NDMS MERCHANT ACCOUNTS
Part of the Merchant Account process is correctly identifying the specific type of business the Merchant will be conducting with the account. Make sure that your MID (Merchant Identification) is classified in the appropriate category for your business type. Not having the appropriate classification can mean serious downgrades on all of your transactions.
Check your merchant descriptor and verify the contact phone number is correct and the description of the business for the MID is accurate. The better defined this information is, the less chance you will have of receiving disputes from customers that may have forgotten about their transaction with you.
Based on that information the merchant will be given one of the following types of merchant accounts, each has its own specific requirements and own rate.
Card Present
A card present transaction is when, a credit card or debit card transaction that is conducted face-to-face with a merchant during which the cardholder is physically present and therefore his or her card is seen and swiped.
Merchants that process card-present payments include grocery stores, department stores, fast-food restaurants, movie theatres, etc. Card payments where cardholders use unattended point-of-sale terminals, such as gas stations, are also defined as card-present transactions.
This is the most common form of Merchant Account. Retail Merchant Accounts are used for businesses providing goods and services in a face-to-face environment. If a Merchant will be primarily swiping the magnetic stripe on the card, and doesn’t fall in to any of the other “card present” categories, this is the type of account normally used.
Restaurant Merchants follow all of the same rules and requirements as Retail Merchants, though there are additional fields that are required by the Card Associations in order for a transaction to qualify for the quoted Discount Rate; these fields are Tip and Clerk.
Lodging Merchants have more information to process in their transactions such as the check-in date, number of nights stayed, incremental authorizations, etc., than any other Merchant type This causes the lodging Merchants' transactions some of the most difficult to qualify for the quoted Discount Rate.
Lodging Merchants are those that offer basic rooms to their customers. In the case of resorts and large full-service hotels, it is not uncommon for there to be multiple Merchant Accounts of multiple types. For example, the front desk has a lodging Merchant Account, while the restaurants have restaurant Merchant Accounts and the gift shops will have retail merchant accounts, etc.
Auto rental merchant accounts are used solely by organizations that rent vehicles. There are a variety of different pieces of information specific to the auto rental agreement that have to be included in the transaction data. The majority of these transactions will be carried out face-to-face and a card swipe will occur.
Card Not Present
Card-not-present (CNP) transactions are those where neither the card nor its holder are present at the point of sale, e.g. orders by mail, telephone, fax or the Internet. NDMS has ten years of expert experience in card not present (CNP) or non face-to-face business environments. Why this is so critical to you as a merchant?
Mail Order/Telephone Order or MOTO
A MOTO account is used when the merchant’s primary mode of sales is not done face-to-face with the cardholder; this increases the chance that the true owner of the card is not making the purchase. Because of this, there is a higher risk of fraudulent activities and MOTO accounts carry higher discount rates than the previously mentioned account types. Additional security checks must be handled as well, such as Address Verification (AVS) and Cardholder Verification (CVV2). MOTO accounts are considered different than ECommerce accounts as there is a physical link between the purchaser and the merchant, either by phone or mail.
MOTO accounts are considered different than eCommerce accounts as there is a physical link between the purchaser and the Merchant, either by phone or mail.
Due to the nature of the Internet and prior instances of fraudulent activity with web-based Merchants, eCommerce merchant accounts carry the highest quoted discount rates. If the merchant’s primary mode of interaction with their customer is via the Internet, their merchant account should be configured as eCommerce. eCommerce merchants follow the same rules and guidelines as MOTO merchants and have to flag their transactions as being eCommerce generated transactions.
There are two types of eCommerce accounts, physical and digital. A physical account is designed for a web merchant, which ships or provides some form of tangible product to the cardholder, while a digital account is designed for a Merchant, which provides a service.
