Frequently Asked Questions

These are frequently asked questions about merchant accounts and taking credit cards (payment processing). If you have a question that is not listed below, please let us know, we’ll be glad to get you the answer.

1. What is a merchant account, how do I get one? - A merchant account is an account you set up with a bank or others that lest you accept credit cards for payment.  You can get one at a bank or through any of a third party Merchant Account Processors like Priority.  These third-party processors are known as an Independent Sales Organization or "ISO" and they include the account along with actually handling the electronic processing involved in taking a card.
   All banks and processors like Priority provide the same basic service – they let you take credit cards for purchases and handle the technical backend and accounting. There are big differences in services, level of customer service and the "fees" that are charged (Sometimes fees are arbitrarily charged to extract more money from you such as set up fees and fees if you change or cancel your account. It pays to shop around and find provider that treats you fairly.)
2. What is a “discount rate?” – “Interchange fee is a term used in the payment card industry to describe a fee that a merchant’s bank (the “acquiring bank”) pays a customer’s bank (the “issuing bank”) when merchants accept cards using card networks such as Visa and MasterCard for purchases. In a credit card transaction, the card-issuing bank in a payment transaction deducts the interchange fee from the amount it pays the acquiring bank that handles a credit or debit card transaction for a merchant. The acquiring bank then pays the merchant the amount of the transaction minus both the interchange fee and an additional, usually smaller fee for the acquiring bank or ISO, which is often referred to as a discount rate, an add-on rate, or passthru . . .
   For ... example, imagine a consumer making a $100 purchase with a credit card. For that $100 item, the retailer would get approximately $98. The remaining $2, known as the merchant discount and fees, gets divided up. About $1.75 would go to the card issuing bank (defined as interchange), $0.18 would go to Visa or MasterCard association (defined as assessments), and the remaining $0.07 would go to the retailer's merchant account provider.” (WikiPedia) 
   Note minimum transaction charges apply so if you take many small transactions, you need to pay attention to transaction fees which can take a big bite out of your profits.  The way to really figure out what you pay for a transaction is to add up the transaction fee plus the discount fee and look at that as a percent of your profit. The lower the fee, the better.
3. How quickly will I receive credit for my transactions? - Funds are deposited into your checking account within 48-72 hours after the transactions have been submitted (called “batched out” this allows you to hold transactions until the end of the day for example, before closing the batch which facilitates accounting and reconciliation activities.   (Batching normally should be done daily).
4. Why are rates higher for some transactions? - Face-to-face transactions where the credit card is swiped is considered less risky than Internet, Mail and Telephone Orders. Face to face rates are quite a bit lower than so called "card not present" e.g., you don't have the card in hand as the instances of fraud and chargebacks are a lot lower.
5. How long does it take to get setup with credit card processing or make a change from the provider I have now? - Setup times will vary, however it usually takes around 24 hours.
6. How hard is it to change? - Changing from your current processor is a smooth transition and handling it is a routine activity for Priority.  Normally, expect it to take no more than about 30 minutes of your time.  From start to finish, your account should be transitioned within less than 4 business days.
7. Will Priority take me as a client? - There are some types of businesses that simply have proven problematic and won't be considered.  However, if you are a mainstream business providing a legitimate service, you likely will be accepted.
8. How long does it take to get approved for a merchant account? The typical time period is almost always within 24 hours, often sooner after your signed application is received.
9. What if I already have a processor? - You always have the option of changing processors. And it is painless and safe. However, don’t close your current account until your new Priority account is up and running.
10. What do I need to do in order to receive a quote?- Get a head to head comparison of your costs with a customized Cost Savings Analysis and a detail of the services you will receive, so that you can make an informed decision. If you are currently accepting credit cards, ideally, give Priority 2-3 months of your current merchant processing statements. That way, you’ll get a good sample so one month will not distort the analysis. You will get a detailed pricing comparison and quote.  Even if you are not currently accepting credit cards, we can still give you a customized quote based on your processing needs.
11. I already have a credit card terminal, can I use it? - Most terminals have the ability to be reprogrammed.  Once Priority identifies the type of terminal you have, and confirms compatibility, reprogramming generally only takes about 15 minutes.
12. I have a “virtual terminal” that runs on my PC, can I use it? – Probably. Check with Priority and if it’s compatible, they will handle the technical changes.
13. What types of credit card processing terminals are available? - Point of sale "card-swipe" stand alone terminals and integrated cash register systems for retail merchants like ones you see in stores. PC software (both dedicated programs that run on you local system or "virtual terminals" that run over the Internet through your browser are great solutions for low volume Internet merchants or if small mail order business and are available.  Using a virtual web-based program means you don’t have to buy or lease a point of sale terminal and it may not have a minimum monthly fee.  For mobile business, mobile terminals are available so you can take payment while still at the customer's location.
14. What is a shopping cart? Shopping carts are software programs that run on a web server and let customers select items from a catalog, etc., and put them in a "shopping basket." I you have ever bought from Amazon, you are using a shopping cart.  There are dozens of these available and the selection of the right one is not simple.  Making the right decision involves needed features, stability, what kind of software it will work with, and other issues. 
    Priority can be a good resource and help guide you since they know what will work with their software and have a lot of client experience.  If you already have or are going to use a terminal or software not provided by Priority, check with them to be sure it will function with one of their payment gateways.  Most major processors like Priority support proven gateways that are compatible with most of the shopping cart systems.
15. What is a chargeback? - A chargeback is a transaction that is reversed, i.e., deducted from your account instead of added. A chargeback can occur for many reasons, such as double, disputed purchases, expired cards and a host of other reasons.
16. Why are there monthly fees? -  For some type accounts, there is a minimum monthly charge which assures that low volume users costs of serving are always covered.  Your fees from card usage typically offset against the fee so if you are running many transactions the fee essentially is zero.