General
Merchant Accounts
Authorizations and Deposits
Sales Drafts
Credits
Chargebacks and Retrievals
General
Who is Element?
Element Payment Services is a payment processor that delivers secure credit, debit, ACH and other payment solutions to its customers. Element's merchant payment processing solutions are cost-effective, high quality, and PCI DSS-compliant.
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What is PCI DSS?
This is an acronym for the Payment Card Industry Data Security Standard. PCI DSS
is a set of security standards that were created by the major credit card companies
(American Express, Discover Financial Services, JCB, MasterCard Worldwide, and Visa
International) to protect their customers from identity theft and security breaches.
Under the PCI DSS, a business or organization should be able to assure their customers
that its credit card data/account information and transaction information is safe
from hackers or any malicious system intrusion. There are 12 key requirements to
achieving PCI DSS compliance.
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What is Interchange?
Interchange is the percentage and transaction fee charged to merchants to process
credit/debit card transactions. Interchange is priced at the transaction level and
depends upon the combination of industry category code, the method by which cards
are accepted, the card product, and sometimes even varies by transaction size. All
banks and merchant processing companies operate from the exact same Interchange,
Dues and Assessment costs.
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What are Dues & Assessments?
Dues & Assessments are processing fees merchants pay to the Card Associations to finance their roles in the following:
Operating the network
Setting rules
Setting pricing
R&D (develop new technology, combat fraud)
Marketing/Branding
They are a set percentage of the sale and are generally collected on a daily or monthly basis.
With Monthly Assessments, merchants pay on or around the first of the month via an ACH transaction for the previous month's assessment fees.
With Daily Assessments, fees are debited from each batch. Additionally, on the last day of the month, the merchant is assessed additional fees which may include charges for reporting, authorizations, international or cross border transactions, etc.
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Why are there different rates on my statement?
The rates vary based on the amount of risk involved in the transaction. The lowest
rates will always be the ones where the customer is present and the card is swiped
and a receipt signed in a face-to-face transaction. The credit card companies view
these types of transactions to be fairly low in risk for fraud, whereas internet
transactions and transactions where orders are taken by phone or mail are generally
considered higher risk since the customer is not present and the card is not in
hand.
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Who do I contact for help with my account, my terminal,
or other merchant account-related topics?
Contact Element Payment Services' 24 x 7 Support at 1.866.435.3636.
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Merchant Accounts
What is a merchant account, and do I need one?
A merchant account is set up with a financial institution to allow you to accept
credit card payments directly from your customers. All money collected through your
merchant account is deposited directly into your business checking account within
2 to 4 business days. You need a merchant account if you want to take credit card
payments from your clients using your own business name, and have the money deposited
directly into your business checking account. A merchant application must be filled
out, signed, and approved in order to set up a merchant account, and this application
serves as a contract with Element for merchant payment processing services.
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Do you offer merchant accounts to businesses outside the
United States?
No, not at this time.
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What Card types are accepted?
All cards are accepted, including MasterCard, Visa, American Express, Discover, and JCB; as
well as debit cards.
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How do I get set up for Discover Card and American Express?
If you have an American Express merchant ID number, this needs to be provided to
us on the merchant application; or you can elect to apply for an American Express
account (also on the merchant application) and Element will handle the account set
up on your behalf. For Discover, due to their recent changes in policy and procedure
for obtaining a merchant account; Element will apply for a new Merchant ID from
Discover, even if a previous merchant account existed.
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How long does it take to get an account set up?
From the time we receive your application, it generally takes 1 - 3 days to receive
your approval. If you are ordering a equipment (terminal, PIN pad, card reader)
it is shipped out upon approval, and will generally reach you within five business
days. You can begin processing as soon as you have received your designated product(s).
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What if I don't get approved?
We have an average 98% approval rate, so it's very unlikely that you wouldn't get
approved. We will go over all the details of your business before you apply, so
we will do our best to be sure that you will get approved.
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How long does it take to receive our funds once an order
is processed?
Funds are deposited directly into your business checking account (via ACH) typically
within 48-72 hours.
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Can I use someone else's merchant account to do my transactions?
No, this practice is known as "credit card laundering" or "factoring."
It is against the Visa and MasterCard agreement. Using someone else's merchant account
to process your credit card transactions can lead to heavy fines and other severe
penalties. In addition, you'll also put that merchant's credit card processing account
in jeopardy.
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What kind of transaction reporting is available?
Element has a powerful, online reporting suite called Web-based reporting. With Web-based reporting you can review daily batch and transaction detail, reconcile
daily deposits, conduct a search by date or card number or transaction amount, view
monthly statements online, and much more. You have the option to elect to receive
paper statements at the end of each month, too.
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Authorizations and Deposits
What is an authorization?
As the name implies, an authorization is a transaction you use to:
- Help verify that the card is not counterfeit
- Verify that the cardholder has sufficient credit for the purchase
- Place a "hold" on the cardholder's credit line for the amount of the transaction
An authorization is required in order to complete a Sale transaction.
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What is a deposit? Do I need to process a deposit for
every sale?
A deposit is the action of submitting your authorized transactions for payment.
While an authorization places a hold on a cardholder's available balance to cover
your payment, a deposit completes the process of charging your cardholders and remitting
payment to your business. In many cases, you have the option of setting your POS
device to automatically deposit your transactions daily.
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I've already obtained an authorization. Do I still need
to process a deposit?
Yes. The funds will not be available to you unless you process the deposit.
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Sales Drafts
What is a sales draft?
A sales draft is a receipt of acknowledgement that the credit card customer signs
upon completion of the transaction. A sales draft is automatically generated and
signed by the customer during most face-to-face credit card transactions.
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When do I need a sales draft?
For every face-to-face credit card sale, a sales draft must be completed. This draft
is a legal and binding contract between you and your customer.
If you have a POS system with a printer attached, it will automatically generate
a sales draft for credit cards that are deposited electronically. When the draft
has finished printing, present it to the cardholder for signature. Give the cardholder
the bottom copy of the draft and retain the top copy (with the original signature)
for your files.
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Do I need to have an imprint of the card for it to be
accepted for payment?
You do not need an imprint of the card IF the transaction was swiped through a POS
device that produces a paper receipt of the transaction. However, you do need to
create an imprinted receipt if the transaction was key-entered into your POS device
or a receipt was not automatically generated by your POS device.
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What do I do with my copies of the sales draft?
All sales drafts should be stored by the merchant in a restricted access area for
at least one year after the transaction date. Further, you should retain all original
sales drafts or legible microfilm copies for at least three years after the transaction
date.
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Credits
What is a credit?
A credit is a refund issued by you to a legitimate customer due to a return, cancellation
of a sale or entry error. This transaction reduces your day's processing total.
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When should I issue a credit?
A credit is required when a customer returns merchandise or cancels a sale and requests
a refund on the amount of the return. You should process the credit through your
POS system if the original transaction was electronically deposited.
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Am I required to issue a credit?
No. But even if it is your store policy not to issue credits, your customer has
the right to seek reimbursement through chargeback procedures.
If your store incurs excessive chargebacks, you may be required to pay additional
fees and, in extreme cases, have your right to accept Visa or MasterCard revoked.
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Chargebacks and Retrievals
What is a chargeback?
A chargeback occurs when a consumer requests a refund from their credit card company.
The merchant is billed by its merchant bank, which has been billed initially by
the card issuer. A chargeback fee, often up to $35, is charged per incident to the
merchant, which is not refundable regardless of the outcome of the dispute. The
merchant bank will charge the merchant a fee for the retrieval of information, and
if it is determined that the customer is right, there will be another fee for the
chargeback itself. The customer will be refunded their money directly through the
credit card company and your checking account will be debited. Eventually, if your
account has excessive chargebacks, the bank may choose to cancel your account. So,
the more you do to protect yourself against chargebacks, the better off you'll be.
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Am I liable for chargebacks?
Yes, if the customer has a valid dispute with the charge in question and you do
not provide the necessary documentation and/or satisfactorily remedy the situation.
If, however, the customer doesn't have a valid dispute and you complied with processing
regulations, you may not be liable. If the chargeback is found to have been in error,
a merchant will be granted a reversal.
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What are some of the different types of chargebacks?
A sale can be charged back for more that 35 valid reasons, the four most common
are:
- no signature on a draft
- failure to fulfill a request for a sales draft
- no imprint on a draft
- unauthorized purchase
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What is the chargeback procedure?
Most often, the first stage of a chargeback procedure comes in the form of a ‘retrieval
request.' A retrieval request is a request from a card-issuing bank to see an original,
photocopy or fax of a sales draft to prove the validity of the sale. If one of your
customers disputes a Visa or MasterCard sale, you will receive a letter of notification
and be requested to send a copy of the signed copy of the draft or other information
to your processor.
In most cases, if your records are complete and you have complied with credit card
regulations, you can successfully contest chargebacks. It is also possible that
the initiation of a chargeback will cause the cardholder's bank to withdrawal funds
from your bank account. Note that you would be notified by letter after your account
has been debited. This is why we always encourage merchants to maintain a balance
in their accounts.
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What is my responsibility?
You are required to locate the signed copy of the draft or other requested information
and send a copy of it to your processor within the time allowed. Failure to do so
will result in a chargeback due to non-receipt of requested item. Your credit card
processors may request copies up to three years following the date of sale.
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How can I avoid chargebacks?
For Card-Present Transactions:
- Verify that the card number and signature on the receipt matches the number and
signature on the card.
- If you manually key in a card number, get a manual imprint of the card.
- Check the expiration date and do not accept expired cards.
- Return policies must be printed on the sales receipt close to the signature line.
- Do not accept a card that looks to have been altered.
- Obtain authorization for the full amount of the sale.
- If a card is declined, do not continue to get an authorization.
For Card-Not-Present Transactions:
- Confirm the customer's card number and obtain the customer's signature on an order
form.
- Make the warranty and return policies clear on your Web site, in e-mail and other
correspondence.
- Use security features such as AVS to verify the billing address and ZIP code, and
CVV2 to verify that the consumer is in possession of the card.
- Ship goods only to the cardholder's billing address and obtain a signed proof of
delivery from the shipper for delivered goods.
- Include a customer service telephone number in the billing name that appears on
customer's bank statement.
- Never charge a cardholder's card until the goods have been shipped.
- Pay special attention to international purchases since they have a greater risk
of credit card fraud.
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