What Is Level III Payment Processing



What Is Level III Payment Processing

Most businesses that sell directly to the consumer use Level I credit card processing for handing transactions with Visa, MasterCard and American Express. However, if you specialize in doing business with other businesses and your primary business model is conducting business with small to medium sized businesses, you might be using Level II processing or perhaps should be using Level II. This is ideal for ground transportation companies who do business between each other. We'll save that for another article and go right to Level III processing.

Level III payment processing is used for transacting business with larger corporate or government purchasers. Using Level III will help optimize interchange rates and save you money as a merchant. With Level III processing, there are many more fields of information to complete on each transaction that help the accounting department of the purchaser reconcile purchases. There may be anywhere from 15 to 100 fields of information to complete based upon the cardholder entity.

Read more ...

What Is 3D Secure



What Is 3D Secure

The 3D Secure authentication is an additional fraud prevention program that allows shoppers to create a password to their credit card that is verified whenever a transaction is processed through a site that supports the use of 3D. The addition of password protection allows extra security on transactions that are processed online through eCommerce transactions. 3D Secure requires customers to enter an additional password after the checkout completion to “verify” they are truly the cardholder.

3D Secure stands for 3 Domain Server, there are 3 parties that are involved in the 3D Secure process : 

  • The business the purchase is being made FROM, such as yours.
  • The Acquiring Bank (the bank funding the transaction
  • The Issuing Bank who issued the VISA or MasterCard

The program is a cooperative effort of Verified by VISA (VBV) and MasterCard Secure Code (MSC).  It is the most recent fraud prevention program available at the moment and commonly used by most companies who have a lot of eCommerce orders such as pizza places like Dominos and Pizza Hut.

3D Secure is also the only fraud prevention program that offers companies liability coverage for transactions that are verified by the additional checks.  This provides additional protection to merchants who implement this program.

Read more ...

What is an "Effective Rate"



What Is An “Effective Rate”

You may have heard the term “Effective Rate” when discussing credit card processing.  You may believe that a processor mislead you when they promised a particular rate. The truth is, they would not promise you a particular effective rate because the overall cost is not controllable. There are too many variables including how the card was processed (phone, manual key, swiped or chipped) as well as the type of card used for the transaction.  The effective rate of a credit card processing statement is the total processing fees divided by the total transaction amounts. The best way to explain an effective rate is to show some examples:


Example #1, we’ll use the following from a competitor:


The total sales volume is highlighted in green, and the total fees paid has been highlighted in red.  By dividing the total fees into the total sales amount, you would arrive at 5.996%.  This is the “effective rate” for this particular example. 

Example #2 from a Chosen Payments Client Statement



In this summary view, we divide the amount of $107.47 into the Amounts Submitted of $5,837.02 to show an “effective rate” of 1.84%.

Read more ...

What is the Flavor of Your Business?



What’s The Flavor of Your Business?


Have you ever noticed that not all tacos are created

equal?  Taco Bell is perhaps one of the most well-known

taco purveyors in the United States.  You can find one in

almost any city.  They are cheap.  They are convenient. 

They have drive-thru lanes. They make buying a taco

super convenient. That’s probably where the buck stops. 

I don’t think anyone ever phoned their mother or best friend to

describe how glorious a taco was that came from Taco Bell. 


Read more ...