It would be safe to estimate that a healthy 80%, maybe even 90% of BT daily sales are paid via credit or debit cards. It's a way of life for many of us. Kevin and I have several cards, each purportedly for a different use, all no-annual-fee, mostly rewards or cash back, plus two for business use. As a merchant, we accept all manner of cards as well - credit, debit, check, reward, gift - except from that Evil Amex. (Why don't very many local stores accept American Express? Probably because they charge higher fees than other companies, without much of a break for small businesses.) In order to do so, we have to sign on with a credit card processor who transfers the payment to our bank account for us, to put it very (very) simply. (and anyone who can explain this confusing maze better than this, please, please feel free to help me do so in a comment!) It is generally a three year contract, and not easy to get out of, if for some reason you become unhappy with your processor.
Our current credit card processor is First Data. We broke our contract with our original processor, Global, in an effort to reduce the fees we were paying for accepting credit cards. We haven't really seen much difference since we made the switch a year ago...but we are PCI compliant at least.
Last May the federal government passed the Credit Card Reform Act of 2009, which included many, many changes to aid and protect the credit card user, some just coming into play this month. It is very controversial, of course. This past May an amendment to the Financial Reform Bill was also passed, called the Durbin Amendment, named of course after it's sponsor, Senator Dick Durbin.
All of this is so very dry, why are we even talking about it? Mostly because the Durbin Amendment is an attempt to limit credit card swipe fees - yay! - and also allows merchants to set a minimum purchase limit for credit card users. I know many of us have seen that sign saying that there was a "$15 credit card minimum", or some such, but until now that was actually not allowed in a business agreement with Visa or Master Card. They wanted everything put on the credit card - don't forget they still charge the same percentage, no matter how low the charge. So sure, a store owner, especially a small, independent business, might set a minimum, but the customer could have protested and been in the right. Now the law sides with the merchant, who will be allowed to set a $10 minimum for credit card sales.
All of this is so very dry, why are we even talking about it? Mostly because the Durbin Amendment is an attempt to limit credit card swipe fees - yay! - and also allows merchants to set a minimum purchase limit for credit card users. I know many of us have seen that sign saying that there was a "$15 credit card minimum", or some such, but until now that was actually not allowed in a business agreement with Visa or Master Card. They wanted everything put on the credit card - don't forget they still charge the same percentage, no matter how low the charge. So sure, a store owner, especially a small, independent business, might set a minimum, but the customer could have protested and been in the right. Now the law sides with the merchant, who will be allowed to set a $10 minimum for credit card sales.
We pay as much as much as $2000 a month to First Data, depending on sales. It's a part of doing business, but we still try to keep it to the lowest limit. If a card doesn't get a read when we swipe it and we have to hand enter the number, they charge us a higher fee. That's why it might take longer, to run a card, because we are trying desperately to get the magnetic strip to read by covering it with a plastic bag and swiping it again and again. Business and Reward cards cost more to process. There are "non-qualifying sales" fees, access fees, settlement fees. Obviously, the fees we pay include those on the gratuity put on the card, which means we actually lose money when we pay out the charge tips. (I have heard of restaurants that back the processing fee out of their servers' charge tips before they pay them. Doesn't that seem wrong? I believe that is why some folks pay the tip in cash.) So it all adds up. Now, we would never consider not taking credit cards - the cost of processing them is of course built into the prices we charge for our food and drink - but the paperwork is massively confusing, impossible to navigate.
However, thanks to the Durbin Amendment, we can now offer a discount to our cash-paying customers! We have talked about doing this for years (decades?), but it has always been against the merchant agreement to do so. Just like that penny you get back when you bring your own bag to the grocery store, you could save some "sense" by using cash! And most of all, the customers who don't use credit cards would no longer be supplementing those who do.
All I have to do is figure out the rules and regulations laid out by the feds!
All I have to do is figure out the rules and regulations laid out by the feds!
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