[nycbug-talk] Internet billing

[Kevin Reiter]

----- Original Message ----- 
 On Wed, 17 Mar 2004 19:28:25 +0000 (GMT)
 Francisco Reyes <lists at natserv.com> wrote:
 
 
> They all require an introductory application before they will even
> answer questions.  They want to do a risk assessment.  While this is
> reasonable, I got the idea that business is not full of cheer in that
> industry.   

I've been working on this recently, and ever since I got a new office phone, it hasn't stopped ringing with offers for merchant accounts.

Here's what I've been finding out lately:

-Visa and MasterCard actually do want your business.  AMEX on the other hand thinks they are above everyone else, and prove it by zapping you with an average discount rate of over 3 percent (compared to Visa/MC at 1.59 percent) and a higher transaction fee.

-Normally, there's a ton of setup/application fees involved, but everyone I've been speaking to in the last few weeks is running some kind of promotion, waiving all setup/processing/application fees.

-The discount rates and transaction fees are cheaper if you're a retail merchant, or if you physically swipe the credit card to complete the transaction.  The figures I've been receiving are as much as 1.3 percent higher if 80% of your transactions are "keyed" - meaning you manually enter the cc number at your terminal, or have a website you use to process your orders.

-Transaction fees range from .20 to .35 per transaction, based on whether or not you're going to be considered a "retail" merchant (swiping cards.)

-Discount rates vary (and are going up effective 1 April), but are usually somewhere around 1.59 for Visa and MC.  AMEX is over 3 (I've seen 3.5 a lot recently) and Discover is about .10 higher than Visa/MC.

-"Smart Cards" are being issued starting this month, and unless you ahve a terminal capable of reading these new beauties, you'll have to spring for another machine if you're going to be a retail merchant.

-A statement fee of around $10 is the norm.  It's worth noting that the processing company sends you a 1099, and includes the statement fees every month, which (I'm told) is a write-off, along with the transaction & processing fees.

I'm signing up with a company called American Paywise (www.americanpaywise.com) and they seem to be on the up and up.  My monthly fees are going to be about $75 per month, which includes the statement fee of $10 and the equipment lease of $59.99 for a Telento T-1 (which allows you to print custom gift cards and other goodies right from the terminal - see http://www.americanpaywise.com/Products.asp)  The monthly minimum in transactions I need to do are $25 per month or I get stuck paying that on top of everything else per month.

If anyone else has any info, please spread the word...

-Kevin