How to process payment transactions inside Microsoft Dynamics CRM

Accepting electronic transactions with Microsoft Dynamics CRM

In today’s economy, processing transactions can not possibly be limited to face-to-face retail interactions, as customers use various devices to shop and pay for their purchases. As the demand for more convenient payment solutions rises, businesses introduce new ways to accept and process payments to stay competitive. As electronic devices become more and more ingrained with our day-to-day lives, companies look for technology solutions that can provide answers to their business needs.

Today, a good majority of businesses use a customer relationship management software or an accounting system to process payments when manual payment transaction via physical terminals is not an option. Aside from the convenience the integrated payment processing solution can provide, the enhancements in security of data being transferred is a huge plus for today's businesses.
Microsoft Dynamics CRM is becoming a popular business application for many businesses due to a variety of reasons.

The system is unique in the CRM marketplace and is leading the way in innovation and usability across the globe. The Dynamics CRM platform offers companies a unique set of productivity tools across sales, marketing, and customer service. Microsoft CRM is differentiated from competitors by its ability to extend and scale across multiple business units, giving companies the ability to leverage their Microsoft CRM investment without the need for additional software.

While there are a number of add-ons and plugins developed to enhance the CRM functionality or to add a new capability, there are not many payment applications designed to facilitate the processing of electronic payments inside Microsoft Dynamics CRM.

The main three contenders in this space are:

Century Business Solutions: eBizCharge
Powerobject: PowerCharge
Nodus Technology: CRMcharge

While all three provide payment processing capabilities within Microsoft Dynamics CRM, there're some minor differences among them that are worth looking at: both PowerCharge and CRMcharge allow you to accept payments inside your Dynamics CRM. However, both companies provide nothing beyond the processing capability. In other words, you will not have a merchant account and your transactions are processed through a third part, usually the company that provides the gateway to you. While this can be a good option for some businesses, many companies do not find it convenient to deal with two or three vendors when it comes to managing one task.

Century Business Solutions' eBizCharge, on the other hand, is the company's own gateway enhancement solution for Dynamics CRM. Century Business Solutions is a payment processor that handles the entire process for you from signing up for a merchant account to further customizing their integration to cater to your business's specific needs.

eBizCharge for Micosoft Dynamics CRM allows you to accept cards and use Century's processing services to take advantage of their cost-effective payment processing packages with dedicated account managers. The company provides in-house support and free charge-back management services to all their clients. Last but not the least, their solutions are FREE and they offer flat rate processing plans to make it easy and cost-effective to process payments within Dynamics CRM.

Interchange Plus Pricing vs Tier Pricing

Interchange Plus Pricing vs Tier Pricing

Interchange Plus Pricing

Interchange Plus credit card processing, also known as Cost Plus processing, is a program in which the interchange rates that are assigned by the major credit card brands (Visa, MasterCard, AMEX and Discover) are passed unchanged directly to the merchant. By leaving the rates unchanged, Interchange Plus provides complete credit card processing clarity to the merchant. The merchant simply pays a small fee to the merchant service provider for the processing. Another major benefit of Interchange Plus, is the flat fee pricing it offers. This pricing makes it much easier for a merchant to successfully analyze and plan all future credit card processing costs. Interchange Plus pricing is used by most large merchant corporations in the U.S.

Pros:

-The cheapest processing option overall.

-100 % clarity on all processing costs.

-More understanding of different card rates.

-Flat fees mean no surprises.

Cons:

-Takes some time to learn the different processing rates for each type of credit cards.

-Requires you to be more involved in your day-to-day card processing.

Tier Pricing

Introduced as a way for merchants to process their credit cards in an easy and simple way, Tier Pricing has been criticized by credit card experts, because it doesn’t provide any details or flexibility regarding credit card processing fees. Another common problem in Tier Pricing, is the mismatching of cards and rates. For example: A credit union debit card (usually a very low interchange rate type) can be billed to the merchant using a rewards card rate (one of the most expensive) transaction. This mismatching is legal and happens all the time. The reason has to do with the lack of variety (or categories) offered in Tier Pricing.

In Tier Pricing, all transactions are billed under just a handful of general categories, usually four:

-Debit aka. Check Cards

-Qualified (standard credit cards)

-Mid-Qualified (hand typed cards such as phone orders/mail orders)

-None Qualified (rewards cards, international cards, etc.)

Since there are no set rules or guidelines determining what cards will go under each category. Mismatching often occurs, and leads to millions of dollars being over charged to merchants per year.

Pros:

-A simple introduction to payment processing for the novice merchant.

-Minimal time commitment from the merchant.

– Zero learning curve.

Cons:

-Results in much higher processing costs overall.

-No details on what exactly the merchant is paying for.

-Zero understanding of industry card pricing.

Interchange plus vs. tiered pricing model. Which is better?

I strongly recommends Interchange Plus pricing, even to novice merchants. The enormous benefits over Tier Pricing, make switching to Interchange Plus pricing a smart business decision. As discussed, Interchange Plus provides merchants complete transparency, as well as the ability to easily analyze and understand their exact processing costs. This detailed information also allows the merchant to compare pricing programs among different merchant service providers. Of course, the biggest benefit of Interchange Plus pricing is it provides merchants a lot of flexibility, beyond the limitations of Tier Pricing. How? By not narrowing down so many different card types into just a handful of generic categories, transactions get processed more accurately- which leads to much lower processing rates on corporate, commercial, business, government, and purchasing cards. This benefit alone, leads to thousands of dollars in savings per year.

EMV, CNP, and Liability Shift

emv-cnp-and-liability-shift

Why Data Security Concerns Small Businesses

Why Data Security Should Concern Small Businesses (and All Businesses, Really)

Given the culture of mainstream data security breaches we’ve been unwittingly thrust into beginning in about 2013, I think it goes without saying that PCI compliance is vitally important, not just in the world of payment processing, but in the world of business in general.

Oh, PCI compliance… I’m talking about that item that never fails to pop up on your credit card processing statement.  It’s that one thing you’re always billed for, no matter whether it’s in the positive (PCI compliance fee) or the negative (PCI noncompliance fee).  Funny little line item it is.

For some business owners, that’s all it will ever be – another annoying, unexplained little line item in an entire world of more pressing business issues.  Maybe something a bit like car insurance – an expense whose worthiness won’t be proven until the day of a catastrophic, metal-twisting wreck.  As a business owner, does a data security breach as you grow your business really concern someone like you?  Or, is this just a game the giants play while anyone smaller than Goliath watches from the bleachers?

Lately, all signs seem to say that yes, business owners – even small business owners – ought to be quite concerned with data security breaches.  Breaches are actually down worldwide from two years ago, but, as our buying culture moves slowly but surely to credit from cash (and our general habits from physical to online), fraudsters and hackers see the channel as a very viable road to profit.  Although PCI noncompliance is just one cause of data security breaches, taking a look at compliance and general payment security pointers can benefit all business owners, as security flaws are usually extremely correctable.

This piece isn’t meant to alarm you; instead, it’s more of a wake-up call for businesses who’ve relegated PCI compliance to the back burner – or, didn’t put it on the stove at all.  Better at least cover that pot if you’re keeping it out overnight.

So, what is PCI compliance, then?

Basically, it’s the security of credit card information – that is, how safe you’re keeping it when and if you’re storing it.

Some aspects of PCI compliance are thoroughly under your control.  For example, when faced with the decision of whether or not to copy down a customer’s credit card number to enter into your accounting system or credit card terminal later, you can choose not to, knowing well that paper trails, even destroyed ones, can increase your fraud liability.

And, other aspects are thoroughly out of your control.  For example, you may be using a payment processing program that keeps unprotected credit card information stored on your business’ server (and, though it sounds crazy, there are programs that do just that).

Do you have a Target (or a Home Depot) on your back?

It’s an unfortunate circumstance of today’s media coverage that the big guys get most (if not all) of the attention, while the little guys get next-to-nothing.  Contrary to what you may have heard, small businesses are a favorite target for hackers.  This white paper shows that 70% of all reported data security breaches happen in small businesses – a truly incredible, harrowing statistic, telling a much different story than the one you’d understand by only reading headlines. 

The headline stories make sense; compared to the enormity of the Target and Home Depot data breaches, the small business ones are…well, quite small.  Though they may be small enough to dip underneath the radar completely, they’re certainly a big story to the business owners they affect.

Data breaches can be murder

I don’t mean for you as a person, obviously.  But, to your business?  That’s a yes.  The National Cyber Security Alliance stated in a report that when a small business is hacked and has its customers’ information compromised, it has a 60% chance of closing its doors within six months of the attack.

When you look at that statistic in tandem with the aforementioned one about how 70% of all reported data breaches occur in small businesses, it’s not quite a death sentence for small businesses – but, it’s close.

Especially in our age, hackers and fraudsters are more skilled than ever before, and, they’re very aware of the fact that small business owners think they’re too small to be viable targets for information breaches.  Incidentally, they’re also too small to be seen by most anyone when they’re broken into, so nobody ever thinks to change their own security tactics until ex post facto.

Don’t be the next unseen statistic

You don’t have to be another story nobody hears about.  Now that you know about all this negativity, you’ll be quite pleased to know it’s not difficult at all to protect yourself from invisible hackers and others who don’t have your best interests in mind.

Regardless of security breaches caused by hackers, it’s pretty easy for anyone to straighten out a rumpled piece of paper you used to copy down someone’s credit card number.  Indeed, this isn’t what most people think of when they hear that term data breach, but if anyone recovers that trashed piece of paper you used, you’ll be liable for any consequences that may arise just the same.  Just resist the urge to engage in that practice, and, if you’ve absolutely needed to do so in the past (for business procedures, direct orders, or any other reason), it may be time to revise standard procedure.

Additionally, if you use a computer-based credit card processing system that stores full, unprotected credit card numbers on your own server (read: is not PCI compliant), it’s time to look into an updated solution, something that fits today’s security standards.  Solutions that employ tokenization technology, for example, break sensitive data into strings of random numbers when in storage, so anyone who successfully breaks into a server storing the information doesn't get anything worthwhile - only garbled strings of characters.

If you used a cloud-based processing system, for example, you wouldn’t be liable for a data compromise the same way you would if you used something that stored information on your own servers.  If you aren’t sure about the status of your own processing system (for example, where it stores information, whether or not it’s even cloud-based), it never hurts to ask your credit card processor or search for reviews of the product you use that relate to PCI compliance and data security in general.

So, what is the value of PCI compliance to small businesses?  It’s much more than a little line item on your statement; the very survival of many businesses depends on it.  Be absolutely sure your own business maintains PCI compliance to avoid any potential pitfalls, and rest easy knowing that your customers’ payment records are safe because of something you did for your business.  Because, as a small business owner, you’ve got a lot more to pore over than fretting about losing your business because of an entirely avoidable data security lapse.

There’s a New Payments Advocate in Town – and it’s the Government!

They've formed something called the CPTC - and, the PIC.  

But... What do they do?

If you follow this blog, you know I’m all about electronic payments.  But, I’ll bet you didn’t know that as of a month ago, the government is all about electronic payments, too!

It’s true.  On March 19^th, Washington issued a press release announcing the formation of a new discussion group, the bipartisan Congressional Payments Technology Caucus (CPTC).  The bipartisan caucus, headed by four US Representatives, will discuss how innovations in payment technology affect all consumers, especially the segment of consumers who aren’t tied to any physical bank, as well as data security.

As well, on April 9^th, four US Senators formed the bipartisan Payments Innovation Caucus (PIC).  Like the CPTC, the PIC will explore data security trends, general payment innovations, and how those innovations protect consumers.

Both the CPTC and the PIC exist not only to foster discussion among congressmen, but to spread awareness of payments technology issues and, in doing so, move contents of the discussions onto the appropriate law-making forums.

What does this mean?

I say it’s about time Congress got on board with electronic payments.  I guess after years of silently developing a hold on our collective hearts, first with simple credit cards, then with mobile payments and digital wallets - and then breaking many of them with those nasty data breaches - someone had to take notice.

It’s a very good thing, because according to an article from Senator Gary Peters (D-MI), a staggering 70% of consumer spending happens electronically (although the difference between card payments and ACH transactions isn’t specified).  He says that by 2017, consumers will be spending $7.3 trillion per year electronically.  (For more stats on current usage as well as the advancement of payment security in general, you can check out this white paper, Payment Security and Beyond in 2015.)

So, does this mean law-makers will take action that involves credit card payments and data security?  Will the government’s involvement in payments mean more support for small businesses?  A global shift in credit card processing costs?  All things remain to be seen, and, since we’re talking about a government operation, we can expect a snail’s pace.  But, it’s something.

Which is Worse: A Damaged Reputation or the Loss of a Key Employee?

Which is Worse: A Damaged Reputation or the Loss of a Key Employee?

This man isn't sure yet...but he'll know soon enough.

It’s an interesting juxtaposition.

Would your company suffer more from the loss of a key employee, someone who hit his numbers every month, has an exemplary track record with his clients, or whose visionary ideas helped shape the company – or a tarnished reputation brought on by an unforgivable social gaffe or, worse, a data breach revealing the personal information of countless customers?

In order to examine this fully, we’ll need to break it down into smaller pieces: The benefits of having a top-of-class employee working for you, and the negative effects of losing such a person in your workforce.  And, we’ll need to look at the payoff of having a great reputation versus the deleterious effects of having a bad one.

Benefits Brought by a Key Employee

Having a good employee at your disposal obviously carries a string of benefits. 

The work he’s assigned gets done, and, not just that – it’s meaningful to the company, so it ends up bringing in appreciable revenue, revenue which certainly would not have arrived if that employee hadn’t contributed his work. 

Having such an employee can also mean entirely new ideas for your company, from website tweaks that positively affect traffic and search engine ranking to an entirely new, successful product line. 

The possibilities are great.

Bad Effects of Losing that Key Employee

Conversely, what happens when that same employee that created all the extra revenue and had ideas no one else could muster ends up leaving your company?

Certainly you can ride on his ghostly laurels for a time.  But, after that time, you’ll start to see a decrease in revenue because the production that key employee brought to the table simply isn’t there.

 

In time, after the key employee leaves, you might have some vestigial remains of his handiwork (such as that tweaked website you’ve told his successor not to touch) or the new product line that someone else oversees, but you won’t get the innovation back.

In short, you’ll return close to the productivity and revenue levels you were at before.  Your current clients might not notice much – maybe a different voice on the phone – but, you will.

Benefits Earned by a Great Reputation

Good reputation, on the other hand, can be thought of as something that happens when you have a good employee working for you. 

You garner a good reputation when someone visits the website that your star employee helped revamp and has a much easier time checking out and paying for his order.  He might tell his friends how easy it was, and he might even mention how you seem to have diversified your product lines, too.  He might write a review on Yelp, for that matter.  But, the principle is the same.  Good reputation comes from people saying good things about you.

The good thing about good reputation is it outlasts your star employees.  Whereas your influx of keen ideas might slow to a halt if your star producer leaves, people will remember how they felt when they read his work, when they surfed on his website, or when they bought the products he conceived of.  And, they’ll come back for more.

Negative Effects of a Bad Reputation

And, conversely, as good as the effects of a sparkling reputation can be, the effects of a lousy one can be exactly as bad.  And, usually worse. 

You might inadvertently plant a seed of bad reputation by making a faux pas at a large social gathering for your business.  By comparison, you might plant a sequoia grove by inadvertently compromising your customers’ data in a data breach.

Now, we’ve all read negative reviews on Yelp.  Those reviews are the ones that seem to stick the most, and the ones that seem to arouse the most passion.  Without going into the psychology behind it, let it suffice to say bad reputation is a much bigger worry than good reputation is a boon.  Whereas people interpret your good reputation to mean you’ve done mostly good things, people usually interpret a bad reputation to mean anyone’s given experience with you will be unequivocally bad.  No bones about it.

And, what’s more is the fact that a good reputation can easily shift to bad, but a bad reputation has a much harder time turning over to good once more.  A bad reputation outlasts your star employees and your bad apples, too.

So, Which is Worse?  Losing a Key Employee or a Damaged Reputation?

After reading this article, hopefully the answer is clear as day. 

Losing an essential employee might look bad on paper, but you’ll not only retain a good deal of his innovations (in some cases), but you won’t be thought of negatively just because of his loss.  You might be thought of…not quite as well.  But, not badly.

If your reputation’s tarnished, though, forget about it.

Negative reviews on Yelp live on forever, and people glom onto those juicy, bad stories much more than they do positive ones.  I mean, what captivates us when we read books?  See movies?

It’s the conflict.  It excites us.  We can use it to our advantage, of course (for example, avoiding a place that has horrid reviews on Yelp), but that doesn’t change the fact that we’re drawn to it.

That’s just how it is.

How Can You Protect Yourself?

Believe it or not, this article shouldn’t read like a death sentence.  It’s very possible to garner a good reputation and keep it that way.  You just have to be smart.

If that means calculating more heavily what you say in social situations, so be it.  If it means turning the other cheek when someone calls you a name instead of flying off the handle, you can handle it.  If it means investing time into looking into a tokenized security solution - or any number of other data security measures -  for your customers’ secure information, it’s worth looking into.

How Much Money Do Your Customers Owe You?

How Much Money Do Your Customers Owe You?

Dealing with someone who won’t pay you has got to be one of the worst feelings ever.

The money they owe you rightfully belongs to you, and yet you still have to be tactful about asking for it.  And, even then, after all necessary niceties (and more threatening remarks, I’m sure), 1 in 4 business owners still have trouble collecting payments from customers.  Adding insult to injury, a YouGov survey showed that in2013, 11% of business owners nearly had to close their doors because of issues with late or missing payments.  Not only is the issue of late payments pervasive – it’s also potentially deadly (for businesses).

Something You Probably Knew Already

Of course I don’t need to sit here and tell you collecting money that’s yours is important.  A dollar you earn now is a dollar you can use to fulfill all kinds of needs, from stashing it in an interest-bearing account to reinvesting it in your business – and, none of that’s possible if you aren’t being paid on time.  It follows, too, that if enough of your clients take too long to pay you for the goods or services you sold them, you may have to close your business; this not only makes logical sense, but the aforementioned study proves it as well.

And, Something You Probably Didn’t Realize

One thing you probably hadn’t considered was that when you have accountants pounding the phones just to squeeze a few dollars out of your deadbeat customers, it not only stresses them out for a marginal (or nonexistent) return, but it takes them away from the things they really need to be doing, like compiling reports or collecting payments from people who are calling you.  So, the negative effect of dealing with people who won’t pay is actually twofold: You lose productivity when you call an emergency “fundraising” session, and, there’s no guarantee you’ll actually recover the money you’re owed.

Given All That, What Do You Do?

It can be extremely stressful dealing with this kind of situation.  This article on avoiding late payments from clients details five different ways to either convince your worst customers to pay up or prevent the very situations that result in delinquent payments, like unclear business terms or lack of an electronic, integrated credit card processing system.

3 Tips For Managing Cash Flow

If you aren’t an accountant – and, okay, even if you are – managing cash flow can be a daunting task.  Cash flow management, essentially keeping your money as long as possible and being able to project how much of it is headed for your pockets at any given time, serves a few purposes.  It’s a great forecasting tool and a fine way to keep your business healthy, and, scary as it might seem, it’s important to get a feel for it.  Let’s just dive right in, shall we?  I promise it’ll be fun, and, we won’t go too far into the deep end J

#1: Project it Correctly

Projecting how much money you’ll have at any given time (or, for starters, just one specific time in the future) is important because it allows you to make other big decisions and, as the name would suggest, plan or project for the future.  Were you thinking of upgrading a piece of machinery in your warehouse?  Maybe thinking of changing vendors for a specific product?  Perhaps you’re even considering giving your employees raises.  Relying on numbers your accountant prepares for you is perfect, but, if you’re your own accountant, you’ll have to learn to project cash flow yourself.  You’ll have to make educated guesses about a number of things, including your customers’ payment histories and upcoming expenses.

Here’s what you can do in two detailed steps:

1. You’ll have to add up all of your cash on hand, plus the cash you expect to get from various other sources later on.  You’ll need to talk to all of your Sales team, Service or Support members, and of course your Credit or Finance department.  You’ll be asking the same question of all of them: How much cash (in its various forms, payments, interest, fees, etc.) are we going to get, and when are we going to get it?
2. You’ll then need to assess when your cash is going to be spent, and on what.  The more line item detail you have, the better – and, that includes items rent, utilities, inventory, salaries and wages, benefits, standard office supplies, advertising… Everything you spend money on for your business, really.

If you can be very thorough in your research (or just very honest with yourself in how your business spends its money), this is all you’ll need to do.  It’s a difficult undertaking, to be sure, but, if you can prepare one of these cash flow projections per quarter (or, more or less frequently, depending on your preference or your financial state), you’ll know exactly how much room you have to make other adjustments, like the aforementioned big purchases, raises, or anything else you might want to do.

#2: Improve Your Receivables

If you got paid for things the minute you sent out invoices, you’d never have any cash flow problems.  That’s usually not how it works, unfortunately.  Bearing that in mind, there are certain things you can do to ensure you get your money a little more quickly, if not instantly; you can start by making tweaks at the inventory level and making other adjustments at the customer level.  For example:

1. If you have old inventory, don’t just keep it around – sell it for whatever you can get.
2. Invoice customers as soon as possible, and follow up promptly if you sense any sluggishness.
3. Automate payments whenever possible,  Whether this means putting customers on a recurring payment subscription plan or simply using integrated credit card processing that plugs into your accounting system, this will get you your money more quickly.  In the case of using integrated payment processing, or even a virtual gateway, you'll save time every day too, which can translate to monetary savings in increased productivity.
4. Ask that customers make deposits on orders as soon as they’re taken; identify customers that have a history of paying you slowly and institute a COD (collect on delivery) policy.  If you’re not sure how to do that, an outside service like UPS can help.  If this doesn’t help, you can simply refuse doing business with those customers until you can be certain they’ll pay you on time.
5. Incentivize on-time or early payments by offering a small discount.

For a closer look at improving receivables cash flow, this piece on avoiding late payments from customers touches on similar ground and provides some additional tips too.

#2a: Improve Your Payables

If your sales are good, you might think everything in your business is hunky-dory – unfortunately, that isn’t usually how it works either.  Great sales can hide problems originating in your expenses, so it does good to pay close attention to how much money is leaving your pockets and when.  Here are some things you can do to lessen the strain and keep money in your pocket longer:

1. Take advantage of payment terms to the fullest extent.  That means if a creditor or vendor demands a payment in 15 days, don’t make it in 10.
2. If vendors offer you discounts for early payments, consider whether or not a discount will help you before jumping on their offers.  If you need to hold onto your money, you may want to let it ride until the payment becomes absolutely necessary.
3. Rather than send payments via post, use electronic transfers to make payments on things the day they’re due.
4. Don’t choose vendors simply on the basis of price.  Vendors with payment terms that serve you in your financial situation may be better for business overall than vendors with rock-bottom prices that need their payments now.

Let your vendors know about your cash flow situation if necessary.  If you ever need to put off making a payment, at the very least the vendors will have advance warning, and they may even be sympathetic.

#3: Survive Real Deficits

While tip #2a is designed to help prevent cash shortages, sometimes it just isn’t enough and you end up in the red anyway.  This doesn’t mean you’re a bad person or you’ve failed as a businessperson – it just means you couldn’t accurately predict the future, and, until we humans develop some form of ESP, you’re off the hook for that one.  Not being able to pay a bill is a completely normal situation, and, there are some measures you can take to lessen the stress from a bad cash flow situation like this, too:

1. Preventative loans help a great deal, but, banks will be much more apt to lend you money if you ask for it in advance – the longer time you give yourself, the better.  If you come to a bank asking for money you need that day, you’ll likely be rejected.  (You can approach third-party loan companies for next-day loans, but you’ll incur astronomical interest rates, so I would advise against this unless absolutely necessary.)
2. Your bank will come in handy for more than just loans.  You can arrange for your bank to give you a line of credit, which allows you to borrow money (like a credit card) up to a certain limit.  I would take the time to open a line of credit even if you don’t anticipate being in the red – it’s just a good business practice, akin to carrying a personal credit card in case of an emergency.
3. Ask your suppliers for help if you can’t get it from the bank, as those vendors probably know you and your business better than your bank does, anyway.  You can probably get what’s essentially a low-cost loan from vendors just by asking for it, especially if you’ve already informed them of your situation and have been a good customer in the past.
4. Using factoring may help.  Factoring is when you hire an outside service to collect payments on unpaid invoices for you.  The factoring company is compensated by taking a percentage of your invoices, but, you’ll be paid immediately for any invoices the factoring company takes over, so this is a good way to put some money back into your pockets immediately, if only as a last resort.
5. You can also ask your most promptly-paying customers to pay you more quickly, taking care to explain your situation and incentivizing them by giving them a slight, one-time discount, too.  You can also go after your very late-paying customers, offering them discounts for paying quickly as well – if you can get them on the phone.
6. In extreme situations, you can sell your machinery or offer your office furniture or similar assets as collateral on a loan.  In these situations, be sure to make your payments on time or you could risk permanently losing the items you handed over.

Concluding Thoughts on Managing Cash Flow

Okay, so I lied a little in the beginning.  Cash flow management isn't such a fun topic unless you're thoroughly in the black - and, even then, you need to continue to perform cash flow projections to ensure you remain there.  As long as you follow the steps here, you should be at least armed with some good information that will help you in the future.

3 Innovative Ways to Reduce Credit Card Processing Fees

How do you reduce your credit card processing fees?

It’s the age-old question.  How do you pay the lowest rate possible?  Can you get away with processing for free?  What’s the deal with interchange levels?  And, what the heck is a discount rate?

Suffice it to say credit card processing is a strange, multi-faceted beast.  There are lots of moving parts, and things going on that even your processing statement, which is confusing enough in itself, doesn’t detail for you.

Talking about it all would take me the length of a tome, and nobody wants that, so I’m just going to cover what you pay today.  Even what you pay has a few different levels to it – it’s not just a single rate that you sometimes hear about in advertisements on the web.  Without further ado, let’s move to the first item to look at to reduce what you pay out.

Wait too long, pay the price

Good things don’t necessarily come to those who wait – it’s best to strike while the iron’s hot, in my opinion.  While this is an adage I live by, it can very well be applied to credit card processing too.  If you’ve authorized a charge on a credit card and wait more than 48 hours to charge that credit card, you’ll be charged a “standard” processing rate – and, that can be as high as 2.95%, a fair bit higher than what you’ll usually pay.  (And, we’re just talking about the set interchange cost, not the processor’s markup!)

In order to alleviate those sorts of charges, simply make sure you’re settling authorized charges at the appropriate times, taking care not to wait too long.  If you use a virtual gateway, you can usually set it to automatically batch out at certain times (or trigger batching out for certain transactions, like pre-auths).  If it seems feasible for your business, it might make sense to nix pre-authorizations altogether and simply charge credit cards at the invoice level.  In any case, strike while the iron’s hot and you’ll come out on top in this case.

Save some money by saving time

Lots of businesses, especially B2B wholesale companies, are extremely advanced in almost every sense, except when it comes to payment processing; they’ll use systems that are quite disconnected, take too much time to use properly, and, for all their inefficiency end up costing businesses more.  This is due in part to the processing industry, what with most payment processors’ tendencies to rope businesses into contracts, lie, be ambiguous in their language, and other nasty habits – most business owners are apprehensive about doing anything differently when they’ve found a processor that’s at least somewhat fair.  It’s not uncommon to see a manufacturing company use the most high-tech equipment to fabricate their products, yet use a standalone terminal (technology that dates to the 1970s) for credit cards in conjunction with their top-notch accounting programs!  It’s unfortunate.

So, is it really possible to get two good things in one package pertaining to payment processing?  Actually, yes.  Using a credit card processing plugin for your accounting system of choice can effectively reduce your processing fees automatically while making your workload a lot lighter.  Plugins like this work with programs from QuickBooks (as an alternative to Intuit merchant services) all the way to Sage 500 (as an alternative to Sage Payment Solutions).  Here’s what happens:

1. Rather than using a credit card terminal, you input your customers’ credit card data directly into your accounting system, which you would have had to do at the end of the day anyway.
2. The plugin automatically transmits extra information like a PO number, invoice number, ZIP code, freight amount, and other information you enter anyway to the credit card-issuing banks.
3. The banks see this extra information and qualify the transactions at higher security levels, since the extra information makes those transactions harder to duplicate or make fraudulent.
4. The higher security gives you a lower interchange cost (set cost) for the credit cards entered that way – especially for business-type cards and GSA cards.

And, that doesn’t even touch on the time savings.  But, imagine how much time you might save not having to run all around your office to complete one credit card order, then stay a half hour (or a whole hour) after work re-entering credit card data to mark your invoices as paid.  And balance your GL.  It’s a lot of work you don’t really have to do!

Birds of a feather flock together

Ever had the feeling you just didn’t belong?  It happens most often in social situations, I’m sure, but your processor can pull a fast one on you and take you on a bad spending trip – all because you operate in a “high risk” industry, or some other industry they don’t particularly like.  Of course, in an effort to earn your business, they may not always tell you this, but they’ll sure make you pay anyway.  So, what do you do when you’re being silently shunned?

First, take a good look at your processing statement and determine if your overall costs seem fair (and, they will vary considerably depending on the type of business you’re in).  If they don’t, you might consider seeking out a processor that caters to your exact business.  Often, credit card processors will cater to specific industries, like adult novelty shops or firearms dealers, by establishing relationships with other entities (offshore or local banks) that will allow them to process transactions that other processing networks might label high-risk.  Prices will be lower with a high-risk-specific processor, for example, than with a run-of-the-mill company because they don’t have to worry about their backing network kicking merchants away, and for that reason the processor doesn’t have to worry about recouping all sorts of administrative costs by charging you.  Everyone wins.

Yours,

Jeremy

PS - I'm sorry; you still can't get away with processing for free.  When I figure that one out, you'll be the first to know, though ;)

3 Cash-Saving Tips For Adult Merchant Account Owners

Do you have an adult merchant account?  

Yes, you!

As someone doing business and taking credit cards in the adult industry, I'm sure you've heard just about everything in the book - and, I'm also sure a lot of it's negative crap, too.  Adult industries and adult merchant account owners in particular get the short end of the stick in today's wonderfully ambivalent, ambiguously sexualized-but-wait-not-really world we're a part of.  When it comes to adult credit card processing, it's a freaking jungle out there.  What are you to do?

This post is here to help address common problems adult merchant account owners or would-be-owners have with getting decent, competitive costs on their credit card processing.  It's a little more difficult to do than it is for run-of-the-mill businesses, but it's attainable.  Read on!

How to get decent rates on your adult merchant account

Take notes, 'cause this might be on the final.

Suggestion 1: Take control of your chargebacks by obtaining extra information

One of the chief reasons an adult merchant account is considered part of a high risk business is because of the chargebacks you'll often incur.  Chargebacks occur when customers (claim they) aren't satisfied with your products or, more often, when they don't remember ordering them, so they file a dispute with their credit card provider looking to get their money back for the product they ordered from you.  Winning a chargeback battle can be difficult if you don't provide adequate information about the credit card and transaction itself, so you should be absolutely sure to:

• Make sure your customer gives you the CVV code from the back of his credit card.  This is just another piece of information that helps verify the card wasn't being used fraudulently.
• Make sure the customer gives you his billing address.  You'd want this for the same reason you'd want a CVV code.
• For retail adult stores, invest in EMV technology.  EMV isn't mandated yet, and, certainly not everyone uses EMV credit cards yet, but, when the time comes, EMV will reduce fraud pretty significantly because EMV credit cards are inherently harder to replicate.  An EMV-enabled terminal costs you $200 or so.  It's a great investment.

Supplying the extra detail and using EMV card readers won't help you win every chargeback, but it will help you win more than you're winning now.  And, fewer chargebacks mean lower costs for you because your processor doesn't need that extra insurance against your would-be fraudulent transactions.  Everybody wins.

Don't let this happen to your poor customers.

Suggestion 1a (or 2): For retailers, give your business an innocuous-sounding name so your customers (or their significant others) don't freak out at their monthly statement

This may seem silly, but it can help reduce chargebacks as well.  You may not be able to control what products of yours your customer chooses to bring home, but you can control how your business is presented on his credit card statement.  Regardless of the actual name of your establishment, which I recommend you keep so as not to turn away legitimate business, you can choose to you have your adult novelty business show up differently on someone's credit card billing statement.  Using the name of a bookstore or referencing the name of the street address of the business are both tactics you can use.  Be a little creative!

Why isn't this you yet?

Suggestion 3: For wholesalers and manufacturers, use a processing method that can obtain the best base costs on business-type credit cards

Some business owners aren't aware that business cards have a few different set acceptance costs based on how much extra information is provided along with each transaction - that is, the more information you provide, the less you have to pay.  And, of the business owners who do know about these lower costs, not everyone knows if their gateway will accept the information, or even how to do it.  Here's what I suggest:

• If you don't use a virtual gateway for credit card processing (i.e. you're still keying cards into your black box terminal), start there.
• If you do use a virtual gateway, ask your processor if you're getting the lowest costs for business-type credit cards.  They may be able to help you.
• If you know you're getting some discounts from card qualifications, ask your processor what steps you can take to get all the business-type cards you take to qualify correctly.  They may be able to help with that, too.
• If your processor is unable to help you, it may be time to choose another credit card processor.

This is another solution that isn't the entire package but will help lower your costs somewhat.  Again, this is only pertinent to wholesalers, distributors, and manufacturers.

I know it's a little harder than usual to get decent credit card processing as someone who wants an adult merchant account, but, it can be done.  Cost savings are part of the battle, and, by at least utilizing point 1, you'll be doing both yourself and your processor a huge favor, because without the chargebacks, your risk level drops significantly.

Happy trails,

Jeremy

How the rise of e- and m-payments affects you...

2015 will be year of the eCommerce and mobile payments

Unless you’ve been living under a rock (and, yes, withhold your judgment because I lived under a rock for many years), you’re aware at this point that payment processing has changed considerably since the first physical credit card terminal in the 1970s.  We still use those old terminals, yes, but now there are other ways of accepting credit card payments that revolve entirely around the internet, where the cards being used don’t even have to be there.  Nowadays, in fact, you can log onto someone’s website and buy something from their online store with just a couple of clicks; you can walk into a retail store and hold your phone to a scanner and complete a purchase.  Your credit card numbers are scrambled and stored in an electronic vault, and, if anyone touches your information, your bank usually lets you know seconds after the occurrence.  The way payment security and convenience has advanced in the past decade or so has been simply astounding.

Today I want to focus on eCommerce payments and mobile payments because these two payment methods in particular represent the zenith of payment technology (at least for the moment), and as the years stack up, mobile payments will likely gain a great deal of traction, and eCommerce payments will become even more popular than they are now.

Do you wonder why that is, though?  It’s not that people embrace whatever new thing is thrust in front of them—just look at New Coke or minidiscs.  Something else is drawing people to these new technologies.  I think it’s pretty intuitive, actually.

 

eCommerce and mobile payments are EASY

I can’t prove this, but I would wager that both e- and m-payments were conceived of with the intent to make life easier, both for consumers and the shop owners who cater to them.

 

Of course, keying in credit card numbers over the phone has always been possible, and, with the advent of the online payment gateway, embedding that technology in a company’s website so consumers could purchase products directly from the site probably wasn’t much of a stretch—in hindsight, of course.  The idea is instead of looking on a company’s website and calling that company to order a product, you can now save a step and simply click, type a few things, and…you’re done.  And, you don’t have to call, wait for a human to pick up the phone, and deal with bad phone connections—none of that.  (The same goes for third party mobile wallets like PayPal.)

Likewise, pulling out a credit card and swiping has always been possible, but, having everything stored on a smart device makes for a world of new possibilities, like the “smart” choosing of the most beneficial rewards program for a particular purchase, and, not having to worry about losing credit cards because they’re all stored on your phone.  Furthermore, the possibility of integrating digital wallets with other smart apps (and hell, just being able to access everything on the same device!) has the potential to make life easier in ways we haven’t even considered yet.

Bottom line: e- and m-payments make life quite a bit easier.

eCommerce and mobile payments are substantially more secure than you might think

I can’t prove this either, but I would wager that both e- and m-payments wouldn’t be anywhere near as successful as they are (even with mobile wallets in such a nascent stage) if their extra security features weren’t working very effectively.  I’m talking about tokenization, of course.

Tokenization breaks credit card information into disconnected bunches of random numbers that can only be unscrambled with a special formula.  If a hacker ever breaks into a server that utilizes tokenization, the credit card numbers he comes across would be completely unusable.  Ironically, it’s the e- and m-payments’ perceived lack of security that prevents them from advancing even more quickly—at least in today’s age.  Tokenization makes credit card data virtually indecipherable to wrongdoers, but older generations who are used to things done a certain way might not choose to believe it.  (And, I’m not bagging on older or more stubborn folks here.  Point in case: I refuse to buy one of those newer TVs with the higher frame (refresh) rates because I’m not used to how the picture looks, and I don’t particularly like it!  I don’t give a damn if the quality’s better.  It just doesn’t seem like a TV anymore with that kind of picture.  And, by the way, I just learned you can turn that feature on and off.  Still don’t trust it…yet.)  I don’t doubt at all that as new generations are indoctrinated into the e- and m-payments mentality, they will embrace it easily, without a second thought—unlike folks who have experienced something different in their lives.

The net effect of these new technologies

We’re living in some pretty pivotal times right now, and, barring the world ending unexpectedly, these payment technologies will soon become the norm—or, even more the norm than they are now.  PayPal, which is already the standard on so many websites, will be even more prevalent, as well as other, similar services like Amazon Payments.  And, as more companies begin to utilize tokenization—on its own or as a byproduct of adopting Apple Pay or something similar for in-store purchases—transactions will get even easier for consumers to perform on their own, without the help of a salesperson.  And, they’ll be safer than ever before.  So, essentially, everything is going to be easier and safer.  That's how technology tends to work.  Eventually.

I know this is a bit of a departure from my normal doom and gloom stance on most aspects of credit card processing, but developers really nailed these e- and m- ideas.  The potential for safer transactions for all merchants is simply enormous, as is the potential for integrating payments into other apps and aspects of life with digital wallets.  This is truly an exciting time…and, I’m really curious to see what happens next on the payments front.