posted
Hiya 'Heads, I would like to be able to take credit card payments, but my business plan doesn't justify the commitment of a full merchant account yet - where I will have to pay anything from $20 to $30 per month for a "gateway" plus "discounts" and transaction fees.
Is there another alternative?
At best, I expect to take a credit card order a month for the first year and don't expect that the amount of the orders will exceed $200 to $300, so the fees will wipe out any profit that I would expect to make from the sale.
However, if there's a company that just charges a higher discount rate, I would seriously consider using them. So, any suggestions would be appreciated.
Thanks in advance,
Checkers
-------------------- a.k.a. Brian Born www.CheckersCustom.com Harrisburg, Pa Work Smart, Play Hard Posts: 3775 | From: Harrisburg, Pa. U.S.A. | Registered: Nov 1998
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I use Merchant Services, Inc 1-877-764-7900 Ext. 113 for Nick. Tell him Mike from SignBrackets gave you his number. They do all sorts of stuff like e-commerce.
He's sorta like a used car salesman, talks fast and such, but I just switched from Merchant Express to them and saved a chunk of change and no monthly fees!
These folks sell refurbished equipment for a very attractive price. You would swear the equipment was brand new the way they go thru it!
See what he can do for you.
-------------------- Mike Berry New England Posts: 534 | From: New England | Registered: Jan 2002
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Most banks offer that too; you might want to check with them. I'd say that most of our payments are made my credit card. We don't take American Distress tho; I ain't paying 4%.
[ March 01, 2006, 04:37 PM: Message edited by: Ricky Jackson ]
-------------------- Ricky Jackson Signs Now 614 Russell Parkway Warner Robins, GA (478) 923-7722 signpimp50@hotmail.com
"If I have seen further it is by standing on the shoulders of giants." Sir Issac Newton Posts: 3528 | From: Warner Robins, GA | Registered: Oct 2004
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Checkers you would be surprised just how many people will use their card when the option is available to them.
More importantly, you capture them right on the spot and get the impulse sale. No worrying about them not having the cash onhand or checkbook handy and no waiting for them to come back with it, which usually results in them forgetting all about it, or deciding they can wait, or even find someone else to do the work simply because you couldn't handle them on the spot and now they've forgotten they even talked to you.
I don't even need to mention the people that won't use checks, won't use a credit card or don't even carry cash anymore - like me - who you can make an instant sale with if you only had a credit card terminal to run their debit/check card through, which works on the same system as credit cards as long as it's a Visa or Mastercard.
The fee on a $300 purchase is $10. That's easy enough to eat or just bump the price up $25 over what you originally calculate as the price for the job and you'll have the fees covered. Shoot, bump it up $50 and cover the $30 terminal fee as well. It's not like retail sales where you can't add terminal fees, we do custom work which means custom pricing and that gives you the ability to compensate for credit card processing costs.
-------------------- "If I share all my wisdom I won't have any left for myself."
Mike Pipes stickerpimp.com Lake Havasu, AZ mike@stickerpimp.com Posts: 8746 | From: Lake Havasu, AZ USA | Registered: Jun 2000
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We have a First Data account, no monthly fee. Depending on if we type in a creditcard number or swipe it, we have to pay a different rate. (never could figure that one out.
The old system we had was a virtual terminal, where we could just go on line, type in the information and it was done.
This was bad sometimes when the web site wouldn't open, locked up or my computer decide it needed to shut down and reboot...arrrggggh! That service was $20 a month
quote:Shoot, bump it up $50 and cover the $30 terminal fee as well. It's not like retail sales where you can't add terminal fees, we do custom work which means custom pricing and that gives you the ability to compensate for credit card processing costs.
That one will getcha in a heap of trouble....it's in the very fine print that you sign agreeing to those terms when you sign on to take credit cards. You can't charge the customers for the convenience of taking credit cards. It's called a cost of doing business.
I know a person that tried that....he almost lost the ability to take credit cards.
Apparently, there is some "list" that if you do lose your merchant account, it about impossible to get setup to take credit cards again. I don't know how true this is, but I'm not going to do something to find out! Do what you want.....
And Dave....there are higher rates when you punch in the number manually verses swiping the card because of the increased risk that it's a stolen card or something along those lines from what I was told by my credit card processing company.
We did tons of searching around before signing on with our current credit card processing company, our bank could not touch their rates, but I would check around just to be 100% sure.
-------------------- Mike Berry New England Posts: 534 | From: New England | Registered: Jan 2002
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Mike B. I always thought it was illegal as well. But I have dealt with many suppliers that charge 2% more to use the credit card or a flat fee like $5. One of those companies is Gemini.
On big jobs I only take checks so I don't lose that percentage to the credit card company.
By the way, I use Quickbooks Merchant Account online and have never had a problem with it.
-------------------- Amy Brown Life Skills 101 Private Address Posts: 3502 | From: Lake Helen, FL, USA | Registered: Feb 2001
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I don't remember who I used when I first bought my shop in 2000 but after a few years I switched to Merchant Services because they could give me a much better deal...which they did. Over the last two years they have been jacking the percentage for using them and my fees.
I might do $45 one month and $2000. the next. I never know. But it started costing me a fortune. I recently switched to QuickBooks service and when I finally got a statement, I called them immediately and discontinued their service. They were so much more expensive...more than they told me over the phone.
For some reason Merchant Services was never terminated so I am at least covered for now. But I too am shopping around.
-------------------- Laura Butler Vision Graphics & Sign 4479 Welch Rd Attica, Mi 48412 Posts: 2855 | From: Attica, Mi, USA | Registered: Nov 2000
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how bout just using PayPal? that way the customer can use whatever card they like. I haven't dealt with PayPal other than purchasing but it seems like it would make a good alternative. I'm pretty sure you only pay for it when you use it. Maybe somebody with some paypal experience could offer some imput on the pros & cons. Just curious if this would be an alternative.
-------------------- Dan E. Kearfott KEARFOTT GRAPHIX 312 W. 8th St. Gibson City, IL 60936
Success comes in "Cans", Failure comes in "Cant's" Posts: 121 | From: Gibson City, Illinois | Registered: Mar 2003
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If a supplier is doing that, then I would call them on it....they might just be doing ti when they can and to who they can. If I was dumb enough to do it and somebosy called me on it, I think I would stop. It's all right there in the merchant account agreement that they/you/I signed and agreed to. You might need a magnifying glass to read all the super fine print...but it is there!
Laura - try calling the guy that I spoke with, tell him that you got the number from me, I feel good about the rates and like I had said, I purchased the terminal & printer from this company. It came through professionally packaged and it was so clean, I thought they messed up and sent me brand new stuff!
-------------------- Mike Berry New England Posts: 534 | From: New England | Registered: Jan 2002
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When we started at the shop I primarily wanted an EFTPOS terminal under the assumption that most transactions would be EFT (not credit) transactions. Now we have a couple of years trading figures I can see that credit card is easily the most widely used, in particular Visa. (over 65%) When we started the merchant account we had to give a guestimated average purchase, not knowing what the avg figure was likely to be I picked a figure lower than what turned out to be the actual avg. This worked OK for the first year but then they average out your turnover and adjust charges accoringly by the bank's scale. As far as merchant charges go if I had things over again, I would allow a damn sight more, or look a lot more closely at the merchant charges involved. A lot of people ask about Amex and Diners but that is more expensive again for the merchant with very little benefit for our purposes. If you find a way to accept CC payment that costs less I am defintely all ears.
-------------------- David Fisher D.A. & P.M. Fisher Services Brisbane Australia da_pmf@yahoo.com Trying out a new tag: "Parents are the bones on which children cut their teeth Peter Ustinov Posts: 1450 | From: Brisbane Queensland Australia | Registered: Nov 1998
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quote:Originally posted by Michael Berry: Posted by Mike Pipes
quote:Shoot, bump it up $50 and cover the $30 terminal fee as well. It's not like retail sales where you can't add terminal fees, we do custom work which means custom pricing and that gives you the ability to compensate for credit card processing costs.
That one will getcha in a heap of trouble....it's in the very fine print that you sign agreeing to those terms when you sign on to take credit cards. You can't charge the customers for the convenience of taking credit cards. It's called a cost of doing business.
I know a person that tried that....he almost lost the ability to take credit cards.
Apparently, there is some "list" that if you do lose your merchant account, it about impossible to get setup to take credit cards again. I don't know how true this is, but I'm not going to do something to find out! Do what you want.....
And Dave....there are higher rates when you punch in the number manually verses swiping the card because of the increased risk that it's a stolen card or something along those lines from what I was told by my credit card processing company.
We did tons of searching around before signing on with our current credit card processing company, our bank could not touch their rates, but I would check around just to be 100% sure.
Yep it's illegal to add fees specifically for credit card transactions, but it's easy enough to circumvent by simply raising prices for all customers (and products) across the board. You're still charging everyone the same price and it's no different than raising prices to increase margins.
When it comes to pricing a custom-made product, and I mean a product that actually is custom, not just something built from a template or jig then painted whatever color the customer wants, you can pretty much add $$$ to the total on a complete whim, just for the sake of you wanting to make more profit, and nobody's gonna prove otherwise. Someone orders a stock kit off my website (in whatever color they want) they're gonna pay the same price everyone else does regardless of how they pay (plus sales taxes for AZ residents), but if someone orders a one-off or original design you bet they're gonna pay more for it simply because I have the freedom to charge whatever the heck I feel like charging.
-------------------- "If I share all my wisdom I won't have any left for myself."
Mike Pipes stickerpimp.com Lake Havasu, AZ mike@stickerpimp.com Posts: 8746 | From: Lake Havasu, AZ USA | Registered: Jun 2000
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quote:Originally posted by Dan Kearfott: how bout just using PayPal? that way the customer can use whatever card they like. I haven't dealt with PayPal other than purchasing but it seems like it would make a good alternative. I'm pretty sure you only pay for it when you use it. Maybe somebody with some paypal experience could offer some imput on the pros & cons. Just curious if this would be an alternative.
Paypal is extremely expensive, not to mention a lot of people are afraid to use it and personally if a brick & mortar business told me to pay them via paypal, I'd wonder what kind of 2nd rate operation they were running.
I spoke with my bank when I decided to offer credit cards. $9 a month, no transaction fee & the % per sale is set by the credit card companies themselves.
-------------------- Chris Welker Wildfire Signs Indiana, Pa Posts: 4254 | From: Indiana, PA | Registered: Mar 2001
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Hi again People, I understand that this is just part of the cost of doing business and have it figured into my fixed costs. But, I'm not predicting that it will generate enough revenue to justify the expense for at least a year. If I sign up for the service, I estimate that it can cost me about $1280 in lease, transaction and access fees alone by the end of the year. That much money will wipe out about half of any sustainable income that the business would have made by then. Oh well, I guess I need to re-think my plan a littme more or just wait until business gets better
Thanks again,
Checkers
-------------------- a.k.a. Brian Born www.CheckersCustom.com Harrisburg, Pa Work Smart, Play Hard Posts: 3775 | From: Harrisburg, Pa. U.S.A. | Registered: Nov 1998
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Paying a lot in transaction fees is a good thing; it means people are using thier cards and you have a lot of sales.
The fixed costs are closer to $15/month from a service like Quickbooks.
I started with Quickbooks for the same reason you would; I didn't expect very many transactions.
But last year we did a third of our business on credit cards. The actual transaction fees we pay are 1.8% of Visa/MC/Discover and 2.3% for AmEx, plus 25 cents each.
All our largest CC transactions are on AmEx, all the smaller ones are on Visa/MC.
-------------------- Paul Luszcz Zebra Visuals 27 Water Street Plymouth, MA 02360 508 746-9200 paul@zebravisuals.com Posts: 483 | From: 27 Water Street, Plymouth, MA 02360 | Registered: Jul 2003
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Brian, We use Peak Card Services 719-784-4991 I'm not sure if they are national but the system we use costs us a flat rate of $7.50 a Month Just to have the service. We have no Card reader we just use the phone and punch in the card number and exp date and it gives us the Autorization right on the Phone. We pay a little more on the percentage rate. I think 2.9 or something. but has worked really well for us for the last 2 years.
posted
I pay $30/month plus 3% and 30 cents per transaction which is a little higher than the rest here but that's the price you pay for realtime online payment processing on "Card Not Present" transactions. Anyone with an actual terminal swiping cards on the spot should pay considerably less.
Brian, maybe you should just go for it then having the expense will force you to aim your sights higher and work a little harder.
Banks are giving away credit like crazy and people are willing to spend it, may as well take advantage of the situation before everything comes to a screeching hault because there's not enough cash to back up all the spending.
-------------------- "If I share all my wisdom I won't have any left for myself."
Mike Pipes stickerpimp.com Lake Havasu, AZ mike@stickerpimp.com Posts: 8746 | From: Lake Havasu, AZ USA | Registered: Jun 2000
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Mike, I looked into getting a remote transaction facility which from what I can gather is the same as a "card not present" facility to allow me to do transactions over the phone. The bank wanted 3 years financials from me as well as the right to recind the transaction up to 36 months after the event without notice or consultation, both of which I thought a burden as well as overkill. Out of curiosity and for comparison, do you know if the same or similar onus apply to your transactions?
-------------------- David Fisher D.A. & P.M. Fisher Services Brisbane Australia da_pmf@yahoo.com Trying out a new tag: "Parents are the bones on which children cut their teeth Peter Ustinov Posts: 1450 | From: Brisbane Queensland Australia | Registered: Nov 1998
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Michael, I use Merchant Services for taking credit cards too, but we pay a monthly statement fee of $10. Do you have to pay that? Also it's 25cents per transaction and rate is 1.82% if I swipe the card. The rate is double if I punch it in.
-------------------- Wayne Webb Webb Signworks Chipley, FL 850.638.9329 wayne@webbsignworks.com Posts: 7403 | From: Chipley,Florida,United States | Registered: Oct 1999
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quote:Originally posted by David Fisher: Mike, I looked into getting a remote transaction facility which from what I can gather is the same as a "card not present" facility to allow me to do transactions over the phone. The bank wanted 3 years financials from me as well as the right to recind the transaction up to 36 months after the event without notice or consultation, both of which I thought a burden as well as overkill. Out of curiosity and for comparison, do you know if the same or similar onus apply to your transactions?
No David, there's nothing like that on my account. I applied for the merchant account online, through my local bank's website and had instant approval. I'm protected from chargebacks as result of fraudulent transactions as long as I use the Fraud Protection and Address Verification suites on all transactions. I have to turn them off however to process international orders because most banks overseas from the US do not use the AVS system. I keep an eye open for any suspect orders too.
-------------------- "If I share all my wisdom I won't have any left for myself."
Mike Pipes stickerpimp.com Lake Havasu, AZ mike@stickerpimp.com Posts: 8746 | From: Lake Havasu, AZ USA | Registered: Jun 2000
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quote:Originally posted by Dan Kearfott: how bout just using PayPal? that way the customer can use whatever card they like. I haven't dealt with PayPal other than purchasing but it seems like it would make a good alternative. I'm pretty sure you only pay for it when you use it. Maybe somebody with some paypal experience could offer some imput on the pros & cons. Just curious if this would be an alternative.
quote: PayPal is affordable for businesses of all sizes. Fees are applied only when you accept a payment—if you don't receive money, you don't pay a penny.
* No monthly fees * No setup fees * No gateway fees * Free eBay and Merchant tools * Antifraud systems at no extra cost
***Standard Rate***: Monthly Received Payment(USD) : $0.00 USD-$3,000.00 USD
Fees per transaction (USD) : 2.9% + $0.30 USD
***Merchant Rate***: Monthly Received Payment(USD) :$3,000.01 USD-$10,000.00 USD
Fees per transaction (USD) : 2.5% + $0.30 USD
Monthly Received Payment (USD): $10,000.01 USD-$100,000.00 USD
Fees per transaction (USD): 2.2% + $0.30 USD
Monthly Received Payment (USD): > $100,000.00 USD
Fees per transaction (USD): 1.9% + $0.30 USD
Flat fee will be charged as follows: $0.30 USD for payments in U.S. Dollars, $0.55 CAD for Canadian Dollar, ¥40 JPY for Yen, £0.20 GBP for Pound Sterling, €0.35 EUR for Euro, $0.40 AUD for Australian Dollar.
Fees for receiving eCheck payments will not exceed $5.00 USD per transaction. eBay sellers can also choose to offer promotional financing terms on PayPal Buyer Credit funded purchases for an additional fee.
Does not apply to Website Payments Pro or Virtual Terminal.
* No extra fees PayPal doesn't charge the extra fees that you might have with a merchant account, like setup fees, monthly fees, and gateway fees.
* No obligation Our fees are only applied when you receive money, and you're never under any obligation to use PayPal. A typical merchant account may require a six-month commitment or longer.
* Chargeback protection We help fight chargebacks on your behalf. In addition, on qualifying transactions, PayPal's Seller Protection Policy shields you from certain liability that you may be exposed to with a typical merchant account.
* Accept payments immediately Sign up for a PayPal Premier or Business account and start receiving payments today -- no lengthy application process.
-------------------- Susan Daniel Huntsville, AL Posts: 53 | From: Huntsville, AL | Registered: Oct 2005
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quote:Originally posted by Wayne Webb: Michael, I use Merchant Services for taking credit cards too, but we pay a monthly statement fee of $10. Do you have to pay that? Also it's 25cents per transaction and rate is 1.82% if I swipe the card. The rate is double if I punch it in.
don't get lulled into a false sense of security by an offer of 1.8%
I did... & several months later I learned that corporate cards & reward cards (which are increasingly more popular now) are costing me up to 4% or more.
I pulled out my paperwork for Merchant Services. The person that I dealt with there is Nick Angelasto. His toll free number is 1-877-764-7900 and he's at ext. 113.
As far as the rates, it's a $1.00 statement fee. NO monthly fees (other than the statement fees) .22 cents per transaction, no set-up fee. the rate is 1.98%. I take Visa-MasterCard-American Express & Discover.
They are handling setting up the gateway and all the technical crap for our e-commerce site.
I did learn something from American Express....I received my bank statement today and there was a $5.00 charge from American Express on there. I called them to see what this was all about. In broken English that I could barely understand... (a pet peeve of mine we won't get into here) she tells me that this is the normal monthly charge. But I have not taken any American Express cards, so how come your charging me? She connects me with her "supervisor" (but she speaks English & I can understand her at least) She goes on and on that it's a normal charge and blah blah blah ....
I tell her that effective immediately cancel my merchant account, there is no way in hell that I am paying for taking a credit card, never mind that I have not even run an American Distress card as of yet.....
He squawks a bit, then puts me on hold, just as I am ready to hang up she comes back and tells me about this super duper program just for merchants like me (cough, cough, gag....) they will not whack me a monthly service charge, they will refund me my 5 bucks, and if I run one of their cards, they will only charge me 1%.
So.... I'll keep the American Express option open for now and see what happens.
If anybody else takes American Express, check & make sure your not getting screwed like they tried doing to me. If they are, call them to say good bye, I would be willing to bet they will do the same thing they say that your doing for me.
Doug...if they do try to jack up my rates as you say they did to you, they will have the same option that American Express did. Why would anybody in their right mind pay such excessive charges?!!! Credit card processors are a dime a dozen and they are all fight for more business.
-------------------- Mike Berry New England Posts: 534 | From: New England | Registered: Jan 2002
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Good news people, I found a local bank with some "reasonable" fees. This bank is simple and straight forward with no hasssles or contingents. The monthly statement fee is $10 and the discount rate is 3% + 55¢ for visa and mastercard. There is a 1 time fee to set everyting up and its $165. They also throw in a manual card printer. While I do admit that the discout is somewhat of a pill to swallow, it is a fixed cost that I can manage and, most importantly, I don't have to worry about loosing money on a small sale.
Thanks again for your input!
Checkers
-------------------- a.k.a. Brian Born www.CheckersCustom.com Harrisburg, Pa Work Smart, Play Hard Posts: 3775 | From: Harrisburg, Pa. U.S.A. | Registered: Nov 1998
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When I started I used paypal. It is so easy and there are no fees. If you dont use it you don't pay. I have started using quickbooks merchant services but I about wish I had stuck with paypal. I still hardly do enough credit card business to justify the monthly fees.
If you use paypal, make a buy it now button that does not include the amount of sale, then copy and paste the email link into a new browser window and save in your favorites. Then when a customer comes in and wants to pay with a card you just sit down at your computer, tell them you use a online credit card processor, click on the link in your favorites and go to it. Works great. The fee is high at 3% but when you figure out all the other fees that the other card processors slap on you. it can be the most reasonable for guys starting out. Another thing that works great is after you have been with paypal for sixty days they will give you a debit card for your paypal account. That is cool if you are strapped for cash because there will always be some money on that card to order supplies with.
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