4 Common Mistakes When Boarding a Merchant Application – and How to Avoid Them

4 Common Mistakes When Boarding a Merchant Application – and How to Avoid Them

by | Aug 11, 2021

PART 1: Most Common Errors

PART 2: Ramifications of Errors

PART 3: How to Avoid Errors

In welcoming the busiest season for payment processors, we’re diving into merchant applications and the steps that payment processors take to ensure that merchants can thrive and grow thanks to the countless businesses that fuel the ever-changing payment processing system.

To process payments, it is common for merchants (businesses) to go through their POS/software provider (ISV/VAR) to be onboarded with a payments processor, such as BOLD Integrated Payments. While processors work diligently to mitigate the seemingly miniscule errors that can potentially lead to disastrous circumstances for merchants, it is mindful to note that errors are never 100% avoidable.

To limit the probability of said errors, BOLD offers all partners access to a dedicated Partner Relationship Management (PRM) team. The seamlessness of the onboarding process can determine the ease of future merchant account adjustments, such as bank account, pricing, or DBA changes – three of which are amongst the most requested merchant account adjustments.

The better part of this article details information stemming from BOLD Integrated Payment’s Partner Relationship Manager Crystal Deese’ extensive expertise on the topic of merchant applications. As a veteran in the payment processing industry, the 7 years of experience that Crystal has under her belt provides us with the answers that many ISO agents, partners, and even merchants can find tremendously useful.

The goal of this article is to:

  •  Discuss the 4 most common merchant application errors,
  • Identify the ramifications of said merchant application errors,
  • Understand how the processor and their partners can work together in effort to avoid these errors as much as possible, in turn ensuring a seamlessly flexible processing platform for our merchants.

PART I: The Four Most Common Application Errors.

Pricing Errors
Pricing errors mean having to call the merchant to request a signature on a Change Request Form (CRF) to correct the pricing as well as provide a copy of their Driver’s License.

Inaccurate Corporate/Legal Name – TIN Mismatch
Providing inaccurate Business Legal Name and Fed Tax ID combos causes a TIN Mismatch or can Pend the application in Underwriting.

Invalid Banking Information
When Invalid Banking Information is keyed into an application, it causes an ACH Reject to occur.

Owner address matching the DBA address and Owner Nicknames
The Owner address cannot be the same as the DBA Address as it must be the physical address of the Owner. Owner names must be full legal names, no nicknames.

PART II: Ramifications of the Errors.  

Pricing Errors
Pricing Errors cause negative residual income for the Partner or an overcharge to the Merchant. Pricing cannot be changed without a merchant signature on a CRF. The merchant will also have to be back billed on a future statement, or the Partner will have to potentially take a loss for the period the pricing was incorrect. Pricing changes are only approved on the first day of each month, so it is essential that pricing changes are submitted no later than the last day of the month. If the cutoff is missed, partners and merchants will have to wait an additional month, which typically leads to the accumulation of negative residuals and back billing.

Inaccurate Corporate/Legal Business Name
If the Merchant has a TIN Mismatch, they have 90 days to correct their information.  The Merchant will incur a $49/month fee until the TIN Mismatch is corrected. At the end of the 90 days, if the Merchant has not made the necessary corrections, the Risk Department will withhold 25% of their deposits for backup withholding for the IRS. 

Invalid Banking Information
When the Processor receives an ACH Reject, they place a 100% hold on the Merchants funds. To remedy this error, a bank change case must be submitted along with a CRF that is completed by the partner and signed by the merchant. The SLA time for a bank change is 6-7 business days, which can delay funding to the merchant, in turn causing strain on business operations. Additionally, this typically leads to an ACH reject fee of $30 each time a deposit attempt is rejected.

Boarding Owners by Nicknames in Lieu of Full Legal Names
Owners of merchant accounts must be boarded under their full legal names listed on the legal ID or driver’s license. Boarding a merchant with an owner’s nickname results in extension on account pending status.

PART III: How to Avoid Such Ramifications.

Pricing Errors
Merchant pricing is more of a strategic process than an everyday price-tag implementation. It is important for our Partners to work with our PRM team for statement/profit analysis and review, which can be conducted in the form of virtual conference calls.

Inaccurate Corporate/Legal Business Name
Anytime Crystal is completing an application with a Merchant, it becomes her mission to seek out even the most miniscule of errors. Typically, it is very telling that an error has been made if the DBA name matches the legal name. Unless a business is a Sole Proprietorship, the legal name should never exactly match the DBA name. The legal name should always be followed by an LLC or Inc.

Productive research can be conducted on each merchant per the Secretary of State (SOS) website. Amongst the extensive research that she conducts daily, Crystal also verifies the legal name, legal address, and ownership of each merchant. Additionally, she Googles the merchant’s business to verify the business address, the business website to gain insight on their products/services offered, and satellite images reflecting the storefront of the specified address.

While formulating applications, it is imperative that the agent/partner asks the merchant to verify small yet sensitive details such as the EIN, SSN, DOB, Bank Account Number, Routing Number, etc. at least twice in attempt to decrease the margin of error.

Invalid Banking Information
The most reliable method of verifying a merchant bank account is to obtain a voided check. Although voided checks are no longer required to proceed with Click to Agrees, they are still an extra form of verification for the banking information that implements security for both the processor and the merchant. Asking for the voided check or bank letter to verify the banking information upfront can reduce or eliminate the possibility of an account going live with the wrong bank account on file. In the case that it is impossible to obtain a voided check or bank letter, one should implement checks and balances by having the merchant verify the sensitive data twice.

Boarding Owners by Nicknames in Lieu of Full Legal Names
As previously mentioned, the Secretary of State website is amongst the most reliable sources for DBA/corporate name/ownership verification. It is common practice to ask for a copy of the owner’s driver’s license at the time of the application. If you cannot obtain a copy of the merchant’s driver’s license, be sure to verify names that are commonly known to be nicknames, i.e. Jim or Jimmy (James) , Mike (Michael), Pat (Patricia), etc.

 Conclusion

In any given industry, many errors are preventable through the practice of proactivity. Per Crystal’s extensive explanation of merchant application errors, we learn the true value of attention to detail for both the payment processor and the partner. All parties involved are susceptible to the negative effects of the ramifications that can easily be avoided should the processor and their partners provide their due diligence applying the aforementioned points to every last merchant application process.

Questions on How We Can Help You with a Smooth Boarding Process?

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Part II: History and Future of Contactless Payments

Part II: History and Future of Contactless Payments

by | Jul 6, 2021

 

Read Part 1: The History and Future of Contactless Payments Here

WHAT MAKES CONTACTLESS UNTOUCHABLE?

Formerly known as “card machines,” terminals have provided the general public with a reliable payment system that is both undervalued and overlooked. History’s first card machine revolutionized the payment system shortly after AMEX developed the first plastic payment card in 1959. Although it was not of the electronic variation, the machine “enabled merchants to produce an imprint on carbon paper slips intended for the bank, merchant and customer as proof of purchase” (Sorenson, 2019) for the first time in human history.

TRIED AND TRUE CREDIT CARD TERMINAL

The same year in which Americans celebrated their first Earth Day, the first electronic card machine was presented to the general public, in promoting the ideology of conservation. Thanks to tech giant IBM, the magnetic-striped payment card, otherwise known as credit cards, was revealed under IBM 360. (Sorenson, 2019) The use of the magnetic-stripe proved not only to be more efficient, but it was also more secure in comparison to its manual-entry predecessor, as the swipe strip was a brilliant form of encryption of personal data, as the strip contained the “name of the cardholder, card number, authorization code and expiry date of the card.” (Sorenson, 2019)

THE EVOLUTION TO EMV

In recent years, the world has been introduced to a new method of encrypted payment known as the EMV chip. Formerly known as “the smart card” (as dubbed by its inventor, Roland Moreno), the popularity of chip-use increased exponentially within the same decade, following its invention in 1975. As a matter of fact, chip-use became mandatory in France as of 1992. However, as with much of which pertaining to technological/societal advancements, the US fell behind, as EMV technology failed to fully integrate into the American payment sector until early 2015. Priority I.S.’ Vice President of Client Services Robert Copeland seems to welcome EMV technology with open arms.

“When looking at security of payments, it is important to look at how we got here. During my lifetime, mag-stripe had long been the conventional method of payment,” Copeland reminisces. “Most Americans will think that EMV is a relatively new concept, but the usage of chip cards really began in the mid-90’s.” Going into detail, Copeland explains that there are 2 types of EMV: chip and pin versus chip and signature, and, as with the encryption capabilities of the mag stripe, addresses general security concerns with the added protection of PIN or signature.

THE CONTACTLESS ERA

Two decades and two global pandemics later, the modern generation has come to adopt contactless technology as a necessity. While convenience defines the modern way of life, a newfound fear of deathly germs had become the centerpiece of 2020. Perhaps interpersonal trading was destined to integrate with an untouchable payment system known as contactless payments. Turns out, mobile payments are not always contactless, as any device capable of making payments using radio-frequency identification (RFID) technology is using contactless payment technology (NFC, 2017), wherein near field communication plays a vital role in making contactless – contactless. As cited from NearFieldCommunications.Org, “the first example of contactless payment came in the form of Speed-Pass in 1997. Mobil gas stations offered contactless payment devices that clipped onto a key ring. The customer waved the device over a labeled square at the gas pump and paid instantly.” (NFC, 2017)

Having experiences countless trials and tribulations within the payment industry, President/CEO of Priority I.S., Gary Liu, can attest to the rising of contactless payment.

“In my opinion, I do see contactless payments continue to grow in popularity here in the U.S.,” Liu attests. “Especially over the past 12-15 months during Covid, contactless payments have increased; especially in the early stages of the pandemic, during which many avoided surface contacts in fear of virus transmission.” Liu also expresses that contactless payment is not only the safer decision, but the sounder decision as well. “It’s become much easier to make a payment at Publix, etc., by simply pulling out your mobile phone.” With human-to-human contact going out of trend, Liu believes that QR codes hits a home run in the restaurant industry, as it is not only “contactless, but it is more convenient and a quicker method for consumers to make their payments without having to interact with their servers.”

Even Priority I.S. CS VP Robert Copeland, long-time EMV advocate, endorses the potential of contactless that is bound to win over even the least technology-savvy. “When you carry RFID credit cards, you need to make sure that you carry them in an RFID-protected device, and we never were told to do that with magnetic swipe or EMV. Security concerns only become more prominent with virus-laden emails and mobile links. Hackers can then steal the personal data on your device(s), which poses as more of a privacy concern in itself,” Copeland explains, “However, I will take my chances with that over having to worry the guy behind me stealing data from my physical card. The reliability of contactless is mostly dependent on how you use it.”

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Part 1: The History and Future of Contactless Payments

Part 1: The History and Future of Contactless Payments

by | Jun 22, 2021

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TRANSPARENT TRANSACTIONS YOU CAN’T TOUCH.

As with all elements in this evergreen society of progression, every evolutionary idea eventually runs its course. Within the financial sector, the 21st generation is spectating as paper currency hits the iceberg and sinks into the depths of the Atlantic. Prior to the devastating impact of a global pandemic, the use of cash had been on a steady decline, with cash transaction rates having declined from 40% in 2009 to 30% in 2019.

COVID’S EFFECT

In plain text, Covid-19 nailed the coffin on the significance of cash. With deadly germs running rampant, countless cash users turned to digital payments in fear of virus transference due to the recycled nature of cash.

Furthermore, the rise of technological advancements is disengaging the general public from traditional notary. As referenced from Barry McCarthy of Forbes Magazine, Visa’s Back to Business study found that 54% of consumers opted for retailers that provided contactless payment as an option. (McCarthy, 2020) At the mention of contactless payments, Apple/Google/Samsung Pay often come to mind. However, payment methods have expanded to the likes of QR codes on pre-pay apps such as Klarna and Afterpay, through which consumers can make purchases with advancements of the exact tender in the form of a temporary credit card, after which the user can pay off the total in increments of 4 weeks (or longer – at the expense of additional interest).

ADAPTATION

As a result of the quarantine mandate taking effect across the world, many became reliant on contactless delivery services such as Instacart, Uber Eats, DoorDash, and newer meal-kit services like Hello Fresh & Blue Apron. Even before the pandemic hit, corporate giants were slowly catching onto the public’s inherent disinterest in interpersonal interactional transactions. In 2007, Amazon launched the Amazon Fresh grocery delivery service, and the pandemic proved to be the determinant of its delayed success in 2020. On January 22nd of 2018, Amazon went a step further in launching its first Amazon Go, a store that incentivizes customers with the added convenience of a grab and go model, by which shoppers access the storefront via QR code, grab the desired products, and go.

Now more than ever, quick-pay options are in high demand. Payment methods are ever changing, and now, we’ve come home to one that our generation can call our own – one that cash or card can’t touch.

Having explored the various contactless payment methods on the market, it is vital that more consumers understand the mechanics behind these seamless transactions. Millions of people joyfully bask in the convenience of using features such as QR codes or Apple/Google/Samsung Pay without understanding the mechanical features that make them possible. Join in for “Part II: What Makes Contactless Untouchable?” in which we explore the mechanical inventions of PAX’s A920/A80, Dejavoo’s Z series, and the newest Clover terminals, that make in-store contactless processing possible.

Read Part II: History and Future of Contactless Payments Here

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A BOLD Merchant Statement Breakdown: Part Two

A BOLD Merchant Statement Breakdown: Part Two

by | May 12, 2021

Read Part I of the Series Here

This post is a continuation of a two-part blog series on Merchant Statements. We discuss what every processor should know about statements, how to uncover hidden fees, and a sneak peek into the BOLD. Statement Analysis process.

As mentioned in part one of this blog series, it is key for both the merchant and the processor to remember that every statement looks different. They can come in different formats or sizes while also using varied terminology or abbreviations. Bottom line, the best thing you can do as a processor is know what the rates are and what they should be. And as you’re looking through your statement, you can see what doesn’t match up. You discover the padding if things don’t match up.

Uncovering Hidden Fees

Typical ways processors are able to pad hidden fees is primarily through interchange. Due to a lack of transparency, deceptive statements make it difficult to identify hidden fees, and therefore, make it easy to fall into its trap. This brings us to a very important question: Are there any tricks to uncovering hidden fees? Gary Liu, President of ISV/VAR Channel for BOLD., says, “At the end of the day, it’s not a trick… it’s math.” Below, you can find links to Visa and Mastercard’s Interchange breakdown.

VISA USA INTERCHANGE REIMBURSEMENT FEES

MASTERCARD 2021-2022 U.S. REGION INTERCHANGE PROGRAMS AND RATES

A Transparent Approach

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At BOLD, we start our statement analysis with math. We take a look at four different sectors of fees: Processing fees, Authorization/Transaction fees, Monthly fees, and Interchange. We take the first three fees and subtract them from the total effective rate to determine whether or not hidden fees exist.

Next, we match what the merchant is currently being charged to give our partners insight as to what profit would look like if it remained the same. With that, we also offer the freedom to modify what the merchant’s statement looks like. Whether it’s a simple adjustment or completely cutting out something, we want to give a broader perspective on ways the partner could save the merchant money while maximizing their profitability.

After receiving a statement, our team will provide an analysis and proposal within 48 hours. To receive your Statement Analysis, submit a case below with your attached statement or email our PRM team at prm@boldpay.io.

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Building An Attrition-Proof Book of Business

Building An Attrition-Proof Book of Business

by | May 10, 2021

Join Gary Liu, President of ISV/VAR Channel, as he sits down with James Shepherd, CEO and Founder of CCSalesPro, to discuss building a powerful, attrition-proof portfolio.

CLICK THE IMAGE BELOW TO WATCH THE VIDEO

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COVID’s Effect on PAX and Dejavoo Terminal Shortage

COVID’s Effect on PAX and Dejavoo Terminal Shortage

by | Apr 15, 2021

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COVID’S EFFECT ON TERMINAL PROCUREMENT 

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Due to the effects of COVID-19, the shipments for the PAX S300 and several Dejavoo devices appear to be on hold until May 1st, if not later. In this blog, we shed some light on the situation at hand, and share insight on terminals that could effectively be alternative options.

THE 2020 STRUGGLE WAS NO TOILET PAPER… NOW IT’S TERMINALS?

Remember that one time stores couldn’t seem to keep toilet paper on the shelves? Oddly enough, terminals seem to be the next hot topic for unnecessary deficiencies… Or at least for the merchant processing industry.

Are You Struggling with Receiving Shipments from Manufacturing Companies?

Perhaps some of you are aware of the growing battle between high demand and low supply in terms of POS terminals. PAX devices, along with Dejavoo pieces, have been largely impacted by the disconnect of shipments making it from Point A to Point B. We are here to give you the 411 on how this situation may impact your business as well as share possible solutions.

PAX Terminals

In this tug of war for terminals, the PAX S300 has taken the biggest hit. It currently holds the number one spot for POS and EMV semi-integrated solutions. After connecting with several of our vendors, it appears that every ounce of their stock is now depleted. It’s possible the inventory won’t be available until May 1st, if not later. So what’s the next step?

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Below are some alternatives that are currently high in stock:

  • PAX SP30

This device is the closest you will come to a S300. Their functions almost mirror each other completely, and come with the exact same cords. The benefits for choosing to use the SP30 is its lower price and its potential to be a permanent alternative for the S300.

  • PAX A80

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The unique feature that the A80 offers is its ability to perform in two modes: a stand-alone mode and a semi-integrated mode. These devices are in high supply and will be an effective aid for the S300 shortage.

Dejavoo Terminals

This week, Dejavoo released an announcement that there will be an increase in their prices as a result of the device shortage. This inflation is set to initiate on May 1st, however Dejavoo is offering a discount for those who are able to use a device without a dial up connection.

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On top of that, they announced that the cheaper Z8 model is out of stock and are unsure when the next shipment will arrive in the US. The Z11 is an available option, although recent issues with software have caused the company to send out additional replacement. That said, the stock numbers for that device may decrease quickly.

Why Cash Discounting is Important

This shortage issue has the potential to negatively impact businesses in multiple ways. However, Cash Discounting presents an important opportunity for these cases. There is an expected influx toward third party applications for cash discount opportunities. If and when this arises, it is vital that your relationship managers are willing and able to provide a cash discount option for various devices.

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