Sharing our experience to educate others.

Here’s an infographic from to explain how credit card companies make their money. (Click to enlarge) Enjoy!

Credit Money
Via: Credit Score

My boyfriend and I went out to dinner last Saturday night, and enjoyed an amazing meal. I truly recommend The Maritana Grille in St. Pete Beach, FL.

When it was time to pay the bill, my boyfriend pulled out his trusty debit card. The waiter saw the card and brought an old-school manual imprinter over to our table. He apologized, and explained that their terminal was down. We “chuckled” along with him, mostly at the sight of such an old piece of equipment.

It’s pretty cool to think about how much the technology behind credit card processing has advanced. As consumers, we rarely (if ever) stop to think about what happens behind the scenes of a purchase. Many technical steps occur in the few seconds between handing a merchant your credit card and walking away with your purchase.

Here is a (simple) breakdown of the process. (If you need help with vocabulary, see the glossary below):

1. You walk up to the checkout counter with the items you’d like to purchase.

2. Either you or the checkout employee swipes your credit/debit card, or enters the numbers manually.

3. An “Authorization Request” is generated.

4. The Processor links up with the Visa/MasterCard network in order to transmit the Authorization Request to your bank.

5. Your bank verifies that your card is valid, and that you have the funds to complete the transaction.

6. A “hold” for that amount is placed against your account.

7. Once the approval is received a “Deposit Transaction” is transmitted which finalizes the transaction.

8. You walk away with your purchased items.

9. The Net Settlement Amount is deposited to the Merchant’s account, usually by the end of the same business day.

Remember… all of the above happens in a matter of seconds. My boyfriend’s account was debited yesterday (Thursday), for the meal we’d eaten 5 days earlier (Saturday). With technology, we’ve gone from 5 days to 5 seconds. Crazy!

(Glossary from

– Payment Processor: Responsible for contacting issuing banks or credit card associations on behalf of the merchant account provider to request authorization and settlement of credit card transactions.
– Authorization Request
: A message sent through FDMS to an issuing bank or credit card association to verify the cardholder has sufficient funds available for the transaction. If the transaction is approved, then a response is sent back to Yahoo! from the issuing bank or credit card association through FDMS.
– Issuing Bank
: Any Visa/MasterCard member bank, which issues cards to cardholders. The issuing bank collects funds for purchases from the cardholder.
– Deposit
: The amount credited to a merchant’s bank account from the settled transactions in a batch, minus any fees.
– Settlement
: A process in which a transaction is processed between a merchant account provider and the issuing bank or credit card association of the buyer. In the case of a sale, funds are transferred from the issuing bank/card association to the merchant’s account. Merchants can review the details of each settlement by reviewing batches.

Myth Busters wanted to do a show on RFID: how hackable, how reliable, how trackable, etc. The show never aired. Here’s why… (You only need to watch the first 2 minutes.) Enjoy!


Just sayin’.

I just read an article on, and learned of the (in)security of RFID credit cards.

As the article states,

RFID stands for “radio frequency identification.” In a nutshell, an RFID credit card has an electronic tag and antenna embedded that transmits the payment information to a reader. This same technology allows you to wave your gas card at the pump to earn rewards or drive through a tollbooth with your E-ZPass.

Author Jennifer Rose Hale goes on to discuss the security risks of using an RFID credit card. She mentions that it’s convenient and quick to pay with these new cards, but asks, “How secure are they really?” Anyone can buy RFID readers, and they are inexpensive. A reader can capture your credit card number in the same way the store clerk does – through radio frequency. Hale poses the question, “As you’re waving your card around, just how much should you be worrying about someone behind you – or behind the counter – secretly scanning and stealing your credit card data?”

The answer: anyone with a reader who is within 2 to 4 inches of you can steal your credit card number, and he or she has a window in which to use your numbers. “That’s because the transmission generates a unique code, which is discarded the next time you use the card.” One major positive: RFID chips don’t transmit sensitive information such as your card’s security code or your address or phone number.

Ok, so someone might have a little bit of trouble getting 2 to 4 inches from you, stealing your card information with his or her RFID reader, and then using your card in the window of time available before you make your next purchase. But, do you want to take that chance?

You won’t have to, once credit card companies implement SAFE® Technology. You’ll be able to lock your cards immediately after using them, and unlock them right before you make another purchase. Even if someone were to steal your card information, he or she wouldn’t be able to use it. Besides locking your card, you can also request a new CVV code for every single purchase. All you have to do is send a text message via SMS and you’ll receive a new code for your card. The old one that you used for the last purchase (even if it was 10 seconds earlier) is thrown out the window. It doesn’t matter how close someone gets to you, or how long you wait to make your next purchase. No one will have access to your card but you. Combining these two features makes your card virtually fraud-proof.

In her article, Hale also points out that stores don’t want their employees to have possession of your card, even if you can watch their every move. Almost all terminals have been placed on the opposite side of the register, giving consumers the control of swiping their cards and keeping it in their hands. So, as for the security of keeping your card in your wallet, it seems to me that it’s safer to swipe it, lock it, and put it away than it is to leave it in your wallet, available to crooks to use during “spending window.”

And really… considering that the technology is named SAFE®, how could you trust anything else?

What are your thoughts? Would you like to use a card equipped with SAFE® Technology?

“Traffic jam when you’re already late. A no-smoking sign on your cigarette break. 10,000 spoons when all you need is knife…” Promoting SAFE® Technology and getting your credit card information stolen…. Oh, that’s not the ending of the song? Well, that was the “ending” for an employee here at M2. Isn’t it ironic?

M2 has developed the safest card in the world, and one of our employees chose to use his bank-issued debit card instead while out to brunch with some friends; long story short, someone skimmed his card and by the very next day he’d been charged for purchases in Texas, Chicago, New York, and Miami. (We’re in Saint Petersburg, FL.)

It’s incredible (incredibly unfortunate) just how quickly someone can steal from your bank account. You probably think that there’s no way it could ever happen to you, right? But the chances that it will happen to you are rising. The number of U.S. identity fraud victims increased 22 percent in 2008 to 9.9 million adults, and the total annual fraud amount jumped 7 percent to $48 billion.

Don’t worry; there is a solution. In order to drastically reduce fraud all around the world, preventing the annual loss of billions of dollars, M2 is now leasing SAFE® Technology to all major credit and debit card companies.

SAFE® (Secure Access for Ecommerce) is a technology that allows consumers to request a unique CVV code for every new purchase. Using this security is like using a new card every time you make a purchase. A new code is automatically generated and sent to cardholders via text message or email. These dynamic codes are transaction specific, and expire after each use.

Not only can you use a new code for each use, but you can also lock your card via SMS (Short Message Service) between transactions.

Here’s an overview of more groundbreaking features:
• Use card equipped with SAFE® Technology anywhere your major credit or debit card is accepted.
• Request a new CVV code for every transaction.
• M2’s patented Geotag® location database validates your IP registration information for every transaction.
• Lock your card to prevent fraudulent charges.
• Unlock your card and use instantly.
• Receive text messages or email alerts with balance information
• Make secure purchases and card-to-card transfers
• Instantly send and receive funds to and from the other side of the world, 24/7
• Transfer funds from card to card instantly
• Change PIN, CVV, check balances and send money all by text message
• Access your accounts online or through a mobile app

The best part? We operate on a “cloud” infrastructure, so it will be very convenient for all major credit and debit card companies to implement SAFE®. As a consumer, you won’t have to order a new card. Keep the card you have, and when your credit or debit card company licenses SAFE®, you’ll automatically have access to the most sophisticated security features available anywhere. Your card will become virtually fraud proof.

All major credit card companies now have the ability to offer this security and control to their consumers, and have the opportunity to increase security and convenience throughout the entire industry.

Giving the power of card security to the cardholder will change the credit and debit card industry forever.

NOTE: The United States Patent and Trademark Office awarded M2 with a patent for SAFE® in May 2011.

For more information please contact M2 President Ryan Colgrove
727-498-1036 – office     |     727-460-8185 – mobile

Time is money. We get that. So, when you answer your phone and hear a salesman that wants you to take time out of your day and talk about processing fees and your current rates, you say, “Thanks, but no thanks,” right? We understand. You have phone calls to make, emails to send by noon, and a meeting at 2pm that could make or break your next project. We also understand that this is your chaotic day (at least) 5 days a week. However, I’m here to tell you that that phone call might be worth more than just a few minutes of your day.

GEICO has an effective way of getting attention with its slogan,“15 minutes could save you 15% or more on car insurance.” With more than 10 million auto policyholders, people are clearly buying into the fact that if they spend just a little bit of time, they can save money. 15% might sound like a small percentage (maybe not even worth your time), but think of 15% of $150/month policy adding up over 4 or 5 years. Savings over 4 years would equate to $1080, and savings over 5 years time would equate to $1350.

NOTE: This is NOT a plug for GEICO, but I’m using this example to demonstrate the effects of saving just a small percentage.

So let’s talk about processing, where savings can be ever greater! Say you’re processing $100,000 per month, and a processor calls you to say that he can save you 1%; I suggest listening. I know what you’re thinking, “1%, who cares?” But think about this:

Saving 1% of 100,000 per month will equate to saving $12,000 per year!

Is that worth a little bit of your time? I’d like to think so. Just like with car insurance, your percentages of savings are going to vary based on your volume, risk level, etc., but whether you’re saving $6,000 or $12,000 per year, you’re still saving!

Now, here’s what you don’t know: Not all processors are equal. Many build cushions into their rates in order to make a larger profit off of their merchants. Say you’re currently processing at 3%, and you talk to a new processing company that promises to take you down to 2%. Many times, these processors look at your statements, perform a business check, and offer a rate that beats what you currently pay, but it’s not as low as you deserve.

Example: Company XYZ calls Sally and says that she’s probably paying too much for her processing. She gives them a chance to offer her a lower rate. If Sally is currently paying 3%, and Company XYZ determines that she could process at 1.8%, many times it will lower Sally’s rates down to something like 2.5%. This way, Sally thinks, “Wow, I’m saving money!” and Company XYZ thinks, “Awesome, we’re making more money off of Sally that we should!”

So, how do you know that you’re getting a fair rate? 3.5% might sound great. But, if you run a perfect business and have great credit, why would you pay 3.5%? This actually does happen to more businesses than you would think. Just like you, the decision makers are way too busy making decisions about other issues to worry about saving 1%. (But you know better now, right?) You deserve lower rates. Find an honest processor, that isn’t more concerned with commissions than saving you money.

Have you thought about this? A processor that pays by the hour has no incentive to make commissions at your expense, so it’s likely that you’ll get the rates you actually deserve.

Do yourself and your company a favor; take 15 minutes out of ONE day to figure out your rates, and find a company to help you lower them. If you already know that your rates are too high, do some shopping. There are fair processors out there. What you should be looking for is a company that can spend a few minutes with you on the phone, take a look at your statements, and get the ball rolling within 48 hours.

Last but not least, all fees and pricing aside, make sure that your processor is just as safe and convenient as it is inexpensive. Proper security and convenience tools can make all the difference in what a processor is offering to you as a processing rate.

Best of luck!

The Census Bureau of the Department of Commerce announced on August 16, 2011, that the estimate of U.S. retail e-commerce sales for the second quarter of 2011 (adjusted for seasonal variation, but not for price changes) was $47.5 billion, making up 4.6 percent of the total retail sales for the second quarter ($1,041.7 billion). This is an increase of 3% from the first quarter of 2011, and 17.6% from the second quarter of last year.

So, it’s clear that E-commerce isn’t going anywhere. In fact, FedEx is predicting to handle approximately 260 million shipments between Thanksgiving and Christmas this year. That’s a 12% increase from 2010!

The increase does make sense. Now, I usually end up driving to the mall, parking in a crowd, and standing in line with everyone else that waited to shop until the last minute. However, it seems that over 260 million other people have figured out that shopping from their desks at work (I won’t tell) or from their couches at home can:

1. save time (no driving to the mall, walking around, or waiting in any lines),

2. increase their options (they’re not limited to buying what the mall has in stock),

3. help them to make informed decisions (when they’re able to compare products and prices from all kinds of merchants).

With today’s technology, all consumers have to do is type their credit or debit card numbers, and their shipments will arrive within days. But what happens behind the scenes? Ever wonder what happens between your entering a credit card number and receiving your package at the door? Here’s a pretty picture from FeeFighters to explain. This infographic is geared more toward merchants, but it does the job of explaining the process. (Click to enlarge and zoom.) Enjoy!

Let’s be honest, every company today, whether it’s one person or a Fortune 500 company, has a website. Think about how many of those companies have that website in order to sell something. The definition of E-commerce is, “business transactions conducted on the Internet,” and it’s not slowing down any time soon.

If you’re one of those companies (selling products and services online), it’s likely that you’re accepting credit cards. If not, read this, and continue here after you’ve finished. If you do already accept credit cards, what is it costing you to process your payments online? Chances are, it’s costing too much (even if you’re not aware of it). Typically, when working with the right company, you can save 50 to 90% in processing fees by using ACH instead of credit cards. Think about that for a second, and then ask yourself yourself some additional questions:

  1. Are you going through a 3rd party? Meaning, does the company processing your payments lease software from another company?

At M2, we own and operate our own technology and software. We don’t have to pay another processor to do the work for us, so we don’t have to charge you in order to cover our overhead.

  1. Are you ready for expansion? You have goals to expand your company right? Is your current processor able to handle more transactions?

M2’s payment solutions are fully scalable. When we’re your processor, you won’t feel a single growing pain. Our software is so sophisticated that we currently have 51 Fortune 500 companies as clients, and we’re ready to increase our processing volume right now.

  1. How is your reporting? You need a great reporting system in order to track real time, web-based account activity reports. Many merchants are complaining about reporting systems that don’t meet their requirements, or are not user-friendly.

M2’s Merchant Reporting Suite (MRS) includes:

  • Reconciliation section including incoming chargeback data/merchant ledger
  • Merchant configurable users and group section
  • Secure Document Delivery system
  • Account configuration information (View Only)

Our comprehensive reporting system will give you all the tools and information you need to take full advantage of implementing ACH processing.

Of course, accepting credit cards is a trusty way to process payments. ACH doesn’t have to fully replace the credit card option on your site. Consider the benefits of implementing both solutions!

What do you think? Have you implemented ACH processing on your site? Why or why not? What are your thoughts?