The credit card issuer, the credit card network and the payments processor are all involved in determining the processing fees. For each transaction, the credit card issuer charges the merchant a commission, or a fee, for the ability to process the card. The charge is typically determined based on a percentage of the transaction and a flat fee. Common card issuers include Chase, Citi, and Capital One, who partner with card networks such as Visa and Mastercard. Payments processors facilitate the transaction and typically charge a percentage of the transaction as well as a flat fee for each transaction.

A variety of factors are taken into account such as PCI-compliance fees, chargeback fees, assessment fees, interchange fees, and annual account fees. Quickbooks Payments does not charge monthly fees or setup fees. The transaction fees vary depending on whether the card is swiped (2.4%), invoiced (2.9%) or keyed (3.4%), plus a flat $0.25 fee per transaction. An added benefit of QuickBooks Payments is our instant or next-day deposits.

While approving a transaction can happen instantly, it may take several days for the money to actually appear in the merchant’s account. During this time, the acquiring bank is reconciling the payment before releasing the funds. It typically takes one to three business days to settle up a payment. The settlement time may vary depending on the time of day the transaction was processed as well as any issues encountered with fraud.

This is the fee both your bank (the “acquiring” bank) and the customer bank (the “issuing” bank) collect for the transaction and for the convenience of these two institutions working together. Interchange fees are determined by the credit card network and can vary depending on several factors that include:

• What type of card you are accepting (Is the card partnered with an airline? A charity?)
• What type of industry you’re in; for example a restaurant and a market will have different fees
• Whether the card is used as a credit or debit transaction

 Typically the interchange fee is a percentage of the total, plus a flat per-transaction fee. The good news? Every processor pays exactly the same fee because they aren’t negotiable…so you don’t have to wonder if you’re paying more than everyone else.

Visa, MasterCard, Discover, and American Express credit cards are convenient. And you pay for it. Assessment fees are simply convenience fees. After all, with a credit card, you’re paid right away, while the credit card company has to wait for the customer to pay their bill. These fees are paid directly to the card network and are variable depending on a variety of factors, including:

• Your personal volume of monthly transactions
• Whether it’s a debit or credit card transaction
• Whether it’s an online or in-person transaction

The company that processes your credit card fee, including QuickBooks, as well as Square, Stripe, WePay, and others, take a fee to collect for the credit card companies.These fees are charged every time you do a transaction. At QuickBooks, we charge 2.9% for invoiced cards, plus $0.25 per transaction. The fee is lower for card reader transactions because the card is present and cardholder info can be verified. This is why keyed transactions are more expensive. Other processors might charge both a flat fee and a percentage, so see what works best for your particular business. You’ll also want to check to see what other fees the MSP charges, such as a flat monthly fee or a monthly minimum.

PCI compliance means that you are complying with Payment Card Industry Data Security Standards (PCI DSS). These standards were developed to help minimize the risk of fraud or a data breach. You’ll want to check with your credit card processing provider to see if they offer PCI compliance services; most do, and they sometimes charge you for it. Some offer these security services without the fee, but some don’t provide services at all, so you still need to follow PCI Compliance requirements such as securing your networks and systems.. The fee runs around $20 to $30 a month and can be billed monthly or annually. It covers services that might include security scans, customer education, and/or data breach insurance.

If you think that something’s off about a transaction, look into it. Call the customer to ask questions about the order. Verify that the billing and shipping addresses are valid. Make a habit of reviewing very large orders, or others that are out of the ordinary.

Europay Mastercard Visa (EMV) developed card chip technology, now a global standard for cards. Being EMV compliant by using chip cards is the best protection against chargebacks. If the card has a chip, use it. EMV cards have chips that provide stronger security features. The chip creates a unique code for every purchase and the code can only be used once. Avoid magnetic stripe cards that can only be swiped instead of inserted into a chip reader. When you swipe, the payment processor matches it to the bank account and the data that’s sent stays the same for each purchase. This makes it easier to create counterfeit swipe cards.

For face-to-face sales, always request to see the customer’s photo ID. Verify that the name and signature match.

When possible, ship with online tracking and use delivery companies who require signatures. If you deliver your product or it’s picked up, get signatures for proof of delivery. Keep these for your records.

Be clear about refund and return policies

For in person sales, cardholders must agree to the store policies by signing or initialing a sales receipt that includes a printed refund and return policy. For e-commerce sales, the customer must click to accept the return policy and other terms and conditions during the checkout process.

Be cautious of scams. A common scam involves being asked to charge more than the cost of the order to a card, and to wire money to a third party for shipping on behalf of the customer. Beware of these types of complicated or unusual requests. If it sounds too good to be true, it probably is.

Double check the details for large orders, orders for several of the same expensive item, or international orders that request next-day shipping. A large number of fraudulent orders come from places like the Middle East, Asia, Africa, and South America.

AVS checks to make sure the address entered on an order form is the same as the card holder’s billing address. This can only be used for U.S. addresses. 

People using stolen card numbers often don’t use the real cardholder’s billing address on an order form. Be cautious of orders where billing and shipping addresses do not match.

Retrieval requests happen when a customer questions a charge on their card and the credit card issuer asks for additional information from the business. If a business does not respond to a retrieval request the request can become a chargeback. To avoid this, send all documents to the credit card issuer to resolve the issue by the date listed. Even if the customer is wrong, if you do not reply you may be responsible for the amount charged.

Most credit cards have a three-digit security code in addition to the credit card number, sometimes called CVC2 or CVV2 numbers. American Express cards have a four-digit security code called the card identification number (CID). 

Most online payment processors recommend entering verification numbers to reduce chargebacks as well as additional fees that may be charged for credit card orders. This extra security measure also helps protect you against fraud.

When a card’s chip or magnetic stripe is not readable, an imprint or physical copy of the credit card is proof the card was present. Keep the copy. Keep the imprint with the record of the sale for your protection and store it in a safe place.

To get started, all you need is a QuickBooks account and an active payment processing account.

Each QuickBooks product offers unique payment features and options depending on the size of your business and how you prefer to process payments. Already a QuickBooks Payments customer? Get step-by-step instructions on how to make virtual payments with QuickBooks Payments.

Note that processing fees are higher whenever credit card billing information can’t be verified. Get virtual terminal pricing

A credit card authorization form is a blanket authorization document, signed by your customer, that lets merchants charge customer credit cards for an agreed amount of time–like weekly or monthly. Businesses use this form to charge recurring payments to customer credit cards. It’s keeps things a lot more simple on the merchant end. And if you ever need to prove your had permission to charge the card, you have it.

Chargebacks happen when a customer disputes a charge from your business and asks the card company to delete it. Chargebacks can cause major issues because disputed funds are held from merchants until the card issuer decides what to do. Also, chargebacks are a hassle for small businesses and can involve care calls and a lot of paperwork. A credit card authorization form is one way to protect yourself against chargebacks. If you have a signed document from your customer that gives permission to charge their card, your chances of winning your dispute is more likely.

Credit card authorization forms come in handy for regular recurring transactions, whether those are recurring manually entered card-not-present transactions or card-on-file transactions. Let’s say you are a restaurant that caters office lunches. If you have an authorization form on file, you know that every time an office calls for a delivery, you can charge it to their card. You don’t have to go back and forth on payment or have them sign for the charge every time. You might also use a credit card authorization form to take deposits for goods, services, or incidentals. If your business rents expensive equipment, for example, use a credit card authorization form to put a hold on a card until the equipment is returned.

Credit card authorization forms are a best practice for merchants. Although it’s not legally required, they can come in handy if you ever need to prove you had permission to charge a customer card. And they are great time-savers.

It’s a violation of PCI standards to record a customer’s CVV, which is why there isn’t a space for it. If you’d like to manually take a payment, you’ll need to request the CVV each time you charge the card.

It allows business owners–with customer permission–to securely store payment information with QuickBooks. This makes it easier to charge recurring customers online or in person through your POS, invoices, or our eCommerce API. If you regularly bill customers remotely (by keying in card information), you can use Card on File to charge customers in the future without any additional action.

PCI compliance standards require that all businesses that process credit card information “restrict physical access to cardholder data.” Be sure to keep cardholder data safe by storing completed forms in a secure room, and restrict access only to employees who require it to fulfill their job duties. Because chargeback windows can vary, we suggest storing all signed authorization forms for 2-3 months after you stop charging the card on file.