Credit Card Processing Fees!!

[Ryan]

I recently changed companies to process our credit cards. It is amazing how much some companies percentage rates are. I am now at a lower rate and saving money. I was curious if any of you know what the current percentage rate (i.e. 1.5%, 1.75%, 2%) etc . you are paying for credit card processing. I am in the process of maybe becoming a part time sales rep for a cc processing company, and look foward to helping out some fellow optiboarders. I'd like to know what your rates are and would look forward to helping you out if needed.

[Refractingoptician.com]

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[PAkev]

Our rates (and to my understanding most credit card clearing house brokers) are established with many contingent factors.

A swipe of the customers card gives us the lowest rate of 1.74% whereas a manual entry such as a deposit over the telephone is up over 2%. We only take Mastercard and Visa. We found Discover and AmEx to take more than what we can pay for their services and don't accept those cards.

The other issue is the amount of credit card dollar volume we do brings a more stable and competitive discount rate.

Another issue is the amount of risk the clearing house is taking which is reflected by your average ticket price. This is a catch 22 situation since they are obviously making more on the discount rate, However they don't get their money (if any) on payment disputes or fraudulant transactions until the dust settles and must work this into the equation. A pair of eyewear costing a few hundred dollars not meeting the expectations of an unsatisfied customer is much more risk than a guy whipping out his credit card to pay for a $20.00 case of beer and after drinking a six pack decides he doesn't like the taste. With this in mind the credit card companies minimize risk and maximize profitability whith a high volume of low ticket transactions.

The previous brings up the next factor which is your business history with a company. The integrity of your business can be reflected by an above or below average amount of payment disputes from customers which indicates a greater or lesser risk of loosing money with your transactions and therefore imposing the respective higher or lower discount rate. A new business with little or no history may expect to pay a slightly higher discount rate than a longer established business.

Finally, just like buying eyewear. "YOU GET WHAT YOU PAY FOR" Timely deposits to your bank account, Easy to operate terminals with fast connection and transaction times, Easy to read statements with supporting detailed information, and a toll free telephone number with access to an actual human service representative when problems arise are worth much more than the compromises made on some sweetheart deal for only a few bucks less.

I probably get a telephone call at least once a week to give consideration of using a different credit card clearing house but hesitate trying to fix something that isn't really broken.

Kevin

[Ryan]

Good points, there is more to credit card processing than just the rates. It is just like eyewear, you pay for the customer service, etc as well as the eyewear. Same as credit card processing companies, you can have a low % rate, but, there are many hidden charges and fees companies charge. All I would need to see is a credit card statement and I can evaluate what you are being charged and where the hidden fees are, and maybe, if I can save you money, you can switch companies, wihout buying a new cc terminal. The company I am with has outstanding customer service 24/7. I just thought I would try and help fellow optiboarders out.

[Johns]

We have switched processing centers recently, and are pretty satisfied w/ a 1.48 rate. We were getting a 1.7 rate, but after all the hidden fees it was more like 2.9% Of course you have to go into the negotations w/ the processing company w/ YOUR figures (not theirs) lined up. What I mean by this is that you must know exactly what you are paying for which transaction. As Pakev mentioned, there are different fees for different ways the transaction is conducted. Many companies can get you hung up on seldom seen scenarios such as punch ins.

Have you seen any of the new cards that have chips instead of swipes ? We've had a few come in, which is why we updated our terminals to chip reader/swipers (to the tune of $3K per location). The chip cards are an ant-theft type card that require the user to type a PIN # into a seperate key pad (like at the grocery store). This way, the credit card has the security feature more akin to an ATM card. Not a bad idea, and I read that w/ 2 years all credit cards will be like this.

[Credit Card Proces]

That's good information though. Thanks for posting this update, I will surely take a look at this technology. I hope that you could post a lot of announcements and updates regarding that so that I could also post my insights about it. Thanks a lot. I will surely update my friends about this.