4 ms·

1.75% is a huge discount.

by dminor 12y ago

thejosh 12y ago
It depends on your volume, i've seen a lot less with medium size volume.
rickyc091 12y ago
That on top of the next day money deposit is a real incentive.
- pmorici 12y ago
  That is pretty common among modern payment processors, Square, Stripe, Bitpay, etc...
  - cbhl 12y ago
    Considering that consumers have months to make a chargeback, this is a relatively new thing in the payments industry (last few years). I suspect it'll make the horror stories that much worse when a small business owner has already spent the money that someone wants refunded.
webXL 12y ago
Only if you sign up by November, and "1.75% per swipe until January 1, 2016". It's 2.5% after that. I guess you could switch back, but by that time Amazon could have already used your data against you. No such thing as a free lunch!
- dminor 12y ago
  I'm picturing the conversation like this: You: "The credit card fee is 1.75% until 2016, but Amazon can use your data against you." Coffee shop owner: "I can add .75% to my bottom line for a year?" You: "Yes, but Amazon can use your data against you." Coffee shop owner: "I sign up where now?"
  - notatoad 12y ago
    To be fair,amazon probably isn't going to be able to supplant coffee shops any time soon.
    - curun1r 12y ago
      For the fresh, barista-brewed cup, you're almost certainly correct. But what about the bag of beans that someone buys along with their coffee? The coffee mug? Hell, go into a Starbucks sometime and look at any item you can buy that you don't have to ask for from someone behind the counter...all of that is what Amazon does better and cheaper (though not friendlier) than any small business can compete with.
will_brown 12y ago
1.75% may be competitive and better than rates of some merchants receive; however, I had a negotiated rate of .4% for one of my businesses. One of the problems with the entire industry is misinformation, unlevel playing field (inability for your average merchant to negotiate the best rates), and the unscrupulous nature of the sales tactics of the merchant services themselves.
- pm90 12y ago
  If you don't mind, could you please share how you got such an amazing rate? Were you negotiating on behalf of a huge corporation? Had a lot of sales? Gave them other business?
  - will_brown 12y ago
    In the scheme of things it was probably a combination of many things. I am a lawyer; the account was for the law firm (not a large corporation); on the scale of things I would not say a lot of sales but the sale price per transaction was ~$150-$1500; I think above all being knowledgeable about the competition and the time/willingness to negotiate.
- btian 12y ago
  Do you know how the .4% gets split? I watched a Khan Academy video quite a while ago, https://www.youtube.com/watch?v=nRzTaWZ6ebs https://www.youtube.com/watch?v=nRzTaWZ6ebs and Sal says the interchange fees charged by banks is on the order of 2%.
- sliverstorm 12y ago
  Why should a small merchant get the best rate? Big clients get the best rates because they a) have more clout but also b) have orders more volume
bdcravens 12y ago
I have a friend who's about to start selling CC processing to local merchants at 1.29%. (His commission is 1/3 of that I think, so in theory the processor can go below 1%)
- notatoad 12y ago
  There's no way that is sustainable. The cards generally pay back upwards of 1% in points or cashback, so any processor that can offer rates under 1% is losing money somewhere.
  - btian 12y ago
    Fidelity Amex offers 2% cashback on everything, and CapitalOne Silver offers 1.5% back on everything. So I'll say that anything under 2% is unsustainable. But there's another guy who claims to have negotiated for 0.4% processing fee. I don't know how that is even remotely possible.
    - notatoad 12y ago
      high reward cards like that are pretty rare at most businesses - i've been told by people at the credit card companies that they assume rewards cost 1% average. and most gateways charge variable rate, so those high-reward cards are higher rate than the low-reward cards. 1.5% is a pretty normal base rate that any small-ish retailer should be able to negotiate for card-present transactions

1.75% is a huge discount.

by dminor 12y ago

1.75% is a huge discount.

thejosh 12y ago

It depends on your volume, i've seen a lot less with medium size volume.

rickyc091 12y ago

That on top of the next day money deposit is a real incentive.

pmorici 12y ago
That is pretty common among modern payment processors, Square, Stripe, Bitpay, etc...
- cbhl 12y ago
  Considering that consumers have months to make a chargeback, this is a relatively new thing in the payments industry (last few years). I suspect it'll make the horror stories that much worse when a small business owner has already spent the money that someone wants refunded.

webXL 12y ago

Only if you sign up by November, and "1.75% per swipe until January 1, 2016". It's 2.5% after that. I guess you could switch back, but by that time Amazon could have already used your data against you. No such thing as a free lunch!

dminor 12y ago
I'm picturing the conversation like this: You: "The credit card fee is 1.75% until 2016, but Amazon can use your data against you." Coffee shop owner: "I can add .75% to my bottom line for a year?" You: "Yes, but Amazon can use your data against you." Coffee shop owner: "I sign up where now?"
- notatoad 12y ago
  To be fair,amazon probably isn't going to be able to supplant coffee shops any time soon.
  - curun1r 12y ago
    For the fresh, barista-brewed cup, you're almost certainly correct. But what about the bag of beans that someone buys along with their coffee? The coffee mug? Hell, go into a Starbucks sometime and look at any item you can buy that you don't have to ask for from someone behind the counter...all of that is what Amazon does better and cheaper (though not friendlier) than any small business can compete with.

will_brown 12y ago

1.75% may be competitive and better than rates of some merchants receive; however, I had a negotiated rate of .4% for one of my businesses. One of the problems with the entire industry is misinformation, unlevel playing field (inability for your average merchant to negotiate the best rates), and the unscrupulous nature of the sales tactics of the merchant services themselves.

pm90 12y ago
If you don't mind, could you please share how you got such an amazing rate? Were you negotiating on behalf of a huge corporation? Had a lot of sales? Gave them other business?
- will_brown 12y ago
  In the scheme of things it was probably a combination of many things. I am a lawyer; the account was for the law firm (not a large corporation); on the scale of things I would not say a lot of sales but the sale price per transaction was ~$150-$1500; I think above all being knowledgeable about the competition and the time/willingness to negotiate.
btian 12y ago
Do you know how the .4% gets split? I watched a Khan Academy video quite a while ago, https://www.youtube.com/watch?v=nRzTaWZ6ebs https://www.youtube.com/watch?v=nRzTaWZ6ebs and Sal says the interchange fees charged by banks is on the order of 2%.
sliverstorm 12y ago
Why should a small merchant get the best rate? Big clients get the best rates because they a) have more clout but also b) have orders more volume

bdcravens 12y ago

I have a friend who's about to start selling CC processing to local merchants at 1.29%. (His commission is 1/3 of that I think, so in theory the processor can go below 1%)

notatoad 12y ago
There's no way that is sustainable. The cards generally pay back upwards of 1% in points or cashback, so any processor that can offer rates under 1% is losing money somewhere.
- btian 12y ago
  Fidelity Amex offers 2% cashback on everything, and CapitalOne Silver offers 1.5% back on everything. So I'll say that anything under 2% is unsustainable. But there's another guy who claims to have negotiated for 0.4% processing fee. I don't know how that is even remotely possible.
  - notatoad 12y ago
    high reward cards like that are pretty rare at most businesses - i've been told by people at the credit card companies that they assume rewards cost 1% average. and most gateways charge variable rate, so those high-reward cards are higher rate than the low-reward cards. 1.5% is a pretty normal base rate that any small-ish retailer should be able to negotiate for card-present transactions