Watch Out For These Tactics!

The Golden Rule of treating people the way you would want to be treated seems to be missing in some big companies in the Canadian Payment Processing Industry these days.

There was a time that the owners and managers of some of these companies (that started small just like everyone else) actually talked to their customers.  Listened, asked questions, and understood their specific needs.  Working long hours to come up with solutions to customer challenges.  They cared about under promising and over delivering.  And because of these basic foundation philosophies, they became successful and grew and grew and grew.

One day, many years later, they now have a portfolio of thousands of customers and dozens of sales representatives across Canada, and everyone is a number in their computer charts and graphs.  Time is precious, so the company has a hierarchy in order to run efficiently and facilitate further growth.  They become inflexible as more rules are needed to manage the duties of a growing staff base.  More complex issues arise, so the focus is taken away from the most important people in any business- The Customer.

Now, the small business owners that they serve no longer need to be treated fairly and with respect just like they wanted for themselves when they were small businesses starting out.  Their customers are just a number now and therefore are treated as such.

Then you come along, and are busily hustling around to get everything ready to open your new business and because you are new to entrepreneurship, you don’t think of getting debit and credit card acceptance for your business till the very end.  It’s probably one of the top 5 important things that a business needs in 2008, but does anybody tell you that?  No, but you are too excited and stressed out to care.

But, you have no time left to think or research.  Still have a family that want to spend time with you and still have daily mundane tasks that need to be done, sprinkled with ‘not so nice things that happen in life’, and we haven’t even talked about your business life yet.

You’ve signed your name to everything you need for your business, retail/office space, equipment, phone lines, internet, computers, marketing, signage, government registration, taking care of trademarks and copyrights, inventory, shelving, renovations, employees, taxes, etc., etc, etc.  Your credit has been checked by a dozen companies and you are over extended and you need to open to turn a profit!

You need payment processing fast and are stressed with so many things going around.  You start looking.  You heard that you needed ‘low rates’ from friends, so you focus on that.  The companies that are not professional in treating customers prey on that, so they promise you low rates, but with all the added fees you end up paying a lot more.

Some big companies these days are being more and more creative and aggressive in their marketing of payment solutions to small to medium sized businesses.  More ‘creative and aggressive’ is not a compliment.

Watch out for these tactics that make the 1-3 things that most small business owners like yourselves focus on that blind them/you to what these payment solutions companies are doing:

1 Annual fees that are not stated.*so you may have low rates and inexpensive terminals, but you will end up paying more

2 If you are estimating less than $1000/mth in credit card volume, then you need to know the minimum charges on debit and on credit cards (per card type!)*ex. If you do ZERO volume in jan., then what are you being charged?

The standard min per card is $10/mth for ANY company in Canada. This is the lowest amount that a payment processor will take an account for. What does this mean? Multiply your ‘discount rate’/ percentage they charge per card type by your volume. If that equals the minimum, then you’re safe.

Ex. You do $400 this month in visa and you pay 2.25%. That means that $400 X 2.25%= $9 in this fee. So, since the minimum is $10, you’ll pay $1more to equal $10. NOT $10 more.

Every company does that. The bad part is that some companies are raising each card type minimum to $20/each! So what that means is that you might get a low rate, but if your business does approx $1000 on each card type, you’ll pay more than that rate offered if your volume is below the minimum.

3 Low fees w/ high per transaction charges.*you may get a rate that looks low, but add the 25cents or more per transaction and you will come up with a number that is higher, especially if your business has small average transactions.

These are the three biggies that are being used right now.  I’ll share more with you when we get a chance to connect.  Please spare yourself the headaches and future frustrations with representatives and companies that don’t care to give you the personal touch, and don’t care to answer your questions.

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Just found out that now some companies are charging $10-20 debit minimums each month for physical retail terminals- debit only, or debit and credit card terminals.

If your business model doesn’t use debit, then this will not affect you.  OR, if you have below $15 average transactions, your debit transactions will probably meet or exceed the minimums (EX. convenience store, dollar stores, or pizza and sandwich take-out places).

WHAT DOES A $20 DEBIT MINIMUM PER MONTH MEAN? What this means is: EX. Let’s say you get promised 10cents per debit transaction. With a $20 minimum, you would have to do 200 debit transactions each month to actually pay 10cents!!! (Same concept with a $10/mth debit minimum as some companies do.)

$0.10 X 200debit trans/mth= $20= this meets the minimum.

But what if you only do 5 debit trans./day and you are open 20days/mth? That’s 100 trans X $0.10= $10. You’ll now pay an extra $10 making each transaction actually 20cents each!!!

You need a professional to explain these things to you, so you know what is involved when you commit. Here at we are the only ones that are explaining and exposing all these creative marketing tactics!

It gets worst if you are promised less than 10cents with debit monthly minimums.