Hi Jensen, We had this same issue at first. (But 10%!!!???) And it also turned out that our bank "owned" our data! Took over a year to get out from under them. We are now paying about 1.9% TOTAL for bankcard processing, and we're happy to recommend our service to anyone. Take all your costs of credit card processing (discount fee, interchange fee, bankcard fees, etc.) -- don't worry about breaking them apart. Look at the total gross that you processed through the credit card company, the total net into your pocket. Take the difference and divide by the gross. That's the true cost of credit card processing for you and the only important number.
There are a number of entities involved in this. Don't get suckered into believing that a company that does all of this for you is going to save you money. They all cost more. The entities in a credit card transaction are: 1) The online gateway. This will typically be Authorize.net or an expensive all-in-one like Stripe. (Authorize charges $10/mo. for this.) 2) Your credit card processor. This is the entity you may have the most contact with and the one that probably sold you the service. Or the one that gives you no service but charges you a lot anyway. They take a small, but significant, nick off every transaction. This is typically where the variability in your costs comes from. 3) The processor's bank. Yep, they're there, too. (But their fees may be hidden from you and show up in #2.) 4) The credit card vault. This holds securely all of your member credit cards. You may use Authorize, which charges another $10/mo. for this. With our management software (DeskWorks), we use Spreedly because they make it easy to draw on the card to go into different accounts, and we don't charge for the vault service (we pay for it). 5) Don't forget the credit card companies. If someone has a card with points or miles or other benefits, you're paying for it in a higher percentage. 6) Your bank. They may not take a visible percentage, but they're probably taking the "float". Meaning they hold your money for an extra day. When you add all of this up, you should be able to be under 2.5% total cost, dropping as you get bigger and have more track record with your processor. And you should have a processor that is always instantly available to you and helpful. Holler if you want the recommendation to the one we're using. Barbara On Tuesday, December 23, 2014 3:18:54 PM UTC, Jensen Yancey wrote: > > I don't know about everyone else, but since I've opened a coworking > office, one of the most mysterious and difficult-to-wrap-my-head-around > concepts has been why the hell am I getting charged so much for accepting > credit cards and where is it all going. In our scramble to get open in > time, we signed on with First Data, Wells Fargo recommended them so what > could go wrong? This month, we billed $1435 through first data, from that, > we were charged a $48.55 bankcard discount fee, a $23.87 Bankcard > interchange fee, and a 53.89 Bankcard Fee. First data is incredibly > unhelpful, but I've managed to figure out that the discount fee is just > what they charge us, the interchange fee is what the credit card charges > us, but what the hell is the Bankcard fee? Also, most beguilingly of all, > It's been slowly going down while our other two fees have been going up. > > I knew it would be a little pricy, but it seems absolutely insane that > we're paying nearly 10% of our revenue out to these companies. It's going > to cost us $500 to break the contract and I'm totally on board with doing > it, but is there a much better solution? > -- Visit this forum on the web at http://discuss.coworking.com --- You received this message because you are subscribed to the Google Groups "Coworking" group. To unsubscribe from this group and stop receiving emails from it, send an email to coworking+unsubscr...@googlegroups.com. For more options, visit https://groups.google.com/d/optout.
