After having taken care of the credit card processing system for the Covered Call Pro site, a web site that operates on a card-not-present scenario, I figured the discount fees that I would get as a quick service restaurant would be lower. It turns out that on a percentage of sale basis, it's higher than I thought it would be.
I met with a rep from SunTrust Merchant Services last week to discuss what they offer and it seems that we'll be facing somewhere between 2.75% and 3.0% discount for Visa and Mastercard without a per-transaction fee. This would be using their new QSR plan that doesn't require a signature for sales under $20. The whole idea of a per-transaction fee that is somewhere in the $0.20 - $0.30 range is ridiculous. Assuming a 3% discount rate, for an average sale of $5.00, I would have to pay $0.15 ($5 * 0.03) plus the transaction fee of $0.25 for a total of $0.40 or 8% of my sale price! That may not seem like a lot, but it's higher than most franchises require as their royalty!
It also bugs me that the rate is flexible. Why does it matter to the credit card companies what the average sale is? If my tickets ended up being closer to $20 or $40 or even $100, what difference would it make on the processing side? I'll be shopping these services around before settling on a processor.
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