I probably get a few Business Owners a week who respond to a detailed quote that I email them w/ ‘what a great deal so and so company is offering’ without wondering “why does this deal sound so good compared to other ones?” Transparency (as you’ll see in this example), Track Record (do they have any Happy Customers?) and Competitive Pricing (fair, not rock bottom) are the three most important things to look at when looking for Merchant Services for your business.
Here’s a great example to illustrate what Point of Sale Companies are leaving out of their quotes to appear ‘CHEAPER’. Name is changed in this example.
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We are so excited to be partnered w/ SmallBusinessOnlineCoach because we feel that they are going to be the best in their industry because of the principles that they are building their business on. Please read the bullet points on Local Search Marketing of this NEW Business Related Service that we are providing to increase the profitability of our Customers. The reason why we chose SmallBusinessOnlineCoach (SBOC for short) is the simple way that they conduct business. It will be clear to you after reading these 7 points below that this company is light years ahead and how companies should operate.
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THIS IS A LONG VERSION OF AN EMAIL RESPONSE TO A RECENT CUSTOMER. IT’S MORE DETAILED FOR THE PURPOSE OF THIS POST:
“Ms. Smith, I appreciate what you are saying, however, I’ve been talking to thousands of Business Owners just like yourself for over 6yrs (yes, I am biased). I’ve seen everyone’s numbers regardless of volume or business model.
Credit card acceptance is essential in this economy for any Small Business Owner. Just consider these ideas below.
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Here are current statistics and projections of North American ad spending and across all mediums. We have added a new service that is cost effective for small to medium-sized businesses to help solve the #1 PROBLEM that all businesses have- CUSTOMER ACQUISITION.
Lately, Aug/ Sept 2009, I’ve been getting a lot of Business Owners say that they are being offered 1.37% or 1.42% for a qualified rate. First, I’d like to refer you to the last Blog Post that I wrote on Visa and Mastercard’s Wholesale Pricing to the Six Credit Card Processors in Canada. The gist of that post is that if the rate that you’re being offered is LOWER than the publicly posted Wholesale Pricing by Visa, then the company that is offering this fantastic deal is probably going to make up for it in other fees or will change this deal on you as soon as you penn your autograph to their multi-year contract.
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Just type into your Google search bar “visa canada interchange rates”. After 5mins of poking around, you’ll eventually come to their public, online PDF of their basic interchange rates.
The most simple way to understand what interchange is, without getting into the complexities of how the money flows or who issues the credit cards, etc., is to look at these rates as if they are wholesale pricing or buyrates From Visa to the Six Credit Card Processors in Canada.
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This article, 7 Lame Reasons Why People Spend More Than They Make is a good example of why credit card acceptance is important for your business because of people’s spending habits. Most Consumers spend more than they make and want things that they shouldn’t be spending money on. In this day and age, businesses that don’t have bank or credit card acceptance will not have as much volume as a competitor’s business who does. It’s not worth trying to save a few hundred a month for a processing service to lose out on thousands of dollars in increased sales. Besides, with a good accountant, who understands business tax deductions, you won’t lose your cash, just your monthly cashflow for the amount of the processing service that you use.
The payment processing industry is very confusing that most Business Owners don’t understand how a credit card transaction works, who’s involved and how does the money flow when a Customer purchases a product or service at their Business.
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Here is a concise article on The Terminated Merchant File Match List written by one of my best friends Matthew Hunt. He explains how Business Owners get on and How To stay off this list. This is the one list besides Santa’s Naughty List that you do NOT want to be on in regards to Credit Card Processors and payment processing and acceptance of credit cards for any business storefront or online that you may want to start in the future. This list is shared among the Six Credit Card Processors in Canada.
If you don’t care about long term PAIN and just wanted the short-term ‘gain’ or savings, then DON’T READ THIS POST!
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What is the True Cost of Merchant Accounts compared to chasing Customers for cheques? This is a great article by Michael Guerin from www.ampyourcashflow.com, a US provider.
Here’s a good graphic illustration of how online payments work when a Customer purchases a product from a website. Courtesy of David Lowry of www.WebPayments.ie
Here is an article that explains why Credit Cards offer Consumers more protection in buying products that have a lag time to get delivered from time of payment. If you have a new potential Customer that understands how their credit card protects them when they purchase products and services, then you need to accept credit cards in your business in order not to lose sales.
When I was sending an email to a Business Owner today letting him know about our new Referral Partners Program, he sent me this reply below after I clarified how the program works. He brought up a good point about getting a Merchant Account.
“OK I understand but we don’t even have a terminal as you require credit to accept credit cards which makes no sense in my opinion but that’s here nor there I guess. I will pass on your name to anyone I know.”
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“Better Business Bureau (BBB) announces the Top Ten Scams of 2008 and simple consumer tips to protect yourself from becoming a victim in the coming New Year.” from the Ottawa Citizen.
If you are a retail storefront business with low margins, then please read about and do NOT do these 3 THINGS in order to avoid the fees that you pay to be able to accept credit cards. They are definite no-no’s that Credit Card Processors frown upon.
Recently, I had two customers tell me about some of the practices of a few companies that process credit cards for Canadian E-Commerce Websites that they had dealt with previously. If you are sleepy, then this will shock you right up! Here are the outrageous things that they do in their fee structuring:
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There are dozens of articles available on the topic of Chargebacks, however, none as definitive as this one. This article gives you the usual reasons why your customers will dispute their credit card charges and what to do to protect yourself.
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It’s almost tax season and it’s time to round up all your debit and credit card processing statements for the last year. If you are missing them, then it’s time to call up your provider and get them. Whatever your processing costs are,
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This is an honour and privilege to have a Guest Post by Michael Guerin, a recognised expert in two industries that help business owners. The Search Engine Optimization/ Online Marketing Industry and in the US Payment Processing Industry.
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What are the 10 Things that Credit Card Processors consider when you apply for a Merchant Account?
1 Any past bankruptcy?
2 Any late or missed payments on bills/ debts. What’s the frequency of these actions?
3 Any large amounts of consumer debt? Over extended?
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By Dec.31, 2015, every business in Canada will be required to ONLY accept CHIP based debit & credit cards. Banks are already starting to switch over cards that need to be replaced, and handing out these types of cards to new accounts holders.
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In this tough economy every penny counts, so it is upsetting to most that Credit Card Processors operating in Canada have and are making changes that increase your costs of processing credit cards.
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9 Predictions for Credit Cards in 2009 is an SCARY but TRUE article about what card issuers are going to do to card carriers as this economy keeps tumbling.
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The challenges of fraud compound when we see how much Canadians love using their debit cards. The Toronto Sun has reported almost 16 million transactions on Dec. 23, 2008 alone. Knowledge of some debit fraud prevention can help if more people knew about them- Check out this article on 10 ways to prevent debit card fraud.
Credit Card Fraud can affect your business and you need to be prepared to deal with it. Here are some fraud prevention tips.
Gift Cards are being used like crazy by retailers and consumers.
Should you add it to your businsss? Here are the reasons why gift cards and loyalty programs will make you more money if you are a retail business.
It’s 2008 and your potential customers are not the same as just a few years ago. They have Google and cellphones that have internet access.
They are smarter and have quick access to dozens of choices for any particular product or service. Making a business’ fight for attention tougher and tougher.
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Here’s a great article for entrepreneurs that is an alternative to the gloom & doom, fear spreading news that surrounds us right now.
Here’s a second inspiring article.
May you have great rewards from your all your hard efforts to understand your customers and offer them superior products and services!
As Large Retailers start issueing more and more debit & credit cards, then it drives spending with payment cards at your business, making card acceptance essential in surviving. And lower fees essential to keeping your money after you make it.
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Here’s an article that highlights some issues of concern for Canadian business owners in regards to debit and credit card processing fees.
Here’s a good article on credit card processing in Canada in regards to escalating rates and fees!
A great article that every Canadian business owner that has a traditional retail storefront business model needs to know in regards to payment processing for their business.
This is an article that sheds some light on why debit transaction fees will SKYROCKET for small business owners in the very near future.This is a part 2 explanation of what is to come for Canadian business owners in regards to debit processing costs.
There are some companies now that have 1-2 page contracts that are SIMPLE and NON-THREATENING.
Watch out for these.
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Here’s some great info on understanding terminology in regards to merchant accounts. Other names for the service to Businesses so that they can accept and process credit cards from their Customers in order for the Customers to purchase the businesses’ product or service: Merchant Services, Payment Processing, Merchant Processing, or Payment Acceptance, but Merchant Accounts is the most widely used term.
Here’s a great article on the difference between Dial-Up, IP (Internet Protocol) and Wireless terminals. I couldn’t say it better than this, so I won’t.
Every payment processing company has a range of products to suite different businesses. From debit machines, to credit card machines, to IP terminals, to Wireless terminals that are not Cellular/GPRS, to GPRS Cellular (wireless) terminals for debit only or w credit card processing, to E-Commerce credit card processing, to PC & Internet processing from any computer, to phone authorisation processing from any phone.
You know as a business owner and especially as a consumer that not every single one company can have the best in services and pricing for every single product offering.
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Here is a great article by a good friend of mine Matthew Hunt on the pros and cons of surcharging.
Here’s a great LINK for you to explain what debit, charge and credit cards exactly are. After reading this, you’ll understand from a consumer standpoint what each card type is, and this will help you as a business owner understand when and why a customer will use each type at your business. Since we are all card carriers these days, we also intuitively know at what price ranges and what products we would use any type.
Here’s an article on security measures that will fight against rampant debit and credit card fraud in Canada.
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See for yourself the importance of accepting debit if you are a traditional retail business model: Interac Association Research Statistics
Please take a look at my ‘Squidoo Lens’ Article’:
I have had the privilege of having two incredible friends over the last decade plus. These two men are intelligent, honourable, and are always willing to take personal inventory in order to improve themselves. We share our daily faith, life, family, work, business, thoughts and experiences. We share each other’s dealings with different people, learning from them, and we love to bounce every thought, new knowledge or experience inquired or acquired off of each other.
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