Could Square’s Customer Service Issues Affect Their Future?

Phone SwipedSquare has been great for helping micro merchants accept credit cards and has had a largely positive impact on the merchant services industry.  However, their much maligned customer service issues seem to really be catching up to them just as they are gearing up for an IPO.  I thought this recent article with the details that was in the LA Times was important enough to share.  You can read all about it here.

I personally think they have a great concept that is great for very small business owners to accept credit cards.  These are businesses in the past that would have found accepting credit cards cost prohibitive if they were to only take an occasional card.  However, it’s important to service your clients, no matter what size they are.  I personally think that Square will listen to their customers and start providing a service, or suffer the consequences.

For customers that want the convenience of mobile card acceptance at a better rate, with actual live customer service, there are choices available.  I personally recommend Phone Swipe.  For more information, go to .


Robert McBeath is a Certified Payment Professional and President of Cornerstone Business Solutions.  Robert has extensive experience offering merchant services and cash advances to business owners. Visit or call him at 888.979.4731.

Merchant Services Application Overview

This brief overview of a merchant services application uses a Signature Card Services, Merrick Bank standard application.  However, most every Visa/MasterCard/Discover Independent Sales Office/Merchant Sales Provider will ask for the same information.  The arrangement of the application might be different, but the differences will be largely cosmetic.  One area that might differ is the rates section and how that is disclosed, but the schedule A (pricing) is not discussed in this particular video, but will be posted in a future video.

My intention for this video is to educate merchants on the application document needed to accept credit cards.  Often I’ve noticed that competitors will show the application documents only long enough to get a merchant’s signature.  I wonder what they are trying to hide in their schedule A and contract?  The application shouldn’t be a mystery at all and mine can be found right here:


Navigating Through the Risks of Credit Card Processing author Bill Pirtle

Author Bill Pirtle’s first book, Navigating Through the Risks of Credit Card Processing is the best and most comprehensive guide for credit card acceptance available, and sadly even most of those business owners that know about it will never take the time to read it.  However, many of the most professional bank card representatives have utilized it as a resource in behalf of their clients.  Personally I’ve not only given many copies of this book out, I’ve also used specific chapters to help educate potential clients.
Since first reading Bill Pirtle’s work, I had the opportunity to meet him and get to know more about his philosophy.  Over the years we’ve also shared many laughs and grown to be friends beyond the industry.  I’m very proud of his continued success in the industry and I’m excited to post this phone interview where he explains his books, passions and how it all started.  Next week I’ll be posting part 2 of the interview where he’ll share his own top three tips for accepting credit cards as well as a few entertaining stories!
For more information on Bill Pirtle and his second book, Credit Card Processing for Sales Agents, go to his site


Robert McBeath is a Certified Payment Professional and President of Cornerstone Business Solutions.  He has extensive experience offering merchant services and cash advances to business owners. Visit or call him at 888.979.4731.


Death, Taxes and PCI-DSS Compliance

pci-compliance-cardMarch 15th of this year marked the 100th anniversary of the 16th amendment being ratified.  At that time, the U.S. was officially allowed to start collecting income tax.  I can only imagine how people must have felt to suddenly be forced to comply with reporting their income and paying a portion of it to the government.

I can relate because I was in the merchant services industry for a decade before Payment Card Industry Data Security Standards Compliance Rules came about.  I feel much the same way about it as I do about paying income tax.  I think most merchants that accept credit cards will agree with my opinion.  It’s complicated, we don’t like it, don’t really have the time to deal with it, but we don’t have a choice so let’s get it over with.

So, much like pulling a band aid off, let’s make this quick, cover the very basics that you need to know, and get it over with:

“What is PCI Compliance?”  Payment Card Industry Data Security Standards was created as a set of rules for all businesses that accept credit cards to protect the card holder’s data they are processing.  Essentially, the card brands want to ensure that businesses are accepting cards in a secure manner and are ultimately liable for any breaches.  Possible card holder information leaks range from employee theft of one customer’s card information all the way up to computer viruses in POS systems, and even processor hacks, such as the 2008 Heartland Payment Systems compromise of millions of transactions.  The Standards are set as a way to minimize these risks.

“As a small business, do I have to be PCI Compliant?”  Yes, whether we like it or not, all merchants are contractually obligated to not only be PCI compliant, but also be certified as such.  The ‘big four’ are very serious about this, and pushing all the processors to get their customers compliant.  As an agent, it’s my job to inform and help my customers with this mandatory regulation.

“What if my business just ignores the PCI requirements?”  Well, unfortunately many businesses do and it’s an unnecessary and severe risk to the health of a business as well as an added expense.  Most ISO’s are going to assess a business a $20 or more monthly penalty to offset the risk for being non-compliant but that’s minimal compared to where the real cost lies. The goal of meeting the standards in the first place is to identify and minimize the risk of an expensive compromise of sensitive customer information.  Any breach of data can be catastrophic to a business.  If this happens to a non-compliant business, fines range up to $500,000 and would certainly be the DEATH of most businesses.

“So what does it mean for my business to be PCI Compliant?”  A business that accepts credit cards must be certified compliant.  The PCI Security Standards Council has approved more than 130 Approved Scanning Vendors (ASVs).  These approved companies assist businesses with a Self Answer Questionnaire (SAQ) and also a network security scan for merchants that store data or are processing via an internet connection.  When all criteria is met to satisfaction, a business will be certified PCI compliant.

“Where should my business go to get this PCI Certification?”  Although in theory merchants could utilize any of the ASVs or possibly even self certify, the bank card processor is going to have a relationship with an ASV that they will want utilized.  When a merchant account is established, the provider will help establish a relationship with an ASV that will then report to them when the business is certified.  Communication may come directly from the ASV.  My personal recommendations for ASV’s are ControlScan and Justified Data Security.

“Alright then, what do I have to do to get PCI Compliant?”  The ASV will give you their website with a secure login ID and password.  Login and do the SAQ, which is a series of questions that will assess card acceptance systems and evaluate risk.  If you are utilizing a POS system or processing through an internet connection, then a scan will be required as well.  A scan is a fairly simple press of a button that will allow the ASV to remotely search for security risks utilizing their software.  When the SAQ evaluation and the scan is passed, a PDF of a certificate is provided.  If utilizing the ASV recommended by the processor, they will automatically be notified and their systems will be updated.

“What if I need help with my SAQ?”  The ASV will provide you a phone number to their qualified customer service agents that can even help walk a merchant through the questionnaire quickly.   Unfortunately, neither the agent nor the bank card processor customer service can help with these issues as they are not approved vendors by the PCI Security Council.

“How much will this PCI Compliance cost?”  Pricing varies among ASVs and services required.  A small business can expect to be charged between $79 a year to $29.95 quarterly.  Although services come from an outside vendor, usually charges will come through the merchant account and will show up on the merchant statement.

“I have to do this PCI Compliance Questionnaire every year!?!”  Yes.  Being PCI Compliant is not a onetime event.  Security is an ongoing responsibility for merchants accepting cards.  Every year businesses will be contacted to re-validate their status.

Okay, that’s PCI in a nutshell.  Now, if you’re the type that likes paying taxes and find tax code interesting, you might also appreciate much more detailed information on PCI Security Standards by going directly to the official Security Standards site.

Interchange Basics When Accepting Credit Cards

When I talk to a new business owner looking to accept credit cards, one of the first questions is naturally, “How much does it cost to take credit cards?”  However, if you talk to a business owner that already accepts credit cards, if he’s completely honest he’d probably answer, “I have no idea how much it is I’m paying or how they come up with that bill every month!”  I’ll do my best in simplifying a very complex topic so new and old owners alike can feel more comfortable in assessing the costs.

When it comes to paying merchant services fees, businesses are either paying way too much for a very simplified billing structure,(ie. Square) or may or may not be getting a great rate with a more complex billing plan.  What makes this even more confusing is that there is no uniform billing structure in the merchant payment processing of bank cards.  Each processor has its own format and even within each processor, there are numerous different fees that may or may not be charged as well as various pricing methods.  I often wonder if many of the processors purposely utilize confusing billing methods to keep the merchants in the dark.

I do know that a big factor in the complexity of merchant statements is the wholesale cost to the merchant provider in the form of interchange.  Interchange is the underlying consistent cost to every processor that ultimately goes to pay the banks that issue the credit cards.  Every processor is assessed the same buy rates on the cards they process.  This cost, as well as others, must be passed on to the merchant.  It is up to the processor how they pass the costs on, mark them up and bill the merchant.

So often I get asked, “Okay, how much is interchange?”  And that’s where I take a deep breath, because it’s not an easy answer.  Interchange fees aren’t just one rate.   Anyone can go to the Visa and Mastercard sites and see the rate structure for themselves.  Click the links here for Visa and MasterCard.  As of this writing, the April 2013 structure is in effect, but category changes, rates change and additions are added approximately every April and October.  You’ll notice that Visa’s rate sheet is ten pages with about 100 different categories.  Mastercard will just make your head spin with 131 pages and hundreds of categories!   Basically the various categories have different fees consisting of a percentage and a transaction fee.  These rates are based upon different variables including the type of card, industry type accepting the card, how the card was processed, and even the issuing bank.

So the next question I often get is, “Well, can you give me a ballpark of what interchange is?  Maybe an average would be helpful”.  Unfortunately, even that is going to fluctuate greatly based upon the business model, average ticket, card mix and other factors.  It will even vary from month to month for each merchant.  I’m very reluctant to quote any kind of estimates, since I can’t predict what type of cards will be accepted.  However, by looking at the charts, interchange can range from .05% and 22 cents for regulated check cards all the way up to 3.25% and 10 cents for some Mastercard credit cards.

Interchange FlowAlthough interchange is the largest set cost to the processor, there are additional processing costs.  Dues and Assessments, NABU fees, APF Fees, Cross Border Fees, FANF and so on are all paid to the card brands.  For more detail, a quick google search should leave you scratching your head.  For now, let’s just say Visa, Mastercard and Discover will get paid roughly .10% and about 2 cents per transaction on volume and a Visa Fixed Acquirer Network Fee that starts at $2.00 a month per merchant.

Processors also will have a cost to process through the networks.  These are known as authorization fees or transaction fees.  All of these fees are before operational costs, marketing costs, risk and loss costs etc.  All must be covered and somehow a profit must be made as well.  Depending on the rate structure a merchant has, he may not see all of these fees clearly, but the payment processor is charging, in some manner, enough to cover their costs and also include a margin for profit.

As you can see, even as simplified as I can make this, there is a high level of complexity with Visa/Mastercard/Discover processing costs.  As a merchant, you don’t necessarily have to be an expert at interchange tables, but you’d better have a relationship with a trusted payment card advisor that will help keep the end costs reasonable.

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