Talk To Me About Credit Card Processing Services...

Business By FromScratch Updated 8 May 2009 , 5:29am by FromScratch

FromScratch Posted 6 May 2009 , 1:03pm
post #1 of 27

I have been looking into getting a CC processing terminal and I figured I'd pop in here and ask for your recommendations. There are a BUNCH on eBay for $0.99 with a contract and I was wondering what you all had for service. Most have no monthy fees or batch fees or sign up or programming fees... sounds too good to be true, but who knows.

So lemme have it... I was also looking at the new iPhone app that allows you to process CC transactions right through your phone. I want me an iPhone sooooo bad and this would be a nice excuse to grab one. icon_wink.gif

26 replies
-K8memphis Posted 6 May 2009 , 1:23pm
post #2 of 27

Five or so years ago I worked for a credit card processor--the folks who run the transactions through the system --take your money, pay to the vendor--megazillions of transactions, grocery stores, ebt --everything everywhere.

So in my bookstore, when it's all broken down, I pay about $1.50 per transaction. Because I have a low volume and because my church has stellar credit.

There can be some hidden costs involved.

There will probably be a minimum monthly fee. So say it's $15 for the monthly minimum. And you process enough transactions to pay fees of $9. They will charge you $6 more to hit the $15 every month.

Some of those deals through Sam's or Costco are pretty good --my sister has one of those--she likes it.

You pay monthly minimum, per transaction fee plus percentages depending on the card that is offered for payment. You would only want to use credit transactions (No debit transactions where you use the pin) And in my store we use Visa & Master Card--no Discover or Amex due to higher processing fees.

When you say ninety nine cents plus a contract--you gotta nail down every detail of the plus a contract part. You can say how much percentage do I pay, how much per transaction fee--but there can be other costs so heads up!

Some of the salespeople would roto root folks for whom English was a second language. Some of those folks get locked into paying exhorbitantly for the printer paper they need for their machine--some of them pay exhorbitantly for the shipping to receive the paper. All depends on your credit scrore and etc. There can be nasty fees for canceling. Ugh, hmm, what else?

I don't know but really watch your step on this. Ask a ton of questions, take your time, get expert local advice from your bank, from an accountant, from a small business owner.

So there are some good deals I guess but keep researching.

icon_biggrin.gif Are we having fun yet?

FromScratch Posted 6 May 2009 , 1:32pm
post #3 of 27

LOL... yes... we are. icon_wink.gif

This is all stuff I am dying to know so thanks so much. icon_biggrin.gif

-K8memphis Posted 6 May 2009 , 1:37pm
post #4 of 27

Service contract for repairs can incur an additional monthly charge.

Sometimes you have to upgrade (think like computers--how they started out real slow and how the new software won't work on older models) your equipment to be able to process the newer software.

They can make your stuff obsolete on yah--big big bucks to replace. Notice how often the equipment changes in the grocery stores & stuff.

We go through our point of sale computer so we have no worries about updating equipment.

FromScratch Posted 6 May 2009 , 2:08pm
post #5 of 27

Is this at the church? The POS computer? I just live chatted with someone over at Sam's/First Data (i think?) about their services. The waive the app fee. The monthy min is $19.95. I have a new computer (less than a year old) so I should be okay there. So much to think about.

-K8memphis Posted 6 May 2009 , 2:23pm
post #6 of 27
Quote:
Originally Posted by FromScratch

Is this at the church? The POS computer? I just live chatted with someone over at Sam's/First Data (i think?) about their services. The waive the app fee. The monthy min is $19.95. I have a new computer (less than a year old) so I should be okay there. So much to think about.




Yes, my computer in the bookstore at church. This is used for retail sales. Interestingly enough the church itself only takes cash and check transactions.

Geez, twenny bucks is a lot. $240 a year. It's based on projected volume and credit score. So this is another area where incorporating does not aid the new business. A new corporation has no credit. Which I don't know if you are incorporated or not I'm just not in favor of incorporating (aka complicating) a new business.

So I'm gonna go check my statement when I get to work 'cause I know there's a few $10 here and $10 there type fees. Like 'dues' y'know.

FromScratch Posted 6 May 2009 , 2:38pm
post #7 of 27

I am an LLC. It's really not that complicated. But I do get what you are saying. I'd just rather have the biz credit be separate from my personal shizznit. (especially since my personal shizznit is suffering in this economy)

I was thinking that the min fee was a bit much... especially when I have seen it as low as $5 (though I'm sure there's something there that will not quite be what it seems).

HeidiCrumbs Posted 6 May 2009 , 3:46pm
post #8 of 27

I'm going through the same thing right now. I don't know if I should just do cash/check and a "I'll send you the bill" type thing. I think people have a tendency to spend more if they can use plastic though so I'd like to offer it but it sounds like a headache to me.

I am going to look into this iPhone app though. I wonder if anyone here uses it? I'll go Google it now and see what I find.....

HeidiCrumbs Posted 6 May 2009 , 3:50pm
post #9 of 27

Here's an article I found on the iPhone CC app. Interesting, very interesting......

http://www.techflash.com/Turn_your_iPhone_into_a_credit_card_terminal_with_a_4999_application35979579.html

It's still more than I want to pay to be able to accept CC's.

HeidiCrumbs Posted 6 May 2009 , 3:51pm
post #10 of 27

Here's an article I found on the iPhone CC app. Interesting, very interesting......

http://www.techflash.com/Turn_your_iPhone_into_a_credit_card_terminal_with_a_4999_application35979579.html

It's still more than I want to pay to be able to accept CC's.

-K8memphis Posted 6 May 2009 , 4:55pm
post #11 of 27

What about paypal?

But looking at my statement--

for one thing my POS people charge me $12 a month to run the credit cards--

then the merchant processing boys charge me $10 for 'web access fee',

my minimum is ten bucks which I meet but I'm small potatoes anyhow

I pay twenty cents for every transaction

And I pay the discount (percentage) based on the amount being charged

So I ran 55 transactions and it cost me $52.23--total--but not counting receipt paper which can sometimes be a huge factor silly as it sounds.

My average ticket is about $18 on this statement and I ran about $1000.

It runs from a dollar to a dollar twenty-five per transaction.

If you call in transactions for voice authorization you pay more.
So I call in nothing. Be in here with your card or send me a check. icon_biggrin.gif

I have a really good deal compared to what happens to some new businesses-(the bookstore is only 1.5 years old)

FromScratch Posted 6 May 2009 , 5:12pm
post #12 of 27

Hi Heidi...

I remember your other thread. Definitely don't send them a bill. If you do anything stick to just cash and checks. That will just be a hurtin' waiting to happen. I think if you open up and start off with just cash and checks and then when you have a good customer base upgrade to credit that's the best way to go.

I'm going to read up on the iPhone app...

FromScratch Posted 6 May 2009 , 5:20pm
post #13 of 27

I don't like PayPal. They are quick to lock up funds and they charge 2.9% plus a $0.30 transaction fee. Same rates with Google Checkout which I am using right now. It's good for occasional processing... but if you do volume you pay way too much.

littlecake Posted 7 May 2009 , 12:34am
post #14 of 27

the whole deal sounds complicated...and you end up getting it "in the end"....i'm thinking of taking CC....i asked about the old scholl knuckle buster....i used that in another business i had a few years ago....it was simple....and the knuckle busters are cheap....i just deposited the slips into my checking account.

well that was then...

they'll still take knuckle busters...but why oh why does it cost 200.00 bucks for them to set it up?....it just stinks to me.

i haven't taken cc, and i've been open since 02....i was thinking of starting...but dang dude...i do not want to shell out that kinda hard earned money....plus i don't wanna spend hundreds on the machine either.

paypal and google....do they seem kinda unprofessional to ya'll or is it just me?

i wouldn't need the machine i don't think...the whole time i been in biz i have only gotten a handful of bad checks....i tried to start a "wall of shame" like on seinfeld...but the 1 lone check looked stupid after a year so i took it down.

patticakesnc Posted 7 May 2009 , 12:52am
post #15 of 27

I will tell you to stay away from the company Merchant Services. I used them when I had my bridal shop. They caused me to close down and a lot of bride to not get their gowns.

Apparently they felt I could only process so much per month.....HA! Tell me how much I can sell! They had set my limit at $2000...I had no idea...I sold $12000 in one month. So they decided to hold $10,000.00 of my money!!!!! They said that they would give it to me a little a month. For example if I did $1000 the next month they would give me a $1000 more from my accumulated sales. BULLSH*T! I could not even order my brides gowns. I couldn't refund their money or anything because I didn't ever get the money!

So anyway. Once I had a number of pissed off brides and fraud charges against me I had to get them to do chargebacks to get their money back. Of course I didn't dispute their disputes. It was horrible. My business was the bad word of bridal. I lost everything thanks to them!

classiccake Posted 7 May 2009 , 2:44am
post #16 of 27

I have accepted CC for years...learned alot! Read ALL the fine print. There are so many variables. I have learned that if they don't get you here, they will get you there!

Some say don't buy your machine...lease ours, then you get really ripped. A terminal costs about $200...you can buy them lots of places. Then you have to have the terminal programmed...now they tell you to send yours in and get one of theirs. Then some charge higher per month fees, other charge higher statement fees, some have low rates on the basic cards, all have higher rates on alternative cards.....from Visa and Mastercard. Did you know the vendor pays for these reward cards...definitely not the CC company. They charge a higher rate for those cards. You need to find out all their rates, not just the basic rate.

There are different kinds of terminals. I have never had repair issues with a terminal.

All of them have fees if you cancel before your contract is up...most contracts are 2 to 3 years. Some will raise their rates, others guarantee rate. Watch EVERYTHING!

One of the best companies I have worked with is Heartland. Merchant Services has been involved in class actions suits.

patticakesnc Posted 7 May 2009 , 2:48am
post #17 of 27
Quote:
Originally Posted by classiccake

Merchant Services has been involved in class actions suits.




That is sooo interesting. I wish I had known that. They ruined a business where I was doing $35K per month in gown sales on the internet. I didn't even have a shop, just selling them from my livingroom!

littlecake Posted 7 May 2009 , 2:49am
post #18 of 27

after these last 2 posts...that's enough for me...i'm keeping things the way they are.

these companies are just evil.

classiccake Posted 7 May 2009 , 3:07am
post #19 of 27

I was not eager to accept credit cards at first, but as my business grew, it really became a necessity. Now around 75% of my funds come through credit/debit cards. As you can see from my previous post, I have learned the "hard" way.

You just have to build those costs into the running of your business. And find a reputable company. Ask other businesses who they use. I wish I had done that in the beginning...of course, there was no Cake Central 13 years ago! icon_cry.gif

I find people are more apt to spend, make impromptu purchases, and will book weddings faster with credit cards.

I have never had a chargeback, but did have one experience with a stolen card (it was her mother's and Mom filed charges against the daugther.)

FromScratch Posted 7 May 2009 , 4:42am
post #20 of 27

They aren't all evil. That's pretty sweeping. Of course they are out to make money... why else would they be in business. Yes there are bad apples out there, but there are bad apples in every business.

I do think that PayPal and Google are less professional in appearance than having an actual processing account, but they are a good option for someone who does limited transactions. The fees are almost double of what most processing companies charge so if you do a lot of credit purchases then these options make no sense when you could be saving money by having a "real" account with someone.

I am going to do my homework and make a decision about it.

bakermommy4 Posted 7 May 2009 , 5:01am
post #21 of 27

Wow what a great thread....I was just going to start accepting cc...I ended up signing up with Paypal...is there anyone who has had a bad experience with the paypal email invoicing. It seems simple enough. I don't have really enough client base to go with a merchant account right now and from what I've heard I don't think I want to. I just know the few clients I do have always want to pay with cc. I've got to be able to accept it or I think it would hurt me.

HHELLLP

-K8memphis Posted 7 May 2009 , 10:57am
post #22 of 27
Quote:
Originally Posted by FromScratch

... The fees are almost double of what most processing companies charge so




(meaning double of google & paypal)

No they're not. Maybe on the front end comparing straight fees. But once you sign up you get all the other fees & charges to make up the differrence.

Terminals can cost much more than $200. Especially the pin code ones--but it just all depands.

It's very true they get you one way or another.
You're gonna pay for this service and yes as was said, you just tack it on to your cost of doing business--invisibly work it into your pricing.

FromScratch Posted 7 May 2009 , 12:50pm
post #23 of 27

With some contracts you can get a free terminal... or you can buy a used terminal. And I meant that google and paypal are double the processing companies when comparing straight fees... not the other way around. I'm not even sure it's going to be worth it this year for me to go this route. I still have to run the numbers.

Many customers have this stigma against PayPal... I have run into a handful in my short time in business. I'm finding that Google Checkout seems to carry a bit less of that stigma so for the time being I am going with them.

350BakerStreet Posted 7 May 2009 , 5:13pm
post #24 of 27

I use PayPal all the time, since it's linked to my website. I've never had a problem with them and I love their invoicing tool. It allows me to write up a detailed list of the charges and apply shipping and tax to the total. I ship cookies so this helps me in that particular aspect. Now that I'm doing cakes, I can write everything out like a contract and if there is any dispute, I can go back to that invoice and say, "Look, you basically signed off by paying for it." The fees are so minimal, I don't really think about it. I probably should though, huh? Maybe when I start looking at CC machines....This thread has really been helpful icon_biggrin.gif

WendyB Posted 7 May 2009 , 5:36pm
post #25 of 27

For my jewelry business I use PROPAY. I don't have any type of equipment, I process cards through the website. Really easy.

littlecake Posted 8 May 2009 , 1:49am
post #26 of 27

what about the deal sam's club offers?

anyone use this?

FromScratch Posted 8 May 2009 , 5:29am
post #27 of 27

I chatted with someone over there the other day. The guy was really nice and answered all of my newbie questions. If you are a Sam's Plus member they waive the application fee and monthly service fee which is nice. This was the breakdown he gave me:

Rates/fees are as follows: Visa/MC/Discover: 1.74% + $0.19 per transaction / American Express (optional): 2.89% + $0.10 / Batch Settlement Fee: $0.29 per batch / monthly service fee: $4.95 (waived for Plus members) / monthly minimum processing fee: $19.95

You can lease the terminal for $14.95/mo with a 48 month full warranty or purchase the machine for $329 with a 24 month warranty. Phone orders have a 0.5% higher rate depending on the card.

He did try to get me to sign up right then (what good salesman wouldn't have) but understood that I wasn't ready and backed off nicely.

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