# If you accept credit cards at your shop



## LeeBarker (Aug 6, 2010)

I'm in a business group and the subject of credit card processing companies came up. Business people are having difficulties in this area.

It is reasonable to assume that the CC companies are having financial/business challenges of their own. They are very much in control, given the complexity of the contracts that we sign and that we give them access to our accounts to both give and take.

I had noticed increasing deductions from my account.

I have made the decision to no longer accept credit cards. Fortunately, I had not leased or purchased a machine. That seems to be the most difficult area of negotiation. But I did sign a contract for their acceptance services, and clear and honest communication with the company appears to have generated an early end to it.

If this subject is of interest on this forum, it will be interesting to hear success stories and creative options. I'd prefer our slant was toward solutions rather than just complaining. I'd like to stay away from that useless, downward spiral.

Kindly,

Lee


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## lanwater (May 14, 2010)

Lee:

Not only they are charging the processing fee, they also charge the merchant the reward fees.
All those free miles and points they "give away", they get charged to the merchant as well.
So the initial rate of 1.7% to 2.5% (and 4% for american express) end up being close to 5%.

Many merchant are unaware of those and many don't factor those charges in the cost of their products.

One way to get around the automatic charge back is to have a checking account with no minimum balance that you assigne to the CC and another for your regular stuff.
One a credit comes in from the CC you transfer it to the other account where they have no access.

The best way probably is to go through paypal or similar service were dispute are a little harder.

Many people abuse the system.


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## sawblade1 (Feb 11, 2010)

I wanted to, but my local bank turned me down, what they wanted to cover me as a liability was 60% of my projected income as a deposit, sign a 3 year agreement, and turn over control of my business checking for a year due to my lack of sufficient credit  This is the same reason I was turned down for a SBA 7a Loan as well even after writing a loan proposal, 45 page business plan and having 5 years tax returns. In my honest opinion they suck and they are wondering why they are struggling well they need us we don't really need them as you have proven and I am out to prove that as well


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## lanwater (May 14, 2010)

I forgot to mention that they will have tons of competition soon as new payment methods are rooled out.

There are a lot talk about paying with your phone, your trwitter account and many others. Some of those method will bypass the CC gateway and they won't be collecting the extra charges they impose in those fee.


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## LeeBarker (Aug 6, 2010)

NPR reported this week that in a few Starbucks shops in the US now you can pay with your phone. Closer than we might think, eh?


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## superstretch (Jan 10, 2011)

I tend to be a bit more techie than most, so let me explain my setup.

Just about everyone I know has a 'smartphone' that is capable of paying someone (me) by simply tapping the two phones together. Yes, it sounds ridiculous, but its jaw-dropping.

For those that don't have that ability, I've been able to take card #'s over the phone and in person with Square ( https://squareup.com/ ). They actually just dropped their per-charge 15c fee and now just charge a flat 2.75% (better than paypal!). There is a $1000 daily limit (if I recall correctly), but there is the addendum that you can negotiate your way higher if you contact support. I've used it several times to split dinner bills, and its been spectacular.


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## Puzzleman (May 4, 2010)

Lee, I accept CC all the time, in fact most of my payments wholesale and retail are with CC's. I have found that the higher the average ticket, the lower the fee. I also have processing companies calling at least twice a month wanting me to switch processors as they say they can save me money. I am currently paying about 3.1% with all fees included.

As far as chargebacks. they just deduct them from what they owe me if there isn't enough money in the account. However, the best way to reduce chargebacks, is to include name and number with every purchase so if there is any questions or problems, I can resolve it first.


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## longgone (May 5, 2009)

I have the Intuit Go Payment plan. It has a plan available with no monthly fees. It is used with my iphone and numerous other smart phones and they also provide a free card swipe device that plugs into the top of the phone. Low transaction fees and %.
check it out if you have a smart phone.


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## Rydell (Mar 7, 2011)

There's also a new startup called Square. It was founded by the guy who started Twitter.

Their terms are exceedingly simple. There are no monthly fees and no startup fees. They mail you a free card reader that plugs into the headphone jack of a smartphone and download the free app. To use the service, simply open the app and swipe the card. Pretty simple. They simply charge a flat 2.75% fee on any transaction using any card(Amex included). Once you link your bank account to the service, your funds are deposited nightly into your bank account. Squareup.com is their site. Although I don't own a business, I still signed up and got my reader earlier this week. I performed a couple test transactions and everything went through okay.

I'm sounding like a commercial, so I'll hush now.

Edit: Just saw superstretch's comment above regarding Square. Count my post as another kudos for Square.


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## Wood_smith (Feb 12, 2010)

Credit card companies facing their own challenges? Like what? Where to store all the money? Up here in Canada, you can get anywhere from 0-2% for your money in a bank, and pay 19.5% on a credit card balance.
I'd love to have that dilemma!


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## Resurrected (Jan 11, 2011)

The fees have been there for a while but banks are getting greedy and want to charge more for using plastic. A lot of retailers are fighting this but with a up hill battle at large. Banks are saying if the company don't take the hit they will go after the consumer. Altogether I can see this as the little guy getting screwed. Just read about this in the wall street journal.


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