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Monthly Archives: February 2017

Merchant Accounts

The various pros merchants services offer

1. Increased sales: Yes, this is right, as credit card orders are these days are larger in number than check & cash orders.

2. Faster checkout: It speeds up the checkout line because accepting credit card payment is instant and easy.

3. Cheaper than cash: It is cheaper to accept cards due to the huge order amounts.

4. Security: Dealing with cash needs more security, as the risk involved is high. Dealing with heavy amount can lead to troubles and there is also the possibility of employees giving out the wrong change amount.

5. More choices: The more payment options you offer to the customers, the more you decrease the probability of losing the sale.

The limited cons

1. Cost: Accepting credit cards involves cost similar to every other cost the business incurs. A good approach is taking it as a cost of doing business.

2. Fraud: Degree of internet fraud or risk is possible to some extent. However, such possibilities are extremely rare.

3. Charge backs: It is important to abide by the rules of credit card company’s rule. In this way, consumers are more safe when paying with card and win against the merchants while disputing a charge.

Which businesses are classified as high risk?

When the credit card industry realizes that a particular business is high risk, they conclude that the business model poses higher level of risk as compared to the traditional business. It is important to ensure that the payment processing account is well established and doing business will bring profits to the business as well as the merchant service providing company.

Here, the processing company has to manage the risk and reward, the merchant needs to be fully equipped to do business without going through over inflated charges. As understood, with any service, few companies charge unfair fees and provide incompatible services; hence, it is important to go for the best business company. High risk is involved in companies that are:

1. Involved in morally ambiguous industries
2. Process card-not present transactions
3. Sell products and services to international countries
4. Use risky sales methods
5. Transacts high average dollar amount

High Rate Loans

Here are the reasons:

  1. As a business model, it is proven to be resilient and profitable. Diverse portfolio, small exposure, short term nature of the loan and catering to a sector few traditional lenders touch.
  2. With Americans’ incomes not keeping pace with inflation, and increasing illegal immigration, there is growing need for Payday type loans as more and more people live from paycheck to paycheck.
  3. While there is State level regulation on Payday practices, this form of lending is highly unregulated and as yet unchecked in any real form by Federal government. And State supervision is spotty. So no wonder new Payday type lenders are cropping up all over.
  4. Because of small loans and not much oversight, entry barriers are low.

PROS AND CONS

Pros:

  1. Easy terms, no collateral
  2. Negative credit history is not an obstacle
  3. Very local
  4. Caters to a segment of population which has no other alternatives to cover their expenditures or budgets

Cons:

  1. Very high rates of interest (although many States have Usury laws, so Payday lenders skirt it by calling these “fees” or “service charges”
  2. Addictive. Since money is easily available, there is less incentive to save and forgo certain expenditures
  3. Does not improve borrower’s credit history–whereas getting credit from a traditional source, even a store, and paying it down regularly will actually improve your credit rating and open up other doors to borrowing

Payment Gateway

While the whole process of swiping the card takes not more than a few seconds, there are quite a few factors which affect the money transfer process. So choosing a proper processor is a must to make the complete process secure and fast. It should also be hassle free without any hidden charges or any other fees. Payment processing speed and security could be a deal breaker with the customer if it is not up to the mark. Accepting credit card is not enough, you should also look for a merchant account services. A few payment processing companies have a high merchant account rate but provide mediocre merchant services.

A proper Credit Card processor provides support to every aspect of your business starting from merchant account processing by providing you with merchant processing account. The processing of credit cards and debit cards with a fast response from both the front-end and backend is the key to a proper business merchant processing. The charges may vary according to the payment gateway, but you can find yourself relieved of the hassles you otherwise had to take. They take care of the details of cards along many devices like mobile device, POS, etc., and verify the data according the card holders name. The transfer request is sent almost immediately for crediting the same amount to the merchant’s account.

These companies are already developing their commitment towards the security of transfers. Even the small businesses are relying more on the cashless transaction, thus the small business merchant support is also being provided by many such processors. They accept credit card payments and process them taking utmost care to provide security and speed.

To assure the merchant of the security and speed of the processing, the companies are engaging their efforts in making the payment gateway more encrypted. Thus any chances of forgery or hacking are obliterated. With the latest 128-bit SSL algorithm, only the merchant and customer have the right to know the required part of the transaction, I. e. PIN number or identification number on the part of customer and another PIN number for the merchant. This classified information provide the base of the secure mode of payment.

Stuck in Debt Trap

We continually hear these statements: you deserve the best, shop till you drop, just charge it, treat yourself, pay later. What sounds like a good idea ends up becoming a burden when the credit card statements come and there isn’t enough in our bank account to cover the minimum amount.

Have you ever considered how much money you spend on stuff you don’t really need? There is a huge difference between needs and wants. We might really believe that we need something when in fact, we really don’t need it, we just want it. Here is a quick list of some costly wants:

  • COFFEE – If you buy 2 coffees a day costing $1.60 – in one year you will spend $1,168.00.
  • EATING OUT – If you eat out at a restaurant once a week and spend $80.00 – in one year you will spend $4,160.
  • TAKE OUT – If you bring home food once a week and spend $40 – in one year you will spend $2,080.
  • CLOTHING – If you buy 1 new item of clothing each week and spend $50 – in one year you will spend $2,600.
  • GROCERIES – If you buy extra snacks, sweets and treats each week when you buy groceries and spend $40 – in one year you will spend $2,080.

If you total all these things, they come to over $12,000! Yikes. This could buy a car, a down payment on a house or even be saved towards the future.