What is a Charge back?
A charge back is a credit card transaction to which the consumer objects, typically because the product or services were not performed, did not arrive and/or theft of a credit card. The cardholder issues a complaint to the credit card issuer in writing. If product or services were issued or delivered then a merchant can argue for arbitration.

What is a discount rate?
The percent that is discounted from a sale that the merchant is charged to process a credit card sale. The discount fees are distributed to the member banks of Visa and Mastercard to cover the Issuers card losses, Banking dues and assessments, processing fees and finally the markup for underwriting the merchant account.
A merchant account is no different from a line of credit. The underwriter (Network 1 Financial) assumes that the merchant is acting in good faith they when process credit cards. If you are processing $10,000 dollars worth of credit cards per month, the underwriter assumes those transactions are honorable and that there will be a limited number of charge backs associated with those transactions. Please keep in mind, most fraud come from merchants negligence or fraudulent intentions…

What is a transaction fee?
A transaction fee is the fee associated with a transaction, authorization or settlement of a credit card.

What is a statement fee?
A monthly fee to cover the issuer’s statement cost, and ACH/EFT transactions to merchant account.

What is a monthly minimum fee?
The industry monthly minimum ranges from $25 to $35 as a standard. If you are processing a $10,000 dollars or more per month, then the monthly minimum is not a consideration. It is not a month maintenance fee, rather a minimum in regards to you sales volume and discount rate. Banks dislike underwriting inactive businesses.

What is verbal authorization?
A verbal authorization occurs when a merchant calls the credit card processor directly for a verbal authorization. A merchant generally does this when access to the Internet or their physical terminal is not available. The verbal authorization provides assurance that the cardholder is valid and that there are funds available in their account. There is an added cost involved when a merchant needs to secure a verbal authorization, however, the cost should be specifically idenitfied and presented within the merchant account contract. Additionally, the total numer and total fee for verbal authorizations should be noted separately on your monthly processing statement.

What is a non-qualifications fee?
It is the addition fee associated when a retail store with a retail merchant account, processes a non-swipe credit card transaction. The transaction is down graded to a higher discount rate (to a non-qual rate). It is impossible not to be charged because there is information contained on the credit card that the processor must have. A typical non-qual rate is 1% to 1.5%. Thus, if your retail store processes a fair number of non-swipe transactions, you should consider a Mail Order/Telephone Order/Internet (MO/TO) Merchant Account because the discount rate is lower. A non-qual rate for MOTO transactions is a transaction that is not batched in 24 hours from transaction time. This transaction is downgraded to a higher discount rate.