Preferred Retail Systems

Easily one of the most frustrating aspect of RMS can be the setup of Electronic Data Capture (EDC). EDC eliminates the duplication of effort often associated with tendering sales by integrating Credit Card (including debit cards) acceptance and approval into your POS and ultimately your accounting system.

Once set up, it rarely gives you any trouble, but watch out! Your setup is only verified by the correct amount of money actually appearing into your bank account. If this very elementary, but important result is not occurring, your money is either floating in cyberspace or worse it is being deposited into some unsuspecting  medical clinic in North Carolina or perhaps even the North Pole.

The following information will give you some perspective about this issue.

Understanding Credit Card setup is challenging for one very simple reason – there are way too many hands in the cookie jar. There are at least 5 and perhaps more entities involved and they all have to be properly provisioned for this to work. Together they share in the spoils of your roughly 3% Credit Card Fees.
 

First is the Cardholders Bank, or the Bank that issued the Credit Card you are about to accept. This is the only entity with which you have absolutely nothing to do. Your only concern is whether the transaction is approved or not. Once approved, it is “money in the bank”… assuming you get the rest sorted out. The Cardholders bank gets about 75% of the Credit Card fees charged.

Second is the Processor. This company is responsible for your transaction from the time it is entered at the POS, until it is deposited into the Acquiring Bank. This is not the same as your Business bank account. The processor collects about 8% of your Credit Card Fees.

Third is Mastercard/ Visa, Discover, and American Express. Although you don’t deal directly with them, they provide name recognition (brand), licensing, and governance over the issuance of Credit Cards with their respective logos. The only affect they have on your transaction is determining how funds are routed through the processors system. They collect about 5% of your Credit Card Fees.

Fourth is the Data Exchange company which provides the secure and redundant infrastructure to ensure that your transactions are delivered safely across the internet from your terminal or PC to the processor, then to the acquiring bank, and then finally into your Business Bank Account. They collect about 6% of you Credit Card Fees.

Fifth is the Acquiring Bank or the Bank which setup your merchant account. They function as a holding facility for your funds during processing. They safeguard your settled batches until they are deposited into your Business Bank Account. They collect about 4% of your Credit Card Fees.

 Finally, the phone company gets a little piece of the action for providing the network that connects all of the entities together. They get about 2% of your Credit Card Fees. 

This may seem like a lot of steps from Credit Card in hand to “money in the Bank”, but there are just a couple of areas upon which you need to focus. The individual at the Bank or Company that sold you your Merchant Services will be unable to provide much in the way of support once you sign up. Their compensation is often tied to the number of new accounts they can generate, and once you are a customer they may not be very helpful. This is perhaps a harsh indictment, but consistent with my experience. You will then have to deal with their customer service department which will probably be less than helpful because almost all of their business is terminal based, and your PC based service request will confuse most of them.

 I always have better luck focusing on the Processing Company. They hold the keys to the information you need to setup your EDC functions. Call them first, but recognize that the technical support folks can do little more than verify your Merchant Account settings. They cannot tell you what you need to enter in RMS or where it needs to be entered. But they can verify the information received is accurate, which in some cases is not.

There is plenty of good news about Credit Card Processing with RMS using a Preferred Provider. Once setup correctly, it rarely ever gives you any trouble that is not self induced such as selecting Discover or Amex as the tender type when it is actually a Visa Card. When your transactions are approved over a broadband connection, it is very fast. And the best news is that you only have one step, not three, to get your credit card information from the Card Holder through the sale and into your accounting system, and that’s a good thing.

 Helpful Hints:

Be sure to settle your EDC transactions every day right after closing and z-report. This way, your EDC batches will correspond with your daily deposits and bank reconciliation.  If you settle two or more days together it is not the end of the world, but you will go crazy doing reconciliations.

Make a note somewhere on your deposit slip of your Credit Card totals for the day. It needs to be outside of any boxes or account numbers, and is not required by your bank. But when you do your bank reconciliations, you will be very glad this information was recorded.

Review your Credit Card Merchant Fees each month and check for new rates at least yearly, or anytime you receive a price increase. And be sure any processor you select is certified compatible with Microsoft RMS. Most are, but some are not.

When all is said and done, the hassle of accepting Crdit Cards is clearly good for your bottom line. And tendering Credit Cards in RMS will save you time… and that will save you money.