Debit/Credit Card Processing

[Ark]

Hello, recently I've decided I am probably paying too much for my debit card processor. We own a convenience store and do approximately $12,000 a month in debit/credit transactions, with $10 per transaction being the average sale.

So with $12,000 in sales, we are paying nearly $600 in fees. I was told fees shouldn't be over 3% or so, which they are, by quite a bit. After looking for a few days online, I am just at a total loss as to who to go with. We originally went with a big name bank, because we figured they would probably be better and more trust worthy than most of the little companies who may or may not be scammers.

Who do you guys use, and recommend? I need a terminal that uses a dial up phone line, as well as a pin pad for the customers to put in their pin's. we don't have Internet, so things like Square wont work. And that probably wouldn't be convenient anyways for the type of system we need.

Thanks for any info.

[Freelancier]

Have you looked at a local community bank or credit union?

Your per-transaction fee should indeed not be over 3%, but that's for bigger transactions... the fixed-price part of the transaction formula may be an issue with smaller ones (e.g., $0.50 fee + a percentage may be small when the transaction is $100, but huge when the transaction is $2, so it's a money loser to take credit cards for small transactions). Consider having a minimum for taking a card?

With so many microtransactions, you may need to find an entity with a lower fixed cost on the transaction and slightly higher variable cost. You should also consider going back to your current vendor and requesting a new rate, since they now have a chargeback history for you and can maybe lower your rates because you are lower risk than expected.

[Ark]

We have a fairly strict $4 minimum, so people can get a pack of cheap cigarettes on their cards. I do make exceptions every now and then, but for the most part people understand and almost always spend the minimum.

[ksnazel]

Squareup.com. No banks. 2.75% flat rate. I can swipe a cc from my phone and monies deposited into my bank account the next day.

[Ark]

Yeah, square seems great. But like I said, I cant use it in the store, too many hurdles.

No internet at the store.

I would need to get a device I can leave at the store full time, since I don't work open to close, my phone wont work for that.

99% of the card transactions are Debit, and the customers need a separate pin-pad, and as far as I can tell, they don't make such a peripheral.

[davidb3069]

I have gone through the merchant company search for 3 businesses of mine in the last 30 days. What a chore. The squareup.com seems to be the best, cheapest solution for small, simple businesses. The problem is, all of my businesses are internet based and not brick-and-mortar and therefore the squareup will not work for me. The $25 max charge without a card swipe is just too low.

I have accounts with 3 different merchant companies. It was a combination of planning and accident. The first account I had to shop around for a long time. It is in a high risk area (legal services) and nobody wanted to sign it. Or so I thought. I went with what I consider to be a pretty slimy company and they would not have been my first choice. About 10 days after I first applied, my first choice approved me for the same business as well so now I have 2 merchant accounts for the same business. Probably not a bad idea considering it is a high risk business. I can use them both for different types of transactions within the same business (and all disclosed to the merchant companies).

For my software business, I had a merchant account 20 years ago. I decided to go with one now to reinvent the business. I went with a merchant company associated with my local bank. At first they seemed more credible but right out of the gate they are charging me more for setup fees than I had agreed to (or at least understood). If I had known about the higher fees, I would have gone back to my preferred merchant processor.

Now I will be going back to one or the other of these businesses again for a third company that is getting setup. This one is a very high risk business for chargebacks and therefore I know I have little choice but to pay higher rates and more setup fees. This type of merchant account is very hard to get approved although I seem to be preapproved as my merchant rep did some checking for me in advance.

How has everyone dealt with the slew of credit report checks required for new merchant accounts? I am sure my credit will probably take a hit because of it. I had to get checked out by 4-5 companies to get my first account. Nobody would sign it (because of high risk market). Now I am still looking at 1-2 more credit enquiries to get fully setup with all the merchant accounts I need.