Merchant FAQ

A smart terminal is an advanced point-of-sale device that can process various payment methods including credit/debit cards, contactless payments, e-checks and mobile payments. It’s equipped with features such as internet connectivity, touch screens, built-in cameras, scanners and runs on an operating system that allows for the installation of different apps. It’s mobile and cordless and can process transactions anywhere, offline and has an integrated chip-and-pin card reader, contactless card reader, and a barcode scanner, providing a versatile and customizable experience for merchants.

For the use of their card brands and the ability to process transactions through their payment networks, associations like Mastercard or Visa also charge dues and assessments. We are required to pay these associations a portion of the total revenue it receives from your customers.

Interchange fees are charges that merchants pay to card-issuing banks when customers make purchases using credit or debit cards. These fees are set by card networks and are intended to cover the costs of operating the payment network. They can vary based on factors such as the type of card, merchant, and transaction. They are a significant cost of accepting card payments and may be passed on to customers through higher prices or service charges. Some merchants choose to absorb the costs, while others may pass it to their customers depending on the industry, business model and laws. Overall, interchange fees are a necessary cost for merchants that accept card payments and should be considered when choosing a merchant service provider.

Cost Plus Pricing, also known as “Cost Plus” or “Interchange Pass-Through” pricing, is a model used by some merchant service providers (MSPs) for credit card processing. It charges a merchant a set rate (markup) on top of the actual interchange rate set by card networks, which varies based on card type and merchant type. The advantage of this model is it’s more transparent and predictable than others like Tiered pricing, merchants know the interchange rate and markup, making it easy to compare costs between MSPs. Additionally, it can be cost-effective for merchants with high volume or various card types as the markup is typically a fixed percentage. Overall, Interchange Plus pricing is an option for transparent and cost-effective credit and debit card processing, and merchants should compare pricing and services of different MSPs before deciding.

Cross-border fees, also known as “international transaction fees,” are added to transactions involving a card issued in one country and a merchant located in another. These fees are typically assessed by the card issuer but can also be assessed by the merchant’s acquiring bank or payment processor. The fee is often a percentage of the transaction value, typically around 1-2% and sometimes it is a flat rate per transaction. These fees can vary by card network and country, established to cover additional risks and currency exchange rates. In some cases, these fees can be waived for certain types of merchants or cards, for example, high volume cross-border merchants may be able to negotiate lower fees with their payment processors and some premium credit cards may not charge cross-border fees to the cardholder. Overall, cross-border fees are additional costs that merchants must consider when accepting payments from customers in other countries, so it’s important to be aware of them and shop around to find the best deal with different payment processors

Contactless payments are a type of electronic payment that allows customers to make transactions using a contactless-enabled card or mobile device instead of a traditional credit or debit card. It’s done by holding a contactless-enabled card or device close to a contactless-enabled payment terminal and uses radio-frequency identification (RFID) or near-field communication (NFC) technology to communicate with the card or device. It has benefits such as faster transaction times, increased security, and convenience for the customer. However, there may be limits on the amount that can be spent per transaction and a PIN may be required after a certain number of contactless transactions. Overall, contactless payments are a convenient and secure alternative to traditional card payments.

Loyalty programs are rewards programs that are offered by retailers and businesses to incentivize repeat purchases and reward customers for their loyalty. Customers sign up for the program, typically given a physical or digital card, and earn points, rewards, or discounts for purchases. These points can be used to claim rewards such as discounts, free items, or cashback. They help businesses increase customer retention, boost sales, and gather data on customer buying habits. Different programs have different models, some focus on earning points, tiered rewards, cashback or credit, and some are digital or mobile-based. Overall, loyalty programs are a great way for businesses to encourage repeat visits and purchases, and also provide valuable data to tailor their services and make more effective marketing campaigns.

Semi-integration is a method of integrating a payment gateway with a POS system to process card-based payments. The gateway acts as an intermediary between the POS and processor, handling encryption and decryption of sensitive data, and card validation. The POS system manages transaction processing and inventory, while the gateway handles communication and transmission of sensitive data to the processor. This allows merchants to continue using their existing POS system while still taking advantage of the security and compliance features of a payment gateway, making it a cost-effective solution. It also allows for more flexibility when upgrading or changing processors and increases security by handling encryption and decryption of sensitive data, reducing the risk of fraud.

E-commerce refers to buying and selling goods or services online. E-commerce businesses have an online store or website where customers can purchase products or services. Transactions are completed online using various payment methods, such as credit cards, electronic check, and digital wallets. E-commerce businesses can be categorized into Business-to-consumer, Consumer-to-consumer, Business-to-business, and Business-to-government. Benefits of e-commerce for businesses include increased reach, reduced costs, convenience, personalization, automation, and flexibility. Benefits of e-commerce for customers include convenience, variety, price comparison, and access to detailed product information and reviews.

Tiered pricing and interchange plus are two pricing models used by payment processors and merchant services providers to charge merchants for credit card transactions. Tiered pricing groups transactions into different “tiers” based on various factors such as the type of card, merchant risk, or monthly processing volume. Each tier has a different pricing structure, which can include a percentage rate, per-transaction fee, or both. Tiered pricing is simpler but less transparent and can lead to higher costs, especially if the merchant doesn’t understand how their transactions are being classified. Interchange plus pricing is when the merchant pays a percentage of the transaction amount (interchange rate) plus a fixed per-transaction fee (markup). It is more transparent and based on costs set by card schemes but may be less simple for small merchants. It’s important for the merchant to research and understand which pricing model fits best for their business.

PCI DSS (Payment Card Industry Data Security Standard) is a set of security standards established by major credit card companies to ensure businesses that accept credit and debit card payments handle and store sensitive cardholder data securely. The standard is divided into six categories, known as the “PCI DSS control objectives”:

1. Build and Maintain a Secure Network: This includes installing and maintaining a firewall configuration to protect cardholder data.
2. Protect Cardholder Data: This includes protecting stored cardholder data, encrypting transmission of cardholder data across open, public networks, and protecting all systems against malware and regularly update anti-virus software or programs.
3. Maintain a Vulnerability Management Program: This includes regularly testing networks and systems for vulnerabilities and implementing software patches to address any vulnerabilities that are identified.
4. Implement Strong Access Control Measures: This includes controlling access to cardholder data by individuals and systems, and monitoring and testing access controls.
5. Regularly Monitor and Test Networks: This includes regularly monitoring networks for unauthorized access, and testing networks to identify vulnerabilities.
6. Maintain an Information Security Policy: This includes developing, maintaining, and disseminating a written information security policy that includes specific requirements of the PCI DSS.

PCI DSS is a set of security standards established by major credit card companies to ensure that businesses handling and storing sensitive cardholder data do it securely. Compliance is mandatory and non-compliance can result in penalties, fines, and loss of ability to accept credit and debit card payments. Businesses can have regular PCI compliance assessments to ensure they meet the requirements.