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omgahya t1_ja8c883 wrote

Reply to comment by NoREEEEEEtilBrooklyn in Fu-Wah in West Philadelphia accepting credit cards after 40 years by PienotPi

Us smaller businesses get charged per card swipe. My shop is around the corner from them, and we’re charged about $3 per card transaction, so cash is always more welcomed. That’s a reason some places have a card minimum of $10-$15.

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DanHassler0 t1_ja8lhs3 wrote

If you're charged $3 per transaction then each transaction is about $100+. If so you could probably get better rates from someone else. Rates are no higher than 3%.

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blazinsmokey t1_ja8pbqf wrote

$3 per transaction? how big is the average transaction then?
you really should be thinking about fees as a percentage

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omgahya t1_ja9bhmu wrote

Average transactions are about $50. I’m not sure how much the actual fees are, the boss herself only mentions the fee as $3, as she deals with the billing side of the POS system.

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ronreadingpa t1_jacee4p wrote

That's extremely high. Could see that for a business deemed high risk (often based on its merchant category code) and/or with many chargebacks (customer disputes). 3%-4% average is more typical for many small businesses.

Assuming the $3 is right, the merchant acquirer (payment processor) is probably gouging her business. Sometimes it's not obvious either. It could be their base rate is competitive, but many of her transactions aren't qualifying for some reason and being charged more. Lots of reasons, including some types of cards, such as high rewards travel cards, Amex cards, etc.

Should shop around or, if sales are relatively low volume, use a pay-to-go option, such as Square, PayPal Here, etc. Most are around 3%. While not great, the hardware costs may be cheaper, especially if one can use their own devices, such as tablet, phone, etc. Many merchant acquirers bundle in the hardware cost into their monthly fee. Maybe that's where the excessively extra cost is coming from.

In short, she should shop around.

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