Merchant Account Fees

Opening retail account and shocked by rate

[iJeep]

I have had my current merchant account for several years with a major bank who gives me a good rate, helps fight chargebacks and has been better than any other I have seen.

I am working on opening a retail location to complement the on-line business and thought I would call to see the rate. They quoted me 2.15% for retail (swiped) transactions. That is basically what I am paying for internet transactions.

What is a normal amount to pay for swiped transactions? I think 2.15% is about double what I should expect to pay.

[Corey Bryant]

Usually you should be paying around 1.75% or less. Check around - processors are always offering deals especially for two accounts

-Corey

[etechsupport]

Yes few companies are offering such deal, you can send your proposal to them.

[edited by: etechsupport at 12:08 pm (utc) on Aug. 26, 2005]

[etechsupport]

iJeep,

You can check with loudcommerce their fees are quite reasonable and also reliable one.

[cabowabo]

That is too high for a swiped card. How long have you been doing business at the bank? Speak to someone high up, tell them how long you have been a customer, and you don't want to leave, however, Bank ABC is offering a 1.75% rate. Most banks will match it to keep your business (assuming you have been with them for at least five years). Good luck.

Cheers,

CaboWabo

[iJeep]

Thanks for the info guys. I will try talking to somebody else at the same company.

[cabowabo]

Let us know how it turns out.

Cheers,

CaboWabo

[LostOne]

Yea, good topic, We're gettin ripped at .0229. AMEX has us at .0299...But we've only been with them for 12 months

[ecommerceprofit]

AMEX has us at .0299 - is this for a swiped or non swiped (internet) business?

[iJeep]

Ugh - my AMEX is 3.1%.......Such a rip off.

I'll let you guys know if I get a different Visa/MC rate with my original company by just talking to a different rep. I haven't gotten a chance to call yet.

[surfweb]

Check Cpanel Merchant, retail swiped transactions should be about 1.75% or less. You can find it about 1.69%

Using Internet Virtual Terminal or shopping carts, just account for the Gateway Fees (example authorize.net).

[edited by: lorax at 2:14 am (utc) on Aug. 31, 2005]
[edit reason] removed URL [/edit]

[jsinger]

You sure you guys are figuring ALL the fees? We're a pretty big business and we pay over 2.50% total as I recall.

[webclub]

At 2.5% for a qualified VISA/Mastercard rate, I would say you can look around and do better. About 5 years ago, those were the rates, but with Paypal's entry, the rates have been really competitive; even Paypal rates are 2.2% for a small business over $10,000. I hear good things about Unitedbankcard but to get the 3 years contract waiver and no monthly minimum, sign up through their online ecommerce partnership at cpanelmerchant This is an important tip actually, United Bank Card is like any bank processor, you will be faced with their standard fees, unless you have a good ISO to keep them contained.

Here in Boca Raton, retails/restaurant rates at 1.75% are considered good, and for Internet or MOTO about 2.35%.

[edited by: lorax at 12:25 pm (utc) on Sep. 1, 2005]
[edit reason] removed URLs [/edit]

[gpilling]

I have found that the true fee calculation varies wildly. We are promised 2.00% for our swiped rate, but there is often some excuse to charge more, and when the monthly fees are calculated back into the picture, the TRUE rate gets bumped again.

For example:
You have monthly sales of $20,000 at 2.00% = $400 in fees, plus the $50 monthly fee gets you a TRUE fee of 2.25%. Always check all the numbers, and not just the rate they claim.

[webclub]

You need to find out your midqualified, or nonqualified surcharge if you are wondering about the extras. It is all about Risk Management and this is where a good ISO plays an important role in keeping it "contained" and negotiates with the processors.

The terms are explained on the FAQs at Cpanel Merchant. Each of your transactions will be classified as either qualified, midqualified, or nonqualified. These three classifications are based on Visa/MasterCard regulations. The rate 2.0% quoted to you is mostly likely only the qualified rate.

Ask your current provider about it.. see what they have to say about it! :)

[Corey Bryant]

As long as you swipe the transactions, you should get a qual swiped rate. When you key in the credit card, you will be charged a non-qual rate because this transaction has a higher risk of being disputed.

Swiping the card shows that you actually have the credit card. Keying in the number, well that does not help too much. I had a friend who actually had his number used at a local gas station about 10 times. He still have the credit card number in this wallet. The transaction was keyed of course. All it takes is one bad employee to ruin a business

-Corey

[webclub]

From what I read, even a swipe card can be non-qualified, if the card is a business or special card, if you read the faq at cpanelmerchant.com. I gather this implies like rebate cards or point cards. It looks like the cost will be transferred to the merchant.

[Corey Bryant]

It depends on the merchant / gateway. But most still charge only the qual rate for all Credit Card and Signature / PIN Debit and Rewards

-Corey

[cabowabo]

plus the $50 monthly fee

If you are paying $50.00 per month, you should find a new provider. I was paying $10.00 per month until I hit $20k in charges per month, then they waived it (after I asked), and I got a slight reduction in the pass through charges as well.

Cheers,

CaboWabo