New Employee

Orientation
Packet
Orientation Topics
Introduction to Merchant Accounts
What is a merchant account?
What to ask before signing up for a merchant
account?
What is a Cardholder?
What is an issuing bank?
How are transactions processed?
Who does the Credit Card system protect?
Cardholders Expectations:
What are Charge backs?
Retail Merchants
Online Merchant:
Shipping Issues?
Cardholder Relation:
Honoring Refunds:
Submitting a deposit:
Summary:
NOTE: Packet does not include MBN PAYMENT SYSTEMS Training is available online
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Table of Contents

Introduction to Merchant Accounts

...................................................................................................................................... 1

What is a merchant account?

.............................................................................................................................................. 2

What to ask before signing up for a merchant

account?
.......................................................................................................................................... 3

What is a Cardholder?
............................................................................................................................................. 4

What is an issuing bank?

................................................................................................... 5

How are transactions processed?

...................................................................................................................................................... 6

Who does the Credit Card system protect?

............................................................................................................................ 7

Cardholders Expectations:
...................................................................................................................................... 8

What are Charge backs?

.................................................................................................................................... 9

Retail Merchants
................................................................................................................................................ 10

Online Merchant:
.................................................................................................................................................... 11

NOTE: Packet does not include MBN PAYMENT SYSTEMS Training is available online
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Shipping Issues?
............................................................................................................................................. 12

Cardholder Relation:
....................................................................................... 13

Honoring Refunds:
.............................................................................................................................................................. 14

Submitting a deposit:
......................................................................................................................... 15

Summary:
...........................................................................................................................................16

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Introduction to Merchant Accounts

The subject of merchant accounts is probably one of

the most difficult subjects to understand. There are
so many questions that come up, and much of the
time people answering them are high-powered
sales people who typically slant the answers in their
own direction to generate a sale. Our advice is to
take your time and research

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What is a merchant account?

A merchant account is the ability for a business

owner to accept credit cards online or in a retail
atmosphere. It allows you to accept the credit card
transactions for which gets processed and
deposited into your bank account. A merchant
account is an industry term when a business
owner / merchant and a bank have contracted to
accept credit card payments. Establishing an
account with a bank, Independent Service
Organization (ISO), or Merchant Service Provider
(MSP) allows you to process credit card transactions
or electronic payments received from your
customers. The bank, ISO, or MSP will deposit the
sale proceeds into your business checking account,
less a small commission.

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What to ask before signing up for a merchant
account?
Before signing a Merchant contract, you should take
the time to research merchant service providers
that offer a single-source solution for your retail or
Internet business. As a merchant, it is important
that your concerns or issues be addressed 24/7 and
with one phone call or email. Take into account the
level of assistance received during your selection
process. Did you reach an automated voice system
or a real person that was friendly and helpful? Were
you placed on hold or was your call transferred to
an available representative? Were technical needs
addressed quickly and processing questions
answered thoroughly? Most importantly, did the
merchant provider offer inclusive services so you
did not have to contact other multiple vendors for a
payment gateway, shopping cart, POS terminal
equipment and supplies, et cetera?
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 What is a Cardholder?

A cardholder is a person who gets issued a credit

card from their bank or financial institution.

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 What is an issuing bank?

It is normally the bank that issues the card to

cardholder.

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How are transactions processed?

Once you are a merchant account customer you

will start taking credit cards either online or in a
retail atmosphere. At that time the credit card
transaction is done buy swiping with a credit card
machine or virtual terminal. The transaction is
then processed by your Merchant Account
Provider and then deposited into your bank
account.

There are many instances where a red flag can

arise if there is any reason of fraudulent behavior
or if there is a substantial increase of volume
happening. There are transaction rates and fees
that are assessed monthly and per transaction and
based on your choice of processor this amount
varies.
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Who does the Credit Card system protect?
When that transaction is approved you are making
a promise and commitment to deliver those goods
to your customer. There are many implications a
merchant can come across if the goods are not
delivered and are faulty. There are many cases
depending on industry that will inquire a certain
amount of charge backs if goods are not as
promised.

There is no way the system can recognize the

validity of your commitment to your end user so
the merchant must always remain in good
standing with the sponsoring bank and as well
with all parties involved. The protection is for both
sides and is not bias towards one or the other. The
main goal of the Credit Card Processor, Merchant
and customer is to supply resources, goods and an
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adequate system that can provide confidence that
all transactions will go smoothly.
Cardholders Expectations:
There are many instances in the world of credit
card transactions and online shopping where the
cardholder isn't satisfied with the goods or
performance of the merchant. There is times
where the customer is unsatisfied and want there
money back (return)
If the customer doesn't receive the goods or
appropriate services retrieval is issued and is sent
to the cardholders bank in which is relayed over to
the Merchant Account Provider who contacts the
merchant responsible. This seems like a chain
reaction of events and it definitely is but all parties
involved must be contacted accordingly.
You as the merchant must retain all copies of
invoices, receipts and documents to protect
yourself and all parties involved. When shipping
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commodities online the merchants must protect
themselves and provide tracking information to
your customer to avoid any mishaps or
misunderstandings. You must try to eliminate
charge backs completely and avoid having to deal
with your issuing bank and sponsored banks. There
are many instances where your account can be
cancelled and will become nearly impossible to
open another one without paying high-risk fees.

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What are Charge backs?

A charge back is where the processor has been

notified by the cardholder that there was
misrepresentation in goods received or services
and is asking for a refund. The main thing to
remember about charge backs is try to avoid them.
You must have a system in place where it allows
the customer to be confident in the transaction. In
case of a lost card or stolen there are many
delinquents who try to take advantage of these
individuals and try to charge credit cards without
validation and you have to pay for it in the long
run.

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Retail Merchants

As a retail merchant having the machine and

ability to look at the card and verify its ownership
is everything. This gives validation to the system
and identifies the cardholder to the issuing bank.
Note: The transaction rates are lower when
actually swiping the card.

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Online Merchant:

If you are accepting credit cards online then you

must have a system in place that safeguards you
and the customer. In these instances complete
information is necessary. For example: phone
number, address, email, and cvc code in the back
of the card and at time if necessary contacting the
cardholders issuing bank to verify user. Make sure
that there are security measures in place when
applying for a merchant account.

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Shipping Issues?

Make sure not to ship to an address that is not the

same as the billing address.

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Cardholder Relation:
If time permits try to contact the cardholder and
verify his address and product details if any to
secure yourself with the order.

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Returns:

Make sure the customer is aware of any returned

or restocking fees and warranty. You must be
obligated to come through on your business
propositions and promises because the customer is
always right in most cases. There are costs
involved in returns so be aware of these costs so
not to hurt the bottom line.

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Honoring Refunds:

In most cases all the refunds and credits should be

done in a timely fashion. If they are not expedited
immediately this could cause a charge back and
avoid other fees involved.

Hold true to your refund policy and exchanges and

keep records of all the transactions and remind
yourself to make the credits accordingly. Your
reputation as a Merchant is online if charge backs
accumulate in a short period of time and you can
be recognized as a non-legitimate business. Your
issuing bank is counting on you to make prompt
decisions on your refund policy. Once again being
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cancelled or removed from your processor it will
make it difficult to go elsewhere.

Submitting a deposit:

The merchant is responsible for submitting a

deposit to the cardholder if goods are not received
or if returned. The money generated from a
transaction from the point of movement from the
cardholder to the merchant's bank account is
technically not the merchants until goods are
received and are satisfied. Two parties, the
cardholder's bank and the merchants processing
company provide the protection of the Cardholder
and Merchant. The deposit format safeguards the
two on a joint agreement that if funds are
accepted and goods are received then a deposit
and chance of charge back can be eliminated.

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Summary:

The issuing bank protects the cardholder and their

processor protects the merchant. The two work
hand in hand with the cardholder to insure that
both parties come to an agreement over stated
goods and services. Below are a few things to look
for.

1. Are you fulfilling your shipment dates and

quality commitments according to the
expectations you have set in the mind of your
credit card customers?

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2. Are you promptly responding to Cardholder
requested returns and refunds according to your
policy, and submitting the appropriate credit
transactions to your Processor?
3. Are you doing everything you can to verify that
the credit card numbers you are accepting for your
goods and services are from the actual
Cardholders, and not from someone else that
happens to know the card number?
4. Are you meeting the terms of your agreement
with your Processor regarding charging the card
and timing of delivery?
You must be aware that the safest methodology of
accepting credit cards is by having the card
present. In online situations where verification
isn't possible be careful that the card and address
is matching along with the cvc in the back of the
card. Verify with the online merchant provider of
top security measures within there system. We
here at Infomerchant hope you and your business
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continued success and are to help in providing you
with the best merchant solutions possible.

NOTE: Packet does not include MBN PAYMENT SYSTEMS Training is available online
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