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Posts Tagged ‘Credit Card Processing Fees’

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Square Changes Fee Schedule for Small Business

Tuesday, December 31st, 2013

Square, the little white box that made life easier for small businesses and start-ups, allowing them to take credit cards without any real hassle has made a change to their fee schedule that has many business owners upset. The company has decided to end its flat fee rate for small firms, instead switching them to the pay by transaction model that everyone else is subjected to.

Beginning on February 1st the flat rate monthly fee that many smaller businesses opted into saved thousands of dollars per year in credit card processing fees. Instead of paying on every transaction, business owners who had $21,000 or less in credit or debit transactions a month were given the option to play a flat monthly fee of $275 for use of the service. There is a huge net of business who use the service as opposed to more traditional credit card processing options.

With the loss of this service, business can be expected to pay thousands of dollars more a year for credit card processing fees, an expense that will cripple many entrepreneurs. Small business owners who paid for the service felt betrayed after learning that it is being discontinued and are considering a switch to other payment processing options.

The fee will go up to 2.75% for every credit card that is swiped through a reader and 3.5% plus an additional 15 cents for every transaction that is manually entered, This is a massive difference between the flat rate fee of $275 a month. For any company that is working in the lower bracket, this clearly means substantial fees for them.

Square has stood by this policy change despite their customers’ objections and will put it into effect on February 1st, 2014.

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Debit Card Fees…why have overall fees gone up?

Thursday, December 8th, 2011

Hi Everyone,

Happy Holidays, the following is an article from the Wall Street Journal discussing the after effects of the 2010 Dodd-Frank Bill and the recently enacted Durbin Amendment. The article talks about merchants who have an average ticket at or below $10.00 and have now seen their debit card rates increase.  Let us know what you think…


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Durbin Amendment

Tuesday, October 4th, 2011

As many of you know, the Durbin Amendment went into effect on October 1, 2011. The following is an article from Fox Business News that explains what this means for merchants…


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Visa/MasterCard – Analysts say more profitable due to debit card fee rule changes

Thursday, June 30th, 2011

Hi Everyone,

Hopefully our loyal blog readers are enjoying their summer and keeping cool. The following is an interesting article in regard to the new changes that have been imposed on debit card fees. According to investors, these changes make Visa/MasterCard more profitable…


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WSJ Article is incorrect in regard to interchange fees

Monday, February 15th, 2010

Every couple of weeks, I like to browse the most recent payments industry articles that have been published online to see what people are saying. For the most part, I very rarely read anything that is not published by a reputable site. With that being said, I was shocked to read this weekend an article posted online by the Wall Street Journal (WSJ) titled “For Businesses That Accept Cards, Tips for Cutting Fees“. The following is how this article started:

“When it comes to credit-card fees, bigger companies have more clout with issuers than small ones. But there are ways to minimize costly processing fees, from negotiating to shopping around. Here are eight tips.”At this point, I am very intrigued! The author is right, bigger companies will always have more clout but that doesn’t mean you can’t have a low rate.

“Negotiate processing fees – To negotiate the interchange rate, which is set by Visa and MasterCard accounts for about three-quarters of merchants’ card acceptance fees, business owners should contact Visa and MasterCard directly, says Trish Wexler, a spokeswoman for the Electronic Payments Coalition, a group representing banks and credit-card networks.” - This statement is incorrect and it is articles like these that confuse merchants on what they should do. Unfortunately, you cannot call Visa and MasterCard directly to negotiate interchange rate as this rate is un-negotiable. There are over 300 interchange rates and though you may not be able to negotiate for a better rate, there are steps that you can take to make sure you process at the most optimal rate. If you would like more information on if you are processing at an optimal rate, contact your processor or us at The Processing Brokerage and we would be more than happy to point you in the right direction.

- The Processing Brokerage

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Credit Card Processing for Non Profits – It’s Time to Check Your Rate

Tuesday, November 10th, 2009

We recently helped a Non Profit client who had not looked at their credit card processing rate since 1999. As it has now been a decade since their last reduction, they thought it was time to see if the market had changed and if they could reduce their fees.  Needless to say, once we provided our analysis and showed them what they should be paying annually, they were shocked! The Processing Brokerage significantly reduced their fees and there are lessons that Non Profits, Associations, and Charities can learn from this case.

What happened to our client is very common for nonprofits as they are naturally focused on their cause and as long as they can accept credit cards, that is good enough for them. If you are a Non Profit reading this right now, this probably sounds very familiar: The last time you looked at your credit card processing was when you decided to take donations online or needed a new merchant account. Since that time, your organization has experienced great growth and success. With everyone being so busy, consistently meeting fundraising goals, and dealing with a scope that has probably broadened; who has the time to look at their credit card processing? Maybe that was you about a year ago and now with a changed economy, your organization needs to change as well. Either way, it behooves you to look into reducing your credit card processing fees further.

There are typically three options that you can take when attempting to reduce your credit card processing fees:


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