by Brendon Degner | Jun 22, 2022 | Merchant Services, resources, small business
Recently, the use of virtual credit cards (VCCs) has become a popular means of paying for goods and services online. VCCs are temporary credit card numbers that allow a consumer to complete a transaction online without providing their real account number. This can add an extra layer of security to purchases involving credit cards.
How Do You Get a Virtual Credit Card?
VCCs are provided as a service by certain banks and credit card companies. If your card provider offers this feature, you can request a virtual credit card through the company’s online portal or associated mobile app. Capital One’s Eno, for example, is an online virtual assistant that generates random credit card numbers for members.
Once you submit your request, you will be issued a temporary credit card number, expiration date, and security number. Transactions using VCCs will show up on your bank statement as if you had used your regular card number.
How Do VCCs Keep You Secure?
Many virtual credit cards are designed to be used only once. This means that, as soon as a payment is complete, the credit card number is no longer valid. In such cases a shopper need not worry about a data breach, since their credit card number can no longer be used by anyone.
In other cases, a virtual credit card may have a longer expiration date. In the event of a security issue, you can simply cancel the virtual card instead of having to close the entire account and wait for a brand new card to be issued.
Some virtual credit cards also allow you to set spending limits, which can protect you from fraud and also help you budget for certain vendors.
Cons of Virtual Credit Cards
Like most forms of payment, VCCs are not without their drawbacks. The main issues arise when a physical card is needed to verify a transaction. For example, many hotels require you to present the card with which you booked a room online. If you used a VCC, that number will not match and could cause issues with confirming your reservation.
You may also run into issues with returning goods to a merchant. Although VCCs are becoming much more commonplace, many stores still need a credit card in order to provide you with a refund. If you do not have a matching physical card for them to swipe, you may be forced to settle for store credit instead of a refund.
Keep in mind, also, that virtual credit cards can still be subject to cyber threats. If your VCC is not designed for single use, the number can be stolen and used to make fraudulent transactions. If you have more than one VCC, it will be extra work to monitor all your card numbers for unauthorized purchases.
Keep Your Business Secure
Accepting credit cards is essential in staying competitive as a business. Finding a merchant services provider that is within your budget and keeps your customer information secure is one of the most important steps you can take to grow your business.
If you need help finding the right way to accept credit card payments, contact Summit Payments Co. We can match you with the right provider and help you negotiate the most reasonable fees available.
by Brendon Degner | May 2, 2022 | Merchant Services, resources
The world of finance is complicated, and it is rare that things proceed exactly according to plan. One hiccup you may encounter as a business owner is having your merchant services application denied. This may be due to one or several reasons, but the most common include the following:
1. You Have Bad Credit
Even if your company is brand new and has yet to establish a credit history, banks and credit card processing providers will look at your personal credit and that of any other companies in which you have ownership. If your credit does not meet minimum requirements, your merchant services account application may be denied.
Solution: if you have a low credit score, you might want to look into finding a business partner with a better credit history who can sign the merchant agreement. It is also a good idea to build up a good cash savings to demonstrate to the bank that you are a safe investment.
2. Your Business Is Considered “High Risk”
There are several industries that are more susceptible to fraud and chargebacks. These industries are categorized as “high risk” and include the following:
- Tobacco sales
- Gambling
- Firearms/ammunition
- Financial services
- Travel
- Hospitality
- Medical and legal services
Many merchant account providers are wary of working with high risk businesses and will deny an application simply because you fall under this category.
Solution: Just because you have been denied by one merchant services provider does not mean you will be rejected by another. Once you have identified your business as high-risk, look for a provider who is willing to work with these types of businesses.
Many merchant service providers will specify on their website whether or not they deal with high-risk accounts. If you can’t find it on their site, call ahead before you begin the application process.
3. You Have Had a Previous Merchant Account Terminated
If you have left a previous merchant account in bad standing and it was ultimately terminated, you may be on a list called “MATCH.” This stands for Mastercard Alert to Control High Risk Merchants.”
The MATCH, also known as Terminated Merchant File (TMF), alerts account providers to any applicants who have had an account terminated in the past. This could be due to several reasons, namely unpaid bills, fraud, or too many chargebacks.
Solution: This can be a tricky issue, but it is not impossible to have your business removed from the MATCH/TMF list. You will need to get in touch with the bank that put you on the list in the first place. If you are not aware of why you were listed, inquire as to the specific reasons and work to address them. For example, you will want to pay any outstanding invoices.
Once you have mitigated any outstanding issues, request that the bank remove you from the list.
4. You Have Personal or Business Tax Liens
Tax liens are imposed when an individual or business is delinquent in paying taxes. This has a similar effect on your application as poor credit history. Merchant account providers will look at your tax history during the underwriting process and view any liens as a red flag.
Solution: Address any tax issues prior to submitting an application for merchant services. Work with a professional accountant to ensure your taxes and general financial history are in excellent standing.
5. Your Business Volume Is Inconsistent
Different industries have “standards” when it comes to processing volumes. When you apply, you will give the provider an estimate of your projected sales volume. The bank will compare this estimate with the average amount usually processed by your type of business. Inconsistencies between your sales volume and the average are likely to cause concern.
Solution: Don’t overestimate your sales volume. Be transparent and give realistic numbers. If you project that you will be processing a higher amount than the industry standard, provide documentation that supports your calculations.
What To Do If My Merchant Account Was Denied?
Being denied for merchant services can be a setback, but it does not mean you cannot find another provider willing to work with you. If your account was denied and you are unsure why, hiring a merchant services broker is a great place to start. A broker will be well aware of what merchant providers consider “red flags” and help you to address any issues. He or she will also know which companies work with high-risk industries.
If you need merchant services but you are unsure where to start or your application has been denied, contact Brendon Wegner at Summit Payments. He can help you find the processing provider best suited to your business and assist you in making the application process as smooth as possible.
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