When someone offers you a Credit Card rate that appears too good to be true, it probably is. When it comes to Credit Card processing, make sure you are aware of EVERYTHING that you will be charged. There are many offers out there with a great rate, but that is the bait. There are dozens of other charge that might apply: transaction fees, statement fees, annual fees, POS WATS fees, ACH fees, set up charges, etc.
Something as small as a transaction fee can seem like not a big deal, but it might add another 0.05% to your rate. We have seen “rates” being offered as low as 1.5%, which we can admit is a great rate, but upon further examination, the additional fees double the effective rate. Nearly all “deals” have contracts that are very costly and difficult to exit.
Our members have been calling us more frequently with rate quotes that appear to be dirt cheap. This simple formula allows you to truly evaluate your cost to process credit cards. Don’t hesitate to call us if you have questions. Remember, if it sounds too good to be true, it probably is.
A = Discount Fee = Credit Card Sales x Rate
B = All Fees (include 1/12 of setup fee)
EFFECTIVE RATE =
(A + B) x 100 / Credit Card Sales
We have many members who call us “after the fact” to let us know they have signed a contract to lease “the latest-greatest” credit card equipment and are changing processors.
Our first thought is, “This is going to hurt…our member!”. Anytime our members call with what appear to be good deals, we instinctively ask questions.
It is not unusual to find our member has signed a four-year contract to lease equipment. Typically, we are seeing monthly charges of $45-$78. That is a pretty good deal, right?
$35 x 48 months = $2,160
$78 x 48 months = $3,744
Wrong. Our equipment prices are in a different ballpark, and guess what? No contract.
At the end of these leases, equipment is typically the merchants to keep, however, much of the equipment marked in this manner is not universally accepted by processors.
When coupled with a laser printer, shouldn’t a desktop program be a powerful tool? It might surprise you to find out that some have turned this combination into their own personal check counterfeiter. As a result, check counterfeiting has become an easy way for criminals to steal money.
Here is how it works. Criminals are scanning images of valid checks into their computers then changing the date, name of payee, the amount, and sometimes the check number. At that point they make dozens of copies on their magnetic ink desktop printers. These printers put the Magnetic Ink Character Recognition (MICR) lines on the checks. These counterfeit checks are so realistic that they can make it through the entire banking system and can even be drawn on the original bank account. This could impact the consumer as well as the retailer who took the check.
If that isn’t scary enough for you, just wait. At this point there is no clear method of prevention. Law enforcement and banking officials say this type of crime could cost the economy one billion dollars this year.
Watch your checkbook.
Is this the newest laser gun for blasting aliens? No, of course not. The Visa Electron is just another type of Credit Card. Actually, it is the fastest growing international card out there. Particularly, this card has gained favor in other parts of the world. Simply put, it is just a foreign Debit Card.
In 1998, the volume on this card increased by 57%. If that growth doesn’t catch your attention, maybe 71 million cardholders will. The neat thing about these cards is that they process just like regular Visa cards, so you do not need any additional services.
To get your Visa Electron decal, please call Visa toll free at, 1-800-VISA-311.