Federal Study Confirms that Electronic Payments are on the Rise

Feb 12, 2014

In order to achieve a better understanding of payment trends, the Federal Reserve launched their fifth in a triennial series of payment studies in 2013. Excluding wire transfers, the study showed that there were an estimated 122.8 billion non-cash payments made by Americans in 2012. This adds to the $79 trillion total shown throughout the course of the study. This shows that there has been a 4.4 percent increase in these types of transactions between 2009 and 2012. This growth rate was just 0.3 percent short of the 4.7 percent annual rate that was recorded for the ten year period that ended in 2012. This data also includes checks written by consumers. Although fewer checks are being written, those that are have been to cover larger amounts, and the checks that are written often clear electronically. The Federal study showed that one out of every six checks that was written in 2012 was deposited using a cell phone electronic image or other remote capturing deposit option by payees.

The study also showed that use of general-purpose credit cards has increased by 6.8 percent a year between 2009 and 2012 since their earlier decline in use between 2006 and 2009. Transactions using general-purpose credit cards have grown from 21 billion transactions during their decline, to 26.2 billion in recent years. These figures from the study are in direct proportion to the growth of prepaid debit card use, which has risen to overtake all other forms of non-cash payments. This form of payment use has grown to 15.8 percent a year to reach a total of 9.2 billion in 2012.

A result of the increase in credit and debit card use has resulted in an increase in fraud according to data published by the Federal Reserve. They estimate that 31.1 million fraudulent transactions valued at $6.1 billion happened in 2012. These numbers were significantly higher compared to any other non-cash payment method. These figures could possibly be linked to businesses that use high risk merchant accounts. Although businesses that use high risk merchant accounts are not inherently bad, these types of businesses are more susceptible to fraud. They often do a higher volume of sales that require multiple transactions and can include online shops, merchants that deal in downloadable software, or gaming websites which all require the use of customer’s credit card information.


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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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