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nskitts
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Joined: 14 Jun 2011
Posts: 80
Location: Jackson, OH
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 Posted: Mar 30 2013 Post subject: Merchant account fees, please tell me if these are good |
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I was quoted these rates and I have a contract in front of me to sign from a large company.
I am a new company with no sales in the past to judge. Would you guys help me understand if these are good rates?
Discount Rate: %1.59-1.69 Per Item $0.16
Amex: Discount Rate: %3.5 Per Item $0.15
Fees: Batch Fee $0.20 per occurrence
Voice Authorization Fee 0.60
Voice AVS Fee 1.25
Chargeback Fee 15.50
Minimum Monthly Discount 25.00
It's scary dipping your toes in the water of these merchant accounts because it's so confusing. I wish the big boys would adopt the flat processing fees like Square
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Harry Nutczak
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Joined: 01 Mar 2007
Posts: 8558
Location: The Northwoods
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| Posted: Mar 30 2013 Post subject: |
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I'm not liking the batch fees, I would wait to sign that, and check with a few others before committing.
What is the contract length, and if their services are so good, why would they force you to keep them for a specified term?
Take a look at mercury payment systems, have them do a quote for you. They have been great for us, and I really like their gift card program too.
If you want a flat 2.75% rate like square, Mercury will do that for you. But, that is a high rate.
See if they will cap your monthly at $275.00 maximum fees. (square is doing that for some places now)
Next question:
Where is the processing equipment coming from? is it a lease at some outrageous cost, and again what time length are they forcing you to agree to.
LOOK AROUND! Get different Quotes.
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nskitts
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Joined: 14 Jun 2011
Posts: 80
Location: Jackson, OH
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| Posted: Mar 30 2013 Post subject: |
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Harry,
I am going with this company because it integrates with my POS, that way I don't have to get PC Charge and all that, and the card processing equipment "reader" comes free if I am reading right.
So,
You think I should call the rep that put this together on Monday and try and get the batch fees lowered?
The term is 1 year btw.
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Harry Nutczak
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Joined: 01 Mar 2007
Posts: 8558
Location: The Northwoods
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| Posted: Mar 31 2013 Post subject: |
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| nskitts wrote: | Harry,
I am going with this company because it integrates with my POS, that way I don't have to get PC Charge and all that, and the card processing equipment "reader" comes free if I am reading right.
So,
You think I should call the rep that put this together on Monday and try and get the batch fees lowered?
The term is 1 year btw. |
There should be ZERO batch fees. Basically what a batch fee is;
At end of day, when you close register, and your batch of card transactions from the entire day, if I am understand their fee structure correctly, they want $0.20 for each card you processed that day.
This is on top of the $0.16 & $0.20 you are already paying for your "Per-Swipe" fees .
Our current rates are 0.25% with a $0.10/swipe, no batch fees, no contract.
I could lower that more if I had a PIN entry pad for people who use their debit card with a visa or MC logo on it.
(thats why major retailers have pin-code option as their default)
Look at your current daily sales, now imagine at least 50% of those sales will be CC transactions, calculate your daily fees, and add those up for the month, then the year.
Look at your total fees, and imagine what you could have done with that money.
In many cases, using the chargepath module in your POS to be able to use a processor of your choice can be well worth the initial expense.
1-Year contract?
Why do they feel the need to lock you into committing a full year if they are so wonderful?
I am just looking at this from a monetary standpoint. those nickels and dimes in fee's add up to a large amount in very short order.
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nskitts
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Joined: 14 Jun 2011
Posts: 80
Location: Jackson, OH
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| Posted: Mar 31 2013 Post subject: |
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Wow, I was thinking the batch charge meant per batch charge, so .20 once a day when you send a batch. If it is for each swipe that is bull crap and I won't do that. Thanks for the heads up. I think I will tell them to waive the batch and the contract and I will sign. I expect a little higher rate as I am unproven but I don't want to be choked!
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daddywoofdawg
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Joined: 22 Jul 2008
Posts: 3892
Location: Starkweather,ND
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| Posted: Mar 31 2013 Post subject: |
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Also ask them when they process to your account,I.E when does the money show in your bank account.some sit on it for a week i'm told.
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Geronimo
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Joined: 29 Jul 2007
Posts: 2896
Location: Montgomery, Texas (and lovin' it)
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| Posted: Mar 31 2013 Post subject: |
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I see you live on OH, do you have a costco nearby? If so, being a costco member, you can go with a company (I forget name) through them at a discounted rate much lower (in most cases) than you can get on your own.
Check at the membership desk and ask about it. That was the company I used (after I left the first one because of too high fees) and was very happy with them and I had them for 12 out of 15 years of business.
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Harry Nutczak
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Joined: 01 Mar 2007
Posts: 8558
Location: The Northwoods
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| Posted: Mar 31 2013 Post subject: |
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| daddywoofdawg wrote: | | Also ask them when they process to your account,I.E when does the money show in your bank account.some sit on it for a week i'm told. |
Good point.
Mercury has 2nd business day / 48 hours.
The big trap many processors get people on is the equipment lease rates. We had a company pitch us 1.5% on all cards, and in the fine print I found $60/Month lease for 72 months (6 years) on their card reader and darn near $1,000.00 charge lease breakage penalty
I bought a USB reader for $15.00, and then I signed with Mercury, the POS software company sent me a free reader after that, So I got 2 of them now.
Read through everything, see what early termination rates are, and set up a separate bank account just for card deposits, this way they cannot raid your account unexpectedly if you break the contract.
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Geronimo
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Joined: 29 Jul 2007
Posts: 2896
Location: Montgomery, Texas (and lovin' it)
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| Posted: Apr 01 2013 Post subject: |
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| Harry Nutczak wrote: |
Read through everything, see what early termination rates are, and set up a separate bank account just for card deposits, this way they cannot raid your account unexpectedly if you break the contract. |
Harry has a good point...to a point 
Read through the contract and know what you are getting into BEFORE you sign and there should be no reason to break the contract.
As far as having a separate bank account just for CC deposits, that's a bit over the top IF you know what you are getting into ahead of time. 
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Mr Tony's BBQ
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Joined: 01 Aug 2010
Posts: 5067
Location: Fredonia Wi
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| Posted: Apr 01 2013 Post subject: |
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| Geronimo wrote: | | Harry Nutczak wrote: |
Read through everything, see what early termination rates are, and set up a separate bank account just for card deposits, this way they cannot raid your account unexpectedly if you break the contract. |
Harry has a good point...to a point
Read through the contract and know what you are getting into BEFORE you sign and there should be no reason to break the contract.
As far as having a separate bank account just for CC deposits, that's a bit over the top IF you know what you are getting into ahead of time. |
My new bank had me set up 2 accounts for exactly this type of situation, amongst others, just be prepared to spend a few hours setting up the accounts....I COULD NOT BELIEVE all the paperwork involved in starting a business bank account due to all the government regulations!! [ was with my last bank for 15 or so years]
All my deposits go into one account, go out of a different - using electronic fund transfers. Works easier and nicer than I originally thought it would, and the safety factor did work after having one account hacked [ thank you R.D.], I simply transferred everything to the other.
I currently use paypal swipe at the 2.69% period, every transaction goes onto a prepaid mastercard withing an hour of the sale.
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nskitts
Newbie
Joined: 14 Jun 2011
Posts: 80
Location: Jackson, OH
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| Posted: Apr 02 2013 Post subject: |
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OK, hardball time! lol, I told them to waive the batch fees and the 15 dollar monthly statement fee and I would sign.
They replied they would waive the batch fees and charge 7.95 for the monthly statement fee.
I thanked them for waiving the batch fee and requested again they waive the monthly statement fee before I sign. Let's see if they nickle and dime me. If nothing else I will run Point of Success and have a mini ipad for Square if they won't waive their nitpicky fee.
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Harry Nutczak
BBQ All Star
Joined: 01 Mar 2007
Posts: 8558
Location: The Northwoods
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| Posted: Apr 02 2013 Post subject: |
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| nskitts wrote: | OK, hardball time! lol, I told them to waive the batch fees and the 15 dollar monthly statement fee and I would sign.
They replied they would waive the batch fees and charge 7.95 for the monthly statement fee.
I thanked them for waiving the batch fee and requested again they waive the monthly statement fee before I sign. Let's see if they nickle and dime me. If nothing else I will run Point of Success and have a mini ipad for Square if they won't waive their nitpicky fee. |
Wait, you're running Point of Success?
Mercury is already bundled in that software, you shouldn't need to get the chargepath module for that software and there is no contract with Mercury, if you decide to quit Mercury though, you do need to give written notice of 30 days or so though.
When I switched to Mercury, I told them I was currently using Square, they offered to match rates, I explained I am not looking for a lateral move, but instead to lower my fees.
Mercury did me right, mention that you are interested in their gift-card starter package too.
I left square because they wanted personal SSN, and different contracts due to our volume, and it was too difficult to close for the day not knowing which cashier ran what charge through square and the POS.
I also left due to poor customer service, well, maybe not poor, but no way to get immediate support over the phone from square, just canned e-mail responses over several days until you get a real person reply, and when they finally reply, you're usually out of the time-frame to do what you wanted to do (IE; Partial refund without card present)
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nskitts
Newbie
Joined: 14 Jun 2011
Posts: 80
Location: Jackson, OH
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| Posted: Apr 05 2013 Post subject: |
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Ok,
They waved the batch and monthly statement fee and their gift card program does sound neat and it's pretty inexpensive.
Also, if anyone ever uses Point of Sucess, consider using Mo as your dealer. He is super quick to respond to emails and help and he is on this forum.
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22.5 WSM "Set it and Forget it."
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Harry Nutczak
BBQ All Star
Joined: 01 Mar 2007
Posts: 8558
Location: The Northwoods
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| Posted: Apr 05 2013 Post subject: |
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| nskitts wrote: | Ok,
They waved the batch and monthly statement fee and their gift card program does sound neat and it's pretty inexpensive.
Also, if anyone ever uses Point of Sucess, consider using Mo as your dealer. He is super quick to respond to emails and help and he is on this forum. |
You're getting charged a transaction fee for gift cards? Or just having the cards printed for you?
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Just remember that the toes you may step on during your climb to the top will also be attached to the a$$es you'll be forced to kiss on your way back down! |
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nskitts
Newbie
Joined: 14 Jun 2011
Posts: 80
Location: Jackson, OH
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| Posted: Apr 06 2013 Post subject: |
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From what I can tell it is just the printing costs.
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22.5 WSM "Set it and Forget it."
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