Credit Card Processing

When searching for credit card processing, I found the following:

They mention a 6 cent “batch fee” and up 1.6% credit and 1.1% debit rates.

Also, on , which I would think is a trusted resource, they link to , which then links to

They are offering a 0% rate for the first four months, and then a rate of .36%. By referring two other businesses, you can lock in the 0% rate.

There must be a catch, otherwise you would all be using one of these companies, right? I see on something about a free ATM placement at the business. They require that you put an ATM at the pizzeria? Is that the catch?

If you are thinking about putting an ATM in your store check with your insurance company. I found that having an ATM would increase my premiums by 4 times. There would have to be at least 20 transactions a day just to pay for the extra insurance costs.

TMP, You are the most prolific questioner we have seen in some time. Your initial questions made it seem like you were a friend of a store owner or an employee: “I am trying to help a friend find a Point of Sale (POS) system” and “I am trying to help a friend, and I am worried what if changing the pricing, investing thousands into new equipment, and other upgrades goes wrong?” but since then all your comments refer to decision making in the first person and never refer to this “friend”. The things you are asking about no longer make sense in that context.

Don’t get me wrong, you ask good questions and are appreciative and polite… it just seems “off” to me. I don’t think any of us mind talking about all these topics. We do so at length regularly. Your questions seem to me more like a journalist working up a story back of the house operations or about the “Tank” or a PMQ staffer driving activity on the forum or something.

I do not mean to offend but my curiosity has gotten the better of me. You have zero information in your profile. Most of us (more active TTers) are reasonably open about basic information such as where we are located and what we do in the industry. Are you associated with a store? Where are you located? What is your role? This has been bugging me for a few days.

I am trying to help a friend. I am not the owner. I am not an employee either. I am interested in business and am trying to learn how to help them.

My friend has been running the business for many years, knows how to make good food, but seems to be falling behind due to competition and lack of keeping up with technology. For example, they don’t have a Point of Sale system, don’t do inventory, don’t have online ordering, aren’t trying to up sell, etc. They make good food, which is something I cannot do, but I have an interest in business and I am trying to learn as much as I can. I feel that if my friend and I work together we can really help out the pizzeria.

I’m located in New Jersey. I don’t work for the forum, although though that would be an enjoyable job. I’m really learning a lot from all of you.

In regards to the credit card processing, just a while ago I thought 2.75% was a good rate since I was seeing that online. Now I’m seeing much lower rates but I’m not sure if there is a catch.

Thank you for all of your help. If you have any more questions for me just let me know.

A lot of these credit card processing offers are misleading to most pizza operators. Many advertise cheap rates that I won’t qualify for due to keying in the bulk of my transactions as opposed to swiping the card. Of course they don’t come right out and tell me this, burried in pages and pages of tiny print is a tiered pricing disclaimer that fails to explain the different tiers. I have chosen to only use companies that offer me a “cost plus” pricing system. This is based on the costs that Visa/MC.AMEX/Discover charge the processor for each individual transaction plus a set amount for each order. My current negotiated rate is cost plus 6 cents per transaction. We don’t have a pin pad so therefore no “debit” transactions and 85% of our card transactions are keyed without AVS and our typical monthly rate is around 2.8%.

If I were in your shoes I would look at the pizza business as I do most everything else in life. If it seems to good to be true, it probably is. There are scammers all over the place and they love to target new, inexperienced businesses. Do yourself a favor and stick with tried and true companies until you get a better handle on the business, otherwise you’re likely to lose more than you are trying to save. In or related to the credit card industry some of the scams I have seen are credit card machine leases that have you paying thousands over time for a machine that you could have purchased for a couple hundred cash, misleading rates which leads to to change processors often paying a large early termination fee and the infamous paper scam that has nailed a lot of the Think Tankers where a company calls up to “verify” the machine you use so they can send you the right paper, then bills you hundreds for a few rolls of paper shipped out.

Thanks for the clarification TMP.

As Paul said, there are a ton of sketchy deals out there in CC processing. With delivery businesses, cards are typically keyed in when the customer is on the phone and are therefor “card not present” transactions. We also us a cost plus model (Heartland) and have had other companies quote against it numerous times. No-one has been able to beat it. With that said, average transactions are small and the card is not present most of the time. I would suggest budgeting for 3% card processing costs. If it comes in less than that just consider it a pleasant surprise.

Thank you both for your replies.

Do you suggest a flat percentage, such as 2.75%, or the cost plus 6 cents?

I’m thinking cost plus 6 cents per transaction is better overall as long as the order is a decent amount, on a small order it might not be worth it. I’m thinking that is why some places require a minimum order.

Thank you again for your help. I’m thinking a lot about Point of Success with Mercury as the payment processor. I hope they will give good rates.

Depends on your average ticket - if it’s say $5.00 then the 2.75% rate is better. Keep in mind that the quote you get will depend on your volume and average ticket. From the information you’ve given it sounds like this is a pretty small shop, so I wouldn’t expect to get anywhere near cost + 6 cents. As far as I know, Paul does A LOT of volume.

Also, AMEX will be 3.5% but if you process less than $5,000 per year you can use their flat fee plan of $7.95 per month.

I have never seen flat 2.75% that did not include some hidden costs like machine leasing, or up-charges for card no present etc etc. If I found it I would take it. My total costs are never that low.

Well, offer a 2.75% flat for CC processing.

Yup, as will mercury if you ask for flat rate.
Just beware of square with their lack of phone support, and trying to interface it with your POS
Been there, done that. I also exceeded their volume

I’m thinking Mercury at 2.75% might be best. Just a flat rate, where small transactions won’t end up being at a higher percentage.

I’m assuming for a small pizzeria 2.75% is going to be the best rate available through Mercury?

Do you have Mercury? How do you like them? Also, do you use Point of Success with Mercury?

Thank you all for your replies.

WHAAAAA!!! im with Mercury and I’m not paying any thing less that 3.1% plus they got me for like a 300 buck security charge this year. i will be calling them next week.

You may also try at because their processing charges are affordable both merchant and costumer.

Effective this past February, Instead of charging $275 for up to $21,000 in monthly transactions, the company is moving to a 2.75 percent swipe fee, or 3.5 percent plus $0.15 for each manually entered transaction. To compare, 2.75 percent of $21,000 is $577.50, which is $302.50 higher than the old monthly fee. If you can swipe all the transactions, then the only way to keep your fees with Square under that $275 number is to process no more than $10,000 in monthly transactions, which would put me over in about a week and a half. I need to reassess mine.

I have been very pleased with mercury, and it is already imbedded in Point of Success software, and they work seamlessly together.
There is room to negotiate rates with many CC processors, so see what you can do with some haggling.

All of those processing fee percentages that you guys mention are negotiable (To a certain point. Even Wal-Mart has processing fees). Basically your processor gets charged a set amount monthly from the CC company and then bumps that percentage up to cover their expenses/profit.

If you have a decent volume and a solid relationship with your processor then it could probably save you a big chunk of cash to just give them a ring and have the discussion with them about your pricing concerns. You will quickly learn how important you are to them.

If they won’t listen/negotiate I am sure you already have other CC processing companies coming into your business monthly pitching their product. Lot’s of options for Merchant CC processing options.

heard a few good things about heartland, I am going to shop rates soon.