Credit Card Transaction Real Cost

Posted by Richard on February 26, 2007, 1:11 pm

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Credit card transaction fees have turned into a financial problem for my
small business. I don't mean the fees I pay the processor, Mercury Payment
Systems, but rather the fees they pass along to me for credit cards which
earn the user financial points. I don't take AMX but I do take MC/Visa &
Discover. What I'm finding is the "Real" cost of taking these cards is 3 -
3.25% of sales.

I'm of the mind to pass this hidden cost back to the customer who uses the
credit card by charging an additional 3.25% on any credit card sale. Anybody
done this before?

If all I had to do was to pay MPC their processing fees I would be fine with
that. But the hidden fees on the special credit cards available today are an
interesting way for a merchant to loose money and I disagree with that. Is
there any way to see up front what a customers card is going to cost to
process?

Anybody have any advise on coping with this issue?

Thanks,
Richard

Posted by Marc on February 26, 2007, 1:45 pm

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It does add up to significant costs. IMHO, it is better to figure it in when
you markup the product then to charge EXTRA, less chance of pissing
customers off. Raise your prices to cover it, wherever you can get away with
it. For most of us, credit cards are probably far and away the most common
method of payment. Unfortunately, MC/Visa know this and can get away with
just about anything they want.

Marc

> Credit card transaction fees have turned into a financial problem for my

> small business. I don't mean the fees I pay the processor, Mercury Payment

> Systems, but rather the fees they pass along to me for credit cards which

> earn the user financial points. I don't take AMX but I do take MC/Visa &

> Discover. What I'm finding is the "Real" cost of taking these cards is 3 -

> 3.25% of sales.

> I'm of the mind to pass this hidden cost back to the customer who uses the

> credit card by charging an additional 3.25% on any credit card sale.

> Anybody

> done this before?

> If all I had to do was to pay MPC their processing fees I would be fine

> with

> that. But the hidden fees on the special credit cards available today are

> an

> interesting way for a merchant to loose money and I disagree with that. Is

> there any way to see up front what a customers card is going to cost to

> process?

> Anybody have any advise on coping with this issue?

> Thanks,

> Richard

Posted by Glenn Adams [MVP - Retail Mgmt on February 26, 2007, 3:58 pm

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I would agree that it is better to build this into your pricing than to
charge a fee for credit cards. Offering a "Cash Discount" used to be a
common practice. I believe it is a violation of most if not all
Merchant account agreements now. If you get caught charging extra for
card transactions, you may soon be a cash only business...

Glenn Adams
Tiber Creek Consulting
http://www.tibercreek.com
glenn@tibercreek.com
----------------------------------------------
Please DO NOT respond to me directly but post all responses here in the
newsgroup so that all can share the information.

Marc wrote:

> It does add up to significant costs. IMHO, it is better to figure it in when

> you markup the product then to charge EXTRA, less chance of pissing

> customers off. Raise your prices to cover it, wherever you can get away with

> it. For most of us, credit cards are probably far and away the most common

> method of payment. Unfortunately, MC/Visa know this and can get away with

> just about anything they want.

> Marc

>> Credit card transaction fees have turned into a financial problem for my

>> small business. I don't mean the fees I pay the processor, Mercury Payment

>> Systems, but rather the fees they pass along to me for credit cards which

>> earn the user financial points. I don't take AMX but I do take MC/Visa &

>> Discover. What I'm finding is the "Real" cost of taking these cards is 3 -

>> 3.25% of sales.

>> I'm of the mind to pass this hidden cost back to the customer who uses the

>> credit card by charging an additional 3.25% on any credit card sale.

>> Anybody

>> done this before?

>> If all I had to do was to pay MPC their processing fees I would be fine

>> with

>> that. But the hidden fees on the special credit cards available today are

>> an

>> interesting way for a merchant to loose money and I disagree with that. Is

>> there any way to see up front what a customers card is going to cost to

>> process?

>> Anybody have any advise on coping with this issue?

>> Thanks,

>> Richard

Posted by HARJIT SHERGILL on February 26, 2007, 3:00 pm

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You should try Citi bank/First data instead of Mercury. You are absoulutely
right Mercury has so many hidden charge. I have been doing business with
Citi 4 years and They dont have any hidden cost like MPC. I tried Mercury
Sep 2006 for one month and I end up paying $200 more than Citi bank in
month. then I swich back to Citi bank.

> Credit card transaction fees have turned into a financial problem for my

> small business. I don't mean the fees I pay the processor, Mercury Payment

> Systems, but rather the fees they pass along to me for credit cards which

> earn the user financial points. I don't take AMX but I do take MC/Visa &

> Discover. What I'm finding is the "Real" cost of taking these cards is 3 -

> 3.25% of sales.

> I'm of the mind to pass this hidden cost back to the customer who uses the

> credit card by charging an additional 3.25% on any credit card sale.

> Anybody

> done this before?

> If all I had to do was to pay MPC their processing fees I would be fine

> with

> that. But the hidden fees on the special credit cards available today are

> an

> interesting way for a merchant to loose money and I disagree with that. Is

> there any way to see up front what a customers card is going to cost to

> process?

> Anybody have any advise on coping with this issue?

> Thanks,

> Richard

Posted by retail on February 26, 2007, 8:20 pm

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Please know your rights like 5 million other merchants that accept credit
cards and Leverage information to your advantage.

http://www.merchantbillofrights.com/

Know effective rate vs. rate. "rate" is an effective shell game business

"Richard" wrote:

> Credit card transaction fees have turned into a financial problem for my

> small business. I don't mean the fees I pay the processor, Mercury Payment

> Systems, but rather the fees they pass along to me for credit cards which

> earn the user financial points. I don't take AMX but I do take MC/Visa &

> Discover. What I'm finding is the "Real" cost of taking these cards is 3 -

> 3.25% of sales.

> I'm of the mind to pass this hidden cost back to the customer who uses the

> credit card by charging an additional 3.25% on any credit card sale. Anybody

> done this before?

> If all I had to do was to pay MPC their processing fees I would be fine with

> that. But the hidden fees on the special credit cards available today are an

> interesting way for a merchant to loose money and I disagree with that. Is

> there any way to see up front what a customers card is going to cost to

> process?

> Anybody have any advise on coping with this issue?

> Thanks,

> Richard