You’Re a Business Owner, Not a Dummy!: Understand Your Merchant Account

By Michael Mintz

In order to compete in todays global marketplace, it is essential that businesses large and small accept credit and debit cards from their customers. Credit and debit card usage continues to rise; if you dont want your customer going to one of your competitors, you must accept plastic.

You need to establish a merchant account. Plenty of providers offer these processing services, but not all of them will share in your companys vision. In this guide, author Michael Mintz provides advice and information about handling a merchant account. It answers these vital questions:

How does the credit and debit card process work?
What is interchange, and why do I care about it?
Who makes what on each transaction?
What are the pricing strategies and additional fees?
How do I read my month-end statement?
Why should I worry about PCI compliance?
What does the Durbin Amendment mean to me?
What should I know about American Express?

Youre a Business Owner, Not a Dummy provides an insiders look at the sometimes complex system of merchant accounts and provides a wealth of information to help you make the right decision for your business.

• Language: English
• Publisher: iUniverse
• Release date: Oct 24, 2012
• ISBN: 9781475922226

Michael Mintz

Michael Mintz earned a bachelor’s degree from the State University of New York at Albany; he is a successful entrepreneur and financial executive. He is the president of MCM Sales and Consulting. Mintz and his wife, Meredith, have two boys and live in South Orange, New Jersey.

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Copyright © 2012 Michael Mintz

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The information, ideas, and suggestions in this book are not intended to render professional advice. Before following any suggestions contained in this book, you should consult your personal accountant or other financial advisor. Neither the author nor the publisher shall be liable or responsible for any loss or damage allegedly arising as a consequence of your use or application of any information or suggestions in this book.

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ISBN: 978-1-4759-2224-0 (sc)

ISBN: 978-1-4759-2223-3 (hc)

ISBN: 978-1-4759-2222-6 (e)

Library of Congress Control Number: 2012907811

iUniverse rev. date: 10/16/2012

Contents

Introduction

CHAPTER 1    How Does the Credit and Debit Card Process Work?

CHAPTER 2    What Is Interchange, and Why Do You Care about It?

CHAPTER 3    Who Makes What on Each Transaction?

CHAPTER 4    Pricing Strategies and Additional Fees: The Real Truth

CHAPTER 5    My Month-End Statement Makes No Sense—Please Help!

CHAPTER 6    PCI Compliance: Why Do You Care?

CHAPTER 7    The Durbin Amendment: What Does It Mean to You?

CHAPTER 8    A Checklist to Use Before You Make a Decision

CHAPTER 9    American Express

Epilogue

Dedicated to my wife, Meredith, and my two sons, Ben and Alex. Their love and endless support inspire me every day.

Introduction

If you are reading this book, unfortunately you are not one of the lucky few to have a cash-only business. In order to compete in today’s global marketplace, it is essential that businesses large and small accept credit and debit cards from their customers. Credit and debit card usage continues to increase. If you don’t want your customers going to your competitors, you must accept plastic.

There is so much that can be said about the merchant processing industry. Many books have been written on the topic, but most of them exceed two hundred pages and are more like textbooks. This is not meant to be a textbook, but instead is more of a reference guide for business owners and financial executives.

In the United States, in order for any business to accept credit and debit cards, a merchant account needs to be set up. There are plenty of service providers out there offering merchant processing services, but how can a business owner or financial executive decide which of the many salespeople are telling the truth and which ones are only looking to maximize their own profit on the deal?

Merchant accounts are offered by a variety of entities, including local, regional, and national banking institutions; direct processors/acquirers; and a vast network of independent sales organizations (ISOs). If you are already accepting credit and debit cards, you probably receive multiple solicitations every month for these services.

As it stands, here is the situation:

• You want to get the best deal for your organization, but there is so much to understand.

• The market is filled with low rates and great deals offered by various merchant services providers.

• In order to make the right decision, you need to fully understand how merchant processing works.

If only there were a simple one-stop resource to get all the knowledge you need to make the right decision.

Well, now there is.

Obtaining a merchant account is not difficult. Understanding your merchant account and the crazy world of credit card processing is not as simple. Forget trying to understand your month-end statement. That practically requires a PhD.

Having run a successful merchant services business, I have heard all of the customer complaints and the many horror stories of how business owners have been taken advantage of by their merchant services providers. That is exactly why I decided to write this book.

It is time for business owners to be in the know and fully understand how their merchant accounts work.

The wide breadth of topics and easy-to-understand structure of this guide make it a must-read for all business owners and financial executives responsible for merchant account decisions.

Take the time to understand how it all works. You will not be disappointed.

I promise to clear the air and provide you with the full working knowledge necessary to make the right merchant services provider decision for your organization.

How This Book Is Organized

This book is broken up into nine chapters, each covering a topic related to merchant processing. The goal is for anyone who reads this book to be in the know the next time a merchant services provider salesperson knocks on the door.

The content in each chapter stands alone, so you don’t have to read all the chapters in order. Take a look through the table of contents to find a single topic of interest, or read the entire book to gain a complete understanding.

CHAPTER 1

How Does the Credit and Debit Card Process Work?

This chapter will discuss

• key industry terms;

• the different ways merchants accept credit and debit