This is my first post, so please excuse any mistakes I make.
I made the mistake of siging a contract and a leasing a terminal from First Data years ago. They promised rates below 2% but by the time all the fees are added up I'm paying over 4.5%!
Thankfully my contract is now over. (it would have been cheaper to switch years ago to a second processor and keep paying their fees!) I have been researching like crazy for a new processor and the least expensive seem to be the flat rate companies. Groupon has a service called breadcrumbs or fee fighters where it is 1.8% FLAT rate plus 15 cents a transaction.
Square.com has a flat rate of $275/month as long as you do less than 20,000$ per month.
I took my gross sales for a year and using square would be be equivalent to a 1.7% effective rate.
We do about $16,000 a month in sales. Average ticket is $40 for the nail salon.
I have these other credit card merchant companies quoting me 11 basis points plus interchange plus 10 cents a transaction. They claim that even with all the fees they charge their effective rate will be less than 1.8%. I should mention that 85% of our transactions are debit cards withOUT the pin entered because debit cards wont' let you put a tip line on the receipt and tips make up a good portion of our business.
Merchant warehouse would not give me references, nor would they look at actual bills they issue and tell me the effective percentage their customer was paying. They cited privacy rules, even though I was not asking for the name or location of the business. They also refused to add an adendum to the contract stating that if their total fees was more than 1.8% than they would pick up the overages.
So for those of you that do interchange plus processing through a merchant provider, what do you think would be best for my situation? What effective percentage do you actually pay with all the hidden fees?
I made the mistake of siging a contract and a leasing a terminal from First Data years ago. They promised rates below 2% but by the time all the fees are added up I'm paying over 4.5%!
Thankfully my contract is now over. (it would have been cheaper to switch years ago to a second processor and keep paying their fees!) I have been researching like crazy for a new processor and the least expensive seem to be the flat rate companies. Groupon has a service called breadcrumbs or fee fighters where it is 1.8% FLAT rate plus 15 cents a transaction.
Square.com has a flat rate of $275/month as long as you do less than 20,000$ per month.
I took my gross sales for a year and using square would be be equivalent to a 1.7% effective rate.
We do about $16,000 a month in sales. Average ticket is $40 for the nail salon.
I have these other credit card merchant companies quoting me 11 basis points plus interchange plus 10 cents a transaction. They claim that even with all the fees they charge their effective rate will be less than 1.8%. I should mention that 85% of our transactions are debit cards withOUT the pin entered because debit cards wont' let you put a tip line on the receipt and tips make up a good portion of our business.
Merchant warehouse would not give me references, nor would they look at actual bills they issue and tell me the effective percentage their customer was paying. They cited privacy rules, even though I was not asking for the name or location of the business. They also refused to add an adendum to the contract stating that if their total fees was more than 1.8% than they would pick up the overages.
So for those of you that do interchange plus processing through a merchant provider, what do you think would be best for my situation? What effective percentage do you actually pay with all the hidden fees?
via Small-Business-Forum.net http://www.small-business-forum.net/accounting-taxes/9741-what-you-actually-paying-cc-credit-card-procressor-first-data-4-5-a.html
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