| 1. Merchant Accounts: What are the Visa, MasterCard | | | | approved or not. Applications fees can vary from |
| & Amex Discount Rates? | | | | non-existent to $300. |
| - Every Payment Processing Provider will have this | | | | 7. Is there a Statement Fee? |
| fee. Discount rates can vary on from as low as 1.59% | | | | - Not all Payment Processing Companies have a |
| right up to as high as 5.0%. The Discount Rate is really | | | | Statement Fee, however, some do. The average |
| not a discount. It is a % of your sales that the Credit | | | | Statement Fee is usually around $5 or free if you are |
| Card Companies charges the Business Owner to be | | | | willing to receive your statement coming to you via |
| able to offer their customers to pay with their Credit | | | | E-mail. I am not sure if this is a nickel and dime fee or if |
| Card. (Example: If you did $10,000 in Visa sales in one | | | | it is Companies trying to go green...? I let you decide! |
| month and your Discount rate was 2.5% then you | | | | 8. Is there a Settlement Fee? |
| would pay $250 in fees to Visa that month.) | | | | - All Payment Processing Companies have a |
| - Rates vary and are dependent on your Business | | | | Settlement Fee. Settlement fees can range from 0.05 |
| Model, Business Volume, Average Sale per Customer, | | | | cents - 5 dollars. |
| Type of Product & Service your business offers, | | | | 9. Is there any Minimum Processing Fees? |
| the way you process payments for your products | | | | - All Payment Processing Companies have Minimum |
| & services: online, telephone, mail-order, or in-store | | | | Processing Fees, ranging from $5 - $25. Often there |
| all affect the Discount Rate your business will qualify | | | | are Minimum Processing Fees for each type of card |
| for. | | | | you intend to have processed. Basically, what this |
| - Usually High-Risk Business will have higher rates. | | | | means is if you do not do enough business to have |
| Businesses that have higher ticket prices, Businesses | | | | high enough fees you will still pay a minimum every |
| that process payments via: E-commerce, Telephone | | | | month. |
| (IVR), & Mail-order usually fall under the High-Risk | | | | - For example: Let's say your Discount rate 1.85% on |
| Umbrella. | | | | Visa and your do a $1000 worth of sales on Visa that |
| 2. Are 'keyed in' Visa, MasterCard & Amex | | | | month and your minimum processing fee is $10. Well, |
| Discount Rates at a different rate then swiped? | | | | 1.85% X 1000 = $18.50 in fees that month on Visa. |
| - Most Payment Processing Providers will have a | | | | Therefore, you have cleared your minimum of $10 and |
| different Discount Rate for transactions that are | | | | you have nothing to worry about. Now if you take the |
| keyed in on POS Terminal instead of being swiped | | | | same rate and minimum, but you only made sales |
| across the POS Terminal. However, there are some | | | | $250 that month on Visa. Well, 1.85% X 250 = $4.62 in |
| exceptions for some businesses that have reoccurring | | | | fees that month on Visa. Therefore, you did not make |
| billing. | | | | you minimum and would be required to make the |
| 3. What are the Transaction Rates? | | | | difference up of $5.38. |
| - Transactions fees are sometime called IDP | | | | 10. Is there a Gateway Fee? |
| Transactions. Every Payment Processing Company | | | | - Most Payment Processing Companies usually have a |
| has at least a Transaction fee for Debit and usually for | | | | Gateway Fee, but usually only for IP POS Terminals, |
| Credit Card Transactions too. It is become more | | | | PC, & E-commerce Payment Solutions. Gateway |
| common that any Transaction that is made on your | | | | Fees can range from $5 to $45 a month. |
| POS Terminal will be considered a Transaction and a | | | | 11. Is there a Monthly Maintenance Fee? |
| fee will apply, whether is it is a void, debit, credit card, | | | | - Some Payment Processing Companies have a |
| refund, batch close, etc. | | | | Monthly Maintenance Fee others do not. If they have it, |
| - Transaction fees can range from 0.05 cents up to | | | | it is usually a Fee that is with IVR, PC, & |
| 0.50 cents and can be different for each type of | | | | E-commerce Solutions, however some Companies |
| transaction, although typical POS Terminal | | | | have it on POS Terminals solutions too. |
| Transactions fees are between 0.08 cents to 0.15 | | | | 12. Is there an Added Value Fee? |
| cents. IVR, PC, & E-commerce Transactions fees | | | | - Some Payment Processing Companies have a |
| are usually much higher ranging from 0.35 cents to | | | | Monthly Added Value Fee and some do not. This Fee |
| 0.50 cents. | | | | usually ranges from $5 - $10 a month. |
| 4. What is the monthly cost for the Point-of-Sale | | | | 13. Is there a Low Achievers Fee? |
| Terminal? | | | | - Most Payment Processing Companies have a |
| - Most Bank Payment Processing Companies offer: | | | | Monthly Low Achiever Fee. Low Achiever Fees can |
| only Rental Program for POS Terminals. Rental costs | | | | range from $5 - $20. This is why it is important to get |
| can range from $20 right up to as high as $100 a | | | | your monthly/annual estimate of total business volume |
| month dependent on the type of POS Terminal your | | | | correct on your Visa, MasterCard, & American |
| business requires. | | | | Express Applications. Most Merchant Account |
| - Private Label Payment Processing Companies | | | | Providers have 25%-35% error lenience. If you are not |
| usually only offer: Lease-to-own or Buy-out Options on | | | | sure it is always better to under estimate your monthly |
| their POS Terminals. Lease-to-own usually run on 48 | | | | annual sale amounts when applying for Credit Card |
| month leases with a 10% buy-out option at the end. | | | | Merchant Accounts. |
| Lease-to-own POS Terminal prices range from $30 - | | | | 14. Is there a Chargeback Fee? |
| $80 dependent on type of POS Terminal. Buy-out | | | | - Most Payment Processing Companies have a |
| POS Terminal prices, typically run from $999 - $1800 | | | | Chargeback Fee. Chargeback Fees can range from |
| dependent on type of POS Terminals. | | | | $10 - $50. A Chargeback is when a Card Holder holds |
| - *** Two very important questions to ask before | | | | a dispute on a Visa or MasterCard or Amex |
| buying a POS Terminal: A) What are the warranty | | | | Transaction that came from your business. If the Card |
| conditions? B) Is the POS Terminal Smart-Card | | | | Holder wins the dispute, they will be refunded their |
| Ready? | | | | money and you will be charged a chargeback fee - it's |
| - PROS & CONS of Renting Vs. Owning: | | | | a similar fee to bouncing a cheque. |
| PROS: When renting a POS Terminal if you require a | | | | - It is always the Merchant burden of proof to prove |
| new POS Terminal is usually will be fixed or replaced | | | | that the Card Holder had used or bought the product |
| at no cost to you. | | | | or services from your business. This is why is so |
| CONS: Rental only: You pay rent forever. If you have | | | | important to check that on Credit Card Purchases that |
| been renting a POS Terminal for $40 a month for 5 | | | | the signature matches the back of the Card Holders |
| years, then you just paid $2400. If you have been | | | | Credit Card and if it does not to ask for Photo ID. |
| renting a POS Terminal for 10 years at $40/month | | | | 15. What are the Technical Support Service Hours? |
| then you just spent $4800 & no asset in your | | | | - Most Payment Processing Companies have a Help |
| business. When you can own a Basic POS Terminal | | | | Desk/Technical Support. However, not all are 24/7. |
| for as little as, $1000 and now have another Asset in | | | | Some are better then others. The best thing to do is to |
| your Business. | | | | get the Help Desk # and give it a call a few times |
| SIDENOTE: Most Private Label Companies will offer | | | | through out a day to see what kind of service you |
| some type of life-time warranty, sometimes at no | | | | would get. |
| extra cost, sometimes for an additional fee. However, | | | | 16. How soon can you have a new POS Terminal in |
| it always comes back to the question of whether it is | | | | my Business if my POS Terminal is not working & |
| better to Own or whether it is better to Rent...? - I will | | | | can't be fixed via the phone? |
| let you decide! | | | | - Payment Processing Companies can vary on this. |
| 5. What are the Set-up Costs? | | | | Some can have one to you within 24 hours others can |
| - Every Payment Processing Company will have | | | | take 2 - 4 weeks before they have a new POS |
| set-up fees, some more then others. Set-up fees can | | | | Terminal to you. The question you have to ask |
| range from $50 - $300. Usually the set-up fees are | | | | yourself is how long can your business run without one |
| one-time only set-up fees for Visa, MasterCard, Amex, | | | | in your business? |
| & Debit Cards - usually around $25 per card. | | | | 17. How long does it take to initially get set-up with full |
| Some Companies also charge an initial set-up fee for | | | | services? |
| programming POS Terminals or a fee for Initial Training. | | | | - Most Payment Processing Companies usually take at |
| Set-up Fees can greatly vary from Company to | | | | least 2 weeks (sometimes as long as 4-6 weeks) to |
| Company. | | | | have your application processed, merchant accounts |
| 6. Are there any application fees? | | | | set-up, POS Terminal programmed and shipped to |
| - Not all Payment Processing Companies have an | | | | your business ready to use. However, there are a few |
| Application fee, however, some Companies do. This is | | | | Payment Processing Companies that can have one |
| usually a non-refundable fee, whether you are | | | | ready in your business in as little as five business days. |