Category: Credit Card Processing Tips & Knowledge

You’re about to give your credit card to make a payment when the merchant says, “Credit card transactions are an extra 3%.”

 

This is called a credit card surcharge. Though it’s annoying, there’s a reason merchants add it: to cover their costs. You’ll rarely see surcharges at large retailers. But you could see them at mom-and-pop establishments, where bottom lines are more sensitive to credit card processing fees.
Is it legal for the merchant to charge you an extra surcharge?

In most States, merchants aren’t barred by law from adding surcharges. According to the Durbin Amendment of the Dodd–Frank Act, retailers are allowed to add a surcharge on credit card transactions. (They are not allowed to add surcharges on debit card or prepaid card transactions.)

 

Merchants are also allowed to require minimum purchases for credit card purchases — up to $10.

 

However, Surcharges are illegal across the board in these 9 states:

Colorado

Connecticut

Florida

Kansas

Maine

Massachusetts

New York

Oklahoma

Texas

 

Does it make sense for you to pay an extra 3% to use your credit card?

That really depends on why you wish to use your credit card in the first place. If it’s simply for convenience, it might not make sense for you to pay an extra 3% for this convenience. However if you need the 30 – 45 day cash float that your credit card afford you, then it might be the only way you can make the purchase. Additionally, some savvy business owners may have a credit card that earns them 2% cash back and the cash back money is tax free (grey area…Speak to your Accountant.). If you’re in a high tax bracket, it may be well worth it to pay 3% and get back 2% of that tax free.

 

Does it make sense for business owners to pass on the fee?

It really comes down to your customers. If you implement a surcharge, it comes at the risk of losing customers who are put off by additional charges for credit card.

 

When consumers were asked would they pay extra to use a credit card at a business, 64% said they wouldn’t pay an extra fee. Additionally, credit cards have become a standard method of payment in virtually every industry and every large corporation accepts credit cards without surcharging.

 

Finally, if your fees are too high, it might be time to look for a new processor. If you’re already a Banquest client, let us know how we can help you when it comes to surcharges. If you’re not a client but interested in how we can support your business, click here to contact us today!

 

It’s our mission to reduce the costs and headaches associated with credit card processing, so we’d be honored to earn your business.
Happy Tuesday & Happy Selling!
Kevin

I debated with myself before writing this blog: is it really necessary? Is there anyone out there that doesn’t already know this information?

 

Unfortunately we and our colleagues in the payment processing industry deal with this all the time. My staff, who unfortunately has to clean up these messes, insist that many of the abusers are truly innocent. They simply don’t know that what they are doing is wrong.

 

What I am referring to is the practice of charging or swiping ones own credit card to their own business – as a quick way to get funds into their bank account. (i.e. a business owner is short $20,000 for payroll, so he swipes his own credit card for $20,000 and has the funds in his account the next day! Sometimes there may even be legitimate reasons for doing so such as when someone owns multiple businesses and he is using his card from business A to pay business B.)

 

I’m not here to discuss whether or not this is a financially good idea in terms of the % rate… (It’s not!)

 

The credit card processors strictly prohibit such transactions and will terminate any account that processes such a transaction. They’re pretty good about catching them too. Sometimes the processor will place the merchant on a blacklist that is shared with all US processors ensuring that this business will never get approved for a merchant account anywhere.

 

In short: never charge your own (or your family or business partners) credit card to your own merchant account.

 

Happy Tuesday & Happy Selling!
Kevin

 

Beginning April 2018, you will no longer need to collect American Express® Card Member signatures for Card-present, point-of-sale Transactions.
When this change takes effect in April 2018, it will apply:
• Globally to all merchants (any size, any industry)
• To all Card Present Transactions (Magstripe, EMV, Contactless).
• To American Express Transactions of any amount.
Why?
• The need for signatures has declined around the world due to a number of advancements in the payments industry. These include the growth of contactless payment options, including card-based and mobile tap-and-pay methods, the global adoption of EMV chip technology, and the continued expansion of online commerce.
• American Express has also deployed advanced machine learning algorithms that allow for more precise detection of fraud while minimizing disruption of Card Members’ genuine spending.
What are the benefits?
• Provides a more consistent and simplified checkout experience for merchants and Card Members
• Delivers a faster checkout process for your customers
• It could also help reduce the operational expenses associated with retaining signatures.

Are there still mobile phones that don’t have a calculator? 😉

 

Happy Tuesday & Happy Selling!

–Kevin

Micro-businesses may be small, but they account for more than three-quarters of private-sector employers in the U.S., and more than 1 in 10 jobs across the country!
These businesses may not be comprised of large teams, but together, they’re the backbone of our economy.
Given reduced resources, micro-businesses may not always offer customers the bells and whistles of a larger corporation.

 

Additionally, customers tend to have a lack of trust in an unknown small business.

 

Paychex surveyed over 1,000 potential customers to understand how different factors build trust and impact their decision to support local businesses.
Read carefully what influences your potential buyers’ minds.

If your business needs a modern, updated, clean website or integrated credit card processing options, please drop us a line at sales@banquest.com.

 

Happy Tuesday & Happy Selling!

–Kevin