Frequently Asked Questions about credit card machines
- What is a Merchant Account?
- What is a Chargeback?
- What is a Transaction Fee, and why is this a Potentially “Dangerous” Charge?
- What are the Other Important Fees?
- Can I use someone else's merchant account to do my transactions?
- Card Holder Not Present?
- How Long Will it Take to Set Up a New Processing Account?
- How often will the Merchant Account Provider Pay Me my Money?
- What is a Reserve?
- I just want a machine!
- What is Air Time?
- What is a lease agreement?
- Who is PDQ Machines?
An account issued by a financial institution that allows you to accept payment via credit cards and debit cards. It is used to regulate and organise transactions before it is placed with your business bank account.
A chargeback occurs when a transaction is reversed and the funds are taken back out of your account. Chargebacks are initiated for a wide variety of reasons, such as duplicate billing, credit card expiration, and bank error and customer disputes.
A Transaction Fee is applied to every transaction. You should pay close attention to the fee, because many providers will “tempt you in” with a low discount rate, but a high fee per transaction.
Some providers may charge as much as £1 per transaction on debit cards and 2.5% on Credit cards. So you could sell a product for £1, only to be charged a debit card transaction fee of £1, and the provider benefits...you lose out.
Other important fees to consider are:
- Air time Fee’s (a per transaction fee applied by the network provider, and this ranges anywhere from 10 pence per transaction to 30 pence per transaction depending on the provider)
- Chargeback Fee (a fee per chargeback, and this ranges anywhere from £25 per chargeback to £50 per chargeback, depending on the provider)
- Monthly Account Maintenance or Membership Fee (a monthly fee charged for the use of your account)
No, this practice is known as "credit card laundering" or "factoring." It is against the Visa® and MasterCard® Scheme Rules. Using someone else's merchant account to process your credit card transactions can lead to heavy fines and possibly more severe penalties. Also, at minimum you will put the other person’s merchant account at risk, and in most cases the merchant would lose their Merchant account
'Card Not Present' is a term used to describe transactions, such as Internet, Mail, and Telephone Orders, when the customer provides their credit card details but not in person. Many banks view this as a 'High risk Business' which may result in higher transaction fees. Banks consider face-to-face transactions, where the credit card and the customer are present, less risky. In face-to face scenarios, instances of fraud and chargebacks are significantly lower. As a result, rates are quite a bit lower for 'Card Present' transactions as opposed to 'Card Not Present' transactions
The turnaround time can vary from company to company, as this depends on a number of details including company location, products sold, risk factors, and sales medium, to name a few.
We aim to process applications and gain approvals within three weeks, but this timescale is approximate. The timescale depends if you are seen as a 'High Risk Business' or if you fail different stages of the 'KYC' (Know Your Customer) Process. In recent times these security checks have increased and have a delayed affect on approvals.
This depending on the Merchant provider. Some remit payments weekly, others every two to three business days.
A Reserve is a percentage of your processing revenue that the merchant account issuer will retain, or hold back, for a period of time, to mitigate against the risk that the issuer is absorbing by providing you with a merchant account. Generally, reserves are set at 5% or 20%, and begin to be paid back after one to six months.
So, if the rate of reserve were 10% and you process an order for £1000, then £100 would be retained by the merchant account issuer, held in reserve and paid back to you in six months. Of course, new reserves continue to be collected even after initial reserves are being paid back, so that the issuer always maintains a one to six month 'float' to mitigate against risk.
Not a problem. If you already have a Merchant Service Account, we can supply you a machine to almost any bank in the UK, all set up and ready to go. Just complete the form.
If you are using a mobile machine, you need a GSM/GPRS Sim Card. This allows the mobile machine to connect to a network that sends data to your acquiring bank. We would normally use Orange, O2, or Vodafone SIMs to do this. There is a cost involved when sending data through a network, based on the monthly amount of data you send over the airwaves.
You can only use a SIM card provided by PDQ Machines, as standard SIMs do not work in our machines.
Typically a written and signed lease agreement is a legal contract and means the terms can be upheld in a court of law. Before signing an agreement it is imperative both parties thoroughly read and understand all terms of a lease agreement to legally protect themselves.
'PDQ Machines' is the trading name adopted by Electronic Card Acceptance Co Ltd. (ECAC).
ECAC process all applications before they are sent to Elavon Merchant Services for approval.