Capital Bankcard Q&A
Obtaining a brand new merchant account or switching merchant service providers is a relatively simple process. At Capital Bankcard-New England, LLC, we believe that you are entitled to accurate information, along with full disclosure and no surprises before, during, or after the sale.
With this in mind, we’ve compiled some of our most common questions. This FAQ section will answer many of your basic questions, but you may have additional questions or require more information. We encourage you to call our office to address any further questions or concerns that you may have @ 860-774-8210.
What is a Merchant Account?
A merchant account enables merchants to accept credit card payments. Any merchant who wants to accept credit cards for payment must establish a Merchant Account with a credit card processing provider, and utilize a business checking account with a bank. A merchant account facilitates cash flow into a merchant’s business checking account, often by the next business day, once each credit card transaction is completed in the form of an electronic advance. The provider must then attempt to secure the cardholder’s funds electronically. This often takes several days. Merchants pay monthly credit card processing and transactional rates and fees to compensate the provider for advancing the sale funds into the merchant’s checking account, and for the risk in actually securing these funds.
There are three (3) major types of Merchant Accounts:
- How you are going to actually collect your customer’s card data at the time and point of sale will dictate what type of Merchant Account you should consider.
- Retail Merchant (Swiped) Accounts: This type of account usually offers the lowest transactional costs because the merchant is face-to-face with the card holder, and the card is physically swiped at the point of sale.
- MOTO Merchant (Keyed) Accounts: Mail Order/Telephone Order accounts tend to charge higher transaction rates and fees than a Retail “Swiped” Account. Why is that? Merchants cannot verify that the person calling in to place the order is in fact authorized to use that particular card. More risk equals higher processing costs.
- Internet/Website Merchant (Keyed) Accounts: Internet merchant accounts, also known as "Gateway" accounts" are similar to MOTO accounts, have higher risk and thus higher processing costs than swiped accounts, and can only be used for Internet/website transactions. A shopping cart is often used to simplify the product or service selection process for the consumer.
How do I get set up to accept and process credit cards with my smart phone?
- Call our office 860-774-8210, complete a mobile merchant account application, and get approved. Once you are approved, simply do a download of our own mobile application Swipe Simple. You may then need to purchase a small attachable card reader, pay an administrative setup fee, activate your account via email, and start accepting cards via your mobile phone. Your phone MUST be compatible with our card readers, and our support network system.
Should I consider leasing a credit card terminal or Point-of-Sale system? No, only as a last resort. Leasing is always much more expensive for the merchant. Do the math.
How do I accurately compare my current plan/rates with any other offer? Call our office and our staff will take a consultative approach to looking at your entire merchant service situation. We will ask you to provide us with a copy of at least two (2) consecutive months of your most recent Merchant Statements, all pages, front and back. Our staff will then conduct a detailed cost analysis, at no charge to you.
How is my terminal connected to my credit card provider, and to my bank? You may connect your processing terminal via a stand-alone analog telephone line, or for much faster transmission speeds, via a CAT 5/6 cable ethernet line to your router, and then to your Internet service. The higher the number of transactions you do each day, the faster the speed you will need. Make sure you know how you want to connect prior to purchasing any processing equipment. All POS Systems must be connected via an Internet and or WiFi connection. We strongly recommend you connect your cc terminal and or any processing devices via an Internet connected Ethernet IP line. If you are connecting your cc terminal device to an open wall jack/port, make sure each jack or IP port has an activated signal.
Do I need a designated analog telephone line for my credit card terminal? No, you can use an analog telephone line splitter, however, you will not be able to take an incoming call and conduct a credit card transaction at the same time. If you have alot of incoming or outgoing phone calls, you will want a separate designated telephone line to connect directly to your terminal. Also, you cannot conduct a terminal download via a splitter. You will need to connect your telephone line directly to a wall jack should you need to update your terminal, and/or conduct any backend terminal service call.
What is an Early Termination Fee?
An Early Termination Fee (ETF) is charged by all and or most Merchant Service Providers if the merchant ends the contract before the end of the initial contract term. While contract terms of 3-5 years are typical, some providers have terms of up to 7 years, with a 30-90 day prior "Notice to cancel" or the fee will be assessed. Some providers also assess all statement fees and monthly minimums remaining when the contract is terminated. Some providers may also assess a lost profit fee based on an assumption of profits they concluded they would have earned during the full term of the initial contract. At Capital Bankcard, we only issue three (3) year Agreements. With our Agreement, a one-time flat (ETF) fee, noted clearly on page two (2) of our contract, is assessed should any merchant cancel during these first three years. At the end of this initial three (3) year initial Agreement term, our ETF converts to zero. It is each merchant’s responsibility to fully understand the Terms and Conditions of their own past, current, and any future Merchant Account Agreements. Should any merchant switch or change providers, each Merchant needs to confirm with their prior and or current provider that they have properly met and ended their legal contractual obligations. This must be done in writing, certified mail, to all appropriate parties involved, and backed up with a phone call to verbally confirm their Merchant Account has been successfully cancelled. Record all names, dates and times of each phone call that you make for your records. Finally, monitor your business checking accounts to make sure your "just cancelled" Provider does not continue to electronically withdraw monies out of your checking account after you have closed it.
What are the rates and fees associated with credit card processing?
All Merchant Providers assign different monthly rates and transactional fees to each credit card transaction based on the type of credit card that is being processed, and how that card data is being gathered, i.e. Retail, MOTO or Internet/web based. Each type of card (MasterCard/Visa/Discover/Diner’s/Amex and others) have different levels of risk. The higher the risk, the higher the overall cost. Monthly Merchant statements are often hard to understand, thus making it difficult to compare different rates and fees. Do not just look at one rate in one category. You must consider all of your rates and fees as a whole. If you are already accepting, ask one of our Merchant Advisors for a no obligation cost analysis. Be prepared to provide two (2) consecutive months (all pages, front & back) of your recent monthly merchant statements. We want to make sure we are comparing apples-to-apples.
All merchants want and deserve aggressive pricing and timely yet professional customer support. This is where we shine! Do not just shop for the lowest rate and ignore the added value of “personalized” customer support. When you call our office, you will actually talk with a person! Don't be fooled by a fast talking one appointment close approach used by some unknown sales rep. Free terminal offers are not free. That is simply a marketing pitch. Be smart, call our office and allow our team to help you with any questions you may have about your existing Merchant Account, and or potential Merchant Account with us. You will not be disappointed.
What is "Next Business Day" Fund Settlement?
Next Business Day Fund Settlement simply indicates when a merchant can expect their credit card transaction sale amounts to be deposited into their designated business checking account. Typically, a merchant’s funds will be deposited into their checking account within 1-2 business days. Terminals or POS Systems must be “Settled” prior to 6PM for Debit, and 7PM (EST) for Credit Card Transactions. American Express funds will deposit separately and directly from American Express within 2-3 business days. If your bank deposit total is smaller than your total batch receipt, you may not have been credited yet with your American Express deposit. You may also have a discrepancy if the same card has been run for the same dollar amount in that batch. There are system safeguards in place to make sure cards are not erroneously charged twice for the exact same amount within a specific timeframe on the same day. Monday through Thursday's settlement totals should deposit the next business day, with the exception of certain holidays. Friday's settlements should deposit on Monday, and Saturday and Sunday transactions should deposit no later than Tuesday or Wednesday of the following week.
Funds may be withheld should a merchant complete transactions that are outside of the processing parameters that were established within the signed and dated Merchant Agreement. Please call our office in advance should you anticipate a high dollar amount transaction that exceeds some of the parameters that you were approved for. Capital Bankcard – New England, LLC is not responsible for any merchant checking account bank fees. Merchants are advised and reminded to confirm that any and all merchant account transaction deposit funds have in fact been deposited regularly. Finally, the term “Next Business Day" Fund Settlement does NOT guarantee that all funds from every single transaction will in fact be deposited on the very next business day. Again, each Merchant MUST monitor their own business checking accounts to ensure they are receiving regular Batch Settlement deposits. Should any Merchant notice any discrepancies, please call our office immediately so we can research this situation.
Call our Connecticut Office at 860-774-8210 9:00 AM - 5:00 PM M-F or Call our Corporate Office at 877-788-2836 8:30 AM -5:30 PM M-F. Please have your Merchant ID Number ready.
Do I need a terminal with a printer? Yes, it is always suggested that you have a credit card terminal that can print out a paper receipt. This allows you the merchant to obtain an original signature from the card holder, and to compare that signature with the signature on the back of the card for security purposes. If you are conducting a mobile transaction, email and or Text a receipt to your customer and to yourself. This protects you, the merchant, against a “Charge Back”. Do your best to keep any and all receipts, and or sale invoices for every cc transaction.
What is a Charge Back? Chargeback is the return of funds to your customer, forcibly initiated by the issuing bank of the instrument, used by a consumer to settle a debt. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer's bank account, line of credit, or credit card. The chargeback mechanism exists primarily for consumer protection. Holders of credit cards issued in the United States are afforded reversal rights by Regulation Z of the Truth in Lending Act. United States debit card holders are guaranteed reversal rights by Regulation E of the Electronic Fund Transfer Act. Similar rights extend globally, pursuant to the rules established by the corresponding card association or bank network.
A consumer may initiate a chargeback by contacting their issuing bank, and filing a substantiated complaint regarding one or more debit items on their statement. The threat of forced reversal of funds provides merchants with an incentive to provide quality products, helpful customer service, and timely refunds as appropriate. Chargebacks also provide a means for reversal of unauthorized transfers due to identity theft. Chargebacks can also occur as a result of friendly fraud, where the transaction was authorized by the consumer but the consumer later attempts to fraudulently reverse the charges.
Merchants MUST comply with all MasterCard/Visa/Discover/American Express Payment Card Industry - Data Security Standard (PCI-DSS) and EMV Terminal/Equipment guidelines and requirements to minimize all forms of credit card processing fraud and chargebacks. Should a Merchant fail to comply with these well established PCI & EMV rules and regulations, they will be subject to a 100% cost liability shift back to themselves, as MasterCard/Visa/Discover/Amex will not share in any chargeback or processing losses with the Merchant.
Please visit the following sites for more info on PCI-DSS and EMV:
Capital Bankcard is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA.