becomes much more streamlined and affordable for the smaller merchant.
The MerchantWARE solution contains two core components:
- Hardware — For under $100, the solution utilizes the latest MagneSafe™ secure card readers from MagTek® to encrypt card data at the “read head,” to ensure sensitive data is never exposed. The readers meet all current PCI DSS requirements to secure cardholder data via 3DES DUKPT encryption.
- Software — To ensure a seamless user experience, the solution includes an integrated version of Merchant Warehouse’s MerchantWARE Payment Gateway. The MerchantWARE Payment Gateway enables merchants to process credit cards, debit/EBT cards and manage their account over a secure Internet connection. It also contains extensive reporting features with the capability to re-charge, refund or adjust previously processed cards, all without decrypting sensitive cardholder data.
Integration with the POS system requires only minimal updates; interested POS vendors should contact Merchant Warehouse at 1-800-968-0953 or e-mail us for additional information on how their customers can benefit.
Merchant Warehouse will demonstrate the solution — along with an overview of possible attacks to a PCI Compliant system and how fraudulent credit cards are made — at booth #5270 during the National Restaurant Association Show May 17-20 at McCormick Place in Chicago, IL.
About Merchant Warehouse
Merchant Warehouse was founded in 1998 on the principle that businesses should be able to purchase credit card processing software, POS equipment, and merchant services at a reasonable price. With over 40,000 merchants, Merchant Warehouse now sets the standard for price, innovation, customer service, and integrity. For more information, please visit our website.
Contacts:
Brian Waldman, Vice President of Marketing and Strategy
Merchant Warehouse
800.941.6557 x2050
bwaldman (at) merchantwarehouse (dot) com
Jeff Dillow / Holly Johnson
PAN Communications
978.474.1900
merchant (at) pancomm (dot) com
Chosing a Merchant Account - Discover the Difference with Merchant Warehouse
Merchant Warehouse has offered great rates and service for credit card processing services and merchant accounts for every type of business since 1997. More than 30,000 merchants later, we now set the standard for price, customer service, ethics and integrity. Whether you’re a small business or a large enterprise, you can expect:
24/7 Toll Free Customer Service
At Merchant Warehouse, we have invested in dedicated departments for both account service and equipment support. These in-house teams will do whatever it takes to keep you up and running with as little down time as possible.
Besides our top notch internal team, our network of service providers has over 900 customer service representatives ready to assist you with your merchant account at any time.
Real-Time Account Access
Many merchants want more access to their accounts than just getting a statement once a month. Our merchants can get online merchant account data, including transaction summaries and batch detail reports, meaning no more waiting for statements to balance your books!
No Down Time
A state-of-the-art-network ensures your credit card processing transactions go through when you need them to.Peace of Mind
Our expertise and personal service allow you to run your business without worrying about your merchant account or your credit card processing services. Most importantly, since we don’t require contracts and don’t charge any termination fees, you can trust that we will constantly do anything we can to keep you satisfied.
Your satisfaction is our top priority. We’ll give you an honest review of competitive quotes or offers — whether you choose us or not!
Benefits of a Merchant Account
With cash less commonly carried, and checks gradually becoming obsolete, credit and debit cards have completely revolutionized the industry, becoming the most common forms of payment. The majority of merchants world-wide are now accepting these cards because of the benefits of a merchant account, and to maintain your business’ competitive edge, you should accept plastic too. After all, you could be missing out on more than just sales…. By accepting credit cards, you get all the Benefits of a Merchant Account:
- Boost sales and improve customer satisfaction by allowing customers to choose their preferred form of payment.
- Increase your average sale because the customer doesn’t need to have the cash on them.
- Speed up the check-out process with efficiency and convenience.
- Protect yourself from potential losses caused by bad checks.
- Avoid the risk and inconvenience of having large sums of cash.
- Accept payments from virtually anyone, anywhere.
By providing alternative payment options to cash and checks, a merchant account can be extremely advantageous for any business. Although some merchants tend to hesitate in signing up for a merchant account due to cost factors, the loss in sales and profits may be far more costly. The fact is, besides all the other benefits of a merchant account, people tend to spend more money when paying with a credit or debit card than when paying with cash. By accepting these payments, your increased revenue will compensate for more than just merchant account costs. So, to make your business more successful, take advantage of the benefits of a merchant account, and accept credit cards today!
To learn more about the benefits of a merchant account, click here or call our Sales Department at 800-941-6557. You can also find more information about merchant accounts in our Merchant Account Resource Center.
Interchange and Assessments
Have you ever wondered how merchant service providers determine merchant account pricing, or why some credit card transactions cost more than others?
To better understand what you’re paying for, you need to know how merchant account pricing is established.
Simply put, there are two basic fees that collectively, make up the vast majority of the cost of a merchant account. In the credit card processing industry, these costs are referred to as “Interchange and Assessments,” and they are charged by bank card networks like Visa® and MasterCard® every time a merchant accepts one of their cards for purchases.
Essentially, the “Interchange” rate is a percentage that is deducted from each credit card transaction amount, and the “Assessment” fee is a flat transaction fee added to the cost of processing each credit card sale.
There are many components that influence the cost of processing a credit card, but the Assessment fee charged for a transaction is determined exclusively by the brand of the card accepted and is set by the bank card network that issued the card.
Interchange pricing is bit more complex, because each card and transaction type has a unique cost, creating an assortment of over 150 Interchange rate categories. As a result, the Interchange category any one transaction will fall under depends on various factors, including:
- A business’ processing environment (retail, phone order, internet, etc.)
- A business’ card acceptance method (swiped, keyed, online, etc.)
- The information sent along with transaction (address verification, CVV2, tax amount, etc.)
- The card brand and type accepted (debit, credit, rewards, corporate, etc.)
To lessen any confusion, merchant account providers typically compile all similar Interchange categories and bundle them into a few groupings such as qualified, mid-qualified and non-qualified. However, this is just one way merchant accounts can be priced. Some merchant account providers quote an “Interchange and Assessments, Plus” structure, which combines the actual cost of the transaction based on the Interchange category into which it falls, the applicable Assessment Fee, plus an additional specified value on top of each.
In the end, the bulk of a merchant’s credit card processing expenses and the root of all merchant account pricing structures derive from the combination of the Interchange and Assessment fees, regardless of the pricing structure.