Posts Tagged ‘Transactions’

This is a great video that explains what’s behind credit card transactions.  VMS-Washington encourages all business owners to learn more about credit card processing so they can save more money on their processing, learn better ways to processing and to know right from wrong when talking to a potential credit card processor.

If you’re interested or want more information about interchange and better rates from an “A Rated” company contact us, VMS-Washington is giving businesses the Summer Deal of the Year.  For a limited time we are offering rock bottom rates for new and existing businesses.  The questions we always ask business owners are:

  • Have you checked out your current or potential merchant service company on the BBB?
  • Does your current provider or potential provider promote your business?
  • Does your current provider or potential provider send referrals your way?
  • Are you getting the best rates in town?
  • Has your current or potential merchant told you about the Durbin Amendment?

Wouldn’t you want an A rated company that and will promote your business though their social media and monthly newsletters.  For more information contact us.

Thank you,

800.531.8575 ext.697

VMS-Washington – Behind Credit Card Transactions Video

The Chargeback Process

Chargebacks occur when a cardholder disputes a charge to his or her account. The diagram below represents the chargeback cycle.

VMS-Washington – Chargeback Management

The entire process, from authorization to funding, usually takes about 3 days.

In the event of a chargeback (when there’s an error in processing the transaction or the cardholder disputes the transaction), the issuer returns the transaction to the acquirer for resolution. The acquirer then forwards the chargeback to the merchant, who must either accept the chargeback or contest it. For more on chargebacks, visit the Chargeback Management section of our website.

Getting Started

To start processing payment card transactions you need:

  • A payment processing terminal – a physical device or software. We support all major physical processing terminals and offer the Orbital Virtual Terminal, which is a web-based application that lets you authorize, capture, settle your payments and more directly from your computer.
  • Merchant account – the service that payment processing companies offer to allow you to accept electronic payments. We provide secure, reliable merchant account services and our processing rates are among the lowest in the industry.
  • Checking account to receive deposits.

Specific for processing online transactions are the following requirements:

  • A functioning web site with a valid secure server certification.
  • Shopping cart – our virtual terminal is compatible with all major shopping carts.
  • Online payment gateway – the online equivalent of the point of sale (POS) terminal facilitates the transfer of information between your website and your processor or acquiring bank, quickly and securely. Our Orbital Gateway is a proprietary system that securely delivers and encrypts your customers’ payment information during electronic transmittal.

Learn how to lower your card acceptance cost: and ask about the Durbin Amendment that was passed on October 2011 and how it will help you lower your rates.

VMS-Washington – How to Manage Chargebacks Resulting from Processing Expired Cards

Visa’s chargeback Reason Code 73 and its MasterCard equivalent Reason Code 4835 are used by card issuers to designate chargebacks resulting from processing credit and debit card transactions where both of the following two conditions are present:

  1. The payment was made with an expired card 


  1. The transaction was not authorized.

It should be noted that, if a merchant processes a card-not-present transaction using a card that expired before the transaction date, but the issuer approved the authorization request, the issuer is responsible for the transaction.
A critical point in determining the validity of such chargebacks is establishing the transaction date. For the purposes of Reason Codes 73 and 4835, the transaction date is the date on which the cardholder first presented the card to the merchant. However, for hotel, cruise line, airline or car rental transactions, the applicable transaction date is the date on which the cardholder first checked into the hotel, boarded the cruise liner or aircraft or rented the car, not the date on which the booking was made.
What causes these chargebacks? As the above description implies, Reason Codes 73 and 4835 occur when a merchant does not follow best card acceptance practices and accepts a payment from a card that is past its expiration date and did not obtain an authorization approval from the issuer.
How to manage such chargebacks? Your response to Reason Code 73 and 4835 chargebacks will depend on the particular transaction circumstances and the actions you have taken (or not) so far.

  • The card was not expired in a key-entered transaction. In such cases you should send a copy of the sales receipt to your processor. The chargeback is invalid regardless of whether authorization was obtained. For key-entered transactions, the expiration date should be on the manually imprinted copy of the front of the card, which should also be sent to your processing bank, along with the sales receipt.
  • The card was expired, the magnetic stripe was read and an authorization was obtained. If you had processed an expired card, for which both the magnetic stripe was read and an authorizationwas obtained, inform your credit card processing bank. As indicated above, the issuer is responsible for such chargebacks.
  • The card was expired, the magnetic stripe was not read and an authorization was obtained. If you had processed an expired card for which the magnetic stripe was not read but an authorizationwas obtained, send a copy of the sales receipt to your processor with the manual imprint of the front of the card, and ask them to include the authorization log in the re-presentment.
  • The card was expired and no authorization was obtained. If you had processed an expired card for which no authorization was obtained, there is no remedy and you should accept the chargeback.  Do not process a credit at this time, as the chargeback has already performed this function.

How to prevent chargeback Reason Codes 73 and 4835? Prevention of these chargebacks is entirely within your control and once again adequate training of your sales staff is the most effective tool at your disposal. A simple but very effective preventive measure is to check the expiration date of the card, presented by the customer, and to not accept payments if the card has expired. You should ask for an alternative payment method instead.

Learn how to lower your card acceptance cost: and ask about our $250.00 guarantee that we can beat your current processor’s rate.

When the Durbin Amendment regulating interchange fees on debit card transactions took effect October 1, it appeared that merchants could accrue some cost savings on debit card transactions and perhaps leverage their savings by encouraging customers to use debit cards in lieu of credit cards, which have higher merchant fees. However, even before Durbin took effect, large banks warned that they were not going to absorb lost revenues from reduced interchange rates. The reduced rate is expected to cost banks about $6.6 billion a year in revenue, according to Javelin Strategy and Research.
In response to the Durbin amendment, many banks terminated rewards programs associated with debit cards. Over the past few months many of them announced tests of increased fees for use of debit cards or simply said they were raising fees or actually increased them. For instance, Wells Fargo and J.P. Morgan Chase announced tests of a $3 monthly fee for debit card use. Southeastern regional bank SunTrust has been charging some customers $5 a month on debit card purchases since June. In September, Bank of America announced a $5 monthly fee for making purchases with a debit card — starting next year. Several consumer polls suggested that the fees would most likely dampen the use of debit cards for purchases.

The Banks Reconsider

Many big-bank customers apparently moved accounts to smaller local banks or credit unions. President Obama and Senator Richard Durbin (D., Ill.) — who wrote the provision that reduced merchant debit card fees — criticized the banks. Over the past week all of the banks that planned to implement the fees have retreated from that position. Wells Fargo and J.P. Morgan Chase dropped their tests. SunTrust said it is dropping its $5 monthly debit card charge and will refund the fee to customers who have paid it. Bank of America issued a statement saying it is dropping its plan to charge customers $5 a month. “We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” said David Darnell, Bank of America co-chief operating officer.

Is This A Win for Consumers?

All of this does not necessarily help consumers, says Odysseas Papadimitriou, the chief executive of credit card search tool provider “Banks may be more hesitant to introduce new debit fees now. But they will still have to find ways to increase charges and drive profits,” he told Smart Money, the financial magazine. “The net result is a status quo for consumers. They’re no worse or better off.”
In contrast, Katherine Lugar, executive vice president of public affairs for Retail Industry Leaders Association, issued a statement saying, “Today’s news is proof-positive that consumers remain swipe fee reform’s biggest winners. Bank of America and its big-bank peers are no longer free to fleece merchants and consumers at will. This outcome is just what consumers deserve, what reform advocates predicted and what we will fight to extend to the credit card market.”
To gain revenue banks will likely turn to services where fees are already in place. Customers may see increased checking account charges, inactivity fees on debit cards that aren’t used, and higher fees for bounced checks. ATM fees may increase and receiving a paper statement may cost customers. Free checking will likely disappear altogether. In 2011 only 45 percent of non-interest bearing checking accounts are free, a drop from 65 percent in 2010, according to a survey by
“If the banks’ revenue streams are cut in one area, they’ll find a different area to make that up,” Bill Hardekopf of credit card comparison site told US News & World Report. “New fees could be more subtle, more under-the-radar.”

Effect on Merchants

Online merchants will be in the same position that existed when the Durbin Amendment went into effect on October 1. As we explained at “Understanding the New ‘Durbin’ Debit Card Rates; Exec Explains” and “Credit Card Processing: ‘Interchange-Plus’ Pricing Not Necessarily Fair,” merchants should monitor what their merchant account providers charge them, and look for providers that pass the Durbin debit-card interchange savings to them. Merchants, in turn, can keep the savings from reduced rates themselves or pass them through to their customers via lower prices. They can also offer incentives to encourage customers to use debit cards instead of credit cards.
It is unlikely that banks will be able to impose new debit card fees on merchants. Instead they will focus on their checking account and credit card customers. Banks may raise credit card fees or interest rates for their credit card holders, which could make using debit cards for shopping even more attractive.

Due to the overwhelming replies and inquiries VMS-Washington wants to help your business out by giving you rock bottom rates for your processing.  We also can help your business by giving you great rates for unsecured business loans with an 90% approval rate for start-ups and existing businesses.  Call or email us if you want to know more.

Michael Roberts

(800) 531.8575 ext. 697