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Posts Tagged ‘Small Business’

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WSJ – Interchange Fees Step Into the Spotlight

Sunday, November 8th, 2009

According to the Wall Street Journal, U.S. banks raked in $45.3 billion last year from credit- and debit-card fees charged to merchants. About 75% of that comes from interchange fees set by Visa Inc. and MasterCard Inc. Overall merchant fees, including other revenue collected by banks and processing middlemen, are up 78% from $25.5 billion in 2003, according to the Nilson Report, a Carpinteria, Calif., newsletter that tracks the payments industry.

Merchants in the U.S. paid an average interchange rate of 1.82% per transaction last year, down from 1.93% in 2005, according to the Nilson Report, an industry’s argument that fees are falling. Please contact the Processing Brokerage for information on our interchange optimization program.
To read the rest of the article about credit card processing interchange fees, please click below:
http://online.wsj.com/article/SB125590252696692963.html

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8 Ways – Small businesses can immediately lower credit card processing fees

Monday, November 2nd, 2009

Having to deal with your credit card processing  fees to some is the most painful task a business owner has. Though it may seem painful, everyone knows that this is an area that provide significant savings immediately for a merchant. Here are some helpful tips that will get you on your way to reducing your credit card processing fees.

8 Ways Small Businesses Can Manage Credit Card Processing Fees

  • Read the Fine Print: This advice applies to every merchant but is specifically important for small businesses. Know the rate that you agreed to and educate yourself on the various credit card processing fees that you are being charged. Many times merchants will enter into an agreement thinking they will be receiving a low rate and then find out years later that they received a promotional rate that was quickly changed only months into the contract. If you find that this has happened to you, you might be owed a refund.
  • Look at Your Termination Clause: If your termination clause states that you have either a minimal fee to terminate or no fee at all, this it to your advantage. Shop your rate around and see if another processor will propose a larger reduction in your credit card processing fees. (more…)

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    Discussion on growing Interchange Fees

    Monday, October 26th, 2009

    Credit Card ProcessingInterchange is in the news again due to the House Committee on Financial Services hearing which discussed the components of the Expedited CARD Reform for Consumers Act of 2009. As many of you know, Interchange makes up a large part of your credit card processing fees and there is currently a discussion on BusinessWeek.com with different merchants who are sharing their stories on what they have done to reduce these fees.

    Referenced Site:
    http://www.businessweek.com/smallbiz/running_small_business/archives/2009/10/small_merchants.html

    Thanks,

    Steve Williams – The Processing Brokerage
    www.processingbrokerage.com

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    Posted in Industry News | 1 Comment »

    7-Eleven Store Owners Have Had Enough…

    Wednesday, October 7th, 2009

    We are happy to see businesses start taking action against the high fees that they are paying for their credit card processing. Let’s take a look at one of the excerpts from the article posted below:

    “We have two stores in California. 50% of our credit card processing fees is about $800 per month. The other store is almost a $1,000 a month. Our [interchange] fees are based on the total transaction, not on a merchandise purchase. If a customer bought a thirty-five cent pack of gum and received $30 cash back so that $30.35 was run on the card, I would pay the percentage of fees based on the money I gave back as well, not just on the merchandise that was sold. My store allows customers $40 or $50 cash back, and it has typically 50 of those in a day. I have to pay interchange fees on all of that.”

    There are a couple points that all merchants should know in regard to this quote:

    1.) If you allow cash back on your transactions, you are essentially paying their ATM fee for them through your interchange fees. Remember, your interchange fees will range from 1.4% to over 3.00%.

    2.) All customers and their cards are equal – Remember, according to Visa rules and regulations, you cannot add your own convenience fee to a transaction just because they are using a credit card. You have to charge everyone the same. In this case, you are unable to charge a convenience fee just for a credit card purchase on cash back…you would have to charge everyone (even cash customers) the same convenience fee on all transactions. This is a very frustrating aspect as you are pretty much trapped into eating these exorbitant costs.

    Referenced Article:

    http://www.businessweek.com/smallbiz/running_small_business/archives/2009/10/7-eleven_store.html

    Thanks,

    Steve Williams – The Processing Brokerage
    www.processingbrokerage.com

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    Credit Card Processing Fees – Lowering Your Rate

    Saturday, February 28th, 2009

    Credit card processing is just a part of doing business for small business owners. An area that businesses should research on are the credit card processing fees assessed by the processor. These fees are commonly known as a transaction fee or simply pricing.

    The pricing a businesses pays will either be billed as a percentage based fee or a flat fee. The transaction fee can also be wrapped up in the discount rate that is also a percentage based fee that consists of all credit card processing fees. We recommend that if you are a company and are being charged a discount rate, it would be in your best interest to change your discount rate to a pass thru setup. When your business is setup at pass thru, it means everything charged is clearly visible and shown individually which allows the merchant a better ability for large reduction in credit card processing fees.

    When analyzing your rate, please note that the rate most competitive for you, may not be the right choice for another merchant. Your transaction fee is determined by average ticket, processing volume, and how many transactions a business processes over a 12 month period. It’s important that a merchant shop around for the best rate. While looking for a lower rate, it’s important to read the fine print of the contract to make sure you are comparing apples to apples and are truly agreeing to the pricing agreed upon.

    The Processing Brokerage will assist you through lowering your credit card processing fees. The Processing Brokerage is an independant expert in the payments industry who strives to empower the merchant through cost cutting solutions.

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    Posted in Credit Card Processing FAQ | No Comments »

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