Archive for April, 2025

(Sort of).

A few weeks ago I came upon an opportunity to explain what merchant accounts were and how they worked. I figured WikiPedia would be a great place to direct them for more information. WikiPedia is an excellent resource, despite the bad press it gets sometimes, and usually provides a well thoughtout and insightful explanation about any given topic.

However, upon visiting WikiPedia to get the link to their entry I was appalled at what I saw. The definition for Merchant Account was, well, poor. Before I go further I should say whomever wrote the entry did try to make it a good entry so this is not a knock on them. Basically, this is the entry posted:

A merchant account is an account that is created so that a business or individual can accept credit cards, debit cards, gift cards and other forms of electronic payment. This is also widely known as payment processing. Online they use an internet payment gateway. A merchant account provider may be a separate company from the payment gateway.

To process transactions, a merchant is charged a fee called a discount rate. The discount rate is a percentage of the dollar amount of the transaction. The discount rate varies, but is based on the business type, the method the transaction is taken (Swiped, Keyed, Internet), and other qualifying factors. An additional fee called a transaction fee, normally a flat fee, is also applied for each transaction that the merchant processes. There are item rate fees (generally 10 cents)–a hidden fee that adds to transaction fee (generally 30 cents). There’s batch deposit fees, (generally 25 cents) that go every day that a merchant account using an internet gateway has activity–but even with these there also is the internet gateway fee (varies from $15-$25 a month). Refunding a credit card payment through a merchant account does not refund any fees or the discount (percentage) rate and charges an extra fee (about 65 cents) for the refund.

When someone files a chargeback it is a $25 fee for merchant accounts. In contrast, paypal charges $10. However with a merchant account you can actually dispute a chargeback whereas with paypal you can only provide a tracking number and if the quality of the merchandise is disputed, no matter what the seller always loses and the seller has no way to provide any statement to the claim. With a merchant account you can dispute shipping charges refund, require a 20% restocking fee, require merchandise to be returned in tact, whereas with paypal the buyer gets refunded including shipping, handling, and insurance charges if they return an empty box with tracking numbers.

When the merchant processes transactions, they are entered into the processing networks. These networks are a series of electronic systems that facilitate the transferring of funds into the merchant’s bank account.

This information is unfortunately incomplete and inaccurate. It shows the limited experience of the article’s author as they have a limited view of merchant accounts and how they work. In light of this I abandoned my forum post and began to reconstruct this entry. It took over an hour but I eventually came up with their current entry. You can see it here: http://en.wikipedia.org/wiki/Merchant_account.

In my opinion it still lacks some content but overall the basics are there and solid. I do plan to go back and revise the content once I have more time. Maybe once I do I can also turn it into an article here for our visitors to read.

Merchant Account Services has officially launched and we’d love to get your feedback. Our goal is to make this site an unbiased resource for merchants! There are money places to go to find merchant accounts online but this website is the first to provide free information to merchants.

Our articles were written for merchants with all levels of experience in mind. The merchant account blog you are reading aims to keep merchants abreast of the latest industry news and happenings. The directory will be a one-stop listing of valuable merchant account and ecommerce resources. Our forums hope to be where merchants can go for help and support related to their merchant account or other merchant services.

Something we are really proud of here are our merchant account resources. There are several checksheets and calculators there to help a merchant choose their merchant account provider. The Basic Fee Calculator is designed to help merchants get a rough idea of what their monthly fees will be each month based on a basic rate quote. The Advanced Fee Calculator offers a comprehensive calculation of a merchant’s potential monthly fees based upon a detailed rate quote. The Basic Account Comparison Calculator allows a merchant to do a rough comparison of up to four merchant account providers. The Advanced Account Comparison Calculator offers a comprehensive comparison of up to four merchant account providers. Needless to say we believe these tools will allow merchants to make better informed decisions and save their businesses money.

If you have any suggestions or comments, please tell us! We want to make this website a valuable resource for merchants everywhere.

From Verifone CEO Doug Bergeron:

VeriFone Holdings, Inc. on Monday, April 10, announced a definitive agreement to acquire Lipman, the Rosh Haayin, Israel-based provider of electronic payment systems. We are very excited with this acquisition and the opportunities it presents. Customers of both companies will benefit from a stronger, more reliable, more innovative and better connected company that will deliver the VeriFone Difference in ways not possible prior to the acquisition.

As we move into this new era, I want to assure you that the continuity of your business is first and foremost and we are fully committed to supporting and aggressively growing the Vx Solutions, Nurit and Omni product lines going forward. In fact, with a dramatically expanded product portfolio, customers can now seamlessly experience the VeriFone Difference with:

* Unmatched portable solutions encompassing CDMA, GPRS, Wi-Fi and Bluetooth wireless technologies that open up new market opportunities and bring electronic payments directly to the consumer wherever they may be.
* A full range of highly secure consumer-facing devices that promote the usage of online debit and enhance merchant-to-consumer messaging and promotion.
* A full range of dial, IP-based, single or multi-application countertop systems that are easy to sell and provide numerous merchant benefits that drive up-selling opportunities.
* A secure family of payments-enabled Electronic Cash Register systems that open up new possibilities for convergence of retail management and payments for small merchants.
* A full range of secure self-service, kiosk and ATM solutions that will allow you to capitalize on the growing trend for electronic payment acceptance in unattended environments.

In addition, customers of both companies can expect enhanced support, service, responsiveness and innovative thinking from the combination of the best, brightest and most experienced personnel from two of the leading companies in our industry.

VeriFone and Lipman are the fastest growing among the leading providers of point of sale electronic payment technologies and this acquisition will extend VeriFone’s leadership in many countries around the globe. Geographically the two companies are complementary, and will be the number one player in North America and Emerging Markets and number one or two in most key markets worldwide. Following the acquisition, VeriFone will become the largest global provider of electronic payment solutions and services. This scale will allow VeriFone to capitalize on the accelerating growth in the emerging markets, as well as demand for increased security, and IP-based and wireless payment systems both domestically and abroad.

We are working quickly to finalize the composition of our larger sales force and support infrastructure going forward, but you should continue to rely on your existing relationships. Any changes or transitions will be communicated to you well in advance.

Closing is expected to occur in VeriFone’s fiscal fourth quarter ending October 31, 2025 .

Authorize.net, the most popular payment gateway provider, announced that it saw a spike in fraudulent transactions pass through its systems this past weekend. The transactions, which ranged from $500 - $700, were billed to all major credit cards for users across the country.

All of the fraudulent transactions were processed through web hosting companies that use the Authorize.net payment gateway services. The hackers who did this apparently stole quality credit card data and used security holes in the web hosts’ systems to run the sales. The money for these transaction were sent to the webhosts. The hackers used the sales to verify whether the credit cards were valid. With the transactions being successful they are expected to use them in other fraudulent transactions very soon.

The web hosts and Authorize.net are at odds over where the security breach occurred. The web hosts are blaming Authorize.net. Authorize.net claims it cannot be there services fault as they just act like a credit card terminal and the blame as to be on the hosts for using flawed software.

On Sunday about 1,500 transaction were run through in a 90 minute period early Sunday morning totaling just under $1 million to one account! A total of three webhosts were used in this attack. In all cases the information put through the system included a valid credit card number, expiration date, cardholder name, and cardholder address. The successful transactions proves all of the information is accurate and correct.