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Processing Explained

How processing works.

Authorization

  1. Customer presents their card at the point of purchase
  2. The card information is transmitted to the merchants processing bank.
  3. Merchants processing bank sends request to the customers card network.
  4. The card issuing bank then either approves or denies the transaction
  5. The approval or denial is then sent back to the merchant to finalize the transaction.

Settlement

  1. Merchant submits “batch” of all transactions done that day to the processor.
  2. The processor forwards the settlement request to Visa, MasterCard, Discover or Amex for confirmation
  3. Card network requests funds from card issuer or bank.
  4. Card issuer then receives the settlement and either issues a credit or debit.
  5. Processor deposits the money into the merchants account and settlement is complete. 

Understanding Interchange Fees

Sample Interchange Table

What is Interchange? Interchange are the fees paid by the merchant for accepting credit and debit cards as payments for their goods and services. Typically, there are two fees associated with every transaction. 

  1. Percent (%) of the total transaction amount and 
  2. A per transaction fee. ie. $0.12

Who charges Interchange fees? Most of the fees associated with Interchange go the card issuing bank of the customer.  The card network/brand and the merchants acquiring bank also are part of the interchange costs.

What affects Interchange? These fees vary on every transaction depending on certain criteria. Interchange fees are affected by several factors which include:

  1. Card Brand – Visa, MasterCard, Discover, American Express.
  2. Bank Issuer/Card Type – Mileage card, Rewards card, Debit, etc.
  3. How the Card is Accepted – Swipe, Chip, Dip, e-commerce, manually entered, etc.
  4. Industry of the Merchant – Will affect the cost of interchange.
  5. Transaction Amount – Size of the transaction

How to Lower the Costs of Interchange

  • Swipe the card when the card is present.
  • Batch/Settle you point-of-sale or terminal every day.
  • Properly enter tip amounts before you settle the batch.

Interchange Plus vs. Flat Rate Pricing

                Due to the fact interchange fees vary on every transaction it can be confusing and difficult for a merchant to project costs.  With Flat-Rate Pricing it makes it easy for a merchant to project their monthly cost based on a set flat rate for every transaction. However, typically a merchant will be paying more money at the end of the month with flat rate pricing. 

Interchange Plus

Flat Rate Pricing

PCI DSS

PCI DSS is the Payment Card Industry Data Security Standards.  Created in 2006 by Visa, MasterCard, Discover, and American Express to ensure that all companies that process, store, or transmit credit card information maintain a secure environment. The standards created apply to all merchants. 

These standards are designed to limit risk of theft and protect all cardholder data such as personal identification, account numbers, expiration dates, names, addresses, or social security numbers.  

PCI Compliance requires all merchants to:

  • Restrict physical access to cardholder data
  • Track and monitor all access to network resources and cardholder data
  • Regularly maintains and test security systems and processes
  • Maintain a policy that protects information security
  • Maintain a firewall
  • Change all vendor supplied defaults for system passwords and other security parameters
  • Protect card holder data
  • Encrypt transmission of cardholder data across open and public networks
  • Use and update anti-virus software on all systems commonly effected by malware.
  • Assign a unique ID to each person with computer access 

Violations of any of the PCI compliance requirements may be subjected to fines as high as $100,000

CVV2

CVV2 is “Card Valuation Value 2 code” It’s the three digit code on the back of  Visa, MasterCard, and Discover cards. On American Express cards, it’s the four digit code on the front.

There are two security codes encrypted into every credit card. CVV1 is encoded into a cards magnetic strip and is only used in “card present” transactions. CVV2 are often used by merchants in “card not present” transactions. CVV2 codes are typically used for purchases over the phone, fax, mail, or e-commerce transactions as an extra security measure.

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Business Smart Credit Card

How it works

A portion of your daily settlement is split between your Credit Kick Start Business account and your regular bank account.  Funds deposited to the Credit Kick-Start account are posted as a credit balance and are available for immediate use.

  • Accept Payments the same as always

  • No disruption to your daily operations

  • Requires no personal guarantee

  • Card issued in your business name

  • Add a new line of credit to an existing line of credit. 

Cash Advance For Processing

How it works
  1. We determine your maximum cash advance by looking at the average amount of card sales you’ve had in the last 6 months, and the strength of your business.
  2. Once you’ve received your cash advance, we set up automatic deductions from your daily card sales. Payments are a fixed percentage of your daily processing volume. Payments rise and fall at the same rate as your processing volume.
  3. With a reasonable credit history and a good track record of card sales, you have a good chance of qualifying for this simple, easy source of working capital – even if you’ve been turned down by your bank or leasing company.

FAQ

Is this a loan?  No. This product is similar to accounts receivable factoring. Your future credit card sales is purchased for immediate cash in your account.

I have problems with my credit. Can I still get my cash? This product relies on real business performance rather than credit to evaluate applicants. This pragmatic approach allows any stable business to qualify for an advance.

Is this a one time only program?  No.  We are pleased to provide renewal transactions with our merchants.  Many merchants qualify for additional funding within 60 – 90 days. 

Social Media & Transaction Analytics

As a business owner, you understand the importance of making informed business decisions to run and grow your business. With Social Media and Transaction Analytics, your transaction data is transformed into rich, personalized insights to empower you to ease those business decisions.

This interactive, near-real-time dashboard is accessible anytime, anywhere – via online, the free mobile application or a Clover device.

With detailed business analytics at your fingertips, you can:

  • Gain customer insights based on spending patterns and segment categories such as new, repeat and local
  • Compare current sales with historical sales data
  • Understand the impact of your marketing efforts
  • Learn which days are your busiest and most profitable
  • Find out how your business is performing compared to similar businesses in your industry or neighborhood
  • Get a weekly business performance summary in your inbox with sales and customer data
  • And much more!

Better target your marketing

Access customer profiles to understand where your customers live, where they shop and how much they typically spend.

See how you stack up

View your sales figures by type and compare them to historical data and other businesses in your area.

Special Feature for Clover Merchants

As a Clover merchant, you will have access to a detailed Product Overview analytics feature – showing inventory levels and which products are selling best by customer category, revenue, and units sold. Receive breakdowns of product categories and your top selling products by new and returning customers.

Sign Up Now for a 30-Day Free Trial

Take advantage of Social Media & Transaction Insights for 30 days free!

After filling out a short registration form, you’ll have instant access to this interactive dashboard of your business performance and watch your transaction data into actionable insights!

View Insights anytime, anywhere via our web dashboard, mobile app or Clover device.