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Old 9th June 2006, 03:20 PM   #1
patkelly0
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Default Accepting credit cards

I noticed a lot of questions regarding merchant accounts, and accepting credit cards and whatnot. Although thats what the business I just started does, this is just an FYI for everybody. [PM if you have questions]

what to look for in retail processing (face to face swiped into terminal) :
1.8% or less discount rate
$0.30 swipe rate
$1500 or less equipment purchase (leases are priced differently)
$0.60 or less debit (0% transaction rate)
24 hour merchant support
low minimum volume fees ($40 or less)
$95 or less application fee
$45 or less annual fee
$100 or less registration or setup fee
$15 statement fee or less
**** make sure you ask about these fees. These fees DO exist, even if they're not mentioned. many times they can be waived. trust me, just ask***


what to look for in MOTO (mail or telephone order[card not present manually imprinted]) and internet processing
2.5% or less discount rate
$0.35 swipe rate or less
$1000 or less virtual terminal purchase (leases are priced differently)
24 hour merchant support
low minimum volume fees ($40 or less)
$95 or less application fee
$45 or less annual fee
$100 or less registration or setup fee
$15 statement fee or less

basically for retail you should be able to do around $3000 - $4,000 in sales a month for under $125 including lease, under $150 for the same amount of sales for MOTO.

hope this helps some. feel free to ask any questions, if i know, i'll give you the ugly truth

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Old 9th June 2006, 04:06 PM   #2
pete
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Default

Quote:
Originally Posted by patkelly0
I noticed a lot of questions regarding merchant accounts, and accepting credit cards and whatnot. Although thats what the business I just started does, this is just an FYI for everybody. [of course if something appeals to you, you can email me at [email protected]... i mean come on.. who would turn down an interested person ]

what to look for in retail processing (face to face swiped into terminal) :
1.8% or less discount rate
1.74%

$0.30 swipe rate
.25

$1500 or less equipment purchase (leases are priced differently)
$ 500 or less

$0.60 or less debit (0% transaction rate)
.45

24 hour merchant support
Yes

low minimum volume fees ($40 or less)
NO MINIMUM

$95 or less application fee
$ 95 one time

$45 or less annual fee
NO ANNUAL

$100 or less registration or setup fee
NONE, just the $ 95 above

$15 statement fee or less
NO STATEMENT FEE

ONE MONTHLY FEE of $ 9.95 (swiped only).


**** make sure you ask about these fees. These fees DO exist, even if they're not mentioned. many times they can be waived. trust me, just ask***


what to look for in MOTO (mail or telephone order[card not present manually imprinted]) and internet processing
2.5% or less discount rate
2.34%

$0.35 swipe rate or less
.25

$1000 or less virtual terminal purchase (leases are priced differently)
FREE V/T
FREE GATEWAY, too

24 hour merchant support
YES

All these same as above -
low minimum volume fees ($40 or less)
$95 or less application fee
$45 or less annual fee
$100 or less registration or setup fee
$15 statement fee or less

Can have one account for both. One monthly fee of $ 19.95 covers swiped and online. Single $ 95 to open both.

Also included at no charge - FREE WEBSITE, FREE ONLINE ECOMMERCE STORE, 3 FREE CHARGEBACKS per month, FREE ONline CHECKS, CHECK GUARANTEE, FREE GATEWAY - $ 19.95 covers all of this, including hosting for wesite/on-line store.

PLUS - for just starting or seasonal businesses - No transactions at all in any given month and there is no charge at all - not even the $ 19.95 monthly fee.

I don't sell this, I am not a rep, and agent, an affiliate or anything else - just a satisfied user. For $ 19.95 a month I have a swiped account, an online account and two totally free, hosted online shops. I get my online sales approved, but not finalized, so I can come in and add shipping, correct for out-of-stock items, etc.



basically for retail you should be able to do around $3000 - $4,000 in sales a month for under $125 including lease, under $150 for the same amount of sales for MOTO.

hope this helps some. feel free to ask any questions, if i know, i'll give you the ugly truth

Again, I am not selling, just comparing.

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Old 9th June 2006, 05:02 PM   #3
jason.bordeaux
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Default Accepting Credit Cards

Sounds like you are happy with your program, Pete - and that's great! Your "customer present" rates for personal card swipe transactions appear to be pretty strong and your MO/TO rates are OK if not outstanding. Most importantly, you are comfortable with the rates you pay for the services you receive and are pleased with your provider. Too many people view merchant processing services as a commodity and will leap from one processor to another for a perceived savings of $5-$10 a month. I am in the merchant processing biz and love to hear when my customers are as pleased as you appear to be.

Pat, with all due respect, your rates and fees aren't very competitive and your list really didn't offer full disclosure. What are the rates for Debit cards swiped w/o pin number? Visa Rewards? MC World? Corporate Cards? Do you apply fees for customer credits back to the merchant accounts? I could go on and on.

When considering a processor, many questions should be asked that have varying answers depending on the type of business. What do you sell? What type of cards do your customers use? Debit? Corporate? Rewards? What is your anticipated total annual volume and average ticket size? How would you profile your customers? Will you swipe cards or will you be taking phone, mail and/or internet orders? The answers to these types of questions will help a business choose a merchant processor. It's a simple fact that the merchant processor that offers the lowest effective rate (total fees/net sales) for one merchant may not be a competitive choice for the merchant next door.

MasterCard and Visa have over 240 different rates for processing credit and debit cards. These rates vary and are divided into categories based on type of card (Visa Rewards, MC Corporate, Debit, etc.) as well as manner of processing (swipe, key entered, etc.) or even the industry. Every merchant processing company is charged the exact same rate by MC and Visa no matter how big or small and then decides on what rates they will then pass on to their merchants. These rates usually vary depending on the annual amount or amount of transactions processed by an individual merchant.

Most reputable processors offer very similar rates. In general, you should look at these processors and decide which one best suits your individual service needs. Those processors who claim massive savings in comparison to the rest of the pack are usually somewhat suspect as they simply can't offer savings beyond the rates charged to them by MC and Visa and the margins are actually very small. They will make their money off of you somehow so read the fineprint. No merchant processor has the "best rates" or "lowest rates" for every merchant.

That said, if you are expecting relatively low $$ average tickets, look for lower transaction fees and accept slightly higher % rates. For higher average tickets, accept higher transaction fees and look very carefully at the % rates for all types of cards as higher average transactions usually encourage Visa Rewards, MC World and other specialty card usage. Most processors who claim to offer "the lowest rates" charge terribly high fees for these types of cards. Also, if you expect to key enter many of your transactions, be careful! The rates for these transactions can be very high and must be processed properly or you will be charged the highest rates/fees that can be assessed.

Lastly, your equipment needs should be accessed on an individual basis. DO NOT LEASE! This is where many merchant processing companies make their big dollars and lock you into their services. Also, never agree to a term agreement - you should be able to change processors whenever you want. Your volume, processing needs and financial situation should dictate whether you buy a software package, a new or refurbished terminal, what it costs, and what its capabilities are.

Have a great weekend everyone!


Last edited by jason.bordeaux; 9th June 2006 at 05:07 PM.
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Old 9th June 2006, 05:28 PM   #4
patkelly0
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oh i was just trying to give a general idea on what should be looked for. the rates i can get you are way better. just trying not to exploit this for advertising. if you want the details on what I can get you, email me.

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Old 9th June 2006, 05:42 PM   #5
patkelly0
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and yes - leases usually are a way to "lock customers in." you're way better off buying outright if possible. one good alternative is getting a pos terminal thru some other means, ebay etc.. and having it reprogrammed. this can usually be done for little or no cost, and depending on the terminal, you can get them for a couple hundred used

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Old 11th June 2006, 05:11 AM   #6
Vacation Mamma
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Default Easy, Reliable, Cost Effective Merchant Accounts

Interesting series of posts here.

The initial numbers posted by Pat here look pretty lousy to me.

Costco offers merchant accounts at much lower rates via Nova.
No equipment even needed if phone/net. Just software.

Not a rep; just satisfied customer, and many small business people already have Costco memberships.

You can check it out at www.costco.com

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Old 12th June 2006, 07:49 AM   #7
Corey Bryant
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Don't forget about Sam's Club either Vacation Mamma

Both can offer prety good deals but there are also other aspects of merchant account. Sam's Club / Costco will turn you right over to First Data / Nova for all support needs.

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Old 12th June 2006, 10:53 AM   #8
jason.bordeaux
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It's great to hear that you have found a solution that works for you, Vacation Mamma

For everyone else out there who is trying to figure out how to choose or find out how their program is performing for them, the following is a pretty extreme example of how two different merchant processors can be a great choice for different businesses. The rates depicted are not representative of any actual merchant processors.

Both of these merchants process $10,000.00 monthly. One of them has an average ticket size of $200 and the other has an average ticket size of $20. Both of them have been approached by two merchant processing companies. One of the companies offers "the lowest rates" and the other offers "no transaction fees".


----------------------------Merchant 1
----------------------------PLAN 1---PLAN 2
CreditCardSalesVolume------$10,000--$10,000
Discount Rate---------------1.75%---2.05%
MonthlyDiscountPaid--------$175.00--$205.00
Transaction Fee------------$0.20----$0.00
(@ 500 transactions)-------$100.00--$0.00
Monthly Service Fee--------$10.00---$10.00
TOTAL PAID----------------$285.00--$215.00
EFFECTIVE RATE------------2.85%---2.15%

----------------------------Merchant 2
----------------------------PLAN 1---PLAN 2
CreditCardSalesVolume------$10,000--$10,000
Discount Rate---------------1.75%---2.05%
MonthlyDiscountPaid--------$175.00--$205.00
Transaction Fee------------$0.20----$0.00
(@ 50 transactions)---------$10.00---$0.00
Monthly Service Fee--------$10.00---$10.00
TOTAL PAID----------------$195.00--$215.00
EFFECTIVE RATE------------1.95%---2.15%

As you can see, there is a drastic difference in the effective rate for each merchant. Based on this info, neither of these processors could be described as better than the other - just different. The merchant profile dictates how competitive the processor is.

This is an extremely simple model, though. Rates for dozens of other types of Visa and MC categories, industry specific services, support model, etc., should all be factored in, too. There isn't a "best processor", but there is a good processing choice for every merchant.

I know I am long winded, but the point is that if a processor leads by saying they have "the lowest rates", "lowest fees", "no monthly fees", "free equipment" or even if your neighbor swears by their processor, be sure to do your homework and find the right answer for your business.

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