Your Frequently Asked Questions (FAQ)
Interchange fees are fees that a merchant acquirer or merchant services provider pays to card-issuing banks to compensate for transaction-related costs. Visa and MasterCard establish Interchange Fee rates. Interchange Plus Pricing model works by adding a certain percentage of margin onto the underlying interchange-rate. It’s widely considered the fairest pricing model in the industry.
OptBlue is a new pricing option that allows smaller businesses to accept American Express credit cards as an affordable way. To qualify for the lower priced OptBlue program, a business must process less than $1 million in American Express credit cards annually.
Retrieval
A retrieval request is simply a request by the bank for information to support the transaction. The bank wants to see legible copies of the actual sales ticket/invoice, and the transaction authorization. American Express calls these requests “inquiries” while Visa, MasterCard, and Discover use the label “retrieval.” Some banks call them “soft chargebacks.” Merchants need to reply to retrieval requests by providing the requested information to the bank to avoid “potential chargeback.”
Chargeback
Chargeback is a forced transaction reversal initiated by the cardholder’s bank. It occurs when a cardholder requests a refund for a transaction directly from their issuing bank. Consumers may declare the transaction illegitimate, because the goods weren’t delivered or weren’t as advertised or arrived damaged, and they demand their money back. The issuing bank supports the cardholder and contacts the merchant’s bank to put a hold on transaction funds. The cardholder receives a refund, and the merchant receives a penalty in for form of a chargeback fee. Merchants can dispute chargebacks by providing transaction records, shipment records, proof of delivery, copies of any correspondence with the consumer, and proof of money transfer.
A retrieval request is simply a request by the bank for information to support the transaction. The bank wants to see legible copies of the actual sales ticket/invoice, and the transaction authorization. American Express calls these requests “inquiries” while Visa, MasterCard, and Discover use the label “retrieval.” Some banks call them “soft chargebacks.” Merchants need to reply to retrieval requests by providing the requested information to the bank to avoid “potential chargeback.”
Chargeback
Chargeback is a forced transaction reversal initiated by the cardholder’s bank. It occurs when a cardholder requests a refund for a transaction directly from their issuing bank. Consumers may declare the transaction illegitimate, because the goods weren’t delivered or weren’t as advertised or arrived damaged, and they demand their money back. The issuing bank supports the cardholder and contacts the merchant’s bank to put a hold on transaction funds. The cardholder receives a refund, and the merchant receives a penalty in for form of a chargeback fee. Merchants can dispute chargebacks by providing transaction records, shipment records, proof of delivery, copies of any correspondence with the consumer, and proof of money transfer.
What is a chargeback cycle?
1
The Cardholder files a chargeback
2
The issuer reviews and assigns a reason code to the case
3
The issuer investigates and take action
4
The acquirer reviews the chargeback and takes action
5
The merchant reviews the chargeback and takes action
6
The acquirer re-presents the chargebacks
7
The issuer reviews the evidence and makes a final decision
Respond to consumer complaints. By resolving a dispute before the consumer calls their bank, you can save yourself much effort.
Offer a refund if you believe the consumer may win a dispute. Refund is always better than a chargeback.
For a card-present environment, always capture a signed receipt with a full description of goods or services provided. Keeping good record will prove useful and valuable in the chargeback arbitration.
For a card-not-present environment, always check for fraud. Many chargebacks are caused by fraud. Set your AVS and CVV filters for better security.
Train your employees. Good training includes teaching them fraud and chargeback prevention techniques, such as looking for suspicious transactions, verifying signatures in card-present transactions, and obtaining signatures on contract and sales orders when appropriate.
Fight back when it makes sense. Each chargeback could cost you an additional fee. In addition, if you have a significant number of chargeback, it could hurt your relationship with your merchant account provider. Your merchant account may be terminated by “excessive chargebacks.” You may not choose to devote the time and resources to fighting every chargeback, but if you believe you could win a case, it may be worth pursuing.
Offer a refund if you believe the consumer may win a dispute. Refund is always better than a chargeback.
For a card-present environment, always capture a signed receipt with a full description of goods or services provided. Keeping good record will prove useful and valuable in the chargeback arbitration.
For a card-not-present environment, always check for fraud. Many chargebacks are caused by fraud. Set your AVS and CVV filters for better security.
Train your employees. Good training includes teaching them fraud and chargeback prevention techniques, such as looking for suspicious transactions, verifying signatures in card-present transactions, and obtaining signatures on contract and sales orders when appropriate.
Fight back when it makes sense. Each chargeback could cost you an additional fee. In addition, if you have a significant number of chargeback, it could hurt your relationship with your merchant account provider. Your merchant account may be terminated by “excessive chargebacks.” You may not choose to devote the time and resources to fighting every chargeback, but if you believe you could win a case, it may be worth pursuing.
The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements designed to ensure that companies that process, store, or transmit card information maintain a secure environment.
PCI compliance is required for anyone that accepts, stores, or transmits payment card information. The PCI mandate is part of the Card Brand operating regulations under which businesses or individuals are allowed to operate merchant accounts and accept credit cards for payment.
The Monthly PCI Service Fee is assessed by Card & Beyond to mitigate the costs associated with becoming and maintaining compliance, updating terminal software, and replacing non-compliant equipment.
EMV stands for Europay-MasterCard-Visa, otherwise known as Chip Cards, are the new technology adopted by the card associations. You’ll also hear it called “Chip and Pin” or “Chip and Signature.” EMV cards come with an embedded microprocessor that provides heightened transaction security, card authentication and additional capabilities not possible with traditional magnetic stripe cards. It is important that all-in-person merchants except EMV transactions.