Costs with taking credit cards

[Gregg Vaughn]

I posted a question several months ago asking about the pros, cons and costs associated with taking credit cards as a small business. I have recently found myself in the position of thinking I may want to pursue that ability, but there are many avenues and they all promise the best service.

The cheapest way out seems to be with my local Sam's Club. They offer their service at a fixed cost of 1.98% + $0.26 of the sale and no monthly fees if your are a Business Plus member ($100 a year) and buy the data entry terminal for a one-time cost of $269. We are a business member already, so we would have no additional monthly fee. Their system allows us to take Visa, Master Card and Discover; addtional fees apply for American Express.

Do any of you use Sam's Club service? How do their costs stack up with what you are paying if you use someone else? Any bad experiences with Sam's Club?

[Mike Null]

Greg

I've just used my bank with a telephone call in authorization. Most of my accounts are on terms but I do need to take cc's regularly. At first glance this may seem expensive but it is extremely convenient in that I can take a credit card where ever I am using only the telephone. AMEX costs about $7 per month extra plus a couple of percent--I could probably get by without it.

I've checked Sam's, Costco and PayPal and can't convince myself there's an advantage given my volume.

[Terry Wawro]

Costco & Sams always seem to get good reviews on CC processing.

I do not use them because I set up to take cards many years ago and I'm too lazy to change. Just for reference I use a swipe terminal and printer that I purchased used. I pay a monthly service fee of less than $10. Because of our business, most of the charges are higher dollar amounts ($400, $2500 etc ) and are keyed in, not swiped. We only take Visa and Mastercard. There is a wide variety of fee levels depending on the card but our monthly average cost of accepting charge cards is between .025 and .028 percent.

[Horton Brasses]

It really depends on your monthly $ volume. If you are running a few thousand in CC per month-or less-Sam's or Paypal make a lot of sense. If you are running into the 10's or 100's of thousands they charge way too much. Call some processors and shop around. It is very easy to switch processors and shopping around can definitely save some money. I switched a couple years ago and saved about $300 per month on the charges.

[Daryl Gregg]

If you are doing just a few, you might want to look at squareup. It uses an iphone or android phone with no monthly charges.

[Perry Holbrook]

If you are doing just a few, you might want to look at squareup. It uses an iphone or android phone with no monthly charges.


Daryl, do you use this service? Looks interesting. I'm shopping to change my service.

Perry

[Daryl Gregg]

No I use FirstData at the store, but square looks really interesting. The only drawback of it is the limit per week or month.

[Alan Trout]

I use a touchtone capture system over my phone and it is cost about the same as any other setup but no monthly fees. I take about 3 cards a month so it works great for me.

Good Luck

Alan

[Darius Ferlas]

I used Moneris and they charged me $20/mo + 2.6% transaction fee on a modest declared volume of $100K a year.
The $20 fee was waived if the combined value of the transaction fees (per month) was equal to or greater than $20.

[Tim Bateson]

Found a work-around for accepting the occasional CC. I take cash, checks, and also bill through PayPal. Problem is a few customers have insisted on giving me their CC #. It's too cost prohibitive to pay for a regular CC service.
Solution - I setup a private shopping cart off my web page ( not yet open to the public) I manually enter their order and send through PayPal IPN. Just the usual PayPal fees.
For special orders it takes me just minutes to build a new product up & into the cart. I now service customers I couldn't before.

[Phil Thien]

Just note that the rates Sams is quoting are first-tier rates. You will be charged second and third-tier rates for non-conforming cards like rewards cards and business cards.

There are actually precious-few first-tier cards out there these days, IMHO.

[Steve Griffin]

I would guess it completely depends on the type of business you are conducting.

For myself, I can't imagine the slightest advantage to credit cards--people are not more likely to buy my products, nor is the possibility of saving a few days in getting paid worth much at all.

Other businesses, like our local liquor store, would be complete fools to not accept credit cards. (And yes, they actually just did that, thinking it was a good idea!)

-STeve

[Sherm Anderson]

Since last October I have been doing cc's with Square, an app on the iPad. It is available for people who have an iPhone, Motorola Android or iPad. Information on the web is at www.squareup.com. There is no monthly processing service charge, only the discount at POS plus $.15 transaction fee.
In 1988-'89 I sold and installed cc services and equipment for National Bancard Systems but starved on straight commission; it was humbling to say the least. I now operate two part-time businesses, one in craft sales and the other in tree service. Although I accept the four major cards no one has asked to charge for the service work. On the crafts scene I have seen a decline in charge card use the last two years, perhaps in line with the recession and its impact on business.

[Brian Elfert]

I used to run a local ISP with dial-up and DSL accounts. $18.95 a month or $189.50 a year. We preferred to take credit cards versus sending a monthly bill. It cost 60 cents a month for the postage, envelope, and paper to send a bill via the mail. It then cost labor to process payments which was done by support technicians between calls. Credit cards cost less than sending bills. The additonal advantage with credit cards was we got regular payments without having to worry about non-payment.

I sold the business just over 10 years ago because it was clear that it was not a long term business and I could still sell for a lot at that point. The business we sold to had over 5,000 customers at one point and has maybe 800 today due to cable, DSL, and wireless. The ISPs who survived diversified into hosting servers for businesses and other things that actually still make money.