Establishing Your Own Visa/Mc Merchant Account

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Attention - Learn From This Scam To Protect Yourself In The Future!

There was an advertisement and press release that started circulating in late November 1993 from Daron Fordham, Mail Order Merchants Exchange, phone (904)322-2607. Daron claimed that you could just pick up the phone, call the phone number and his company would set you up (the same day) with a merchant account. The cost was less than $50 per month.

Daron said: “The majority of mail order dealers are losing thousands of dollars in profits because their local banks are refusing to grant them merchant accounts. Mail Order Merchants Exchange, a mail order dealer discount products and services organization, will grant VISA/MC merchant accounts to new mail order companies for a small monthly fee.”

The very first question in your mind should be “who” gave Mail Order Merchants Exchange the “legal right” to grant these merchant accounts IF banks have refused to? Does Mail Order Merchants Exchange have higher authority than a real bank? I don’t think so. Has anyone within the inner-circle heard of this guy before? I’ve been in business 7 years and I’ve never heard of him!

But before you take my word for it, take a second of your time to personally call your own bank. Ask them what you have to do in order to establish a merchant account so you can accept VISA and Mastercard orders. Explain to the bank employee that you will only be receiving orders through the mail and not as a walk-in business.

Then, after you get the specifics, ask them if you can just run a charge through another business’ merchant account. Run down the street to Kroger’s and see if they’ll charge a purchase from your customer for your product and issue you a check to buy your groceries. Sorry folks - it doesn’t work like that!

It is our job to put a STOP to this type of activity. This new type of scam could escalate into something big if we don’t. Can you just begin to imagine the problems something like this can cause?

Let’s suppose you call Daron’s phony business (which he claims was established in 1993) and set up a merchant account. You receive an order from a customer for $100 to be charged to their VISA card for a product you sell. You give your customer’s credit card number and expiration date to Daron and he could charge whatever amount he wanted to without you or your customer knowing until it was too late.

It’s impossible to determine the extent of Daron’s full intention since Mastercard CLOSED him down. His plan might have been to “get in” and “get out” quickly, obtain credit card numbers and authorizations to charge purchases for himself - then slip out of existence for awhile. Or, perhaps, he planned to make his money from the $50 monthly fees he collected from hard-working people like you.

You know as well as I do, if you establish a merchant account today it will take a little while to let your customers know about it and receive your first credit card order. Daron knew this too. And during this period of time you are still paying $50 per month and waiting on customers to charge a purchase with you, but Daron is making money and planning his escape. Don’t fall for this one and take the time to warn others before they fall prey! (Note to Daron: We’re not as stupid as you think we are.)

Here are a few REAL banks that are willing to do business with people in mail order: Rancho Vista National Bank, 820 Escondido Ave., Vista, CA 92083 (800)433-2460; Bank of Oakland, 360 14th Street, Oakland, CA 94612 (415)763-6834; Charter Pacific, 30141 Agora Road, Agora Hills, CA 91301 (818)991-8512; Rocky Mountain Bankcard Systems, Inc., 950 17th Street, Suite 735, Denver, CO 80202 (303)629-7755; American Pacific State Bank, 16912 Devonshire, Granada Hills, CA 91344; Bank of California, 400 California Street, San Francisco, CA 94145 (417)765-0400 (Merchant Relations Dept.); United Bank of Denver, 1700 Broadway, Denver, CO 80274; Central Bank Service Corp., 309 Captain’s Walk, New London, CT 06320 (203)447-3500; Bank of Delaware, 300 Delaware Avenue, Wilmington, DE 19899 (800)722-1172; Bank South, Atlanta, P.O. Box 4387, Atlanta, GA 30302; Bank of Hawaii, P.O. Box 2900, Honolulu, HI 96846 (808)537-8111; First State Bank & Trust Company of Park Ridge, 607-611 W. Devon Avenue, Box 718, Park Ridge, IL 60068 (847)692-4114; The Central Trust Company, 201 East Fifth Street, Cincinnati, OH 45202 (513)651-8253 (minimum 1 year in business); Ameritrust, 4169 Pearl River, Cleveland, OH 44109; Michigan Bankcard Services, P.O. Box 30096, Lansing, MI 48917 (800)848-3213; American National Bank & Trust Company, 8990 W. Dodge Road, Omaha, NE 68114 (800)833-2586 (midwestern states only please); The National State Bank, 401 Park Avenue South, Linden, NJ 07036 (201)474-1043 (business must be located in New Jersey or New York)

Processors and Independent Sales Organizations

Some believe the following firms are easier to deal with than banks. However, the fee they charge merchants to process charge cards is usually higher than the fees charged by banks.

Automated Communications & Engineering, Inc., 2367 Agate Ct., Simi Valley, CA 93065 (800)678-5667 (provides 800 and 900 number system that takes orders and provides information to cardholders. Discount rates, based on volume available. Their system can reverse chargebacks.); Telecredit, 6301 W. Idlewild Ave., Tampa, FL 33614 (813)886-5000; T.J. Little & Co., 54 Stiles Road, Salem, NH 03079 (603)893-9333; Banc One Wisconsin Bankcard Corp., 1000 N. Market St., Milwaukee, WI 53202 (800)824-8870; Bankcard System, Inc., 3880 Michelson Drive, Suite 200, Irving, CA 92715 (714)733-0707; Electronic Credit Card Systems, 236 W. Portal Avenue, San Francisco, CA 94127 (415)877-1557; R.A. Mulhern Co., Inc., 1820 East Garry, Santa Ana, CA 92705 (714)252-1445; Bankcard, Inc., 1233 Sherman Drive, Longmont, CO 80501 (800)666-7575; National Bankcard Systems, 1800 Silas Deane Hwy., Suite 54, Rocky Hill, CT 06067 (203)563-8292.

Why?

Many of you may be asking “why” mail order businesses are so discriminated against when trying to obtain a merchant account. The reason is NOT because the bank, or Visa/Mastercard folks dislike you. The reason has nothing to do with your credibility as a human being.

The problem lies primarily in the fact that a mail order business can open and close up shop tomorrow. And if a small mail order business owner dies before a customer gets his/her bill - the customer could refuse to pay it (called a “chargeback”). This leaves the credit card company being left in the middle to pay the bill and absorb the loss. This situation may sound like “one chance in a million” to you - but things like this happen every day and credit card companies (as well as banks) have to protect themselves. In other words, they want to make sure your business is established, making money and will make more money by utilizing a merchant account.

So don’t get mad and out to seek revenge if your bank denies you. Just find another bank that approves you. It may be difficult - but it’s not impossible. Besides, if it were extremely simple for everyone to get a merchant credit card account - anyone could set up a fake business today; have their friends charge purchases on stolen credit cards; transfer the funds into their account; withdraw it tomorrow morning and be on the way to Mexico in the afternoon!

My Personal Experience: If you cannot get approved through your bank (like me), call Jayne Iorfida, The Athens Group, 6170 Knoll Lane Court #294, Clarendon Hills, IL 60514 (708)789-6368. She works with CardService International (a professional association) in helping mail order dealers get approved. Without her, I would not have a merchant account today.