The credit card networks are waiving fees for Haiti donations
Posted by: Curtis Stevens on January 19th, 2010

According to NY Times, many of the card networks are waiving the credit card processing fees associated with processing a card when making a donation for Haiti relief.  This would allow consumers to donate their funds knowing that almost 100% of their donation should be going to the intended party.  According to a report, banks make as much as $250 million a year on charitable donations, especially rising after a disaster.  The card networks have only waived their fees once before, after the tsunami in 04.  Visa stated that it would not apply Interchange fees through the month of February to a select group of charities.  The names are still being piled.  MasterCard said it would waive donations made to Red Cross, Unicef and a few others.  Amex would be waiving fees until the end of Feb.  Discover said it would also be waiving the fees, but did not disclose the details.  This is great for consumers as well as non charitable organizations.

What can poor customer service do to your business
Posted by: Curtis Stevens on January 18th, 2010

1205188352_2e0558e0b6If you didn’t know it already, I’m a stickler for good customer service.  I think most customers would say the same thing.  If after repeated attempts, you do not provide good service, they won’t come back.  Back in the day, if you were not happy with a business, you would tell a few of your friends.  Well, that was so 1999.  This is 2010 and the Internet has evolved into a word spreading machine.  With places like Twitter, Facebook and blogs, if a company doesn’t take care of their customers, that one bad apple could share their voice among thousands of potential customers.  This can also work in the merchant’s benefit too.  However, we all know too well what bad press can do.  It spreads like wild fire and good news moves like a turtle.  Unfortunately, the credit card processing business has too many companies that do not believe the same as I. There are plenty of great processors, but the ones with poor service should not be able to survive even though they do.

photo thanks to brainclots at

Bill Me later found itself some trouble.
Posted by: Curtis Stevens on January 15th, 2010

Does your business currently accept payments using the Bill Me later service in addition to credit card processinglogo-slogan payments.  Bill Me later is currently facing a law suit over the interest rate they charge for their service.  The suit was filed by a former customer of Bill Me later.   The suit is asking for 3 times the amount of interest Bill Me later charged the plaintiff and anyone else who joins.  They claimed the interest rates could be as large as 40 to 100% APR.  Since they are not a chartered bank, they are not regulated by the government.  While the service can be a very good selling tool for merchants, I think this law suit is frivolous.  People are suing companies for unjust reasons.  In my opinion, if you are not ok with the percentages that they will charge you, then do not use their service.  Simply do not buy the products if you do not have the cash and live your life within your means.  It sounds like this person was doing exactly that and instead of taking responsibility for their own choices, they decided to pass the blame onto the company and try to get some money out of it.  This ultimately then affects the rest of us as law suits are very expensive.

Cash or credit, many gas stations may be asking
Posted by: Curtis Stevens on January 15th, 2010

pump-300x240The NJ ledger reported the other day that a few local gas stations are starting to offer two tierd pricing for gas at the pumps.  Almost like how the credit card processing industry does its pricing.  One price for cash paying customers and another for credit card payments.  The gasoline industry has seen a steady incline in credit card payments usage.  Especially back when gas was topping $4 a gallon and this places a tight squeeze on the station’s profit margin.   The report stated that the pricing system is completely legal, but not an option for most gas station owners because they are not able to purchase the necessary equipment required to track everything.  The systems can cost up to $15K.  On a side note, it may be legal in terms of the law, but they may be in violation of V/MC rules.  Their rules state that a merchant can not surcharge a customer who is paying by credit cards.  The way the market has been getting around that for years is to have a cash discount from the regular advertised price.  But doing this is a very fine, tricky line that I recommend taking extreme caution with.

Image thanks to

Are you offering free shipping, part two
Posted by: Curtis Stevens on January 15th, 2010

Picture_9This is a second part to my free shipping post.   There are many shipping strategies one can use for their business.  One such example would be a fixed amount like $7.95 regardless of order size or amount.  This would however encourage large orders, but that is a good thing!  As I mentioned in my other post, offer free shipping with a minimum purchase amount.  There are a few benefits to offering free shipping, such as larger order sizes, item prices could increase and per-order cost may decrease.  Downsides are your profit margin for the heavier items may be too low and the additional profit may not justify the increased shipping expense.  You would need run some “what-if” scenarios using each pricing method and see which one works best for your business.  Click on the image to the left for a download excel sheet you may download to help you figure this out. tailors to merchants of all types including Internet, retail and wireless credit card machines. However, this really only pertains to Internet merchants running an ecommerce store.

Are you offering free shipping
Posted by: Curtis Stevens on January 15th, 2010

FreeShippingOffered In today’s market place more and more consumers are expecting Internet merchants to offer free shipping.  If you currently do not, isn’t it time you consider doing so?  A recent report by an analyst showed that free shipping remains an important factoring in normal online sales.   What I found interesting was that the average order amount was higher for merchants that offered free shipping.  When an Internet store offers free shipping for purchases over $75 for example, it encourages consumers to spend more to receive the incentive.  People like to receive free stuff.  This encourages them to continue shopping to see if there is anything else they may like to buy.  Merchants do have a cost by absorbing the shipping cost, but if it were to increase your average sale amount, that would very well pay for it.  Plus, the extra bonus is you landed a customer that could very well come back many more times in the future.  Look at Amazon, their profit margins are very slim, but they have a ton of repeat customers.  Having larger sales does increase your merchant account fees, but then that is also something you must expect too.

Pin-based debit used to be FREE
Posted by: Curtis Stevens on January 11th, 2010


NY Times released a very interesting article last week about pin-based debit transactions.  I have been in this business for years and even I learned a few things about the history of pin-debit.  Pin-debit is starting to become very big business, a big percentage of all electronic transactions.  With the whole economy down and consumers trying to avoid creating themselves more debt, more consumers are starting to use debit cards more frequently than ever before.  When debit cards first started gaining traction in the 1980′s, the small debit networks didn’t charge any fees to process the cards using a pin number.    Sometimes, merchants even received a small kick back as the banks saved money by not having to process a check.  That all changed when Visa entered into the market with their Visa debit card that could be signed for and still attached to their checking account.  This then made the banks money and become appealing to all of them.

As you can see in the chart, the fees for pin debit has been steadily climbing.  You will notice the huge spike in 2007 and that is because Visa’s network (Interlink) removed the cap that debit networks always had.  The cap was a set amount that all transaction costs would not exceed, such as 55 cents, regardless of transaction amount.  By looking at the price in the late 90′s, you can see that they do not have very much cost to process pin-debit transactions. The big reason is they are tied to a checking account, which only gets authorized based on available funds.  Whereas credit cards are attached to lines of credit and consumers can default on that.  Debit cards however isn’t debt, but the same thing as writing a check and ut 100% secure for the bank.  If you do not take advantage of pin-debit transactions, why not call your credit card processing to set that up?  If they cannot handle this for you, then give us a call.

Is it time to wean consumers off huge discounts in 2010
Posted by: Curtis Stevens on January 11th, 2010

This year may look very different for consumers in terms of big discounts.  Many large merchants are reporting that they plan on keeping their inventories low to cut operating costs.   It is different for each industry though.  For example, take the auto industry.  They are slowly seeing a 15% increase in auto sales.   The clothing store on the other hand, maybe one of the few markets that will still be heavily discounting to encourage consumers to keep shopping.  However, the discounts may not be as big as last year.  Deep discounts is a result of overstocking and big chain merchants should do a much better job this year controlling it.  The economy doesn’t seem to be dropping anymore, but it will definitely take time for consumers to feel confident enough to start spending big bucks again.  Business for us in the credit card processing industry took a big drop in December, but things seem to have picked back up after the new year.  This is the main reason for such a delay in posting a new topic.  We are seeing more merchants calling us that are interested in switching processors to save a little bit on their processing fees.

Is your store turning away customers
Posted by: Curtis Stevens on December 30th, 2009

Mike from describes his recent experience in a REI store located in California.  It is a warm 80 degrees on a December day.  He went there looking for some clothing and the first thing he noticed is it was warm in the store.  This definitely did not encourage him to try on any clothing.   I think most business owners would agree, nothing turns a shopper away faster than an uncomfortable experience.  Society as a whole is becoming more picky on what they expect and will tolerate.   It doesn’t matter if you or your employees are comfortable, but your customers.   How can this apply to your business?  I personally go to a local gym here in Denton and at times, it feels like they try to save money by not keeping the place at a cool temperature.  I would think most fitness people would agree, that is one of the most important things for a gym.  Another area that can cause inconveniences for your customers is the speed in which you handle your credit card processing. For example, the speed it takes to process a credit card transaction can be critical for a fast food restaurant. Not so much for a sit down eatery, but is for many types of businesses. Also, older credit card machines process transactions slower than newer units. Such as the Verifone 3200 machine is awfully slow compared to a newer units introduced in the last five years.

2009 holiday ecommerce sales are up 3%
Posted by: Curtis Stevens on December 21st, 2009

It looks like 2009 has been a good holiday sales season for Internet merchants.  From Nov 1 to Dec 11, online stores received a total of 19.9 billion in sales, compared to 19.2 last year.  That is a 3% increase over last year during this tough economy.   According to ComScore, last week was the Internets best opportunity to get the last minute shoppers and receive their finale sales for the holiday season before shoppers direct their focus onto retail stores.  We still have some ways to go.  Compared to 2007, Internet merchants have seen several billion less than just two years ago. A 3% increase is great news for the credit card processing industry as well. That means our merchants have processed more compared to last year, which should result in a slight increase in our processing profit as well. I hope this is a sign of a positive 2010.

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