All About Wireless Merchant Accounts

Wireless merchant accounts are merchant accounts which depend on a device that uses a wireless transmission of the credit card information. No electricity or telephone land lines are required. The card can be swiped or the card information can be keyed in.

Card Present

Card Present (CP) is the term used when the customer is face-to-face with the retail clerk. The customer presents their card and signs the receipt. Most Card Present accounts are for brick and mortar retail establishments.

However as long as the customer and business are face to face, the card can be swiped through the terminal and authorized it's still considered Card Present. Examples would be street food venders, flea market stands, farmer's markets, and arts and craft vendors.

Wireless credit card terminals where the face-to-face contact takes place are considered retail or Card Present as well. The advantages of being classified Card Present are lower rates and a less extensive background check with the application.

Card Not Present

Card Not Present (CNP) simply means the business and customer are not face-to-face when the sale is made. The card is not present at the time of the transaction. Phone, fax, email, or postal mail transactions are all considered CNP. Some membership accounts, such as for fitness centers are considered CNP as well. While the original transaction may take place face-to-face with the card present, the follow up monthly billings do not.

CNP transactions are keyed into the credit card terminal, Point of Sale software, wireless device or through a secure Internet interface.

Internet

The sale is made by acquiring the customer's credit card information through the merchant's website and then processed for payment by utilizing an internet merchant account.

Simply because a business has a website, or the business name is a .com, .net or so forth doesn't mean it is classified as an Internet business. The products or services can be advertised on the site and described. However, if the customer calls in, emails, or faxes their credit card information the business is classified as a CNP. If the merchant uses a payment gateway to process their transactions they are considered CNP and not an Internet business.

Wireless merchant accounts are classified as CP or CNP. The process from sales to payment is as follows:

Authorize & Capture - When the credit card is swiped or keyed in, the merchant's wireless device contacts the processing bank and gets authorization for the transaction and requests that the sale be recorded and money deposited in the merchant's account. The sale is then captured. There is usually a set transaction fee and a percentage of the amount of the sale fee.

Refund - If the sale is reversed. The money is taken out of the merchant's account and credited to the customer's account. Refunds are voluntary and processed through the merchant's wireless device. This is completely different from a chargeback. There are no fees to process a refund, no penalties, and no limit on the amount of refunds.

Authorize Only - The credit card information is swiped and amount entered and authorized by the processing bank with a six digit number signaling the funds are available. The customer's credit card is not charged but the amount that has been authorized is reserved and not available to the customer. The amount of the sale is not deposited to the merchant's account.

When the sale is completed, within 30 days or the authorization expires, any amount up to the authorized amount will be approved and the funds released to the merchant account. Authorize only is used by car rental companies, hotels, and for deposits. When an authorize only is completed it's called a force transaction.

Voids - Applicable only on transactions that have not been batched yet. For retailers with hundreds of sales a day, it does not make sense to have each sale be individually deposited. Some processing banks charge a fee for each batch. At the end of the day the sales are batched and one deposit made. A sale can be voided if the point of sale device has not batched the transactions.

Chargeback - Chargebacks are initiated by the customer through the processing bank, for a variety of reasons or simply that the customer wants a refund and does not want to contact the merchant. Chargebacks carry a double penalty for the merchant. Each one has a fee of $15 to $35 depending on the merchant contract and if the level of chargebacks goes over 1%, fees overall can increase or the merchant account can be terminated. The chargeback fee is final even if the processing bank agrees with the merchant and doesn't reverse the charge.

The ability to offer customers the option of paying by credit card anywhere and anytime through the use of a wireless merchant account results in more sales and satisfied customers.