Financing Merchant credit card fee

[BungeeII]

An over-the-counter transaction should not cost the retailer more than 1.9%. Many times it's lower. This is because it's being swiped at the point of sale where the retailer is able to verify the identity of the purchaser. Less chance of fraud.

Mail Order / Phone Orders are higher charges, in the 2's to 3's. These are higher risk charges, even with retailers requesting the 3-digit number on the back of the cards.

American Express is 3% or higher. Between the exorbitant rate charged to the retailer and the annual fees charged to the card-holder, it's a wonder they're even in business.

 

[mustangsallysdad]

An over-the-counter transaction should not cost the retailer more than 1.9%. Many times it's lower. This is because it's being swiped at the point of sale where the retailer is able to verify the identity of the purchaser. Less chance of fraud.

Mail Order / Phone Orders are higher charges, in the 2's to 3's. These are higher risk charges, even with retailers requesting the 3-digit number on the back of the cards.

American Express is 3% or higher. Between the exorbitant rate charged to the retailer and the annual fees charged to the card-holder, it's a wonder they're even in business.

Again, 2.63% plus swipe fee and this is at point of sale...the credit card company has nothing to do with the fee...the fee is charged by the retailer's banking institution (terminal owner, at least in my case), and that is with POS electronic verification (no funds in your account and the transaction is declined). In that case, I still pay the terminal swipe fee.

 

[Big Bri]

I pay 1.54% for regular Visa and M/C if it's a reward card i pay the 1% or 2% on top of that. i also have a 10 cent swipe fee. now on debit cards its just a flat 35 cent swipe fee if you put in a pin number.
i don't accept Amx. The card companies do charge the fee and then your bank or Merchant Account adds a fee on top of that. In my case i pay the Card fee and the swipe fee goes to My Merchant (card processing center)
all of these fees can be negotiated with the merchant center by looking sales.
also if you do more sales under $10 your swipe fee will be less and your % paid will be higher. again you can negotiate or shop for these rates.
Hope that helps.
Brian

 

[AndyMA]

It depends on the size/scale of the business and who they may be associated with. One of the selling points of buying groups and dealer associations is lower transaction fees on credit cards.

The real question I guess is "why does it matter?". Is your dealer taking this in to account in your pricing? Is there a reason that you want to put it on your card, such as points or benefits? If you're looking at the points/benefits, most of them end up being the same as something around a 1% rebate...guess how they fund those...with the merchant fees.

If its just the use of credit that you need and you don't want your dealer to incur the processing fees, just get a bank draft or cash advance on your credit card and use that. Or better yet, get a low interest line of credit.

If my business takes a credit card with a reward or points paid for its use, we are charged a higher fee to cover that cost. The customer never sees it but our "discount fee" has 2 or 3 different rates depending on the type of card.

Andy

Antec Energy LLC Home Energy Saving Services

 

[AndyMA]

I pay 1.54% for regular Visa and M/C if it's a reward card i pay the 1% or 2% on top of that. i also have a 10 cent swipe fee. now on debit cards its just a flat 35 cent swipe fee if you put in a pin number.
i don't accept Amx. The card companies do charge the fee and then your bank or Merchant Account adds a fee on top of that. In my case i pay the Card fee and the swipe fee goes to My Merchant (card processing center)
all of these fees can be negotiated with the merchant center by looking sales.
also if you do more sales under $10 your swipe fee will be less and your % paid will be higher. again you can negotiate or shop for these rates.
Hope that helps.
Brian

I doubt that you could get that rate again, It's very low.

Andy

Antec Energy LLC Home Energy Saving Services

 

[mustangsallysdad]

Again, 2.63% plus swipe fee and this is at point of sale...the credit card company has nothing to do with the fee...the fee is charged by the retailer's banking institution (terminal owner, at least in my case), and that is with POS electronic verification (no funds in your account and the transaction is declined). In that case, I still pay the terminal swipe fee.

I should clarify...I (as the retailer) do not get billed a fee from the CC companies...I pay the marchant fee to my bank...I have no knowlwedge of the arrangement between the CC Co. and banking institution and have never been informed of negotiation of fees. I haven't paid less than 2% in 10 years or so.

 

[Big Bri]

andy,
you can get rates like this every day if you have the volume, and you shop rates. When a merchant calls to give you a quote on their rates and ask you to fax over your last statement, tell them no, tell them you quote me your best rate and if you are lower than what i'm paying now i'll switch.
Never sign a long term contract with a Merchant so you can get out at any time.
Buy your Credit card machine don't lease (there only $300)

I doubt that you could get that rate again, It's very low.

Andy

Antec Energy LLC Home Energy Saving Services

 

[Pops15]

andy,
you can get rates like this every day if you have the volume, and you shop rates. When a merchant calls to give you a quote on their rates and ask you to fax over your last statement, tell them no, tell them you quote me your best rate and if you are lower than what i'm paying now i'll switch.
Never sign a long term contract with a Merchant so you can get out at any time.
Buy your Credit card machine don't lease (there only $300)

Thats some good info. I've heard the 2.63% figure mentioned by multiple business owners that i know.

 

[BungeeII]

Again, 2.63% plus swipe fee and this is at point of sale...the credit card company has nothing to do with the fee...the fee is charged by the retailer's banking institution (terminal owner, at least in my case), and that is with POS electronic verification (no funds in your account and the transaction is declined). In that case, I still pay the terminal swipe fee.

I'd recommend you shop around a bit. And, you're right, Visa/MC does not charge the retailers directly. There is a very convoluted processing industry that's best comparable to the mortgage industry. You may think your mortgage and/or merchant account is through your banking institution, but they're just account managers... the service is held/provided by a separate entity.