A major problem facing the payments industry is merchant education. Ask a typical merchant to explain how a payment is electronically processed, or to describe the relationship between a processor and a card issuing bank, and you probably will receive a blank stare in return.
That central problem is addressed by Merchant University. Founded by industry expert Theodore Svoronos and fraud and risk mitigation specialist Ian Wynne, Merchant University is a website designed to educate merchants about the various facets of the complex and often confusing payments industry.
The site provides information on everything from how to establish a merchant account to how to fight chargebacks. The category called Merchant Accounts 101 offers guidance on topics from pricing structures to what constitutes a gateway to the various rates and fees merchants are commonly charged.
"One of my favorites: rates and fees," Svoronos said. "It explains every, single, possible fee known to this industry," from the discount rate to hidden or "junk" fees tacked on by unscrupulous agents. Another tab, Best Practices, informs merchants of the basic do's and dont's of card acceptance so merchants can protect themselves from card brand fines or from losing their merchant account status.
Yet another section, Frequently Asked Questions, enables merchants to investigate "everything from what is a legal business name to the information you fill out on the merchant app," Svoronos said. "Who should be the contact person? What is my product service? What's a partnership? What's a sole prop?"
Wynne said the industry is replete with "high-end" information, but the basics are overlooked. "You've got to start at the bottom and build a foundation of best practices," he said. "And we want to help with that, be that foundation of best practices."
The site took over six months to develop, with the co-founders culling information from numerous sources. Svoronos called the online university "merchant agnostic," meaning a merchant's size or type doesn't matter. "It can be a tiny $1,000-a-month merchant; it can be a $50 million-a-month merchant - and everywhere in between," he said. "There's a resource in there for everyone."
Wynne believes that, while merchants of all sizes reflect a fundamental lack of understanding of the payments industry, the online university may be particularly useful for newer, inexperienced merchants who are especially uninformed. "They really are vulnerable to processors and associations that are willing to take advantage of them in any number of ways," he said. "And that just creates a pretty terrible experience for the merchant."
"If you are a MO/TO merchant and they try to put you on a three-tier pricing program, tell them no," Svoronos added. "If someone tells you they don't know how to fight chargebacks, get on the darn site and learn how to fight chargebacks."
In addition, the site can be a resource for ISOs and merchant level salespeople (MLSs). "It's really focused on the merchant," Svoronos said. "But it also can be a great source of information for ISOs or MLSs if they have questions. ... Hopefully they're going to know this information. But if it needs to be used as a reference source by anybody, we want to make that available to them."
Svoronos noted that other sites have sprung up that are marketed as resources for merchants, but Merchant University is different because it isn't a vehicle for selling something else. "This industry needs this very, very badly," he said.
"So we don't board merchant accounts. We don't care where the merchant goes, as long as they understand the industry: what they're getting themselves into, what pricing structure that they should be under, rules and regs, how to fight chargebacks - everything the industry needs to tell them so that they can succeed."
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