I am in the processing of writing my business plan and need to factor in the expense of credit card processing.

I have solicited some "quotes" from different Merchant Account companies, and am having a hard time wading through all the marketing jive talk. Some offer great rates but only for "qualified purchases". Others offer great low rates for the credit card purchases but only when swiped, there's a different rate if you have to transmit the credit card number via phone, another rate for online purchases, and yet another rate for debit card purchases.

Any suggestions in helping me find the lowest rates (for future use), and the best credit card service?

Try setting up a paypal account, you will be able to accept visa, master, discover, etc. online and transfer the funds to your business accounts for the lowest fees, until you can afford an in-store or office service.

Stephanie S. Barnes
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Stephanie - thank you, that is a great suggestion for my online business transactions.

However (sorry I did not make this clear previously), I will also have a physical retail store also. So I will need to be able to accept credit cards in person or over the phone as well.

What kind of store and products are you selling?
Do you have a website now?

Currently, I do not have a website, as we still writing our business plan and preparing for opening our retail store in January 2008.

It will be an event planning and tent/party rental business.

Most "orders" will be placed in person, in our retail store, through a consultation for an event.

Otherwise, I plan to initially set up a basic website displaying our offerings. Eventually, I would like to add a feature to the website so that you can reserve a rental item online with a credit card.

Have you tried your bank? When I started my store front business (in 1996) I got mine from my bank.

A few years later I started a party plan business and got my terminal directly from Discover Card. They helped me set up with Mastercard and Visa too.

Don't feel alone. how credit card processing works is a mystery for most small merchants, which leads to a lot of poor decisions regarding which processor to use.

You're on the verge of commiting Mistake #1: "Any suggestions in helping me find the lowest RATES...? Here's where most merchants go wrong. You don't want the lowest 'rates', you want the plan that costs the least based on how YOU do business. BIG difference. Low rates = MORE expensive if you're being quoted one qualification level, but most of your business qualifies elsewhere. That's why everybody advertises 'low' rates--the teaser rate is the worm, and the poor merchant is the fish.

Yes, I know it's confusing and that doesn't make sense. Go to www.merchantservices-help.com and educate yourself in how rates work and how merchants pay for processing. Email any specific questions you have to amspcs@juno.com.

Hope this helps.

Barry G

Wow...thanks to all of you for the help.

Barry, you are correct. The more research I have done, I have found what you said to be true. Just because they advertised a low rate in one area (swiped credit cards), there were sometimes add-on fees and monthly minimums. And I will check out that site.


*GG*

>I have solicited some "quotes" from different
>Merchant Account companies, and am having a hard time wading
>through all the marketing jive talk. Some offer great rates
>but only for "qualified purchases". Others offer
>great low rates for the credit card purchases but only when
>swiped, there's a different rate if you have to transmit the
>credit card number via phone, another rate for online
>purchases, and yet another rate for debit card purchases.
>
>Any suggestions in helping me find the lowest rates (for
>future use), and the best credit card service?

All credit card merchant accounts work that way, for better or for worse. There is one rate when the card is swiped, a higher rate if you take orders by mail, phone or your Web shopping cart, and another higher still if your Web site does automatic transactions, as software companies typically do. There's no way around that.

What you need is a set of rates that are reasonable. The best way to get that is by joining an organization (such as a local business or professional association) which has a contract with a merchant account company. And if you're a member of Costco Wholesale, that company offers a VISA/MC service at good rates to holders of its Executive cards.

Also,
Be aware that if you are going to be doing rentals for business events, then most of your transactions will be "non-qualified" transactions.

If you are going to be doing mostly personal - such as family reunions and weddings - they will be "qualified".

A lot of business cards have "award" points - these are great for the user - but the credit card companies charge the retailer that they get charged at.

Good luck!


Joe

Joe has provided a little bit of mis-information here. Let me clarify:

Whether or not a transaction pays 'qualified' or 'non-qualified' (i.e. higher) rates depends on HOW the credit card is used (swiped or non-swiped) and WHAT kind of Visa or MC is used, i.e. a personal card, a business card, a corporate card, a foreign card, and so on. It has nothing to do with what kind of business the merchant is engaged in. This means that, contrary to the above, if you do personal business such as a wedding, if you don't 'swipe' the card, or the card used to pay is a business or foreign card, you will indeed pay higher non-qualified rates.

The 'award' cards Joe refers to above is actually a new category of Visa and MC card types known as "Rewards" cards. They are, as Joe says, the kind of card that pays the consumer bonus points of some kind. And since Rewards cards do NOT qualify for the lowest "qualified' discount rates, the merchant will indeed pay a little more to process sales run on these rewards card.

To learn a little more about V/MC rate structure and different card types, please go to www.merchantservices-help.com

Thank you.

All the best,
Barry

Thank you for clarifying. My knowledge of it could be better. You are exactly right. I was thinking of a situation we had. Most of our customers are business customers, but we also process non-swiped. Both of these together gave us higher rates than we had initially anticipated.

Joe