All - I am in the process of looking at the credit card sevices provided a small company. Over 90% of the company's billings are paid via CC. Before I start down this road does anyone have recent experience on research, negotiaion pitfalls, service, rate comparison, etc. as it relates to CC merchants?
Thanks in advance for your thougths and comments.
Regards,
Rick
Credit Card Merchants - who provides best service and rates
Answers
Surprisingly, Costco provides merchant credit card services at rates that are hard to beat. My clients use them.
3
The discount rates always look good. I've found that it's best to work off of net billings. That is, the interchange rates plus a small per centage. When CNET Networks was a public company we were getting socked with downgrades fees from cards that weren't 'vanilla'. The stated discount rate is off the table for these cards and that will throw your analysis out the window. We got this pricing from Wells and also B of A. I would start there and also with an anlysis of the type of cards you are taking. Good Luck
Totally not true. Their underwriting is slow and very restrictive and they will shut your account off as soon as you go over your assigned monthly limit. Also they give you a low "teaser rate" that you will seldom get as they tell you right in the agreement that they will downgrade all rewards, corporate & business cards to a much higher rate -well over 3%. Don't fall for their scam.
Litle & Co. sold the platforum that Chase Paymentech is using. They have since come out with their new platforum. Rates are very competitive and Interchange rates generally are fixed. Service is the key. Marc Haskelson at 800.548.5326 is their VP of Business Development. I have found these folk at Litle & Co. to be very helpful in getting started and for on-going relationship support.
I have heard of Costco but try Wells Fargo. They are offering a great rate. I am about to switch to them.
I was responsible for negotiating merchant accounts a couple of years ago at Encover ($20+M in annual activity on cards), and then worked with my
As for 'advice', I have used FirstData, Chase (Paymentech), MerchantExpress, and Quicken (I have not used Costco) and can say they're all about the same in areas like "avg approval rating", cust service access, acct setup time, reconciliation support, etc.
Depending on your business volume and customer type (i.e., consumer vs business customer) you should compare the Average Discount Rate (internet vs retail), transaction fees (internet vs retail), and assess any other fees associated with things like Address Verifications, "card not present" swipes, etc. Also determine whether there are any required monthly fees, fees for gateway access, statement fee (a fee like a monthly subscription), and monthly minimums. Last, check to make sure they support all credit and debit card types, and if business-to-business, what additional fees they charge for procurement cards.
Hope this helps
We use IPPAY, and have found they have the CHEAPEST rates for processing ACH checks, as well as other processing compared to other merchant processing units. We just switched last year after I did an exhaustive search and analysis. Wells Fargo came in fairly low with a quick turnaround compared to the others, but was still a bit higher than IPPAY. However, IPPAY (IPPAY.com) came in much cheaper and is already set up to work with our software for immediate processing. The issue we had previously was the hold time some of these merchants wanted, especially on e-checks (Besides just the cost)
Additionally, I have also been pleased by the response to any and all issues we have had and the smooth transition to IPPAY. Our old provider fought us on cancelling -- wanted us to pay lots of fees. Whoever set up that contract...well, we won't go there.
We do all our processing online - no cards present. Due to more stringent PCI compliance, we have started implementing more requirements for our business customers.
We've had a bad experience with Elavon (Nova). They charge us the wrong discount rates, the Virtual Merchant was difficult to implement, and they are slow/uncooperative in solving problems. My dogged persistence over the course of months is the only reason our issues with wrong discounts rates got any attention. We are currently looking at moving to JP Morgan Chase - the Chase Paymentech.
I have been told by Heartland that the difference in rates is due to the mark-up by the provider. Providers already receive commission from the bank card company but most do add a mark-up on top of the original rates. If you are in the Bay Area, Victor Chu from Heartland at the Fremont office will be a good one to contact for this information
1
I have heard good things about Comerica's service and their rates. Let me know if you need an introduction there.
Some good comments posted already. I would add: If you have the volume to support it, go for a flat fee process plus interchange. The bill should be easy to read with the interchange clearly marked - ask for a pro-forma. Make sure you look at the way that they process charge backs-is there a logical way to manage as that can get you. You also want to make sure that you are registered for any "special programs" run by the card brands such as Large ticket. We use BAMS, Barclay's, RBS and Payment Tech. I would not recommend any one over the other as they all have strengths and weaknesses. We stay within our bank group to leverage that relationship. Watch the language in any contract that you sign for PCI compliance.
When you evaluate rates, it may be worth considering what other services you'll be getting in the package you pay for. I met with BofA and Wells Fargo here in LA several months ago and it was night and day the level of confidence and service on offer. I went with Bank of America in a heartbeat, even though its rates were a little higher. It's relaxing to know I can pick up the phone and talk to someone who will know what I'm talking about.
What I have found that in dealing with processors that are bank related is that you have to use their bank accounts, you can't direct your DDA to other banks and they are not as flexible on rates.
And whomever you deal with, it never hurts to keep asking for a discount as most will in order to prevent you from leaving, or offer you newer equipment to keep. you
We are a lender and we have many relationships with many CC processors. If you would like you can give us a call and we can see if we can help.
Visit our website and drop us a line if you wish.
www.katalystfp.com
The fees are generally % plus $.XX fixed amount. If you have small transactions you want a higher % and lower fixed amount and vice versa.
Joan
Filed Under:
Cash Management