Credit Cards

Well, It looks like after going on a decade we are going to join the modern age and start taking credit cards. I met yesterday with the representative from Heartland Payment Systems. I was very impressed with their rate structure, but even more so with the level of service.

They are contacting our POS supplier to do the intergration of Credit Card clearing with the POS and will install the system and install the internet connection over DSL.

Thanks to everyone who posted a few months ago when I had questions. I did not want to add the CC process during our busy season when we have enough going on but now we are in our slow time.

I am hoping to see the sales bump and keep our comp increases coming while I am seeking to sell the business.

If you run across any problems with Heartland integrating with your POS, RBS Lynk works with your POS company frequently. I’m very happy with their rate, and service has been wonderful. Scott who has posted here as RBSlynkman has contact info in the memberlist.

Welcome to the 1990’s!!!

Just remember that you absolutely must accept mastercharge and diner’s club. :slight_smile:

Diners Club? I am not sure I have ever even seen one.

T’was a joke about you being so far behind. MasterCHARGE was changed to MasterCARD back in the 80s I think.

If it’s not too late I would love the opportunity to compete for your business. Thanks Paul, for the recommendation!

Curious, what are your rates for M/C and Visa?

Mine are 1.7 percent for Visa and 1.5 M?C

Cost Plus 8 cents.

Sounds like you have Tier Pricing What is your per item charge? (above the %)

interesting, i thought all Credit Card Merchants were charged a percentage based on sales. Exactly how does cost plus 8 cents work?

per item charge is 3 cents per transaction which is a new fee imposed by Visa / M/C

Lynkman, how much volume do I need for cost + 8 cents? I was at cost + 19 cents with RBS and only recently got them to cost + 12 cents. +8 cents sounds much better to me!

The qualifications for CP 8 are

  1. Pay at the Counter
  2. Average ticket less than $20.00

This is our Quick Serve Restaurant pricing. 90% of my Pizza Restaurant customers fall under QSR.

If you are a “Sit Down/Pay at the Table” Restaurant then CP 12 is probably as low as it goes (depending upon volume). We do have some Merchants paying Cost Plus 4.5 Cents but their Annual Volume exceeds $10,000,000 with an average ticket of $30.

Basic Pricing Reasons are:

  1. Higher Volume / Low Average Ticket = Lower Risk = Lower Rates
  2. Low Volume / Higher Average Ticket = The necessity to charge more per transaction to realize a profit.

Suffice it to say Cost Plus is the Best Pricing Structure for Restaurants but, at the same time, the most difficult to understand. I’ll be happy to explain to anyone willing to listen.

Believe it or not------up to 85% of the Fees that a Merchant pays goes to the Card Issuing Bank and the Associations (VISA/MC) the remaining 15% goes to the Aquiring Bank and Processor/ISO.
The Ironic thing about this industry is, The Aquiring Processor assumes 100% of the RISK while only making a 15% profit.

Basic business principles apply The higher the Risk the More Profit that should be made.

so waht are the fixed costs for this service? and how about delivery orders?


Cost Plus is exactly what it sounds like:

Cost is the “Wholesale Rates”, aka Interchange and Assessments, that the Associations (VISA/MC) charge DEPENDING upon Card Type (Debit Card, Credit Card, Rewards Card and Corp Card to be simplistic) and how these Cards are presented (Swiped or Handkeyed) You can find Interchange Rate Disclosures at Both and (Between the 2 Associations there are over 300 Interchange categories)

Interchange is paid to the Card Issuing Bank and Assessments to the Associations.

Plus is simply the fee that we (Processors) charge to handle the money. This can either be in cents, Basis Points or a combination of both.

Cost plus is the best pricing because there are no “Markups” like there are in Tiered Pricing.

Fixed Cost would be the 8 cents per Transaction (Takeout or delivery or sit and eat)
20 cent Batch Fee
$0.00 Statement Fee

Having said all that, I see you are in Canada, so I would not be able to help you because we are not licensed in Canada yet.

We are pay at the counter, but the average CC ticket is about $26.00. We do about $36,000 monthly on cards right now. Is the average ticket level what’s giving me CP 12?

when you are be sure to let me know, perhaps you know anyone else in Canada offering these rate structure like yours?

Scott - question:

My CC sales per month are running about 24 - 25000 on 1400 - 1500 transactions … about 400 transactions totalling 10 - 12000 are unscanned (delivery sales). Approximately half of these are Visa/MC debit card sales. My question is, Am I getting hosed? Also, do I need DSL to integrate with my POS (Point of Success)? Nice as DSL would be, it really is not available to me at this time.

Cost plus is the best way to go. RBS thanks for your intrest. The rates I got are lower than what you are discussing here. My rate is cost plus 5 cents. The real value to me, however is that they have a person standing in my store to talk to me and will impliment the solution for me.

Wow, That’s GREAT!

Just one thing to watch out for:
Once you get your statements check for a Basis Point line item in addition to the nickel. Alot of the Heartland statements I look at have the Basis Point added charge. Not saying that you will, just an FYI to make sure you are paying what you expected.

Also, we have local presence Nationwide as well. I understand personal service.