Credit Cards

[Mountain View 14]

For those of you who take credit cards, have you found that the ability to accept this form of payment actually brought you more business? I had a merchant bank call me yesterday (an employee of the bank got one of my post card mailers) and was emphatic that being able to accept credit/debit cards as payment would "drive" business my way. I understand that he is a salesman and is expected to say that, but have any of you found this to be true? I haven't had any customers mention this at all (I take cash or checks). Does having the credit card logos on business forms and advertisements make people any more likely call you?

[Tegrey 121]

Pete,

We have had Visa & MC for over four years. It has paid for itself. Not making alot of extra money on it. You have to think of it as a service you supply to your customers. The cost is expensive ($4,000.) for our machine and a monthly service charge. Many folks like the charge so they can build up their air miles. It cost us, so we have to add a little on to all jobs to cover it. The benefit, We are a full service company, offering charges. The drawback, you won't make much more than you would without it. Hope this helps.

[PressurePros 249]

I agree with Terry as far is not generating extra business but I have heard the opposite from other contractors (that offer more expensive services like remodels). I take them via PayPal Pro with virtual terminal (2.3% plus $20 monthly fee). Again Terry hit it when he said it is an added service. Putting the logos on your advertising is a strong way to build credibility. I have yet to see a come-and-go lowballer that takes CC's. Personally I would give more benefit of the doubt to a company that takes them as an established business.

An excellent point someone made recently is that by accepting CC's for deposits, you can assure your customer recourse against being taken advantage (of).

[bigchaz 157]

I have it through paypal on my website. Much more affordable and I dont even see the peoples credit card information. They simply type in the amount and it sends the money my way. You only pay per transaction. Not sure if its drawn more business (people don't seem to care between check or CC) but it looks professional and I push people to use CC when they are not home or far away. IT saves me a separate trip for deposit and final payment

[Mountain View 14]

He told me over the phone that it is $30/month for sevice and equipment and 15 cent per transaction. He was a little pushy for my taste. Ken makes the point of legitimacy that I was thinking about myself.

[FLORIN 21]

The experience I have had is the customer is more willing to go with add on services/ upselling if they are able to charge. Maybe its their mentallity that they can finance that bigger lump sum rather than pay it all at once.

[dpaull 80]

Good point Florin, I was going to mention the same thing. I believe the add-on sales *could* increase, but mainly if you're selling high dollar stuff. If you're doing a $600 job and want to add on a $100 something or other, accepting credit cards really won't do much for you. Now if you're doing a $600 job and notice the deck needs done and want to add on a $1500 job, now is when accepting credit cards may have their advantages.

[Chappy 138]

I just did my first job for Credit card payment. I wasnt going to but realized that I was going to loose it if i didnt and figured since I had a paypal account, why not. She hasnt put it through yet, but it looks easy and I have paid that way before. I believe it was about $21 on a $745 job.

[John Doherty 126]

I take them for the reasons Ken stated, I have the v/mc logos on all my stuff. I have yet to have a customer ask me to take one. Did I mention that in another life I was a card products manager at a brokerage firm?

Some things to look for:

1. Termination fees, they try to lock you in for 2 years or so, want to change to get a better rate, or God forbid you go out of biz, etc. You have to pay it just like with cell phone plans, it's usually around $275.

2. Equipment, for the amount of transactions our type of biz generates you don't need any equipment, don't buy or lease any, do it via your PC.

3. Have the rate explained to you, 'qualified' is the lowest, it's also called 'card in hand', it means just that, you have the customers card and swipe it through a machine for authorization. If you do the math the # of transactions you do at this lower rate will probably not equal the cost of equipment to swipe the card with (see#2).

Non-qualified rate is a transaction done via PC, phone, etc. it's slightly higher but it's the one you'll end up paying, make sure you're clear on which rate is which.

4. Application fees, if you have bad credit don't even bother, your just throwing the fee away, they won't approve you.

5. Personal Gaurantee, you personally gaurantee all transactions, so lets say that $2500 deck that your customer isn't happy about and decides to dispute through their Card issuer. The processor takes it out of your account and you gaurantee you'll pay it.

6. In addition to your rate you will also have a monthly fee.

7. Discover and Amex, don't accept them, they have different rates that are higher than v/mc. You won't lose any business by not acepting them.

Shop around, I went with the plan offered via Quickbooks, no application fee, no termination fee.

[Mountain View 14]

Outstanding advise everyone. If I do anything, it will be paypal/pc me thinks.

[MMI Enterprises 289]

So are all the call-in methods considered non-qualified and/or cost more or have a monthly fee.. I just want call in at about same as what my Paypal does.

[John Doherty 126]

Kevin all the 'call in' or 'via PC' are generally considered non-qualified, to throw in more confusion there is also a blended rate. The blended rate is between the 2 rates and comes into play if it's a non-qualified transaction but you can provide additional info like the 3 digits on back of the card.

The difference in the rates is because of fraud risk, there is less in person card fraud then there is via phone order or internet.

The monthly fees will always be there, for example the QB offer has a $17.95 monthly fee. There is also a $20.00 monthly minimum for the collection of the rate they charge.

So if the rate is 2.44 (the current rate) and you do $1000 in transactions they take $24.40 and don't ****** the minimum.

If you do $100 in transactions they take $2.44, and at the end of the month take another $17.56, because they didn't get their $20.00 minimum.

As far as the rates go, QB's current is 1.72 for qualified (card swiped) and 2.44 for non-qualified (via pc or phone).

[MMI Enterprises 289]

No monthly charge for standard PC based Paypal. Last I checked the approx. 2% is only charge..Guess the difference being the standard account the customer must innitiate payment and the merchant/pro account you just charge them with the numbers. ..Is there some benefits of QB over Paypal type Ken refers to? Oh it seems yer saying you get to do phone-in with it as well as pc based.. that correct?