What Every Merchant Should Know by Payex

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Credit Card Processing Fees Increasing This April?
Do They Need To?

April is almost here—the time when merchants often see the cost of processing credit cards increase. Are you aware of what changes are in store for your business this April? Do you know if your processor needs to raise their rates to remain profitable, or are they using April to simply increase their bottom-line?

Anyone who has accepted credit cards for more than one year knows the card brands (Visa, MasterCard, Discover, and American Express) consistently evaluate the fees merchant service providers pay to process transactions (interchange). Price changes typically take effect twice each year, April and October. Did you know that it is not uncommon for interchange to DECREASE?

When the card brands conduct their review, they decide to either increase or decrease interchange, and sometimes even add new categories to make accepting credit cards more attractive for certain markets or to accommodate new types of cards.

This April, the card brands are increasing certain fees and adding several new categories. For example, MasterCard increased the cost of most transactions over $1000 by 0.01% and they increased the cost of many World Card transactions by .04%. Visa introduced new categories for chip-based cards and had no notable changes otherwise. This is just a high-level overview of a very complex system. (You can see the actual cost of processing transactions at www.visa.com and www.mastercard.com – Search: Interchange)

So savvy merchants are asking themselves:

·    How many of these types of obscure transactions do I process?
·    Will new pricing affect all of my transactions or just these lonely few? And ultimately…
·    Does my processor need to increase my fees this April?

The answer for our clients is no. The changes this April are so minimal that there is very little, if any, justification to pass along an increase to merchants.

This is one more example of what sets Payex apart from other credit card processors. It is our policy to only increase client’s fees if and when it is absolutely necessary. Still, many other merchant service companies will take this opportunity to raise rates regardless of how deeply the adjustments actually impact their bottom-line.

So remember to always look at your March, April, September, and October statements to learn how much your processor is increasing your fees. Then, tune into What Every Merchant Should Know to learn if an increase in your fees is justified!

Add comment March 22nd, 2011

So This Is The New Year?

As the calendar changes and the challenges of 2010 fade into the background, there seems to be a new energy in the air. For the first time since the financial crisis began in 2007, businesses, and more importantly the people behind those businesses, have a palpable sense that the New Year will be a great one. If 2010 was a time for recovery, this New Year is a time for creativity and confidence both personally and professionally. Do you feel it? I know I do.

Despite a growing optimism, we understand that fulfilling these hopes requires a multitude of changes. What Every Merchant Should Know is no exception, and you can expect to find some pleasant surprises and upgrades in the coming weeks.

The one thing that will not change is our dedication to offering unbiased support, advice, and discussion on the topics you are interested in. Take a moment with me to reread that last sentence. Discussion. We all understand what is meant by the word, and we all know that we like being part of a true discourse, yet how often are we really part of the discussion? Merely commenting at the bottom of a blog post may seem like discussion, but it is really just scratching the surface.

When blog author X finishes his ramblings and clicks submit, you see only one carefully crafted statement, to which a few readers attach their own deeply held beliefs and ideas. Do you see the problem that I see? This blogger-reader relationship is a two-way mirror of sorts; I get to see who you truly are, but all you see of me is the dull reflection of unanswered comments against a static blog post background. This, simply put, is not good enough.

Though I can (and will) continue to pass along information and stories I find relevant to the world of credit card processing and merchant accounts, I would much rather talk about what you find relevant. Email me. Tweet me. By all means comment, challenge, question, and converse. What Every Merchant Should Know is here for you, but just as importantly you are here for us. Have a question? Send it along and I promise to find you the best answer in a timely manner in the form of a reader mailbag or standalone post. Have a comment, question, or criticism of something in a post? Say what is on your mind, and expect feedback. Help us put the social into social media.

2011 has the potential to be an incredible year of growth, but only if we reach out and make it so. Do not sit back and get overwhelmed by Merchant Services. Become a part of the process by joining the What Every Merchant Should Know community today.

Twitter- @WEMSK

Add comment January 13th, 2011

Housing and Recovery Act of 2008- What It Means For You and Your Business

It is a new year, and unfortunately the change in date brought along a little known change related to credit card acceptance. Congress and the IRS, in their infinite wisdom, tucked legislation within the Housing and Recovery Act of 2008 requiring, among other things, reporting of your credit card transactions to the IRS. This legislation, though passed back in 2008, came into full effect at the start of the 2011 calendar year.

So what does this mean for business owners and merchant service providers?

First, credit card processors will now need to validate every Tax Identification Number (TIN) with the IRS that you provide to your merchant service provider. In the event there is a mismatch, the processor will require a prompt update to the correct TIN or be forced to withhold deposits from you.

Second, processors will now be required to report all credit card transaction processing information to the IRS in January for your prior year’s processing. While credit card transactions and checks were always much more traceable than cash, this direct reporting seems to be another instance of “Big Brother” flexing its muscles.

Finally, and in our opinion worst of all—you better hope you and the IRS are on good terms. If you happen to owe them a little money, your credit card processor could be forced to withhold all or a portion of your funds and forward them to the IRS.

While the IRS claims the new legislation is a simple way to help track money between small businesses and merchant account providers, we believe that the policy change is both unnecessary and threatening to business owners. In our opinion, and likely many within our industry, this is simply another instance of big government sticking its nose in a business it doesn’t understand.

For example, the systems required for merchant service providers to validate TINs, provide reporting, and withhold funds were or are not fully in place. Software development costs to ensure proper handling of such can be extreme. With profit margins of processors being compressed more than ever, most if not all are resorting to passing these costs on to merchants in the form of higher rates, annual fees, or increased monthly charges. So if you as a business owner are paying more to accept credit cards, does that mean you need to increase the prices your customers pay? If so, what effect does that have on their ability to spend what little money they have with other merchants like you?

For that matter, what effect would it have on your business if the IRS ordered your credit card processor to withhold 30% of your credit card sales to repay a tax liability you may owe? Could your business survive?

We would love to know what you think of these new requirements and how they might impact your business or your industry in general. Do you think the changes are positive or do you concur that “Big Brother” stuck his nose where it doesn’t belong yet again? While there is little that can be done about it, we would really like to know your take on this matter. Please comment with your thoughts or questions.

You can check out the full IRS legislation (all 48 pages) here.

Add comment January 7th, 2011

Is your POS system leaving you –exposed?

Let’s face it… Point of sale systems are common place in many retail and restaurant environments. In fact, they’re practically a necessity. Clearly there are millions of businesses across the US run without computers and inventory management solutions and other fancy gadgets that make life easy. For those of you who DO have the luxury of such devices–could you imagine running your business without them?

The only problem with any computer attached to a network and specifically the internet, is that it is now subject to being hacked. Furthermore, there is NO fool proof way to ABSOLUTELY guarantee that your systems will not get hacked–unless of course you don’t connect to the web. It’s like your car… you can lock your doors, install an alarm and even use a theft deterrent like “The Club”, but if someone really wants your car–you may as well kiss it good bye… or leave it in your underground bomb shelter… but what fun is that?

So let’s say you have your sweet POS System that helps you run your business. Are you able to afford the hefty fees to keep your software updated year after year? It would be interesting to know–statistically speaking–what percentage of businesses do subscribe to these plans for their POS. From our experience, considering the exhortation cost, the percentage is low. This is a very serious issue because often times those updates include security patches to prevent hack attempts in the first place.

Why is this important? Well, consider this unfortunate Columbus, OH restaurant. Press coverage is fantastic–when it’s for the right reason. What’s worse is Tip Top is not alone. This is an every day occurrence. Of course we do not know–nor are we implying that Tip Top or it’s POS vendor did not keep it’s systems up to date. The fact is–just like your car… it may not matter.

So what’s the solution? Use your POS system to handle all of the intricate details of your business like inventory, time clock, etc. and even as a cash register–but leave the credit card processing portion to a good old fashioned credit card terminal! Well… it doesn’t have to be old fashioned of course.

For example, Payex and it’s resellers across the nation are working hard to help restaurants combat fraud from hackers or even their own employees by bringing payment right to the customer. For example, in this video GGL Processing, a reseller for Payex, helped well known Joe Roots Grill and Lucky Man’s Pizzeria in Erie, PA with just that…

Keeping Payments Where They Belong!

When you’re are ready to:

reduce your cost of expensive software upgrades

reduce the number of times a server has to visit a table

protect your client’s credit card information from hackers

protect your client’s from skimming

Or, if you just simply want to upgrade to the latest and greatest way of accepting credit cards for your pay at the table restaurant or delivery business, remember to call your friends at Payex. A Payex expert will help design a custom solution for your business at the most economical price available!
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Add comment January 3rd, 2010

What Every Merchant Should Know by Payex

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Posts filed under 'News'

Credit Card Processing Fees Increasing This April?
Do They Need To?

So This Is The New Year?

Housing and Recovery Act of 2008- What It Means For You and Your Business

Is your POS system leaving you –exposed?

Old systems become obsolete: What merchants should be aware of

Visa drops two major processors from PCI compliance list: What to consider before signing the dotted line

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