Tip of the Week
Small businesses comprise approximately 50 percent of the total working U.S. population. In 2011, non-employer small businesses alone generated $989.6 billion total revenues, according to Business Insider.
Small businesses are vital to a thriving local community, a successful national economy and credited with establishing an overarching entrepreneurial spirit. What is one thing most of them have in common? They accept credit and debit cards as a means of payment.
The electronic payment processing industry is a critical component for small, mid-size and large businesses alike. All merchants depend on reliable, affordable electronic payment services to grow their businesses; however, some credit and debit card processors take advantage of small businesses that do not have large accounting and auditing teams to protect their interests. Rates can be easily misrepresented, fees can be hidden or inflated - and the numbers quickly add up.
Not many people know or realize the intricate workings of credit card processing. Electronic payment processors establish the link between businesses and the card issuers, enabling the rapid approval of payments after a credit or debit card is swiped. A day or two later, funds are transmitted from the issuer to the merchant. Easy enough.
Interchange fees are the largest piece of the puzzle. This fee is paid by the merchant to the consumer’s card issuer. A second interchange cost is charged by the card networks (MasterCard and Visa). The final portion is paid to the payment processor, which actually handles the transaction and provides customer service.
Merchant/payment processor contracts can vary significantly, but in recent years most merchants prefer to be priced on an “interchange-plus” basis. This provides much greater transparency for the merchant by separating interchange fees - which should be billed at cost - from processor fees, which are negotiable.
Pinterest is becoming a new outlet for scammers. Watch out for con artists who access users’ accounts and pin spammy products. You get an email from Pinterest. It says a friend has shared a “pin” with you. The email and link seem legitimate, so you click on it. The image is different from what your friend typically pins, but it looks real. Common scam pins include celebrity and beauty photos and giveaway offers. When you click on the image, you aren’t taken to an article or the real business’s website. Instead, you find yourself at a site selling counterfeit products, featuring a bogus news story or promoting work from home opportunities, among others.
— Better Business Bureau
Some of them are names you know, while others may be new to you. The world’s most powerful women are:
1. Angela Merkel, chancellor, Germany
2. Dilma Rousseff, president, Brazil
3. Melinda Gates, co-chair, Bill and Melinda Gates Foundation
4. Michelle Obama, first lady, United States
5. Hillary Clinton, philanthropist, former secretary of state
6. Sheryl Sandberg, chief operations officer, Facebook
7. Christine Lagarde, managing director, International Monetary Fund
8. Janet Napolitano, secretary Department of Homeland Security
9. Sonia Gandhi, president, Indian National Congress
10. Indra Nooyi, chief executive officer, PepsiCo
Number to Know
8 million: There are approximately 8 million employer-based small businesses in the U.S. today.
- Business Insider
Google’s Eric Schmidt recently spoke at a tech event at South by Southwest, telling participants that robots are coming and we better get used to the idea, the Washington Post reported. “Robots are replacing human tasks. This is progress,” Schmidt said. “It has a displacement component, but eventually it makes us a more productive society.”
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Biz Bits: What you may not know about your credit card processor
Tip of the Week