What Merchants Need to Know About Credit Card Surcharging

Aug 24, 2015

As if there is not enough to worry about in the credit card processing world, merchants are hearing a new term these days: Surcharging. While it is not a new term, it is getting attention, and it is not because everyone knows exactly what it is. This term, and what it represents, has been a mystery to merchant and customers for a long time. Because of this, we are here to tell you what surcharging is, and why it can affect your high risk merchant account.

No one likes extra fees, especially if the fees are “hidden”. This is what many consider a surcharge to be, because it is charged to the customer at checkout to cover the merchant’s card processing cost. This charge can be more for high risk businesses, because the processing fees are typically higher. The problem comes when customers are not told of this charge. On the flip side, if you tell customers that you are charging a bit more to offset your credit card surcharge for processing their card, they are liable to take it as you are complaining about their choice of payment.

Surcharges depend on your merchant account processor, and the charge amounts, be it percentages of flat amounts, are the same with within each card company. This can vary greatly, and this is why it is important that you look into obtaining a high risk merchant account. While all companies who accept plastic card payments are at a higher risk of having a fraudulent charge, not all merchant account providers understand this fact. High risk merchant account providers do understand this, and they are your best bet when you must accept plastic card payments. However, because of surcharges, you need to look far and wide to make sure that the high risk merchant account processor you choose is the best for you, your business, and your customers.

Like with many things, the cheapest rate may not be the best, but the most expensive rate might not be the best. Every company is different, and not every merchant account will work for every company. Take your time locating the right high risk merchant account for your company, because it is one of the most important business decisions you will make.

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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 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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