Credit card fees (NAC!)

Huw Powell audi at
Fri Apr 15 21:01:36 EDT 2005

> This last month, the merchant account fees on my credit card acceptance 
> came to a full 25% of total sales! Mastercard and Visa are making more 
> on what I'm selling than I am. In addition, they sent me a 15 page 
> document which itemized in great detail all the various upcharges and 
> penalties and reasons why I'm going to have to pay them even more

Mike, I have to ask just what you're selling, or, why the fees came up 
to such a high percentage?

I've been doing mail order for 17 years, and taking MC/Visa through my 
bank for 15 of them, and I'm still paying a hair under 4% (plus $10 or 
12 a month).  Considering that 90-95% of my customers use the plastic 
rather than send checks, I suspect they find it *very* much to be what 
they want to do.  It also makes international transactions transparent - 
I charge in US $, they get billed in their local currency, and don;t 
seem to be getting ripped off on the conversion AFAIK.

Customers of this type (mail order/web site etc.) also get some major 
peace of mind using a card, since they have disputation rights that are 
very strong if something goes wrong.

> Mike, you need to hunt for a different card processing agent.  I pay a
> monthly fee to the processor for something like $12-15 and am charged
> 2.5-3.5% of transaction amounts, depending upon the amount and the card
> used.

> I agree with Kneale. I pay no monthly fee and my percentage is about 3%.

As suggested, I would simply look into another vendor to do your 
processing for you.  My system is totally stone age - all I can accept 
are MC/Visa, I pay a moderately high rate, and I actually dial the 
transactions in on the phone to get authorization and charge the cards. 
  But it works, and I don't have to rent a terminal - there's not much 
need anyway since I so rarely see cards in person.

Huw Powell

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