04-15-2004, 02:15 PM #1Newbie
- Join Date
- Apr 2004
Anyone heard of / use electronictransfer.com?
Searching around for Merchant accounts and ran across this site. Anyone heard of/use/have experience with them?
Their rates look pretty good - here is a section of their rate list.....
Approval Time............................ Hours
Transaction Fee.....................$.25 Swiped-$.29 Keyed
Discount Rate........................1.69% Swiped-2.18% Keyed
Secure Gateway....................$10.00 Monthly
04-15-2004, 06:14 PM #2Junior Guru Wannabe
- Join Date
- Feb 2001
That isn't all the fees involved with merchant services.
I take it that you must be retail then? I'm confused by what you said. You have retail rates, but are using an Internet gateway? That doesn't make sense. I have included some detailed information about every fee you will probably encounter with all providers. Some may not apply, but the surcharges will most differently apply!
Remember, it doesn't matter what the "sales person" tells you. What is in the contract is what stands. Providers reserve the right to increase your prices at any time. Visa & MC are always going up, so expect it, once or twice a year!
THIS IS IF YOU ARE RETAIL. MOTO/INTERNET - The information will be slightly different (like a monthly gateway fee, etc.).
When deciding on a particular solution for your business, make sure the startup price you are quoted is the complete cost involved. Be on the look out for any hidden application fees, setup fees, general startup fees, etc. It is a good idea to fully understand every fee (number) found on the application and read the fine print.
Qualified Discount Rate
The discount rate you see advertised is referred to as your qualified rate (e.g. 1.79%). For the transactions to go through the qualified rate, they must meet the criteria set by Visa & MasterCard. There are certain actions or inactions that will cause your transactions to downgrade to a more expensive rate. When this occurs, merchant providers pass the cost on by adding a surcharge called Mid-Qualified & Non-Qualified to your main discount rate. No matter how large or small the provider is, everyone has the exact same buy rates from Visa & MasterCard. Since this is an on going service, could these rates be trivial when it comes to the service you will receive as a merchant?
This surcharge applies to certain credit cards along with all keyed transactions. It is added to your main discount rate.
Example: Discount Rate is 1.79% and Mid-Qualified is 1%, then your rate on those particular transactions becomes 2.79% (1.79% + 1%).
This surcharge applies to certain types of credit card transactions, such as business and corporate cards. Other situations will also cause your transactions to automatically downgrade to this rate, such as you didn’t use AVS on keyed transactions or failed to batch out within 24 hours of processing a charge. Merchants can expect to receive anywhere from 10 to 50% of their transactions as downgrades
Example: Discount Rate is 1.79% and Non-Qualified is 1.60%, then your rate on those particular transactions becomes 3.39% (1.79% + 1.60%).
Many customers are mislead with this particular fee. If you receive any offer that is below 20 cents, it is advised you take extra precaution as it could be a trick. If so, check the application for any fees called "Interchange Fee", "AVS Fee", etc. Basically, any fee in the 5 to 10 cents range will most likely be a per transaction fee.
Address Verification Service (AVS) Fee
You must use this service on all keyed transactions or they will automatically downgrade to the non-qualified rate. The transactions will go through as the mid-qualified rate unless another factor forces it to downgrade, such as a corporate card. The standard rate for this service is 5 to 10 cents per transaction.
Batch Header Fee
Your transactions must be closed out at the end of the day or they will automatically downgrade to the non-qualified rate. This fee covers the expenses involved with your account accessing their 800 number network & closing the transactions. Batching out once a day is sufficient for most merchants. If you do not process anything for a particular day, then it will not apply.
Monthly Statement Fee
Most providers call their monthly fee a "statement fee". It helps cover the expenses involved for providing 24/7 customer service, risk management & loss prevention, underwriting, billing, fraudulent services, etc.
Monthly Debit Fee (Pin Based Debit)
Some providers charge a monthly fee to accept pin based debit cards. These are the debit cards you process through the debit network by utilizing a pin pad and allowing the customer to enter their four digit security code. Depending on your average ticket size, processing a debit card as a debit, can save yourself a great deal of money. There are numerous debit networks with rates all across the board. However, the most you will pay for any network is 45 cents (as low as 10 cents) plus any fee from your provider such as a transaction fee. You can also process a debit card through Visa & MasterCard as a “credit card”. This can be any debit card that has the Visa or MasterCard logo. Examples are the Visa Check Card and MasterCard Debit Card. Both of these cards can be processed as a pin based debit or signature based debit (credit card).
Monthly Minimum Fee
This will apply when the amount you are paying in discount fees does not add up to your monthly minimum. For example, your discount rate is 2% and you processed $1,000 for the month, then that is $20 in discount fees (0.02 X $1,000). If your monthly minimum is $25, then you will be charged the $5 difference.
Contractual Terms & Termination Fee
Having merchants locked into a long contract with a large termination fee has become a controversial standard in our industry. The general commitment is one to four years with a termination fee ranging from $150 to $600.
If you already have a terminal machine or purchased it elsewhere, your merchant provider may charge a re-programming fee. This is to cover the expenses involved with someone calling you over the phone and having your machine download the software from their 800 number (usually takes around 40 minutes).
Discover Account Activation Fee
Discover directly charges a one-time fee of $50 for the life of the account with no monthly fees.
Chargeback & Retrieval Fee
A chargeback and retrieval fee usually applies when a transaction has been disputed by the customer or their issuing bank
Voice Authorization Fee
Associated when an issuing bank sends a "Please Call” message to the merchant instead of an authorization number and the merchant must make a phone call.
Hope this helps.
04-17-2004, 12:17 AM #3Web Hosting Master
- Join Date
- Aug 2003
- Twin Cities Area
well, they have been around a long time
although im not sure why an internet merchant would want to go that way!if you haven't considered chapter 7 bankruptcy, maybe you should.
eliminate your debt, keep the property you want, most people qualify.
contrary to popular belief - no attorney is necessary!
04-17-2004, 01:01 AM #4The E-Commerce Answer Guy
- Join Date
- Aug 2003
- Chesapeake, VA
A few quick notes to add to Curtis' already very detailed and helpful post on fees to ask about on any merchant account... keep in mind that not all merchant processors charge all of the above fees.
For instance, there are some merchant providers that do NOT require a Monthly Minimum and which do NOT have a Cancellation Fee / Termination Fee.
For a smaller merchant, it is very helpful if you can avoid incurring a Monthly Minimum cost as this could save you up to $300/year.
For a larger merchant, the mon-minimum will probably not even apply in the first place.
The vast majority DO assess these various fees and it is standard for the industry but you'll want to ask any processor you interview to see what their policy is regarding that.
One other item of note... when you talk to various processors, make sure that they are quoting you the most recent rates effective -after- the April '04 cost increases from VISA/MC.
Some times you will find a Web site is outdated and not all processors will bring that to your attention so make sure to read the rates on your contract before signing up.
And last but not least... do your due diligence, see what other merchants have to say about each processor and make sure you get any special terms in writing.
Best of luck with your search for the right merchant processor for your needs!CDGcommerce.com - Trusted Merchant Account Solutions since 1998
Many thousands of successful, growing businesses benefit from our expertise every day. You can, too!
We help merchants to eliminate gateway costs, reduce & mitigate fraud and achieve streamlined PCI compliance.
Learn more today at http://www.cdgcommerce.com - we look forward to helping your business grow!
04-19-2004, 01:07 AM #5Junior Guru Wannabe
- Join Date
- Feb 2001
The monthly minimum could be a concern, but if you look at it this way, it should as you will have bigger problems. If you are wanting to start a real business and not a hobby, then the monthly minimum shouldn't come into play if you process at least $1,000 to $1,500 a month. If you do not plan on doing that much, then is it a business or hobby? Something you may want to consider, what level do you want to take your business to? Maybe the monthly minimum will give yourself motivation to bring in sales, sales, and sales!