posted on August 25, 2008 09:11:12 AM new
Here is some info about processing your own CC cards using a Merchant account. I just spent 6 months analyzing rates, etc. so I have become quite knowledgable about it.
If you are looking for a merchant CC processing account, I highly recommend not using you bank without first checking the rates of competitors. Rates vary depending on your type of business and the amount you process.
In the 5 years of owning a retail store, I have found there to be only two benefits to using your bank for Merchant Processing... 1) they usually deposit funds next day vs. an independent processor that normally does it within 2 days. 2) You can go to the bank and have them fix any problems internally between processing and your bank account without them pointing fingers at someone else.
Personally, I have never experienced a problem with outside merchant processing. Not to say there won't be a time, but so far so good.
Wells Fargo is extremely expensive. They wanted us to pay 2.5% + 35 cents per transaction, plus their add on fees. When I compared it to my previous outrageously high processor, Wells would save me $10-20 a month. By comparison, I am using a new processor, got a free CC processing machine with ATM pin pad on it, and save $100-$150 a month in fees (that is $1200-1800 a year).
It took me 6 months of research to find the best deal, but so far I've been happy. We use it for our store front, so the PIN processing saves us a huge bundle on its own.
Here is the thing about Merchant Processing...
There are different rate levels for processing Credit/Debit Cards (non PIN based). Our is set up in 3 tiers.
1) The standard rate is generally for a basic credit card and check cards processed as Credit. This is normally under 2% + transaction fees (ours is 18 cents for each transactions). Our rate is only 1.64%.
2) Mid Qualified tier which is normally under 3%. Ours is 2.1%. This mid-qualified rate is generally for Rewards Cards. Frequent Flyer programs, etc. What this means is that you the merchant pays for your customers Frequent Flyer miles... and then some. Most people don't know that the merchant pays for the miles they earn. You really have to watch this tier b/c the rates can really jump high.
3) Non Qualified Rate can be as high as 4%. Ours is 2.85%. This is generally Business Cards, Government Cards, and International Cards. In addition, this may also be the rate you pay for non-swiped payments (ie: phone payments).
Our PIN based transactions are 18 cents per, plus about 59 cents flat fee. PIN won't help you if you are processing online or by phone. How this translates to savings vs. Credit card rates is simple.
$1000 transaction:
PIN Based: 77 cents.
Credit/Debit Card ran as a credit: $16.58
Last month I saved almost $100 in PIN Based vs. Credit/Debit. I should note that it is better to run a card as a credit for transactions under $30 b/c the credit card fees will be less than the PIN based transaction fees.
You should also never pay more than $10.00 a month for statements, and never fall for monthly or annual fees. You should also expect there to be a minimum of $25 in fees per month. Also avoid anybody who charges Batch Fees. That is another stupid add on.
Lastly, your machine. You will need a machine. Our processor leased our machine to us for free.
I would be happy to refer anyone to our processor. We get a $50 referral bonus for anyone who signs up.
posted on August 25, 2008 09:20:30 AM new
Oh, and whether you process cards now or in the future... I HIGHLY recommend reviewing your statements every single month.
Processors like to put important messages on their statements like rate changes, etc.
One thing I found was that my previous processor started charging us a $100 annual fee. My partner who used to handle our bookkeeping didn't know this and never caught it. I found it the 2nd year and called them on it.
Recently, VISA/MC did something Slimy. They charged all merchants $59 for something they called a one time, "PCI Compliance Fee". It was some BS charge for Fraud compliance. The problem is that VISA/MC forces merchants to sign a contract that states they can charge you a fee at any time for whatever they want. Our fee showed up on our bank account without any prior notice. I immediately called the Processor and they removed the fee, though it took 3 weeks to see the credit on our bank account. Obviously, this is a huge problem b/c it can leave a small business wide open to bank charges if you don't know a fee is coming your way.
posted on August 30, 2008 10:59:30 PM new
Hello,
I am interested in your referral. I feel my cc processing is to high.
you can email me at [email protected]
Please put in the subject line cc referral from Vendio
Thanks
Pat
Pat Norris
Bowpro
posted on August 31, 2008 06:07:42 AM new
HI Thank you for all your work on this issue. I have been trying to "wade through" all this for months. I have a merchant account and also accept paypal. It is costing me $$$. Please send me you information at [email protected]
