ForumsMerchant Services

If your product or services attract corporate buyers then prefer AMEX.
Discover.. personally I do not see any value now a days. however it is great card since they are offering life time 0% loan.
VISA is the best
Master Card - ok

Try google checkout. that is cool and some users prefer, I mean the first time buyers. having a google checkout does not harm.

Good Luck

• Kat

Re rates, Discover costs essentially the same now as V/MC. It USEd to cost a few pennies more,but Discover recently changed their business model. They and V/MC are essentially the same.

Let me answer your question this way: Assuming costs of V/MC/Disc are essentially the same, why would you NOT accept Discover and instead chose to hassle and argue with the customer over payment options?

Here's a better idea: When a customer decides to patronize you, make his experience as positivet and hassle-free as you possibly can. When he/she decided to purchase something, take WHATEVER payment form them offer, put a HUGE smile on your face, then say 'thank you'. Do NOT hassle the customer with 'we don't accept THAT card, we only take THESE cards' and so on. The LAST thing you want to do is hassle your most valuable asset, your customer, who hopefully (if you make the shopping experience pleasant) will return and patronize you again and again, and tell all his friends to do the same, for years to come. Even if the payment type the customer offers you costs you a few cents more, DO IT....a customer is worth much more than a few pennies in the long run.

Bottom line: It's all about business mentality. Concentrate on the big picture, you have more important things to do in order to make your business successful then worry about a few pennies here and there.
MAKE YOUR CUSTOMER HAPPY AND THEY'LL MAKE YOU HAPPY.

Caveot--If your cc processor is trying to charge you a setup fee to add Discover, or if the Discover rates quoted are higher than your V/MC rates, then you're being ripped off. Please reply to me via this forum and we'll talk about dealing with that issue.

Good luck
BG
www.merchantservices-help.com

Dear Nat:

Generally, following are the average ratios for credit card usage:
Visa/MC is about 60/40
Visa & MC/Amex is about 70/30.
Discover lags way behind. BUT...if a customer prefers Discover for whatever reason, TAKE IT!!!, why in the world argue with him about it?

Re the wisdom of a merchant accepting only Visa/MC and not American Express, let me be as brutally honest as I can be.

From MY point of view as someone who makes a living on Visa/MC processing residuals, it's obviously great that a merchant takes only V/MC and refuses Amex. More earnings for me. 98% of my earnings come from V/MC transactions, residual earnings from Amex are insignificant aside from a paltry one-time signup bonus.

From YOUR point view as a merchant, I sincerely feel most merchants who accept V/MC but refuse Amex are being shortsighted and somewhat foolish.. Reasons:

#1, the LAST thing you want to do with a customer is hassle him when he tries to patronize you...see my previous post on this subject.

#2, contrary to popular myth, in many interchange scenarios (particularly for ecomerce vendors) Amex is NOT much more (if any) expensive than V/MC, you're probably talking about mere pennies either way in any event.

#3 There are many many reasons why consumers strongly prefer to use their Amex card, such as corporate reimbursement requirements, rewards points, security and protection reasons, etc. As a business owner trying to make sales, why would any merchant intentionally eliminate these folks as potential customers? Their money is as good as anybody elses'.

Those are my honest opinions, even to my own detrement. Hope this is of value.

BG
www.merchantservices-help.com
amspcs@juno.com

I did not think of it that way. I defintely think you have valid points!

The statement about Amex rates being double that of Visa/MC rates is absolutely _in_correct.

Accurate statements would include:: Amex rates are double of V/MC QUALIFIED rates. These days, few
(and decreasing every year) Visa/MC transactions qualify as "qualified'.

Truth is: Amex rates are about the same, maybe even a little less, than many V/MC NON-QUALIFIED rates*.*

Unfortunately, for internet and mail/phone order merchants, every single one of their transactions will fall into this non-qualified realm by virtue of being non-swiped.

This is very easy to ascertain. If you're a non-swipe merchant, simply do a little math with your monthly merchant statement. It will tell you what your total V/MC volume was for the month. Then look at the total amount of the bill. A lot more than the 1.59% or whatever you thought you were paying, isn't it. That's because mid-qual and non-qual surcharges were tacked on.

If anyone would like to learn a little about how Visa/MC rates (qualified, mid-qualified, and non-qualified) work, may I suggest you review the following page:

http://www.merchantservices-help.com/nonqualrates.html

Good morning, Nat,

Don't mean to sound argumentative, but if we're talking about Visa/MC, we ARE talking about qual/mid/non.
That's the way it works.

In your case, 2.39% IS your mid-qual rate. Since you are a non-swipe merchant, they are callling it your 'qualified' since they understand none of your transactions will fall into a 'true' qualified bucket because none will be card-in-hand swiped. That's commendable--at least they're being straight with you. I might add 2.39% non-swiped is a pretty decent rate. The lowest mid I've ever soon is around 2.09%, which translates to $2. out of your pocket for every $1000 you process. So unless you're processing mega-bucks, (say $25,000 per month or more VMC) you've probably got pretty fair numbers there.

I still take issue with your statement that 90% of your sales fall into this qualified 2.39% bucket. That would be very very unusual in today's market, since that would mean you almost NEVER get paid with a V or MC classified as a corporate card, foreign card, B to B card or several others, all of which would fall into the higher non-qualified rate bracket. That's almost impossible to do these days. And that non-qualified rate would be much closer to the Amex rate you are quoting (which @ 3.85 also sounds about right).

More likely, you ARE having a bunch of your sales fall into non-qual, but you just don't see it on your statement. Very undersandable, most statements by design are very difficult to make heads or tales out of.

I suggest you do the following. Look at your statement carefully. Take the bottom line fee amount you were charged that month (this is probably the sum of TWO separate numbers on your statement--the discount deducted from each daily batch, and the overage amount debited from your business account at the end of the statement period). Then, divide that number by the total V/MC volume you did that month.
By this means, you arrive at the true discount percentage you actually paid, which you'll find is probably in excess of the 2.39% you expected. If you'd like a little help in this regard, let me know and I'll help you out.

Incidentally, here's another thing to look for on your monthly merchant statement: I'm positive you're getting some (probably a lot) of business on signature debit (aka check cards) cards. Are you being charged the same 2.39% or more on those too? If so, you're being overcharged. Signature debit discount rates should be less than the 2.39% you're charged for credit cards since interchange cost to the processor is much less for these cards (remember the big Walmart lawsuit w/V/MC a few years back??--this is what it was all about). If the processor isn't giving you back the difference and is keeping it for themselves......tht's not fair. If that's the case, you might want to question your processor on this since you're being overcharged a tad.

Have a great weekend.
BG

BG.

WOW, Twenty Eight (28) posts before this one AND "Not Answered"??

h4.

In my experience, neither Discover nor AmEx have start-up costs or statement fees: they are "add-ons" to your existing merchant account, and thus - yes, they are totally worth adding. You can also establish Discover and AmEx merchant accounts directly with issuers (Discover/Novus and American Express Merchant Services, respectively), and in my experience, the rates are 2.2% for Discover and 3.5% for AmEx, non-swiped. Neither of two ever had "non-qualified" rates, and thus, costs of accepting Discover and American Express are more straightforward than Visa/MC.