Are Credit Card Processing Fees a Blessing or a Curse?

– Hey, hey, Tampa Bay How are you on this beautiful Monday? It's 11:00 a

m so it's time for my live show I'm Denise O'Berry and I'm thrilled to have you here today, and if you're not in Tampa Bay, if you're in other places around the world, I love that, too So let me know where you're from if you're watching live Today's show is gonna be on an interesting topic

It's one that is a topic that comes up it seems like all the time in the business groups that I participate in, and it's really a point of contention for some business owners We're going to be talking about credit card fees Are they a blessing or a curse to your business? And that is accepting credit cards in your business for purchases There was, what started this off in one of my groups was someone who just was really really upset about what it was costing her for people to pay her to use her services She said that she'd paid thousands upon thousands of fees to credit card processors in order to do business with people and that she was thinking about imposing a surcharge on those people because some of the people that she does business with charge surcharges

Well, that's led to a bunch of different discussions I know that, number one upfront, surcharges are frowned upon by the credit card companies So, you need to be careful if you're gonna do that, and number two, surcharges are illegal in some states I know that last time I checked, they were illegal in my state, which is the state of Florida, but they're not very friendly fees either If I knew that I was gonna have to pay a surcharge in order to use a credit card at a company, I would probably go elsewhere unless they were the only company that I could do business with in order to get that certain thing that I was getting

One of the things that's really exciting in today's environment in addition to all the technology that we have at our fingertips is the fact that you can be a small business owner in the middle of nowhere Be it in the United States or some other country way out in the country somewhere with nobody close to you in your small bedroom running a business, and you can process transactions from somebody on the other side of the world because of the technology that's available To pay a small fee for that convenience, it just boggles my mind It's wonderful I think it's a wonderful thing that somebody on the other side of the world can purchase something from me, and all I have to do is pay a small fee for it

Most of the times, credit card fees run about 29% Now I'm talking about the most common processors that are online today and that's PayPal and Stripe So, if you have a regular merchant account, we'll talk about that in a minute, then it might cost you a little bit more, but it's so convenient I mean, think about it

What if you didn't have that option? What if the only way for somebody to pay you was to send you a check, and you were in the United States and somebody in Australia wanted to buy something from you? They'd have to mail you a check, or some kinda certified money order It would have to come all the way to you Probably take a week or two I don't know how long it takes these days, and then you'd have to wait for the funds to clear before you could provide them with what they purchased Good gracious

That would be a ridiculous way to run a business So I particularly think that paying credit card fees is a blessing Now granted, yes sometimes it makes you wanna choke at how much the fee is when it's coming off the top of what you're selling your product or service for, but it's worth it in the long run, and really what it comes down to, it's the cost of doing business, and I know some people get, you know, roll their eyes at that statement but it really is, and think about it this way If there was no PayPal or there was no Stripe, we'd all be at the mercy of the merchant processing companies, and I remember way way back at the beginning, not the beginning of the internet, but when online businesses started becoming popular in the early 2000s I'd say, and I got a merchant account then, because I wanted to sell things online and over the phone to my customers So the only way to get an account at that time was to go through somebody who sold merchant accounts

It was the salesperson that worked for a merchant processing company, and so what I did is I found somebody in one of my business networks, signed up with them, and it was a huge, elaborate process This person had to come to my home where my office was, take pictures of me, my computer, the things I was gonna sell, and then get me a merchant account I had to get approved through them, and then I had to get, that was for Visa and MasterCard, then I had to get separate approval from American Express, and American Express at the time was a little bit more than Visa or MasterCard as far as processing's concerned The fees that I paid then were much more than they are today Number one, I had the percent of sale like just like you do today, and I don't remember exactly what my percent was

I think it was somewhere around 3% or 4%, but in addition to that 3% or 4% per sale, I paid like a flat fee and I don't remember exactly what that was either but I believe it was like $2 dollars plus 3% for every single transaction, and then on a monthly basis I got charged a $10 dollar a month statement fee by the merchant processing company So those costs were a lot more than what you paid today via a PayPal or a Stripe in order to take credit card transactions and payment for your products and services So that's one of the reasons why I think it's such a blessing today, plus it's just, I mean, it just makes it so easy for you to go in business online, and anybody pretty much can be approved So it's pretty cool to be able to do that today, and it makes it available to anybody who can have a business online Now here's a couple of other things

There was a question that came up about well, governments charge us a convenient fee in order to pay our taxes Well, yeah they do, you know, and they were wondering why couldn't they charge a convenience fee Well number one Let's talk about the government for a minute The government doesn't make any money

The government only has money because they have our money We give them our money Some people give it to 'em with a little bit of nail biting, but we all give 'em our money The government runs on our money, and frankly I don't know about you, but I don't wanna have to pay every Tom, Dick, and Harry's credit card fees, because we're the ones who would be paying for that Not the government

Remember the government doesn't have any money unless you give it to them So, the government is allowed to levy a convenience fee when you wanna pay your taxes with a credit card, or buy your license plate with a credit card, or something like that and there are some exceptions from the credit card processors for businesses that can charge convenience fees, but you need to make sure and check with your credit card processor, Visa, MasterCard, American Express, and you also need to make sure and check that in your state it's a legal thing to do, if you're gonna consider that From a customer service prospective, I don't think it's customer friendly at all I really don't So I wouldn't go there

I would just, if you want to compensate for it a little bit, increase your prices a little bit Now increasing your prices is gonna increase your fees, but if you wanna feel better about bringing a little bit more money in the door, then that's an option for you to use Then there's a thing called surcharges There's companies that I heard of charging surcharges to people for using credit cards As a matter of fact I've seen it

Not in recent time but a few years ago there was a company that I was going to do business with I didn't do business with them That wanted to charge a surcharge for using my credit card And credit card companies really frown on that, and as a matter of fact they recommend that you report it to your state's department of consumer affairs, because it's not really kosher thing to do I would personally just stay out of the fray of charging any fees at all, and if you have any questions at all, just don't forget to put a note in the comments

Now, one of the things that started happening recently, and I totally love this is with QuickBooks I use QuickBooks for my accounting, and they have given me and many of their other customers the capability to use automatic bank transactions So if I send somebody an invoice, I can give them the option of paying by credit card or paying by ACH, so all they have to do is transfer money from their bank to mine And at least for now they're not charging any processing fees for that So if you have QuickBooks or if you work with an accounting system that has that same option, that would be a way around the fees

I think it's wonderful I know a couple of the companies that I do business with, my accountant and an online company that processes my leadership assessments, they actually use QuickBooks, too So, when they've been sending me their invoices, they give me the option to pay them via ACH, and hey, I'm all for that because if that money's gonna stay in their pocket, I'm very happy for that, because I'm sure that they're not paying processing fees for that ACH, automatic transaction either So really that's the skinny on what's going on for credit card fees Seriously, look at it like paying for web hosting, or paying for whatever app you use, or buying a template for your website

It is the cost of doing business and if you're paying thousands of dollars in credit card fees, that means your business is doing really well, so that's a good thing It's like paying taxes You know, the more money you make, the more taxes you have to make It's really, it's an exciting thing because you're making a lot of money I know it can just really choke you up

Trust me I do, but it's a good thing It means your business is healthy, and that's one thing that you should be very proud of So here's what I wanna say to you Use and consider credit cards to be the cost of doing business, and if you wanna get a little bit more in your business' bank account, raise your fees instead of looking into a whole big deal about levying some kind of convenience fee on your customers, because it truly is not customer friendly, and it may be against the laws in your state, and definitely a problem with the credit card companies So don't go that direction

Now if you have any questions at all about this information, please put it in the comments I did find a fairly recent article about this topic, and so what I'll do is I'll leave a link in the comments for you And please in the comments let me know, how do you feel about paying credit card processing fees? All opinions are welcomed, no matter how you feel about it, but I would love to hear about it Alright so, make sure you leave a comment, and make sure and like my page I go live every Monday at 11:00 a

m Eastern time, and I'd love to have you join me I love to have great discussions with those of you that are out there and around the world Thank you again for joining me today, and I will see you next Monday at 11:00 am

Have a good week