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• Explain the components of the credit approval process
• Utilize the Risk Acceptance Grid to identify necessary paperwork for approval
• Identify the difference between a Chargeback and a Retrieval Request
Objectives
By the end of this module, you will be able to:
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Reasons for Credit
48 Hour Payment2 business days from settlement to deposit in Merchant’s DDAAdditional time between merchant receiving money and TransFirst getting paid
Floating Interchange CostsIssuing Banks Fees are taken out before TransFirst is paidOnly bill merchant once a month
ChargebacksCardholder or Issuing Bank is disputing a transactionCard Not Present merchants more susceptible
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Liability
Liability for a Merchant account
Advocate for collection issues in a chargeback situation
Merchant’s credit is investigated for approval or denial
Financial responsibility assumed before receiving payment
Monitor potential fraudulent transactions
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Responsibility
Approve or Deny Questionable Merchants
If STW Holds Liability
Perform Risk Assessments
and Transactions Inquiries
Handle collections for chargebacks
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Credit/Risk Grid
6 Risk Categories:
Low
Medium
High
Medium/High with certain characteristics
Government Entities
Not for Profit
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• Merchant Application Packet
• Premise Inspection
• Personal Guarantee
• Marketing Materials
• 2 Trade References
• Most recent 2 years Business Financials
•In business less than one year, Business Plan and/or pro forma financial statements
• Proof of Property
SSN not required for:Not for ProfitGovernment EntitiesPublicly Traded Corporations
•Smaller Ticket
•Low Volume
•Mostly Swiped
•Good Credit
Smaller Ticket
Lower Volume
More CNP
Future Delivery•Same as Medium
•Almost all CNP
•Future Delivery•Large Ticket
•High Volume
•Future Delivery
•Specific SIC Codes
• Contact information
• 501c(3) form from IRS
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All merchant applications submitted
through the Gold Merchant Level
approval process
In some cases, due to poor credit or other red flags the merchant will
not qualify.
At this point all hope is not lost
Rule of thumb: Attempt Gold, Attempt Silver
Gold Merchant Level
Underwriting
Silver Program
Merchant Level Credit Program:
• Very high risk or negative credit
• Specific criteria is needed
• Stricter guidelines
• More Restrictive
• Addendum to Application
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Underwriting
If no solution can be found, TransFirst contacts the merchant and takes
responsibility for the decline
STW has the option to accept liability for merchant approval if declined by TransFirst
STW Accept Liability
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Underwriting
Exclusion ListMerchants will not be set up
Prequalification FormInquiry for questionable merchants
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All transactions processed by our merchants come in large files to the Risk department every morning.
A Risk investigator is assigned to look over the batch for inconsistencies and fraudulent transactions.
One way TransFirst mitigates the risk is by rejecting transactions that should not have been processed, prior to payment to the merchant.
Risk Department
TransFirst looks to Mitigate Risk
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Chargeback/Retrieval
ChargebackWhat is a Chargeback?
A dispute of a transaction
Who can submit a Chargeback?CardholderIssuing bank
Who Notifies the merchant?TransFirst
How?Written Letter
RetrievalWhat is a Retrieval?
An inquiry of a transaction
Who can submit a Retrieval?Cardholder
Who Notifies the merchant?TransFirst
How?Written Letter
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Chargeback/Retrieval
A merchant is debited the transaction amount on a chargeback
A retrieval only requires a response with verification of the transaction
The Difference is:
Failure to respond will result in a Chargeback
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Review
1. Three reasons TransFirst does a credit check on new merchant accounts?
48-hour paymentFloating Interchange CostsChargebacks
2. Name 2 of the Risk levels a merchant can be classified as by Credit?
LowMediumHighMedium/High with certain characteristicsNot for ProfitGovernment Entities
3. What are two reasons a transaction is reviewed by the risk department?
Higher than Average TicketOver Monthly Volume
4. How does TransFirst notify a merchant of a chargeback or retrieval?
By Letter, mailed