accepting credit cards for small business

[Bird]

Dave, I did contact the seller and he claimed to not know either what the problem was. Then later, he said he "thought" that it was something to do with the way his PayPal account was set up so that it wouldn't accept credit cards. /forums/images/graemlins/confused.gif So in our exchanges of e-mail, he agreed to send it COD via USPS. That was January 31. Twelve days later, I inquired again and he said he'd had some computer problems but would get it in the mail. After another 12 days, I inquired again, but haven't heard from him since. And since I never could get any answers from eBay or PayPal, I left no feedback on the seller because I don't know for sure what the problem was and he has positive feedback from a number of others.

 

[OkeeDon]

In my business, we had a lot of small charges ($10 for a propane cylinder refill at that time) and a few big ones each month (folks buying really expensive stainless steel grills). I pretty much had to have credit card services; most people expected it. Like the others, I paid a monthly statement fee (around $25), a transaction fee (started around 10 cents, went close to 15 cents), and a percentage of each sale -- around 2.2%. I went to my bank and asked who they liked for a processing company, and they arranged to have the CC gal come to my store and get everything set up. I did not have internet CC per se; I had internet sales, but folks called me with the CC number. Internet processing is a whole different ball of wax; at that time companies were a little leery of it; I expect that they've gotten a lot more comfortable with it in the past 10 years.

I did not lease or buy any specialized equipment except a card swiper attachment for my computer. It went inline with my keyboard, and when I swiped a card through the magnetic reader slot, the information was sent to my computer as if I had punch the keys. I had a bar code reader that worked the same way (my keyboard cord had a couple of "Y" adaptors). I used a program called Regit that is a Point of Sale system. Kind of a simplified system that requires you to have a bit of computer knowledge to interface with QuickBooks. It had a CC module that automatically dialed the CC company and got an approval for the swiped card, just like the big boys at Wally World, etc. The program also interfaced with a cash drawer and a receipt printer. The best part was that the whole thing, hardware (drawer, printer, CC reader, bar code reader) and software (POS system and CC module) was less than $1200, plus the cost of the computer, but the system was happy with an older machine with only 64K memory; today that would almost be the least expensive comonent. The program also networked to the 'back room' where I had another computer where I did purchasing, inventory control, etc. It was a slick setup. They've lowered the price; I think you couild put the whole thing together for about $600 or $700, now. Regit Point of Sale - you can download the software and play with it.

I still have my setup and could be persuaded to sell it, but it wouldn't be overnight -- Some of it is in storage and I'd have to dig it out. There are some upgrades -- I think you'd be as well off to buy new.

As far as the cost of the CC processing, I just thought of it as a business expense like electricity or trash service. While I did account for it as cost of sales, I didn't try to work it into the price of the item. The best way to accept a credit card is to not worry about how much less you're making on that sale, because it's likely you wouldn't have made the sale without the card. It WILL increase your sales.

 

[khd]

There are alot of variables on credit cards. Rates are based on the transaction type. i.e keyed, catalog sales and card present. Card present gives you the best rates as a precentage of sales. In my high volume sales and I think in all sales, card present transactions give the best rates (interchange) as the actual swipe sends track 1 and track 2 data reprsenting to the bank that the card was there and in person and hence presents the least risk. Keyed (manual swipe and hand keyed)and catalog (inet sales fall in this catagory) transactions have the highest rates usually 1-3% over interchange. This is for Visa/MC only as Amex sets their own rates , roughly 3-4% and the only way to reduce their rates is to wait in excess for payment. If you want to get paid quick you pay the higher rates. After these charges transaction fees are assessed for pre-auth, sale and finally settlement and then comes monthly fees based on volume.

I don't believe you can, as part of your merchant agreement, charge more for CC sales over cash sales. Then you have to think about debit cards....a whole nother story. And personal guarentees in case you go on a scam binge and submit bad transactions they will want you to personally guarentee the money.

Not trying to scare you off as CC sales are an integral part of remaining competitive just alot to be aware of and kowing as much as you can will only benefit you and the success of your company.

Go to the bank you do business with and either they will process or have a partner that does processing for them.

Good luck,

Kevin

 

[tractorman]

Our credit card machine has helped tremendously, especially nice with phone or internet orders. You can buy a terminal on Ebay for a fraction of what you would pay through the company handling your merchant account. Check with your local bank for rates. Good Luck!

 

[stevenf]

fishman, We accept credit cards at the shop and although it is painful to give up your hard earned money to the clearing companies I'm not sure we could exist anymore without them as to many people have no cash or little in their wallet and if they can't pay with credit card they'd go someplace else. Our rates vary with the particular card and it seems like every time you get it figured out they change the way they do things. In the last week I received a letter from visa/MC saying that we could no longer archive numbers and they are wanting to force a survey on small businesses to find out how each individual stores their credit card receipts computer integrated is the worst because the hackers are going in and retrieving the numbers from your customers and then going shopping they went on to say that your company will be held liable for all loses regardless of amounts and they quoted several scenarios that cost them many $100,000 of thousands of dollars each year which they are planning on passing on to us if they can prove you were at fault thru stolen records from your business. I called the clearing house today to inquire and they said that they had heard the Visa and MC had sent the letters but in most states it is tied up in the courts as to who's problem it is although they did say I should take their survey. I went to their website and got mad at the questions and escaped out so, very unbusiness like they can send me a request in writing before I volunteer any of the info they were asking for. Again I say, I don't think most retail businesses could exist and prosper although I'm sure you can find plenty of mom and pop businesses like ours that do not accept CC's I just didn't want to be losing customers to my competition who did accept them and I'll also say that many folks who don't have $20 in their wallet will spend far more if they can use a CC to pay as Americans most of us are used to financing our lives with credit card bills some of us can pay the balance and some just go a little more indebt each month. I'm not sure who decided it wouldn't be right to charge more for payment by credit card as it seems reasonable to me that if one guy pays cash and the other pays CC and it cost you X% why can't you pass it on to your customer. I don't think it a law just a CC company policy to encourage people to use CC's and then they bill you for accepting them. If they pay over the phone and you have no card to swipe it cost a 2 or 3 % premium above normal for the drop in security. I will say that since I own my business and it is a custom printing type of business there is not a set fee for everything and so if I know before I give the price that there is a good likelyhood that I will be paid with a CC my price ends up higher than someone paying cash or check BUT I didn't say that. /forums/images/graemlins/smile.gif
Steve

 

[aardvark]

All my hobby business credit card sales are via paypal. Anywhere between $1200 and $2000 per month on paypal. I can tell you that since beginning to take credit cards via paypal, I have alot more sucessfull sales than I used to. At first I was thinking the roughly 3% fees were high, but frankly, my sales increased alot more than 3% since beginning to take credit card via paypal. I only really sell on ebay, so paypal is integrated nicely with ebay. I know Bird had a problem with it, but I've never had any issues. The only time I *might* have had a problem was when I tried to cancel a UPS shipping label, and paypal wouldn't let me. Called the 1-800 paypal customer service number and they cleared it right up.

 

[PineRidge]

We run an Internet based company and deal with folks from around the world. Most use a variety of payment methods. For credit card processing we contacted our local bank and purchased a software program called Via-Warp. With this software we can manually input the credit card info into the computer and it will immediately do the verification process and transfer the funds into our account. Other than your own PC, an Internet connection, and the software no other equipment is necessary for you to accept all credit cards......

 

[fishman]

Wow! Some really good replies from everyone. Of course that is what I anticipated. /forums/images/graemlins/smile.gif

Sounds like contacting the bank where I have my business account would be the prudent first step to see what they offer. I think a phone or computer-based transaction system would be best for my situation. Being as how I'm often "on-site" with a client, it would be nice to be able to take care of a credit-card payment right then. Calling it in on a cell phone would be sweet.

I've used Paypal and have had no problem with them. However, the fact that the person paying the money also has to be computer-literate (or just patient) enough to have their own account makes that a less desirable solution, imho. I envision that being a good solution for a small web-site though, and that is likely in my future.

I'm going to get some info tomorrow and report back. Thanks again to everyone.

 

[Henro]

<font color="blue"> many people have no cash or little in their wallet and if they can't pay with credit card they'd go someplace else </font>

This may be true, but it is certainly not the case for my wife and I. No, we don't have money to burn, but we do like the protection offered with credit card purchases. We also don't mind the rebate we get from our Discover card. Not a lot, but more than nothing.

Seems to me that in todays world there is not option OTHER than to do what is necessary to accept credit cards if you are selling. We use ours not because we can't pay, but rather because the credit card offers some protection if the seller does not deliver, or because at the end of the year we get a few free nights out at our favorite restaurant.

Today there seems to be little advantage to the buyer if he pays cash... /forums/images/graemlins/frown.gif

 

[stevenf]

Henro, You are absolutely right and its amazing how busy I can be at work not to stop and realize that when we first started accepting credit cards it really was because we had frequent front counter run ins with people that wanted to pay with credit cards and we didn't accept them so they'd leave, at that time there weren't all the incentives to use them. In todays world with the exception of the Id theft problems there is every reason to use a charge cards: air miles, cash back, discounts on future purchases at select stores etc. Although it really doesn't seem right that the seller absorb all the cost of doing business with a customer because they choose to use a CC but on the other hand no one forces me to acccept them so I don't know whats right anymore. Frankly my statement about the credit card users getting a increase in their transaction is limited to some of my customers who choose to abuse the fact that I take credit cards and also have house charge accounts that they ride for 30 days and then come in and want to put the balance on their credit cards so I can wait for my money even longer and pay a %of the historic sale for my trouble or better yet I've got a couple of customers who like to wait until they get their statements and then call me with their credit card number which cost me an additional 3 or 4 % above the normal credit card fees. Regrettably I know I should just refuse to let the customers do this but the way sales have been I'm afraid of running them off.
Steve /forums/images/graemlins/confused.gif