This value add service aligns with our goal to make our clients’ lives easier by streamlining their process and helping them to run more efficiently.

Contact Us: https://www.magothy.biz/contact
WooPOS Free Trial: https://www.bit.ly/trywoopos

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider. Back from hiatus. Been in the lab cooking something up. No. But seriously, typically first quarter and the first half of second quarter is our busiest season for new account acquisition, so I’ve been grinding, getting those accounts, trying to make up for 2020, which kind of sucked, right?

I have a very, very, very special announcement about a new product that we are offering. Now as many of you know, we primarily focus on card-not-present business, and we also focus on omnichannel business. On the omnichannel side, we have recently partnered with a point-of-sale system called WooPOS, and WooPOS is great for the omnichannel merchant that has a retail store location, a storefront, that is also selling items and services online through an e-Commerce website. So as the name might imply, WooPOS, they’re not affiliated with WooCommerce, but their POS system integrates with and syncs with WooCommerce.

Now, this means that if you are a retailer that has a physical store and an e-Commerce store, this single point of sale can manage and maintain your inventory across those two environments. One of the biggest of challenges that those type of retailers have is they may have widget A. And their inventory shows that they have two sitting on the shelf, and somebody walks into the store and buys those two that are sitting on the shelf. The website probably doesn’t immediately, or if at all, reflect that they no longer have widget A in stock because someone came in and purchased them.

With WooPOS in their inventory management, when an item is purchased in-store or online, it is removed from the inventory so that you can’t oversell an item that you don’t have, which is fantastic. Now WooPOS has a direct integration with Elavon Converge gateway which is wonderful because you can utilize one gateway for the point-of-sale side and that same gateway can integrate with WooCommerce on the e-Commerce store side, so all of your transactions flow through the same gateway. And from a hardware standpoint, for the customer-facing PIN pad using the Ingenico Lane 3000 device, that integrates with Converge.

One of the best things that I really like about WooPOS is that it is a Windows-based platform. One of the biggest challenges that you have in the point-of-sales space is that a lot of these programs and software are designed in a way to work with specific hardware that you have to buy from the manufacturer which tends to cost more, and it makes it more difficult to replace or fix or troubleshoot. WooPOS is a Windows-based point-of-sales system, so you’re using a typical desktop, right? So you can use a small-form factor. You can use an all-in-one which we’re looking at doing that has a touch screen. You can use a standard cash register with a USB-triggered cash drawer for when the sale is completed, and all the peripherals – the printers, the barcode scanners and things like that – you can use generic stuff that you buy on Amazon to work in unison with this platform.

Because it’s Windows-based, it’s much more stable, and they’re using standard Windows drivers, which will make it very easy. The cost barrier to entry is very low because a lot of this equipment, especially the computers, the business may already have. We’ll put together some packages that will bundle all of that if a merchant is starting from scratch. But the installs that we’ve done so far, the vast majority of the hardware the merchant already had, so we’ve been able to use the hardware that they had and save money and time on that part of the installation.

I will post an affiliate link in the description here if you want a 30-day trial, but, again, we’re really, really excited to partner with WooPOS, looking forward to some great things. I’ve started using it. I’m a huge fan.

One of the things that I like most – a lot of things I like most, but another thing that I like most – is the owner Benny and their programming team, they are on the ball. We’ve recognized a couple of things that needed little tweaking and changes to personalize it for our merchant. We sent the request over to the development team, and within a couple of hours they had it changed and up and running on their platform, which is something that you really like to see from software developers who aren’t rigid and think that they know best how to use or develop the system. But they value the feedback from their merchant services provider partners as well as the merchants, the business owners themselves.

That’s what I wanted to update you on. Again, I know it’s been a minute. We’re going to try and work through and get some regular content going, but it is RV season and I’m all about that glamping life. So I’m going to be in and out quite a bit.

I hope this information was helpful. I hope you check out WooPOS and please don’t hesitate to reach out if you have any questions or would like to schedule a demo. All right. That’s all I got today. Have a good one.

The post HUGE ANNOUNCEMENT!! appeared first on Magothy Payments.

This tax would be levied against digital ad providers who make more than $100M a year in ad revenue nationwide, and could be up to 10% on the revenue that they generate on said ads running in Maryland. For context, Facebook and Google made roughly $2.5B in ad revenue in Maryland last year, which would’ve generated $250M in tax revenue. The obvious downside is that this tax imposed on the tech giants would undoubtedly be passed along to small businesses using the ad services who are already struggling.

The good news for Maryland small businesses is that this lawsuit will probably be tied up in courts for the foreseeable future.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider. I came back today to give you an update on the Maryland digital ad tax.

If you don’t know and you’ve been living under a rock or you don’t live in Maryland, the Maryland legislature passed a bill that would impose a tax on revenues that are generated for online ads here in Maryland when the company imposing them has more than I think it’s $100 million a year in ad revenue. So it targets big tech companies like Facebook and Google and places like that, and it would levy up to a 10% tax on the revenues generated for digital ad sales here in Maryland.

They were estimating that it would raise about $250 million in tax revenue which, of course, anybody with a functioning brain understands would be passed on to the small businesses who are actually using these services. So that was the bad news.

The good news as of right now is that companies are coming out of the woodwork to sue the state of Maryland because of this unconstitutional and asinine piece of legislation. Notably, the U.S. Chamber of Commerce and the Internet Association, they are obviously suing the state of Maryland because the law is unconstitutional. It’s predatory, and it specifically targets digital ads while ignoring print and television and other avenues like that.

So this legal battle could be in the works for a while, and so the good news is hopefully it gets overturned and is deemed to be unconstitutional so that small business owners like us don’t have to shoulder those costs.

Keep your fingers crossed. We’ll bring you any updates as they happen, and I hope you guys are having a wonderful day. I’ll catch you in the next one.

The post **UPDATE** Maryland’s Digital Ad Tax appeared first on Magothy Payments.

We’re literally going through a pandemic and small businesses are barely surviving as it is, and these people think that more taxes are the answer. Who exactly do they think is going to be paying those taxes? Facebook? Google? Psh. Those guys will just raise their prices to offset the tax loses so that small businesses carry the burden.

This is what happens when government runs amok. These people must be stopped. Governor Hogan has already vetoed the bill, but they’re scraping together the votes to override his veto.

BEGIN TRANSCRIPT: 

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider.

I wish I was coming to you under better circumstances, but apparently the legislature in the state of Maryland is terrible. Yeah, they’re terrible.

If you don’t know, some of the brilliant folks on the Maryland legislature think that a digital advertising tax is a good idea in the middle of a freaking pandemic in which small business are barely hanging on. Somebody had the bright idea that companies like Google and Facebook that sell digital advertising should pay a tax to the state of Maryland up to 10% based on the volume of digital ads that they sell in the state of Maryland.

Using round numbers, if Facebook sells $100 million in Facebook ads to Maryland businesses, the state of Maryland wants Facebook to pay them $10 million in a tax. Indulge me, if you would. Who do you think is actually going to be paying that tax? Do you think it’s Facebook, or do you think it’s the small businesses that purchase ads from Facebook whose costs are going to go up? Who do you think?

As a merchant services provider, we are a trickle-down business. We work a lot with home improvement contractors, home services companies, and a lot of our clients – a lot of them – use Google ads and Facebook as their primary lead generation tools.

In the middle of the pandemic, not only getting used to the restrictions that the politicians are putting on them but the fact that so many Americans are hurting and out of work, if you’re a home improvement contractor, your cost per lead is going through the roof, as it is, simply because your ad has to be shown to more people just to find somebody who is interested in a position to be able to purchase that service from you.

On top of that, the bright folks in the Maryland legislature think that taxing Google and taxing Facebook is a good idea. Yeah. This is what happens when people who have never run anything or owned a business try and control the economy and people who actually produce. It’s terrible. It’s idiotic. Governor Hogan has already vetoed it, and they’re scraping together the votes to override his veto because they’re terrible.

Please do us a favor. Call your elected officials. Tell them that this is asinine and that they’re going to be voted out in the upcoming election because I can’t even for the life of me understand why anybody with two brain cells to rub together thinks that this is a good idea right now. But, you know, crazier things have happened.

With that, we’re signing out. I got nothing else.

The post STOP THE MARYLAND DIGITAL AD TAX! appeared first on Magothy Payments.

When a consumer purchases something from a business, they expect the item to be shipped and delivered in a timely fashion. Unfortunately, the USPS has had problems losing packages and not updating the tracking information, which in turn causes the consumer to think that the business ripped them off and took their money without ever sending their items.

This is a widespread, common problem. If you’re a consumer, please be patient. This isn’t the fault of the business, and issuing a chargeback with your bank is hurting that small business for something that’s not their fault. If you’re making a purchase online and you have the option to select the shipping provider, we advise you to use one other than the USPS. Yes, USPS is [usually] a lot cheaper. But as the old saying goes, you get what you pay for.

BEGIN TRANSCRIPT: 

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments,  Maryland’s highest-rated merchant services provider.

I want to take a moment and talk to you about the USPS, the United States Postal Service. I have no idea what is going on over at USPS, but it is causing a problem for a lot of businesses and a lot of merchants, especially eCommerce merchants who ship goods to their clients.

I know we personally have a number of clients right now who are dealing with chargebacks from their customers because the USPS wet the bed on doing what they’re supposed to do, which is delivering packages. This is not a direct insult to USPS employees who are doing their job. If you are a good worker and you are doing your job, I am not talking about you, so please don’t take offense to this. But the organization as a whole has a history of incompetence.

When a merchant ships an item and gets a tracking number and it goes off and USPS does what they do and that tracking number doesn’t update for weeks or months, then that customer who is expecting those goods, turns around and issues a chargeback on the merchant as if the business didn’t do their part when in actuality it is the post office who sucks. This is happening a quite a bit.

The advice that I have is if you are consumer, please, please, please be patient with these businesses. It is not the business’ fault. I understand that you purchased something. You’re expecting it. It’s not their fault, OK? Issuing a chargeback only hurts the business.

If you are a business, we can help you with the chargeback portion. Our clients, we offer chargeback assistance at no additional cost. Just an update to our existing clients in how we do our order of operations for chargebacks, we’ve recently updated it so that we, Magothy Payments, are notified via email the moment a chargeback comes across so that we can begin that process for our clients.

It’s very, very difficult right now for eCommerce merchants, and a lot of them, a lot of our clients are dropping USPS as a service provider because they’re not doing their jobs properly. When an eCommerce merchant has multiple providers, as a consumer you go the website and it says, “FedEx is this much. UPS is this much. USPS is this much.” USPS is usually the cheapest option, and so people by default are like, “This one is cheaper. I’m going to choose this one.” A lot of times in life you get what you pay for, and it’s causing problems.

Again, we want you to be aware of an issue that is happening quite a bit. If you’re having an experience like that right now either as a business or a consumer, tell us about it down here in the comments. Leave us a note, and I hope this information was helpful. I hope you understand why things are happening the way that they are.

If you have any questions, you can always reach out to us. So if you enjoy the content, please consider subscribing and liking and sharing this video. Hope you’re having a great day. Take care.

The post The USPS Is Causing Chargebacks! appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider, back for another episode of whatever this is. I haven’t quite figured it out yet. But I’ve got a lot of good information that you, the people, the small business community, need to know and need to understand.

Today I want to talk to you about Maryland’s House Bill 777, which is now signed into law, and what it does to protect you, the small business owner, from the predators in our industry, whether it’s the banks or the merchant services provider.

When I got into this industry a little over six years ago, I noticed a huge, huge problem. I would meet with a business owner who wanted to switch their payment processing over to us. We were saving them a couple hundred dollars a month. Then when they went to go cancel the service with their previous provider, their previous provider attempted to levy fines upwards of thousands of dollars for switching their services.

What happens here is oftentimes a merchant services provider or a bank on their agreement for merchant services on the signature page, there’s a line that says, “By signing this document, you are agreeing to our terms and services, which can be located here.” And on the piece of paper, there is a written-out URL that has a link to an often 75 to 100-page document which is their terms and services. Buried in the middle of that huge document in 6-point font, there is a clause that says, “This agreement is good for three years. If you cancel before three years, we will charge a cancellation fee of $499 and liquidated damages penalties of $100, $200, $300 a month for all the remaining months left on the agreement.” In essence, the merchant services provider is saying, “By you taking your business elsewhere, you are causing us financial harm, and so we are going to bill you for our lost profit.” Of course, they’re causing you financial harm because you suck. If you didn’t suck, they wouldn’t leave.

But that’s a huge problem that we were dealing with. Merchants were getting stuck in these agreements, and the merchant services providers would give them literally a 30-day window where they were allowed to cancel that agreement, or it would automatically renew.

I am a mission driven type of person. It’s in my nature. I cannot see a wrong being done and just be quiet and be silent about it. Providentially, I ran into a gentleman who was a referral. He owned a cigar shop. I was telling him stories of things that I had seen in the industry about big banks and merchant services providers ripping off small businesses. We were trading horror stories and things he had seen, and I jokingly said to him, “I wish I could make that illegal” or “I wish I could write a law to make that illegal,” or something to that effect. He looked at me and said, “Did I mention to you that I’m a state delegate?” And I said, “No, you did not. But that would be useful.” He is delegate Seth Howard here in Anne Arundel County, and he invited me down to Annapolis. I met with his legislative team. We hammered out a bill, and it took us three years, three legislative sessions, to get this bill passed.

Basically what it does is if you are a small business in Maryland, you have fewer than 50 employees and you are processing less that $2 million in credit card volume a year, this is designed to protect you. The majority of our clients are those small businesses. What it does is it caps all of the fees, fines, penalties, liquidated damages that a company can charge you at $500. It levels the playing field and makes it more competitive in our industry so that if you are a small business owner and you’re not happy with the service that your merchant services provider is providing, you can then shop elsewhere without fear of a huge financial retribution being levied on you for taking your business somewhere else. it also makes it so that if your agreements automatically renew, once it automatically renews, there can be no fees, fines or penalties levied once you’re in the renewal period. The information about your cancellation fees, it has to be in 12-point, bold font on the actual agreement that you sign. The renewal date, the penalty for cancellation, the contact information of the merchant services provider, all of those have to be on the actual agreement that you sign in 12-point, bold font. Each individual clause has to be initialed by the merchant. This was huge in bringing transparency to our industry, which is obviously not known for being transparent.

In the first couple of years, we had a lot of opposition. First Data and the Maryland Banker’s Association and all of these big, huge corporations who didn’t want us to go forward with this legislation, even though I work in the industry, my industry hates me because this legislation in Maryland affects how merchant services providers can compensate their sales agents because they know that they can no longer slam a merchant for thousands of dollars. They can’t afford to pay this merchant sales rep several hundred dollars, a thousand dollars in up front bonuses knowing that they can recoup the money if the business takes their business elsewhere.

It really ruffled some feathers and pissed off a lot of people, but, frankly, I don’t care. I believe that this is the right thing to do. I am a free market capitalist. I believe in the less government the better, but the payments processing industry is like the wild west. And these merchant services providers and big banks were running rough shod all over the small business community. I think that merchant services providers, banks, and their clients, the actual small businesses, that we should be on the same side of the table. We have a vested interest in the long-term growth and success of their business. Why are you trying to violate the people who are your customers? I don’t get that. I don’t understand that, so we took steps to change that.

If you are a business owner in Maryland, again, you have fewer than 50 employees and you’re processing less than $2 million a year, this applies to you. This was signed in April of 2019. It went into effect in October of 2019. As of this recording, this is the last day of November 2020, it is in effect, and it is protecting you right now. If you have any other questions about that legislation, you can visit www.mdhb777.com and there’s more information about that and how you can file a claim if you have a merchant services provider who is violating that regulation.

So I hope that information was helpful, and we’re continuing to commit to bringing you some useful content. I hope you guys are having a great day.

The post What Every MARYLAND Business Owner Needs To Know About Their Credit Card Processing. appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Amber: In Maryland, people of color own more businesses than almost any other state in the country, and BBB connects consumers with businesses they can trust. To support our community of Black business owners and consumers, we’re spotlighting Black-owned, accredited businesses that promote trust and integrity. Today, I’m here with Jaron Rice, founder of Magothy Payments. Jaron, thank you for joining me today.

Jaron: Thanks for having me.

Amber: First of all, what inspired you to found your business?

Jaron: That’s a loaded question.

Amber: Yeah. I know.

Jaron: Honestly, I’ve been in professional sales my entire adult life. I’ve sold everything from, you know, I did five years as a mortgage banker originating loans. I sold home improvements for five years. I’ve sold pest control. I’ve sold cars. One of the things that really pushed me in the direction of starting my own business was I’ve always been a relational seller. I’m not high pressure. I’m informative and consultative. “Here’s what your problem is. Here’s what the solution is. Here’s how that works.”

I’ve always, always, always been more interested in the relationship after the sale than just getting the sale. One of the challenges that I had being in sales professionally is that oftentimes the organizations I was representing would drop the ball after the sale was executed during the installation or the implementation of whatever the product or service was. And that was very disheartening for me. That kind of pushed me in the direction of I want to start my own company where I can be more hands on in managing and maintaining the relationship after the initial sale. And that rabbit hole, I tumbled down into merchant services.

Amber: That’s awesome. Yeah, maintaining connections with your customers is really important.

Jaron: Absolutely.

Amber: What obstacles have you had to overcome while owning your business?

Jaron: There have been a lot.

Amber: I’m sure.

Jaron: The first one was when you are doing B2B sales and you don’t have a reputation, you have to rely a lot on cold calling. For me, one of the things when dealing with business owners, we live in Pasadena in Anne Arundel County, and cold calling businesses – and I don’t know. I want to preface this. I don’t know if this is my own head trash based on some experience I had before or if it was something that was valid. But when I was cold calling and walking into businesses, I felt that I needed go above and beyond to be exceptionally professional as a large, 6’1” Black man who is covered in tattoos. For me, even though I didn’t want to, I was in a suit and tie all the time. Regardless of the business, I would walk into a sweaty, stinky auto repair shop and I’ve got on a suit because I was concerned about the perception coming from corporate America. That was hard for a long time.

But then as the business continued to grow and our portfolio was growing and we started getting more and more referrals from our existing client base, when we had a reputation and I was seen in the area as the industry expert, then I was comfortable being myself.

If a business is calling me and they’re showing up at our office to work with us, I’m OK wearing a t-shirt and shorts on Friday. You know what I mean? Because this is my office, and you want my service. It’s a different dynamic when you are pursuing people for business versus when they’re coming to you.

We have grown our reputation to the point where people are now pursuing us to work with us, and I’m a lot more comfortable in that environment just being myself. I’ve worn flip flops into the office for three months now. I haven’t worn real shoes in the office in a while, and there’s no way that I would feel comfortable doing that back when we first started.

Amber: Yeah, you had to work really hard to gain that credibility, but now you’ve got it. That’s awesome.

Jaron: Absolutely.

Amber: So what have been your strategies for maintaining trust with your business throughout the coronavirus?

Jaron: I think just being present and being available. When it first happened, we did a couple of video series on YouTube outlining how the payment processing industry was changing because of COVID. When it first happened, we saw a monumental wave of fraudulent transactions and chargebacks. Some of it was on the business side where cash was tight and they were taking payments from cards that they had on file before the work was done, and then on the flipside we had consumers who were then having buyer’s remorse where they paid a home improvement contractor $10,000 for this project and then found out two weeks later that they were no longer employed and then called their bank to reverse the charge because they wanted that money back even though they had gotten the service.

The industry was experiencing a ridiculously high volume in chargebacks that they were working through. And because of that, they kind of circled the wagons and we saw a lot of funding delays and larger transactions being scrutinized more than they had in the past as everybody adjusted to that. And so, we just made sure that we were available.

We’re in financial services, so we were still considered essential. I was in the office every day, our staff was working remotely, being available to reply to emails and to answer phone calls. Because for a business owner, especially during the shelter in place, if you’re not essential and your business is shut down, that’s a very scary time.

We work with a lot of event planners and charter bus companies and limousine companies that COVID basically cleared every event that they had for a two to three-month period. A lot of times, these people have paid deposits six months, a year in advance. Now that business was dealing with a cashflow crunch because they’re having to refund deposits from a year ago whose funds they’ve already used to pay drivers and to maintain their equipment and things like that. And so being available for them to help navigate through that from a payment processing standpoint really helped to build trust for them.

Amber: Yeah, absolutely. Being able to respond to conflicts that your customers are having is incredibly important.

Jaron: Absolutely.

Amber: What are your goals moving forward?

Jaron: One of the things I love best about being a business owner is studying the market and figuring out the next big trend before it gets here. When most people think of merchant services providers, they think of payment processing at a restaurant or a retail location because that’s where consumers are spending their money. And while we do have clients who do that, that’s not a huge focal point of our business at all. They represent the minority. Our biggest segment of clients are home improvement contractors followed by home services companies, followed by B2B and then automotive repair.

A lot of our businesses are in card-not-present environments meaning they’re running transactions when someone is not physically there presenting a credit card to them. We have a gateway software solution that allows them to key in transactions. They can send payable invoices. We put hosted payment pages on their websites. They have mobile apps and things like that. And that pivot, moving in that direction consciously two to three years ago set us up so that we weren’t nearly as negatively impacted by COVID as we possibly could’ve been as some of our counterparts in merchant services have been.

If you focus heavily on restaurants and retail and those businesses are shut down, this is a trickle-down business. If you have a client who stops processing because they can’t open, you stop making money off of them. The pivot that we made years ago to go after the home improvement market segment turned out to be a wise move with what happened because they are still considered essential.

The goal is focusing on how is life going to be different after COVID? Let’s just say a year from now life is back to normal. There’s a vaccine. Everybody is happy. Business owners are always going to have to think about the next possible pandemic. Having a plan in place and working with market segments that are going to have the minimal impact as possible from something like that, we as a company need to start thinking about that now.

There are certain businesses we brought in through COVID. We brought on a client who is a disaster response company who provides PPE and COVID-19 masks and things like that. That’s what they did as a fulltime business for years and then COVID happened. They were doing two, three, four years’ worth of revenue in two or three months because it was an emergency, and everybody needed them. We brought on business like that through the process.

Our goal and our focus is to make sure that we’re paying attention to those opportunities to put ourselves in a position to be able to weather the next storm, whatever it is, because it’s eventually going to happen. We don’t want to be so heavily invested in one industry that something like an economic collapse in the housing market that would affect home improvement contractors affects us. We want to be as well-diversified as possible. That’s really the goal and focus going forward.

Amber: Yeah. Finding balance and being able to adapt is incredibly important.

Jaron: Absolutely.

Amber: Yeah. I think that’s a great moment to end on. Jaron, thank you so much for taking the time to talk to me today.

Jaron: Absolutely. Thanks for having me.

Amber: Of course. And to our viewers, thanks for watching. Watch out for our next video where we will highlight another Black-owned business advancing marketplace trust, and, of course, be sure to show your support for local Black-owned businesses.

The post BBB Black-Owned Business Spotlight appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, I’d like to welcome you back. I am Jaron Rice, aka Ronny Ruckus, the founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider. I want to take a minute on this COVID-19 update and tell you why you should not use GrubHub or DoorDash when you’re ordering from your favorite local restaurant.

The reason is simple: these companies charge an arm and a leg. We visit a Korean fusion place. They have amazing bulgogi and bibimbap, and we order from there roughly once a week. It’s called Red Tigers in Pasadena, MD. I believe it’s DoorDash that they’re using.

Normally when we do carryout orders, I go to the restaurant. I stand in line. They make my bowl. I pay, and I leave. Sometimes there’s a bit of a line because they’re fulfilling DoorDash orders for the drivers to come and pick up or for other people to come and pick up. This last Friday before I left the office, I placed an order so it would be ready when I got there.

When I walked in, they recognized me. They know that I’m a regular. She said, “Oh, you’re a regular.” I said, “Yeah, I placed the order already.” She looked at it, and she literally looked at me the way that I’d imagine my wife looked at me if I told her I was in love with another woman. She looked so betrayed that I’d ordered on DoorDash. She said, “No, why did you order? You can call us. You can use our website. We’ll place the order. We’ll have everything ready.” She said, “They charge us 30% to process orders through them.”

Thirty percent, right? We’re going to use a round number on a $30 order for my wife and I to make two bowls. DoorDash got $9 out of that just for using their mobile app. I picked it up. They didn’t send a driver. They didn’t do any of that. It was literally using their platform to place the order.

If you care about small businesses, you should absolutely order from them directly when you have that opportunity. Now I understand there are certain cases if they don’t offer delivery themselves and you want it delivered. If they don’t have a website or a way for you to place an order directly with them, then DoorDash, GrubHub, places like that, are the only option that you have. But if you can do it outside of those organizations and go directly with the small business, more of that is going to the actual business because it’s literally killing them. Their margins in the restaurant industry are small as it is. Using that type of service really is only hurting them.

I’m begging you. Please, please, please place your orders with your local carryout place instead of using one of those big software platforms.

I hope everybody is staying safe. I hope that’s some valuable information and we’ll catch you in the next one.

The post Don’t Use DoorDash or GrubHub for Carryout! appeared first on Magothy Payments.

The post #magothyaroundtown Birthday Bash! appeared first on Magothy Payments.

BEGIN TRANSCRIPT: 

Good afternoon. Jaron Rice, founder and CEO of Magothy Payments. Today is April 17th and I wanted to give you an update of what is going on in the payment processing industry as it relates to COVID-19, coronavirus, whatever you want to call it.

We are in Maryland. The state is still in a state of emergency. It’s effectively shut down. This emergency has caused a ripple effect in the payment processing industry that nobody expected or foresaw but we’re experiencing right now on the front lines. And so, I wanted to give you an update of how that is looking.

One of the first things is that a lot of the processors right now are experiencing a ton of chargebacks. If you’re new and don’t understand the merchant processing industry, a chargeback is when a cardholder essentially tells their bank, “I didn’t authorize this transaction,” or “This company, person, ripped me off. This is not what I paid for.”

Normally, the chargeback window for VISA and Mastercard is 120 days from the date of the transaction or the delivery of goods and services, whichever is later. For AMEX and Discover, it’s actually one full year. Let’s say there’s a home improvement company. They replace a roof for somebody and three months later it’s leaking, and that home improvement contractor doesn’t answer their phone, doesn’t have any sort of customer service, that customer can call their bank and say, “This company ripped me off.” The bank will then forcefully take those funds from the business and hold them in escrow for 30 days while they explain themselves.

Now if the company doesn’t have the money, then the acquiring bank that authorized the transaction is responsible for paying back the cardholder. That’s what we’re seeing a ton of right now. There are a lot of business that are experiencing higher chargebacks than normal.

If you are in the wedding planning industry or you’re an event planner, you have a venue or you’re a caterer, you’re a losing company, or something like that, and people are booking deposits months in advance and COVID-19 comes around and basically cancels every event that you’ve had planned for the next several months, there are going to be a lot of cardholders that want their money back. Even in this situation, the best customer service is not going to prevent chargebacks because there are some cardholders who are just not in a position to be patient. They need their money back because their daughter’s wedding has been canceled or postponed, and that several thousand dollars that they shelled out? They want their money back.

What we’re seeing is that a lot of these processors are getting hit with tons and tons of chargebacks that their clients, the merchants, the businesses don’t have the money to fund. And so, we’re seeing a lot of the banks circle the wagons and scrutinize transactions a lot more.

At Magothy Payments, we focus a lot on the card-not-present high-dollar transaction space, and so we’re seeing it a lot with our clients where they’re running large transactions. Even with proper documentation, they’re showing a signed agreement, they’re showing a payment authorization, the processor is holding funds until they get confirmation from the cardholder that the service has been performed or that the items have been delivered.

In times past, they didn’t require all of that confirmation. But now they’re starting to protect themselves. We’re dealing with a situation with companies that sell and supply medical devices and COVID-19 masks and things like that. In times past, that business, when they were ordering from their supplier, they were on a net 30 or net 45 payment window where they can order 1,000 masks and then their supplier would give them 30 to 45 days to pay that. They would order the masks. They would have them in stock, and then when their customer comes around and wants to buy masks, they sell them. They have them in stock. They collect the money from their customer, and then they pay their supplier. What is happening is these suppliers are now requiring that the merchants pay up front. So instead of being net 30 or net 45, it’s, “No. Pay me now.”

Business that are going through a cashflow crunch are having to shell out up front for their supplier. And then when they collect from their customer, if it’s a large transaction, those funds are being held. They’re having to ship out the goods and make sure that their customers get it. And the acquiring bank is calling their customer to make sure that the items have been delivered and that they’re happy with it before they’re releasing those funds. It’s creating a huge crunch because now the processors are not allowing prepayments on large transactions.

What’s happening is a lot of manufacturers of COVID-19 masks and personal protective equipment, they are running out of stock. They can’t provide. If you have a business that collects from their client, “We’re going to sell you 1,000 masks,” their client pays with a credit card and it’s let’s say at $10 a piece it’s a $10,000 transaction and they’ve got the money from their client, they place the order with their supplier and then their supplier takes their money, but then there’s a backorder. And their supplier is saying, “Oh, we can’t get it to you for 30 days,” which causes a crunch because they haven’t gotten the money from their client. They can’t deliver, and it creates this ridiculous cycle that is affecting everybody.

This is very common right now, unfortunately. If you work with any of the major processors, any of them, all of them will tell you that they’re dealing with the same thing right now. If you’re dealing with it, hopefully you have a merchant services provider or a rep that is very communicative and let’s you know what’s going on and updates you on the progress of getting these funding delays rectified.

It exacerbates the problem because most of these processors, the people in their loss prevention department, are working remotely, and so they oftentimes are not available by phone. It’s a difficult mess. This is happening across the country, across the world. It is a big problem that we’re seeing right now.

If you’re experiencing it, you’re certainly not the only one. Eventually we’ll get past this as things improve and people start going back to work and there’s less of a cashflow crunch. But if you’re dealing in the space where your customers are accepting large card-not-present transactions, prepare yourself for funding delays because this is just par for the course.

I hope that was useful information. If you have any questions about it, you can email us at info@magothy.biz. Check out the website, www.magothy.biz and I hope you’re having a great day.

The post How COVID-19 Is Affecting The Payment Processing Industry appeared first on Magothy Payments.