Specializing in the development of small business merchant accounts makes you, the web developer, partially responsible for assisting your clients with the creation of certain policies that can impact their moneymaking ability. While you should probably never assume it’s within your domain to tell your clients how to run their business, it never hurts to make suggestions that can reduce their exposure to potentially costly chargeback situations.
Raising the Bar
There’s a saying everyone’s heard that dictates, “The customer is always right.” Although this is generally stated as a guideline to help businesses establish certain criteria to ensure ultimate customer satisfaction, it’s something that the major credit card companies have implemented as a standard to operate by—or pay the price.
Don’t Promise the Stars
Your clients may often feel the urge to make pie-in-the-sky promises as a way to attract business, but as their web developer and consultant, you should suggest they keep expectations realistic. And not just as a general customer satisfaction rule, but because consumers are given an incredible amount of leeway when it comes to requesting and receiving chargebacks. Was a product’s delivery promised by a certain date and received late? If so, your client could end up eating the cost. In other words, your clients should never promise the stars if they can only deliver the moon.
Chargebacks can be bad news for your clients. Not only are the rules slanted in favor of the customer, but they can also end up being very costly.
Any time your client is hit with a chargeback, there’s an associated fee of $25. If the chargeback turns out in favor of the customer, your client is responsible for paying back not only the original purchase but the fee as well. If the chargeback is ruled in favor of the merchant, the $25 fee still applies.
The Three Primary Causes
There are three primary causes for cardholder disputes, and each is something your clients should be made familiar with if they have an established credit card processing account.
Misrepresentation of the product, or of services. Your clients should accurately represent what it is they’re selling in order to avoid the risk of chargeback.
Your merchant’s DBA isn’t recognized on the customer’s statement. Ensure your clients know that their DBA should bear some resemblance to the goods they’re selling. This can cut back the instances of customers assuming they’ve had their credit card information stolen.
Unclear or unfair refund and exchange policies. It pays to be lenient with refunds, as failure to do so could result in a costly chargeback situation.
Payment gateway integration with eCheck.net functionality may not be something that you as a web developer consider an important point of sale application for your client’s website, but they themselves might feel differently, especially if that merchant is sensitive to the needs of those who don’t feel comfortable using credit cards online. In this case, it’s time to break out the glossary and get yourself familiarized with the ABCs of eCheck basics.
- ARC (Accounts Receivable Conversion): ARC is a nifty feature that allows a merchant to take a physical check mailed to them by a customer and process it as an electronic payment.
- BOC (Back Office Conversion): Performing a Back Office Conversion is similar to an ARC in that it’s a functionality that allows a merchant to convert a physical check into an electronic payment. The only difference here is the method of the check’s receipt. Whereas ARCs are performed on checks received by mail, BOCs are performed on checks written at an actual point of sale and handed over physically.
- CCD (Cash Concentration or Disbursement): A CCD is a charge or refund transaction on a customer’s checking account. CCDs are transactions performed only to and from the business checking accounts of corporate entities.
So you’re probably sitting there asking yourself, “Why in the world would any merchant want to set themselves up to take check payments online when they can already accept credit cards?” But you probably already know the answer to that question. So why’d you ask? Easy answer: because no good web developer leaves any stone unturned, or any question unasked.
Even if your client processes plenty of credit card transactions, accepting checks electronically helps ensure that the integrated payment system you create will allow a wider range of potential customers to purchase your client’s products or services. It’s an important option to leave open, if not solely to offer customers without credit cards the ability to make purchases, then to simply give their customers an additional payment option in the event a backup method’s ever needed.
Before you try to integrate eCheck functionality into a website, here are just a few things you need to ensure your client has:
- A U.S. bank account that can accommodate online transactions.
- An Authorize.net payment gateway account enabled for Card Not Present transactions.
- Successful website and payment gateway integration using the Advanced Integration Method (AIM).
The ability to accept electronic checks may seem to some an antiquated payment method, but the most successful online merchants know that the more payment options there are, the better their chances of closing a sale.
If at any point you’ve found yourself scratching your chin and racking your brain trying to determine if the ability to accept credit card payments by mobile device is anything that businesses outside of a slim minority could ever take advantage of, reset your brain and have a look below.
You want to talk about a merchant that spends a majority of their time “in the field,” look no further than the average landscaper. They’re literally out there, stomping through knee-high weeds to beautify our surroundings. Who better to take advantage of a mobile merchant account than a landscaper? And what better way for a landscaper to appeal to their customer’s desire for convenience than to have the ability to process a credit card payment through their trusty mobile device?
More often than not, the guy in the work boots who comes over to knock down a few walls and rebuild your living room is the same guy who does the books at night. Equipping contractors with the ability to process credit card payments in the field can be a lucrative venture for the enterprising developer.
Perhaps no better industry exemplifies the need to be able to process credit card payments remotely than this. Because as Murphy’s Law dictates it, nobody ever has their checkbook handy when the car breaks down.
It’s been said that the proof is in the pudding, but the fact remains that there are a lot of people who simply don’t care for it. That, or the idea of determining whether or not something is of good quality by spending money to test it out simply doesn’t appeal to most people’s common sense. When it comes to you selling your abilities as a capable merchant account service developer, it’s not enough to expect clients to give you their business on faith.
Maintain a Portfolio
For the most part, you’ll be dealing with established merchants. A majority of these people will have a developed and attuned business savvy. Just because they can’t tell you the difference between HTML and HTTP doesn’t make them clueless. It’s entirely up to you to be able to provide potential clients with the tools they’ll need in order to decide whether or not to give you their business.
- Not every website you design will be a work of art, but if you want to show potential clients what you’re capable of, you should be able to produce a short list of ones that come close.
- Spotlight your diversity by offering samples of work from businesses in radically different industries.
- Accumulate client references. People pay attention to what past customers have to say.
A major component of taking part in merchant affiliate programs is ensuring that you become an expert in certain areas you never thought you’d explore as a web developer. One of the most fundamental aspects of becoming a well-versed merchant account reseller has nothing to do with anything as complex as understanding how merchant account fees are assessed. It’s as basic as knowing the difference between a traditional merchant account and a third-party merchant account.
Traditional Merchant Accounts
A traditional merchant account is established directly between the merchant and the merchant’s bank. Every time a credit card transaction is processed, the funds are deposited directly into the merchant’s bank account—and likewise, any time a refund is processed, it’s debited from the same account.
Third-Party Merchant Accounts
A third-party merchant account is the type offered by Merchant Focus, and is typically associated with a lot less legwork (and a lot less voluminous paperwork) than what tends to come with traditional merchant accounts. A third-party merchant account provider acts as intermediary between merchant and credit card company in order to offer clients lower credit card processing fees. Online merchants often require the assistance of web developers to become fully integrated.
Twitter/Mobile (not to exceed 140 characters):
Traditional merchant accounts are established directly between merchant and bank, whereas third-party accounts are provided by an intermediary company.
There’s a general misconception about the dangers of using a credit card to pay for something online that has its roots in the most basic of human conditions: the rose-colored lenses syndrome. How’s that work? We’ll explain.
Even people who consider themselves somewhat tech-savvy have a tendency to view technology in a suspicious light. It’s true. It’s a part of the human condition that’s manifested itself in a history of both good and bad science fiction flicks that generally result in the overthrow of man by the evils of technology.
One of the reasons for this mistrust has more to do with people’s conception of the nature of crime itself: 100 years ago, there were no credit cards, and 100 years ago, there was less crime. But if that’s not faulty logic based on a rosy-colored perception, there’s no such thing.
FACT: Using a credit card online is far safer than physically handing it over to someone at a brick-and-mortar establishment. While a large majority of working people are honest, upstanding, and would never think of stealing someone’s information, the reality of credit card skimming has made it apparent that keying in digits over secure credit card virtual terminals is a lot safer than traditional methods. As a web developer, it pays to be aware of this—and to make your clients aware of it, too.
There are some really great marketing strategies you can suggest to your clients to help them boost sales by driving customers to their websites. Online shoppers have a tendency to spend more time browsing, and have the ability to buy much higher volume if given the ability to shop from the comfort of their homes and not limit themselves to what will fit in a single hand-held basket or shopping cart. And then there are those who buy less frequently due to the fact they don’t always have the time to travel across town to visit their favorite shop. In the end, your clients’ main concern should be giving their customers no reason not to buy.
Your clients can drive traffic to their websites (or bring online customers into the store) by offering coupons. Suggest giving all in-person shoppers a coupon that can only be redeemed at the merchant’s online store. The reverse can be accomplished by giving coupons to online buyers for discounts at the store’s physical location.
Building a website registry that allows customers to create login IDs and rack up rewards points is another effective strategy your clients can employ, all the while saving on credit card processing fees through their affiliate merchant status. It’s a clever marketing ploy that feeds on itself and generates an increased stream of sales.
Discussing mid-qualified rates is a bit of a moot point when it comes to what you’ll need to know when you sign up for the Authorize.net merchant account resellers program, but it’s information that doesn’t hurt to have. To steal and savagely twist someone else’s quote: you can never be too smart.
The mid-qualified credit card processing rate is exactly what it sounds like—a rate that falls between the lower qualified rate and the higher, non-qualified rate. The reason it’s a bit extraneous to the discussion is because as an Authorize.net merchant, your new and small business clients receive a simplified, two-tier billing rate of qualified and non-qualified.
Why Do Some Merchant Providers Charge Mid-Qualified Rates?
It’s certainly not done to be cruel. Sometimes the reason certain credit card transactions fall into the mid-rate tier are preventable, sometimes not.
- A card is keyed in to the merchant’s terminal, instead of being swiped. This can happen for a number of reasons—either the magnetic strip is worn or the card isn’t physically present.
- A customer uses a rewards or business card. These types of cards carry higher processing rates for the merchant account provider, so the added cost is passed down to the merchant.