Podcast
Questions and Answers
Average ticket size is calculated by dividing total sales by the number of products sold.
Average ticket size is calculated by dividing total sales by the number of products sold.
False (B)
Brick-and-mortar businesses usually have lower operating costs compared to web-based businesses.
Brick-and-mortar businesses usually have lower operating costs compared to web-based businesses.
False (B)
Trade shows often showcase products and services across various industries.
Trade shows often showcase products and services across various industries.
True (A)
The EBT card allows participants to pay for items using cash benefits only at participating locations.
The EBT card allows participants to pay for items using cash benefits only at participating locations.
Payment processors are responsible for transmitting information exclusively between customers and retail stores.
Payment processors are responsible for transmitting information exclusively between customers and retail stores.
B2B transactions occur between businesses and consumers.
B2B transactions occur between businesses and consumers.
Companies that participate in trade shows do so to promote their competitors' products.
Companies that participate in trade shows do so to promote their competitors' products.
The average ticket size is a key performance measurement for various business sectors, including retail.
The average ticket size is a key performance measurement for various business sectors, including retail.
The interchange rate is a fee that merchants pay with every credit card and debit card transaction.
The interchange rate is a fee that merchants pay with every credit card and debit card transaction.
The discount rate refers to the interest rate charged to consumers for long-term loans.
The discount rate refers to the interest rate charged to consumers for long-term loans.
NACHA stands for the National Automated Clearing House Association.
NACHA stands for the National Automated Clearing House Association.
ACH payments are primarily made through credit card networks like Mastercard and American Express.
ACH payments are primarily made through credit card networks like Mastercard and American Express.
A PIN debit transaction is completed using a password entered by the customer at the point of sale.
A PIN debit transaction is completed using a password entered by the customer at the point of sale.
The Debit Network only allows for ATM cash withdrawals and does not support online transactions.
The Debit Network only allows for ATM cash withdrawals and does not support online transactions.
Landing pages are only effective after a customer has made a purchase.
Landing pages are only effective after a customer has made a purchase.
Retargeting involves showing ads to users after they leave a website without making a purchase.
Retargeting involves showing ads to users after they leave a website without making a purchase.
Storytelling is a one-way interaction between the teller and the audience.
Storytelling is a one-way interaction between the teller and the audience.
Merchant Acceptance allows businesses to process payments through cash only.
Merchant Acceptance allows businesses to process payments through cash only.
A Restricted Industry Addendum is not necessary for industries with low risk in payment processing.
A Restricted Industry Addendum is not necessary for industries with low risk in payment processing.
Bank Disclosure includes information about fees and terms associated with payment processing services.
Bank Disclosure includes information about fees and terms associated with payment processing services.
Storytelling does not require any interaction from the audience.
Storytelling does not require any interaction from the audience.
Retargeting can display relevant ads to users based on specific pages they have visited.
Retargeting can display relevant ads to users based on specific pages they have visited.
CRM systems help with contact management and sales management.
CRM systems help with contact management and sales management.
Email marketing is only useful for the initial stages of the customer relationship.
Email marketing is only useful for the initial stages of the customer relationship.
Community engagement focuses solely on geographic location.
Community engagement focuses solely on geographic location.
A fan page is a personal profile for sulking.
A fan page is a personal profile for sulking.
Email marketing helps achieve objectives like notoriety, image, and action.
Email marketing helps achieve objectives like notoriety, image, and action.
CRM solutions are limited to customer interactions in sales only.
CRM solutions are limited to customer interactions in sales only.
One of the main benefits of email marketing is its scalability.
One of the main benefits of email marketing is its scalability.
Agent productivity is not a focus of CRM systems.
Agent productivity is not a focus of CRM systems.
A merchant account allows a business to accept and process electronic payment card transactions.
A merchant account allows a business to accept and process electronic payment card transactions.
Fees charge refers to a variable price charged for a specific service.
Fees charge refers to a variable price charged for a specific service.
CDP stands for Credit Discount Program and allows businesses to absorb credit card fees.
CDP stands for Credit Discount Program and allows businesses to absorb credit card fees.
The effective rate (AER) is calculated only for secured loans.
The effective rate (AER) is calculated only for secured loans.
Monthly volume is used to assess a merchant's risk by calculating average transaction volume.
Monthly volume is used to assess a merchant's risk by calculating average transaction volume.
Surcharge downgrade specifically applies only to the ‘Qualified Discount Rate’ of the processing fee.
Surcharge downgrade specifically applies only to the ‘Qualified Discount Rate’ of the processing fee.
A merchant service is necessary for a business to handle cash payments from customers.
A merchant service is necessary for a business to handle cash payments from customers.
Average monthly transaction volume is calculated by dividing the total annual transactions by 12.
Average monthly transaction volume is calculated by dividing the total annual transactions by 12.
Study Notes
Merchant Services Overview
- Merchant service involves financial relationships enabling businesses to process card payments from customers.
- A merchant account is a specialized business bank account allowing the acceptance and processing of electronic payment transactions, requiring partnership with a merchant acquiring bank.
Payment Processing Concepts
- Cash Discount Program (CDP) allows passing processing costs to customers who pay with credit or debit cards, preventing businesses from incurring 3-4% in loss from fees.
- Surcharges added to the “Qualified Discount Rate” of processing fees are known as surcharge downgrades, commonly classified as "Mid-Qualified" and "Non-Qualified".
- The Interchange Rate is a fee charged per credit or debit card transaction, also referred to as "swipe fees".
Financial Metrics
- Average monthly volume reflects a merchant's average transaction volume, calculated as annual transactions divided by 12, vital for evaluating merchant risk.
- The Effective Rate (AER) represents the restated interest rate on loans, reflecting the equivalent annual rate for compound interest.
- Average ticket size indicates the dollar amount of sales per customer, determined by dividing total sales by the number of customers.
Types of Transactions
- ACH payments are electronic bank-to-bank transfers through the ACH network, classified into Direct Deposits and Direct Payments.
- Pin debit transactions occur when a customer uses a bank-issued debit card linked to their checking account and enters a PIN at the point of sale.
Business Types and Marketing
- "Brick-and-Mortar" denotes traditional businesses operating physical stores, facing challenges from e-commerce competitors due to higher operating costs.
- Trade shows are industry-specific exhibitions where companies promote their products and services.
- E-mail marketing fosters customer relationships through direct messaging and can enhance awareness, image, and action, with scalability for reaching many recipients.
Engagement and Relationship Management
- Community engagement is a strategic approach involving collaboration with focused groups to address shared issues.
- Fan pages on social media like Facebook serve as communication channels with audiences unified by interests in specific brands or topics.
Advanced Marketing Strategies
- Retargeting targets previous website visitors with relevant ads after their initial engagement, enhancing potential conversions.
- Storytelling in marketing engages an audience through interactive narratives, enriching listener involvement and response.
Compliance and Financial Transparency
- Merchant Acceptance refers to processes enabling merchants to accept card payments.
- Restricted Industry Addendum outlines specific regulations and additional conditions for high-risk industries in payment processing.
- Bank Disclosure is critical information provided by banks to merchants detailing fees, terms, and conditions associated with payment processing services.
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Description
Test your knowledge of essential merchant services terminology with this quiz. Understand terms like Merchant Service, Merchant Account, and Cash Discount Program. Ideal for those interested in banking and payment processing terms.
