Setting up to take credit/debit cards (credit card, monthly fee, small business)

[teach1234]

Thanks for those who respond. I'm starting a small business (auto repair) and have no experience in accepting credit/debit cards. There are internet sites but I'd like some advice from experienced business owners. I can find card readers from @350 on ebay--is this the way to go? Any pitfalls/advantages to take into account?

[chet everett]

Talk to your local banker. Odds are that you can get as good a deal from someone local as through the ebay offers, as there are multiple layers of middle men involved for the online sellers of terminals and payment processors, while your local bank will be able to skip several of these layers and (theoretically) pass the savings on to you as a way to count on your continued business...

[sunsprit]

In addition to your local banking relationship for a CC processor, you may want to check out the "deals" available through auto repair industry trade group affiliations.

I got my best discount rate and monthly fee structure for years this way. Unfortunately, you really have to shop the available deals every year or two ... one year, it was the NFIB that had a promo connection, another year it was the auto tech certification folks, another year, it was my credit union. Don't hesitate to switch if there's a better deal from time to time ... it's your bottom line at stake.

[revelated]

Local bank is best bet for cost savings.

Online is best bet for clean setup (Authorize.net I recommend. There are resellers who can also give you free terminals.).

[teach1234]

I received a quote from a national bank (or the arm that does credit transactions)--a free terminal, 25$ a month, and 3 different % rates (I don't have them in front of me)--I think 1.5, 2.2 and 3.3% of the amount charged. Since my business will be initially small, I'm assuming I'll pay the 3.3% rate but this part isn't clear to me. Is this proposal in line with industry standard? Thanks for you comments

[sonarrat]

The rate you pay will depend on the card they use. Those are probably Visa, Mastercard and Discover in some order. The monthly fee is what you should be weighing against the cost of buying a complete setup, say from Quicken, which you won't have to pay a monthly fee for.

[chet everett]

Originally Posted by teach1234

I received a quote from a national bank (or the arm that does credit transactions)--a free terminal, 25$ a month, and 3 different % rates (I don't have them in front of me)--I think 1.5, 2.2 and 3.3% of the amount charged. Since my business will be initially small, I'm assuming I'll pay the 3.3% rate but this part isn't clear to me. Is this proposal in line with industry standard? Thanks for you comments

I think those rates AND the monthly fee are pretty standard. I think you can get a better deal from a place like Costco or Sam's Club, but of course you have to a) pay THEM an annual fee b) have one close buy to sign up. I suspect that the Costco setup also does require you to buy a terminal from them...
Elavon - Merchant Credit Card Processing

[pghquest]

Originally Posted by teach1234

Thanks for those who respond. I'm starting a small business (auto repair) and have no experience in accepting credit/debit cards. There are internet sites but I'd like some advice from experienced business owners. I can find card readers from @350 on ebay--is this the way to go? Any pitfalls/advantages to take into account?

You usally dont need to go out and buy a card reader, look around for a "merchant account" This gives you the ability to charge cards. Any POS system worth looking at will have a card swipe device.

Suggestions
1) Find the POS system that your planning to buy
2) Find a merchant account
3) Dont buy any excess equipment until you have completed step 1 and 2, otherwise its very likely you'll end up with hardward you cant use. Trust me, I know..

[pghquest]

Originally Posted by teach1234

I received a quote from a national bank (or the arm that does credit transactions)--a free terminal, 25$ a month, and 3 different % rates (I don't have them in front of me)--I think 1.5, 2.2 and 3.3% of the amount charged. Since my business will be initially small, I'm assuming I'll pay the 3.3% rate but this part isn't clear to me. Is this proposal in line with industry standard? Thanks for you comments

The different rates will depend on what type of payment your accepting, not the amount of business. Yes, as your business grows you'll qualify for bigger discounts but you'll have to go back and re-apply.

one rate for debit cards
one rate for credit cards like V/MC
3rd rate for probably American Express, Discover, electronic checks.. you'll have to check but thats where your different rates would come in..

[sinsativ]

What accounting software are you using? ie, quickbooks, peachtree, etc? Some of those will have recommendations, also let you know which ones are directly adaptable. If you have good relations with your commercial banker, I assume you have a commercial banker, talk with them, sometimes they can help. Another avenue is the Chamber of Commerce, or, the Association of Auto Mechanics in your area, be it City, county, or state, whichever the size warrants. Some of these can help you get a better rate due to their size. Since I don't know where you are located, it's hard to help recommend. Another thing to think about, in the beginning I have worked with several start-up businesses, and they have their mind in the right place, but, not their direction, by that I mean, do you have customers already lined up that will use credit and debit cards? If not, see what business, hopefully a bank or something like that, ATM is close by which might make it easy for someone to take their card to one of these and get the cash for you, then you can offer cash price only. The cost of these machines and the extra rates is sometimes detrimental to a good business and it's cashflow. You can believe youre making $50 on a transaction, and it turns out to be $30.
By the way, I'm an accountant that has set-up several small businesses, including an auto repair facility, so I know what youre in for.
Good luck.