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Question re credit cards
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Ken: Love your forum.
We are having a disagreement in our office about the use of a 'Blanket Credit Card Authorization' form.
Can we us a credit card authorization form that allows us to charge at will for all our services when those services are being rendered ?
My accounts payables person believes we must call the customer each time a service is rendered to get permission to charge their credit card on file with our office even though they have already signed our credit card authorization form. Do you have a good or better form for this or know of one?
Thank you,
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Answer
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There are two issues to keep in mind. There may be statutes that govern how credit cards can be charged, and there may be Merchant Account Agreements that by contract dictate how you can charge credit cards. Remember there are also Red Flag regulation that require that you have a written policy that your employees acknowledge dealing with the safe keeping of personal information that you acquire. That means credit card and other information that can, if misappropriated, result in identiy theft and improper charges.
The Standard Form Contracts have provision for credit cards. We are adding a provision for automatic withdrawal from the subscriber's checking account. That provision will be added soon.
Getting paid the recurring charges and even authorized charges for one time services is of concern to all businesses. Recovering your accounts receivables in a timely fashion is important so you can meet your own account payable obligations. Whether it's worth the 2 to 4% to the Merchant Accounts is a determination that you have to make and perhaps something you need to work into your calculation for your charges.
I asked a Merchant Account company to respond and the response is below:
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Ken –
There are some specific regulations set by the Card Associations with respect to how you can process recurring transactions, however there is no problem with doing it assuming you are following the proper procedures. The written approval on the authorization form must at least specify the Cardholder’s name, address, account number and expiration date, the transaction amounts, expected timing or frequency of the recurring charges and the duration of time for which the Cardholder’s permission is granted. It is also important that you make sure that your credit card processor has properly set up your account for recurring payments – otherwise you will be charged a higher fee. As you know, we specialize in processing for businesses that charge their Cardholder’s accounts periodically for recurring goods or services, so please feel free to have anyone call me at 800-709-8795 or visit our website at www.skybankfinancial.com. I would be happy to explain more or provide generic authorization forms which are approved by the Card Associations.
Thomas J. Aronica, CPP, President / CEO
Miami, FL 33132
786-360-6391
800-958-4250
taronica@skybankfinancial.com
www.skybankfinancial.com