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Credit Card Fees and Processors

I know I am bringing up a topic that has been much discussed in the past, but a recent spam phone call has revived the issue in my office. With all the fees that we pay to accept credit cards, is there a real way to compare service and rates to get the best deal? How often can I renegotiate the rates? How difficult is it to switch processors and who owns the data if you do move? And do I have the ability to decline use of any cards that are going to cost me a lot more than the basic cards (I'm thinking of the premium cards that come with points and/or cash back)? Why does the public not realize that these perks are costing someone extra? (FYI - the spam call is from a company that cold calls and uses a common company name to lead you to believe that your rates are about to increase. Per the internet, if you speak to them you are given lower rates, but not told about the excessive eqpt rental fees and early termination fees.)

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

If you want to compare, get a copy of their contract. Get in writing any answer to a question you have and if the answer isn't complete enough get in contact with their Counsel.

More and more shops are not taking AMEX, but you risk loosing sales by limiting payment options.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

I would also check with local banks, many are now offering these services and if they process in house and not use a TPA the fees are less. My CC fees are the lowest they have ever been and no hidden fees. Everyone I have worked with over the years however typically has a 3 contract and early term fees. As Wayne points out go through every detail and ask a lot of questions. The contract shouldn't be very cumbersome either.

David Rau
Title: CFO
Company: Cornerstoner Building Alliance Lumber SW
(CFO, Cornerstoner Building Alliance Lumber SW) |

Look at Shift4.

Kathy Vanlandingham
Title: Business Manager
Company: Woods Communications Corporation
(Business Manager, Woods Communications Corporation) |

We evaluated this a year ago and I just dropped various company data into an Excel grid to review. Rates for several of the lower cost companies were comparable and so we decided to use the credit card service offered by our bank.

We have a great relationship with our banker and we decided it would be helpful to have someone with a proven record of helping us on our team if ever a dispute, data theft, etc. occurs. This is an important non-financial factor and should be considered.

Dan English
Title: VP of Finance
Company: Mud Pie LLC
(VP of Finance, Mud Pie LLC) |

We just went thru the selection process as we moved away from TSYS. This is much more difficult than just comparing. The costs come from downgrades and data loading. As we have thousands of cc customers, the savings were incredible. Also, the new processor follows thru with a monthly conf call so that there is plenty of visibility.

Kevin Bailey
Title: President
Company: Logical Processing Solutions
(President, Logical Processing Solutions) |

The best way to compare and make sure your getting a fair price is to ask for a proposal that is the actual pass thru fees from the card companies and the processors fees as a separate line item. It is commonly referred to as "interchange plus pricing". The processors can write up anything they want but tell them you need the actual contract you will be signing with all of the pricing and any fields left blank should be marked NO CHARGE. Also ask for an actual monthly merchant statement. They can white out the client's name. You just want to see where their fees are and all of the actual "pass thru fees". Get at least 3 references. Make sure they delete any early terminations fees so you can leave if not satisfied. A good processor will not hesitate to agree to that. The monthly merchant statement if done correctly will clearly show you how many debit cards, rewards cards, corp. cards. etc you take as well as the actual interchange fee associated with these cards. Hope this is of some help.

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