All your merchant services questions answered.
We Hope!
Bankcard International Group provides low, medium, and high risk merchant services to hard to place merchants. We offer merchant services combined with the best in class service and professionalism your business deserves. Our promise to you:
Truth in Pricing
We are committed to providing your business with transparency in pricing with NO hidden fees, NO unexpected rate increases – ever, NO bull.
Top Notch Service
Putting the service back into merchant services. We will treat you and your business with respect, honesty, and credibility at all times. We will provide you with top notch customer service and the absolute best merchant account solution for your business and industry type.
Credibility
We will only utilize time tested and proven solutions that provide your business with the confidence and stability it requires so that you can do what you do best – grow your business, not worry about the security of your processing.
Now lets answer the top High Risk Payment Processing questions!
What is a merchant account?
A merchant account is an account with an acquiring bank that enables a business to accept credit cards. A merchant account is basically a line of credit that is established based on a number of factors including credit, business model, and the amount of “credit” that is requested. Bankcard International Group works with over 27 domestic and international acquiring banks so that we can provide the absolute best rates and service possible.
What is an acquiring bank?
An acquiring bank is a financial institution that is a registered member of the card brand associations Visa, MasterCard, Discover, American Express, etc.. in order to fund credit card transactions for their merchants. Acquiring banks provide transaction funding so businesses can accept credit cards, debit cards, and other forms of non-cash payments.
Acquiring banks are appropriately named as they acquire (or accept) credit card transactions from card issuing banks that provide consumers with credit cards. An acquiring bank is responsible for underwriting a “merchant account” for any business that it allows to accept credit card payments. In doing so, acquiring banks assume the risk associated with the transactions they process and fund. In the event that a business is unable to refund a reversal, chargeback, or refund the acquiring bank is liable to provide those funds to the cardholder.
Acquiring banks are appropriately named as they acquire (or accept) credit card transactions from card issuing banks that provide consumers with credit cards. An acquiring bank is responsible for underwriting a “merchant account” for any business that it allows to accept credit card payments. In doing so, acquiring banks assume the risk associated with the transactions they process and fund. In the event that a business is unable to refund a reversal, chargeback, or refund the acquiring bank is liable to provide those funds to the cardholder.
How do I apply for a merchant account?
Applying for a merchant account is relatively simple but you do need to be prepared to provide documentation to show that you are a legitimate business with good intentions.
Since merchant accounts are a function of the banking system and are susceptible to fraud they are required to adhere to federal guidelines including the Patriot Act and KYCC (Know Your Customer’s Customer) oversight. You will be required to provide your business information, personal identification, and credit information so the bank can verify your ability to be approved for an account.
How long does it take to get approved for a merchant account?
It can take as little as an hour up to 7 days or more to get approved for a merchant account. For traditional low-risk merchant accounts, Bankcard International Group offers our industry-leading application portal that can have your merchant account approved and ready to accept credit cards in just a few hours. For some eCommerce or International merchant accounts, the approval process is a little more extensive, it can take up to 7 days but generally, merchants are approved within 2 to 3 days on average.
What types of businesses does Bankcard International Group accept as clients?
Bankcard International Group can provide merchant accounts to just about any business category. We offer the unique ability to provide just about any legal business the first class service and great rates that your business deserves.
Do I need a business checking account to obtain a merchant account?
Yes. Merchants must have a business checking account to establish a merchant account - however - sole proprietors may establish a merchant account with their personal checking account.
Can I get a merchant account with bad credit?
Having bad credit can hinder your ability to establish a merchant account, however, Bankcard International Groups has many options to help merchants accept credit cards. Even if your credit is not perfect or you’ve had a bankruptcy, Bankcard International Group has a merchant account for you.
What credit cards will I be able to accept with a merchant account from Bankcard International Group?
You will be able to accept all major credit cards with Bankcard International Group including PayPal. If you process more than $1,000,000 annually in American Express® transactions you will need to establish a direct account with Amex per their regulations.
Do I need to have an American Express® account before I apply?
No, you do not. If you would like to accept American Express simply let us know and we will take care of it for you at the time of application (unless you process more than $1,000,000 annually in Amex transactions).
My website isn’t ready, can I still get approved for an account?
Yes, you will just need to provide some additional information. For eCommerce merchant account approval you must provide (at a minimum) screenshots of the website pages that include your Shipping, Refund, and Terms of Service as well as the products or services you will be selling. This is required to help the bank verify that you are truly selling the products or services you applied for and not something else. Once your website is live it will be subject to review prior to your merchant account activation.
How will I receive payment from my credit card transactions?
Your credit card transactions will be “batched out” daily and released to your bank account in 24 business hours. Depending on your bank’s processes you will receive your funds within 24-72 hours.
Is there a customer service number I can call if I need help?
Yes. Bankcard International Group not only has a team of highly qualified certified payment professionals to service your questions Monday through Friday but we also provide 24/7 customer service based right here in the United States. Contact our office at +1(800) 441-6814 or reach out through email to cs@bankcardinternationalgroup.com
Will I receive a monthly statement?
Yes. You can choose to receive your monthly merchant services statement either by mail or electronically.
Does Bankcard International Group accept foreign businesses?
Yes, Bankcard International Group has a network of international banks and we provide the ability to work with businesses from just about anywhere in the world! If you have a business in need of an International Merchant Account contact us.
I want to sell my products around the globe. Do you offer International Merchant Accounts?
Selling products internationally from the United States is becoming more and more prevalent, however, many merchant service providers cannot facilitate this function. At Bankcard International Group we offer multiple international merchant account options that are secure, dynamic, and affordable.
What is a discount rate?
A discount rate is actually the opposite of a discount! A discount rate is the rate you are charged for the processing of a credit card transaction. When a purchase is made with a credit card the acquiring bank is essentially “fronting” the proceeds to you, the merchant, and waiting for the banking system to reimburse them (which can take up to 10 days). For providing you with this service they charge a ‘discount rate’ or a rate at which accounts receivable is paid (discounted) before its maturity date. The discount rate is a blend of both a percentage of the amount charged and a per item fee.
Can I use a smartphone or tablet to process credit cards?
Absolutely! Bankcard International Group has multiple mobile payment processing services depending on the needs of your business. We can help you choose which option would work best for your business needs.
What is AVS or the Address Verification System?
AVS is a step taken to help combat credit card fraud. AVS verifies the numerical portion of the address being entered while making a credit card purchase matches that of the billing address registered for the cardholder. Having AVS service on your merchant account can be a very effective tool to help combat fraud and chargebacks.
What is a Chargeback?
A charge back is when a consumer disputes a charge on their credit card statement as being potentially fraudulent. There are a number of reasons why this may happen, such as, products being misrepresented, never delivered, or credit card fraud. However, unfortunately, something that was created to protect consumers has become abused by those it was meant to protect. This is called “friendly fraud” and takes a costly toll on businesses, banks, and credit card rates.
When will I be charged for my credit card processing fees?
Most merchant accounts are set up on a monthly settlement for credit card processing fees, however, some business owners prefer to settle out of their daily deposit. Bankcard International Group will work with your preferred accounting practices.
Do I have to pay my credit card processing fees at one time?
Yes, your fixed monthly fees will be billed at once. If you prefer to have your fees withdrawn daily you can request that on your merchant application but most merchants prefer monthly billing to simplify their daily bookkeeping.
How do I read my monthly merchant account statement?
This is a common question and we understand how difficult it can be to understand your merchant services statement. Bankcard International Group makes every attempt to make our statements as transparent as possible, however, your bill for credit card processing can be quite complex. Simply give us a call and one of our certified payment professionals will be happy to provide you with the knowledge you need to navigate your merchant account statement.
How do I change my bank account information?
This is a simple process but always plan ahead because dedicated deposit account changes can take up to 4 days to take effect. This is due to the fact that the acquiring bank has to verify the new account information as accurate in order to make the change. This is an anti-fraud step to help protect you and your customers.
Do you offer seasonal business merchant accounts?
Seasonal Businesses often get charged monthly fees whether or not the business is actually processing credit card payments. Bankcard International Group has programs with your business in mind. Just let us know your business is seasonal at the time of application including approximately which months you will be operating and we'll make sure you are not paying for merchant services when you don’t need them.
How do I start accepting credit cards with Bankcard International Group?
We make it as easy as possible to accept credit cards. Simply give us a call and talk with one of our certified payment consultants or write us with some basic information about your business and we will get you the proper application and information that best fits your business model.
Can I sell my own Gift Cards?
Custom Gift cards are one of the easiest and most effective ways to promote your business, bring in new customers, and increase your margins. With Bankcard International Group it is easy to create your own custom gift cards. There are just a few simple steps: first decide how you would like the design to look and submit it. Once your design is submitted, proofed, and approved your cards will be produced and linked to your merchant account. Finally, sell, donate, or give away your gift cards and watch your bottom line grow!
How do I process check transactions?
Believe it or not, Check Payment Processing is actually the fastest growing sector of payment processing! Whether you need to accept check payments online, over the phone, or in person Bankcard International Group can help you! We even offer international businesses the ability to accept check payments domestically.
What is PCI Compliance?
Payment Card Industry Data Security Standards (or the PCI DSS) are a series of Best Practices that all merchants who accept credit cards must comply with. PCI Compliance certifies that merchants meet the PCI standards annually. These standards were created by the PCI SSC (Securities Standards Council) which consists of the major card brands (Visa, MasterCard, Discover, American Express) and the card issuing banks - the major banks that issue credit cards to you and your customers. PCI DSS is an effort to help secure payments, protect consumers, and mitigate the negative effects credit card fraud has on the economy.
I just sold my business - can the new owner use my account to accept credit cards?
No, once you sell your business the new owner must establish a new merchant account. This is an important step in selling your business because the holder of the merchant account can be held liable for fraud, misuse, or security compromises associated with the account. You do not want to be liable for a business that you no longer own! Simply let the new owner know how much you have enjoyed working with Bankcard International Group and have them call your representative to establish the new merchant account and we will make the process seamless and easy!
What is EMV?
In an effort to keep up with international payment standards U.S. banks are now issuing EMV chip credit cards. EMV (or chip) technology is named after its original developers: Europay, MasterCard and Visa. EMV credit cards have a small computer chip that generates a unique code with every transaction. This makes it difficult, if not impossible, to counterfeit consumer credit cards. The use of EMV technology has been proven to greatly reduce or eliminate credit card fraud due to counterfeit credit cards. On October 1, 2015, card brands and card issuing banks shifted the liability for card-present credit card transactions in the event of a chargeback due to fraud. The liability of fraudulent credit card transactions used to lie with the card issuing bank, who would pass it down to the processor and onto the merchant. Now, liability will lie with the “least compliant link” in the payment chain. Meaning that merchants must upgrade their point of sale stations to be EMV or potentially face the cost of any and all fraudulent transactions. This liability can go far beyond the amount of the transaction! However, it’s easy to avoid this penalty and pass the liability back to the card issuing bank by implementing an EMV capable terminal.
What is Interchange?
Put simply - Interchange is the cost that all merchants must pay to have their payments processed -it is the non-negotiable portion of your merchant service fees. It is the cost that the card issuing banks, card networks, and major cards brand charge for any credit card transaction. There are over 400 categories in the interchange system for the various card types and acceptance methods. Interchange is the basis for your cost to accept credit cards and represents the cost that credit card processors pass on to business owners. Credit card processors, or merchant service providers, or both, markup interchange for their services using a variety of pricing models.
What is a Basis Point?
A basis point is 0.0001 (or 1/100th of a percent 0.01%) and is commonly used as the measurement for the amount that a business will pay above interchange in order to accept credit cards.
What is Tiered Pricing?
Tiered Pricing is the most common billing model used for merchant services. In this model, a merchant service provider takes each of the hundreds of different card types from the interchange table and clumps them into “buckets” or tiers. Although this model makes merchant services fees appear simple it can also mask many hidden fees. Every merchant service provider or credit card processor can establish which card types fall into which “buckets”, making it impossible to compare one credit card processor to another.
What is a secure gateway?
A secure gateway is a software product that captures your customer’s credit card information and encrypts it for secure transmission and approval by the credit card processor. A secure gateway is most commonly used in the eCommerce environment and is integrated with your shopping cart. From the user perspective, the purchase is seamless yet the secure gateway actually takes over as soon as the customer proceeds to the checkout screen. From that point on, the transaction takes place within the secure gateway where the transaction is encrypted and submitted for approval and funding.
How do I accept credit cards online?
Starting an eCommerce business or adding eCommerce to your retail location can be a great way to bolster retail sales or to expand your customer reach. Accepting credit cards online is easy. Once your website is built you can apply for a merchant account and choose the secure gateway that most easily integrates with your shopping cart. There are many website building platforms that make creating your website easy but choose carefully because many of them require that you use their (expensive) credit card processing services or levy additional fees if you do not use one of their preferred providers. Contact Bankcard International Group today and let one of our consultants guide you.
What is a 1099-K?
All credit card processors are required to report the gross credit card transactions that any business processes to the IRS. Both the IRS and the business owner are provided a copy of the reported income via a 1099K form. The IRS began requiring processors to report this income in an effort to catch businesses not reporting 100% of their income.
What is TIN verification?
Your merchant account must be established under the exact same legal name and TIN (Taxpayer Identification Number) as your taxes. That means all the dashes, dots, and spaces must be the exact same with your merchant account and your IRS business registration! If your TIN does not exactly match IRS business records, the IRS requires your merchant service provider to withhold 28% of your processing volume until the discrepancy is rectified. If you receive a notice that your TIN does not match please contact Bankcard International Group so that we can help you fix it right away.
What is a Virtual Terminal?
A virtual terminal is a secure web-based interface that allows a merchant to process credit/debit cards, ACH or check payments from any computer that has an Internet connection. A virtual terminal can work with a card reader or be used to accept payments over the phone.
What is Recurring Billing?
Recurring billing allows you to schedule payments from your customers on a regular basis. Recurring billing can greatly reduce the time and money you spend on billing and collections. It also provides a very convenient way for your customers to pay you on time, every time. One of Bankcard International Group’s consultants can help you establish the best recurring billing procedures for your business.
What is ACH?
ACH stands for Automated Clearing House. ACH payments are made when a customer prefers to use their bank account directly to make a payment for goods or services. ACH payments are a fast, secure, and cheap way to accept payments.
Should I offer ACH Payments?
ACH processing is a great alternative payment method for many businesses because it’s fast, safe, and less expensive than accepting credit cards. Businesses have a need for recurring payments, such as membership fees ( think gyms and supplements). Billing and subscriptions, in particular, can greatly benefit from accepting ACH Payments. ACH is also widely used in industries such as healthcare, government, utility providers and property management.
Is ACH the same as an eCheck?
Although ACH processing and eChecks both take payment directly from checking accounts they are greatly different in how they are processed. With ACH funds are transferred from one bank account to another by means of debiting or crediting the accounts. With an eCheck, funds are originated via a one-time payment using a check that is generated virtually or physically. That check is then deposited either electronically or physically to your bank account. Both payment methods utilize routing and account numbers. eCheck Payment Processing is very popular with many high risk industries because it does not require a “funding” bank and most closely represents a customer writing a check for their purchase making it more difficult to dispute.
How long do refunds take?
According to the Electronic Transfer Act, banks are given up to 10 business days to process refunds. There are many improvements being made to make this process more efficient for both businesses and consumers but the U.S. banking system remains one of the slowest among first and second world nations.
Can I accept ApplePay, Android Pay, Samsung Pay or any other Pay?
Yes, you can accept Apple Pay, Android Pay, Samsung Pay, and most any other mobile payment type. All you need is a terminal or card reader that is NFC (near field communications) compatible. This will enable your business to accept payments from any NFC enabled device, which not only increases payment security but can be much quicker than a traditional credit card payment.
What is NFC?
NFC stands for Near Field Communications. NFC is widely used in mobile payment technology, like ApplePay. It is considered to be a highly secure payment method because consumers’ credit card information is never exposed to the payee by handing a credit card over. Rather, the customer simply unlocks their virtual wallet (usually with biometrics or a unique PIN) and hovers their device or card near your terminal. The terminal is able to sense the NFC device and the payment information is securely passed on for processing.
What is a High Risk Merchant Account?
A high risk merchant account is a credit card payment processing account for merchants that are classified to be a high risk to the acquiring bank or credit card brands. High risk classification is generally based on the services or products offered by the merchant or business. Businesses can be considered high risk due to a number of reasons including a high chargeback incidence in the industry as a whole (like the travel industry), business sells or works with morally questionable products (like the adult entertainment industry), products are restricted legally or by age (for instance tobacco and CBD), or they could be associated with “brand damage” to the acquiring bank (like the firearms industry).
Can I accept Credit Cards for Cannabis/Marijuana?
At this time the federal government and the card brands consider accepting credit cards for cannabis as money laundering and do not legally allow credit cards to be used to purchase cannabis. Any provider offering credit card processing to cannabis businesses is opening themselves and the businesses they serve to potential federal prosecution. Until federal guidelines are adopted legal, plant-touching, cannabis businesses cannot legally accept credit cards. However, Bankcard International Group does have legitimate card payment options for both retail and eCommerce cannabis merchants.
Can I accept Credit Cards for CBD?
Yes, however, be careful who you work with. There are very few acquiring banks certified by the card brands to offer compliant CBD payment processing solutions. It is very important to work with a provider who is experienced in navigating the complexity of accepting credit cards for CBD. Although it is technically legal at a federal level, there are still many states and municipalities that do not allow for the sale of CBD. For this reason, there are very few processors and acquiring banks that choose to work transparently with the industry. Be sure to work with a reputable payment processing provider.
Do you work with the Adult Entertainment Industry?
Yes, we work with legal adult entertainment businesses and understand the unique challenges of the industry. We have both domestic and international solutions avaiable.
What is Offshore Payment Processing or Merchant Accounts?
Offshore payment processing refers to a domestic business (based in the U.S.) that utilizes a bank in a different country to process its payments. There are many reasons why this may be necessary or desirable for the business. Offshore merchant accounts are not the same as international payment processing. With an offshore merchant account, the payment is processed in the country where the merchant account is held, whereas International Merchant Accounts process payments domestically (in most cases).
What is Dynamic Currency Conversion?
Dynamic currency conversion is a process where the amount of a credit card transaction is converted at the time of sale to the cardholder’s preferred currency or the currency of the payment card's origin. In other words, let's say you make an online purchase from a European merchant but want to pay in US dollars. If that merchant’s payment processor offers dynamic currency conversion then your purchase would be charged in the equivalent US dollars but funded out to the merchant in Euros.
What is an authorization?
This is the term given to the process of validating whether funds are available on a credit or debit card. When you process a credit card transaction, a response comes back from the issuing bank with either an ‘approved’ or ‘declined’ authorization attempt by the issuing bank.
If the authorization is approved, funds are available in the customer’s account. Once an authorization is approved, a six or seven digit authorization code will be provided. If the authorization is declined there are either not enough funds in the customer’s bank account (if a debit card), the customer has reached their credit limit, or there is some other problem with the credit card. Authorizations “hold” the transaction funds until the day’s sales are “batched”, at which time it is finalized for processing and funding.
What is Batching out?
“Batching out” is the process of finalizing all transactions for a period of time, usually daily, and sending them out for final processing and funding. Most businesses batch out automatically but many need to do so manually. For instance, restaurants that accept tips should always batch manually so that their staff can ensure that they adjust their authorizations to accommodate for any tips left by their customers. If the batch were to be sent before this adjustment - the staff would not receive their tips.
What is an Authorization Fee?
This is the “per transaction” fee assessed for each communication or authorization attempt that is made with a card payment. It is not a percentage based on the amount of the sale but rather a fixed amount for each transaction run.
What is Average Ticket Size?
The average ticket size refers to the average dollar amount of your sales transactions. Average ticket size is always asked when you set up a new merchant account. If you do not currently process credit cards you can simply estimate your average credit card sale amount. If you already process credit cards, just divide your total monthly volume by the number of transactions to determine your average ticket size. This number is important in setting up security matrixes on your account for fraud detection and prevention.
Card Present Transaction
Any transaction that takes place in person where a card is physically used to make a purchase. It is important to note how you will be accepting credit cards in order for your provider to set up your merchant account with the appropriate parameters that allow you to take advantage of the best possible interchange categories.
Card Not Present Transaction
This is any transaction where card information is entered into the terminal without a physical card, such as online or over the phone. Once again, it is important to note how you will be accepting credit cards in order for your provider to set you up with the appropriate parameters that allow you to take advantage of the best possible interchange categories.
Credit Card Imprinter
This is a device that makes a carbon imprint of your card information to be processed at a later time. Although rarely used anymore, in rural or mountainous areas where communications are subject to going down many businesses must use a credit card imprinter to allow them to run credit card transactions when communications are up again. With today’s security concerns, this is no longer recommended. A more secure option would be to upgrade to a wireless/WiFi terminal equipped with “store and forward” capability. The terminal is capable of storing all transaction information while communications are down and forwards the transactions once they are available again. This way no one’s card information is available to steal.
What is store and forward?
Store and forward refers to a terminal’s ability to capture and encrypt card information even when communications are not available to authorize the transaction. This can be useful for many businesses in remote areas in the event the internet goes down during business. As soon as they get back into an area with communications the terminal will send out the transactions for approval.
What is a credit card processor?
A credit card processor is an entity that handles the electronic verification of card transactions and releases them to the acquirer for funding.
What is Encryption?
The process of translating data into a unique code (encoding) to ensure secure transmission. Encryption is an effective way to help ensure data security. Credit card terminals and secure gateways are responsible for Encrypting card data before it is transmitted for authorization.
What is a Monthly Minimum?
This fee is the amount that a processor charges you if its discount rate, transaction fees and other account fees do not collectively equal a predetermined amount defined in your merchant processing agreement. For example, if your monthly minimum is set at $25 dollars but your total processing fees (not including monthly or other fixed items) equal only $20 then your processor will charge your account the difference of $5 to meet the monthly minimum.
What is a PCI Non-Validation Fee?
A fee charged to you if you do not obtain a PCI Compliance Validation Certificate. The validation certificate is obtained by completing and passing an annual Self-Assessment Questionnaire (SAQ) and/or Quarterly Network Scan (if you electronically store cardholder information or your payment processing systems are connected to the internet).
What is a PIN?
This is the personal identification code associated with a card or virtual wallet that a customer must enter when making a purchase.
What is a Retrieval?
Retrieval is the first step in the chargeback process. In a disputed transaction, the issuing bank requests a copy of the physical sales ticket for the transaction in question to be retrieved.
What is a Terminated Merchant File (TMF)?
Also called MATCH, this database is maintained by third-party processors, banks and other financial institutions. It is a cohesive list of merchants whose privileges to process credit cards and other electronic transactions have been terminated by an acquirer for violation of a merchant processing agreement. Both business and personal information is placed on the MATCH list. Once a business is placed on this list it can become incredibly difficult to establish another merchant account.
What is an Ancillary Cannabis Business?
Ancillary cannabis businesses or cannabis-related businesses are any business that generates a majority of their income from the cannabis industry but does not work directly with the marijuana plant or any of its by-products. Ancillary cannabis businesses generally market directly to the industry and/or its consumers.
PIN Debit Payment Processing for Cannabis: What does the receipt look like?
The receipt looks like a typical payment receipt containing the merchant’s name and address, telephone number, terminal number, transaction date, final amount charged to the card, the last four of the card charged, among other data points.
PIN Debit Payment Processing for Cannabis: What does the customer's bank descriptor look like ?
Merchants use their true DBA/Trade name as the descriptor. However, they do have the option to choose whether they want their DBA or legal name as the descriptor.
PIN Debit Payment Processing for Cannabis: What is the funding time frame?
Funding time frame is typically next business day.
For example, if a merchant submits a batch on Monday evening, the merchant can expect funds to deposit to their bank account on Tuesday evening/early Wednesday morning, depending on time zone.
PIN Debit Payment Processing for Cannabis: Who is the bank?
Due to the Bank and processor's legal counsel recommendations we do not publish the name of our bank or processor. HOWEVER, ALL approved applicants DO receive FULL BANK disclosure. The acquiring bank has been servicing depository accounts for the industry for many years. Call us for more information.
PIN Debit Payment Processing for Cannabis: How is this legal?
Legal counsel for the bank and processor has carefully reviewed all compliance aspects and if buyer/seller transact in the sale and purchase of Cannabis, where it is deemed legal, our solution is compliant. Points that help in a sustainable cannabis payment processing solution that make ours legal are:
- At the present time, only point of purchase PIN based debit transactions are accepted ensuring a card present purchase.
- “Preventing the distribution of marijuana to minors;We require that dispensaries have all applicable cannabis license(s), that the licenses are active and that the merchant business is in good standing with their local jurisdictions, and that they are compliant with all applicable laws and regulations. Since federal marijuana laws still technically deem marijuana illegal, these laws exist in obvious contradiction to state and local legislation. Our legal counsel has advised that, assuming merchants are compliant with state and local laws and regulations, our underwriting criteria and ongoing monitoring programs should, in addition to other legal compliance topics, focus on the eight federal “enforcement priorities” as outlined in the Cole Memo released in August 2013, which are namely the following:
- Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
- Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;Unlike Point of Banking/Cashless ATM solutions, Point of Purchase, the dispensary is properly underwritten with full KYCC being performed and verification of MRB license is current, with periodic reviews. There is no masking of the merchant's true business to our clearing bank unlike many Point of Banking systems.
- Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
- Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
- Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
- Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
- Preventing marijuana possession or use on federal property.”
- Our payment platform operates on the pin debit networks only and not the credit card networks like other solutions that are being offered.
- In addition we have taken steps to ensure that the chain of custody and flow of funds never touch a source that does not have proper BSA/AML policies and procedures in place for the industry.
PIN Debit Payment Processing for Cannabis: What is the MCC Code?
The MCC Code for cannabis is 5912- "Merchants classified with this MCC sell prescription and proprietary drugs, nonprescription (over-thecounter) medicines, vitamins, cannabis (where legal to do so) and may also sell related items such as cosmetics, toiletries, tobacco, heating pads, back supports, novelty merchandise, greeting cards, and a limited supply of food items."
PIN Debit Payment Processing for Cannabis: Does it integrate with my POS?
We can integrate with many of the most popular POS platforms through IBM’s DataCap software or Dejavoo’s SPIN platform, for supported devices. Call us for a current list of supported POS systems and terminals. If you would like yours on that list let us know - we'd be happy to talk with them.
PIN Debit Merchant Account for Cannabis: How long does it take to get set up?
Typical application-to-approval times are around 2-4 business days for correct and completed packages.
PIN Debit Merchant Account for Cannabis: What is the difference between debit and credit cards ?
- A debit card is directly linked to a cardholder’s checking or similar type of cash account. When a cardholder pays for something using a debit card, funds are immediately debited from the cardholder’s account.
- A credit card is linked to a line of credit issued to a particular cardholder based on a financial institution’s evaluation of the cardholder’s creditworthiness. The cardholder pays for goods by charging against the line of available credit. The cardholder is not immediately responsible for the payment/transfer of funds—instead, the credit card network assumes the risk and the cardholder pays off any balance owed at a later date. The majority of credit cards on the market are issued by major national/international financial institutions who do not (yet) support the industry.
PIN Debit Merchant Account for Cannabis: Why can't I accept credit cards?
Credit cards, essentially a line of credit, are subject to different laws and card brand rules than debit/”check” cards. All of the major credit cards have issued specific statements stating that they will not support any cannabis-related activity on the credit networks, in addition to legislation forbidding certain financial activities. Dispensary or cannabis Credit Card processing is simply illegal (at this time).
PIN Debit Payment Processing for Cannabis: Can I charge a Convenience fee to help cover the cost?
Yes, merchants can choose between a fixed-dollar fee or a flat percentage rate up to 4.0%.
PIN Debit Merchant Account for Cannabis: How can I accept a debit card with a Visa or Mastercard logo on it?
Debit cards are different from credit cards. The Visa or Mastercard brand on the front of a debit card is in place to facilitate "PIN-less" transactions AKA signature Debit transactions. For cannabis, as this time, signature debit is not available because these transactions are routed through Interchange on federally regulated card brand rails.
PIN Debit transactions are processed differently. The issuing banks (the debit cardholder’s bank/financial institution) partner with a debit card network to “issue” cards programmed to be processed according to a certain network’s debit transaction routing protocols. However, this is only part of the picture, as secondary and sometimes tertiary debit networks (typically “regional” networks like STAR, NYCE, etc.) are also supported. For example, if a Chase customer attempts to charge their Visa-branded debit card—and Visa’s in-house debit network, Interlink, is not supported—the debit card will seek an authorization through another network such as Maestro, STAR, etc.—whichever the issuing bank has partnered with as an alternative network.
It is possible that a bank like Chase, Bank of America, Wells Fargo, etc. has partnered with both Visa and Mastercard’s debit networks to allow a cardholder access to both of these debit networks, Interlink and Maestro, respectively, giving the “front-of-the-card” brand/network the “first” position, while giving the other brand the second position (e.g., if Brand #1 is declined, then run Brand #2, etc.).
Look on the back of your Debit card and you will likely see multiple network logos.
Federal law (see Section 1075 of the Dodd-Frank Act, also known as the “Durbin Amendment”) requires that “[an issuing bank] or payment card network shall not…restrict the number of payment card networks on which electronic debit transactions may be processed to (i) 1 such network; or (ii) 2 or more such networks which are owned by (I) affiliated persons; or (II) networks affiliates with such issuer.”
Debit network prioritization is also subject to the particular card processor’s BIN-level hierarchy. For example, if a processor hierarchy is set to prioritize NYCE over Interlink, and the card is NYCE-enabled, the debit card will route to the NYCE debit network first, even though the primary card network may be Interlink.
PIN Debit Payment Processing for Cannabis: Can you reprogram my terminal?
Yes. We can remotely program supported terminals through a remote file download (internet connection required).
PIN Debit Payment Processing for Cannabis: How is this different than a Point of Banking Cashless ATM solution?
Cashless ATMs are designed to make transactions appear like cash withdrawals at ATM machines. This is an obvious means of working around certain Card Brand rules, which may result in account termination at any time. Moreover, transactions are typically denominated in $5 or $10 increments, which creates an awkward customer experience due to the “illegitimate” feeling of the transaction. This is not the trajectory for sustainable cannabis payments.
Our true Point-of-Purchase solution is a true PIN-Debit environment, where a cardholder is required to enter their PIN in order for the transaction to be processed.
This is in contrast to “offline” debit transactions which may be processed at a later time over credit card networks despite being a “debit” transaction.
PIN-Debit transactions are processed immediately and are true point-of-sale/purchase transactions just like you experience at the grocery store or anywhere else.
PIN Debit Merchant Account for Cannabis: Why is a Bank Attestation letter required?
The Attestation Letter serves as an acknowledgement to our bank that the merchant has made their banking partner aware that it is a cannabis-related business. The acquiring bank will also use this letter to verify with your financial institution that they have cannabis compliance in place and that they do support the industry.
Who is the OCC?
The OCC stands for the Office of the Comptroller of the Currency. The OCC supervises national banks, federal savings associations, and federal branches and associations of foreign banks.
The OCC pursues a number of main objectives:- To foster competition by allowing banks to offer new products and services
- To ensure the safety and soundness of the national banking system
- To improve the efficiency and effectiveness of OCC supervision especially to reduce the regulatory burden
- To ensure fair and equal access to financial services to all Americans
- To enforce anti-money laundering and anti-terrorism finance laws that apply to national banks and federally licensed branches and agencies of international banks
- To investigate misconduct committed by institution-affiliated parties of national banks, including officers, directors, employees, agents and independent contractors (including appraisers, attorneys and accountants).
Do you offer a Marijuana Merchant Account for cannabis dispensaries to accept credit cards?
No. At this time it is illegal to accept credit cards for cannabis - regardless of the method. Until there is federal change cannabis merchant accounts are simply unsupportable.
Offices that are offering to provide credit card processing for cannabis are doing so under false pretenses and are masking the true nature of the business from the processor and or acquiring bank. Doing so is fraudulent and can constitute money laundering.
