Credit Card Merchant Knowledge Base

Here's your chance to learn details about different terms and phases used in the merchant account industry. If there is a payment processing phase that is commonly used that you would like to recommend here please contact us.

Credit card (visa, MasterCard)- operates like an on demand loan. The traditional credit card has the option to pay in full or defer payments. The consumer has the option of paying back the loan money in full or paying back a portion of the money with incurring interest charge on the unpaid portion.

Charge Card (American Express, American Eagle)- Provides short-term credit. The consumer must pay the entire debt of a charge each month. There are no interest rates but late fees are usually present if the payment is delayed.

Debit Card- Issued jointly by banks and credit providers. Instead of accessing a line of credit debit cards access a bank account directly.

Prime Rate- this is the rate at which banks will lend money to their most favored customers. The rate will move up or down with changes by the Federal Reserve.

Savings Bond- A bond issued by the United States government in denominations of 50 to 10 thousand dollars. A bond can not be bought or sold.

Fixed Mortgage rate- the interest rate on the amount of money borrowed when buying a house. The fixed interest rate is a constant percentage.

Adjustable Rates- the interest rate on the amount of money borrowed when buying a house. An adjustable rate is never constant. If it goes up the customer pays more but if the rate declines the customer pays less.

Treasury Securities

Bills- Treasury bills are short-term securities that mature in one year or less from their issue date. The interest rate is the difference between the purchase price of the security and what is paid to you when it matures.

Bonds- Treasury notes are securities that pay a fixed rate of interest every six months until they mature. Bonds mature in more than ten years from their issue date.

Notes- securities that pay a fixed rate of interest every six months until they mature. Notes mature in more than one year, but not more than ten years from their issue date.

New car loan- the interest rate on the amount of money borrowed to buy a new car.

Used car loan- the interest rate on the amount of money to buy a used car.

Bank Accounts- a fund that customer has entrusted to a bank and form which they can make withdrawals.

Federal Funds Rate- The interest rates at which banks and other depository institutions lend money to each other.

Discount Rate- The interest rate at which an eligible financial institution may borrow funds directly form a Federal Reserve Bank.

Capitalism- aka- “the free enterprise system” which was created is the economic system where individuals own the factors of production, and the private sector (consumers and business firms) make most of the decisions. Capitalism is a recent historical development and represented a dramatic change in the way people have handled social economic problems.


Avoid these mistakes when choosing a merchant account provider

Choosing a merchant account provider is an important decision for a business - good partnerships can help contribute to a company's cash flow and reputation, while partnerships that are less than ideal can hit merchants with hidden fees and limiting contracts.

To help them make the best decision in their choice of merchant account provider, Merchant Account Guide recently published a list of common mistakes that businesses make when choosing a provider.

Topping the list was misunderstanding the fee structure. Many merchant account providers do not charge a monthly or annual fee, but instead charge higher or additional transaction fees. Companies should fully understand how they will be charged, and for what.

The second most common mistake was along the same lines - failing to read the contract thoroughly. The article advised businesses to ask for the contract, terms and conditions, and service agreement before making a decision.

Businesses should also consider the security offerings of the merchant account provider in question. Are the POS terminals up-to-date and PCI compliant? Is there fraud protection included in the merchant services? These are important questions to ask.

Another recent article from Merchant Account Guide advised businesses to assess their needs and goals for payment processing before choosing a provider, to ensure that their needs are met. ADNFCR-2514-ID-19543843-ADNFCR