Merchant Services Options

Merchant Services are what the banks call credit card processing (and debit card processing, etc).

What we're looking for: as cheap as possible, good response in case of problems, a way to use our own swipers, an easy way to get out after a year (at most) if we want to, easy-to-read monthly statement

We are currently looking at two options:

TotalmerchantConcepts.com

This is the outfit that is hooked up with our new credit union.

From Eric at TotalMerchantConcepts dot com (see email to C7 on September 19, 2006).

For pricing, it varies based on how you process the credit cards.

1.55% + .22 (Swiped Check Cards)
1.75% + .22 (Swiped Credit Cards)
2.05% + .22 (Swiped Rewards Cards)
2.30% + .22 (Key Entered W/AVS transactions)
2.95% + .22 (Swiped Corporate or International Cards) or (Key Entered W/O AVS transactions)
$8 Monthly Statement Fee
$10 Monthly Minimum (Either this charge OR the percentages listed above) -- WAIVED
$29 Annual Fee (billed 6 months after you begin processing)
$49 Reprogramming Charge if you use your own equipment. (for all terminals)

Termination fee: none (as long as you give 30 days' notice)
Extra charges to accept American Exp. and Discover
3-year contract
Risk protection: There is no credit check required, and if something goes wrong, no FG individual has to take the fall: TMC will go to FG as an organization and tell us to figure things out - kind of more of a good-faith thing. In place of a co-signer with a credit check, we need to show them a year's worth of financials (profit and loss statement and a current balance sheet).
We will also need to show them our IRS determination letter, proving that we are a 501(c)(3).

Portland Merchant Services

This is a one person company in the neighborhood. He bills himself as a transparent credit card processing company.

He gave us a list of what Interchange charges him (and the other services we're considering), and says he add 10 cents and .35% to everything. This makes it easy to tell his exact rates for any given type of card we process.

He also gave us a sheet entitled 5 Questions Credit Card Don't Want You To Ask. He does strike us as honest. He's been in business for a long time, but in business for himself for only a short time.

Termination fee:$295
3-year contract (???)
Extra charges to accept American Express/Discover?
$49 setup and $5 monthly fee
Risk protection: individual must submit to a credit check. The co-signing individual would ultimately be responsible if anything went egregiously wrong.

Advantages: Close-by, in n'hood, so can come by and fix any problems easily.

Disadvantages: just one guy.

Innovative Merchant Solutions

This is an Intuit company (or one that was swallowed up by Intuit) that has visited us in the past.

Samantha Witter from Intuit-IMS stopped by. We talked some shop and this is what we came up with.

We can use our own Machines, no need to buy. While our average transaction stays under $25 our rate is:

Rate: 1.73%
Transaction Fee: $0.10
Monthly Fee: $7.50
Batch Fee: $0.25
Startup Fee: $12.50

This would be for accepting MasterCard and Visa only.

What we need for the application:

501(c)(3) form
articles of incorporation
Voided check

The person that signs the application should have good credit. The organization will be held responsible for any mishaps, not the signer.

We haven't heard from these people, as they've historically had bad follow-up. We'll drop them for now.

Some Assumptions

We've got no hard data, but the Thrift Store customers "seem" to want to pay in plastic, which means we'd see a drop in cash and probably an overall rise in sales income. Most of this would be likely be debit purchases, but some (especially purchases greater than maybe $50 might be credit card purchases).

At the Front Desk a number of people are sent to the ATM machine each day. Sophia guesses 20% of the folks would use plastic instantly, and that many of them would pay the suggested amount, rather than a lower amount they happen to have on hand. So Front Desk donations would also rise.

Assuming we have a $5 minimum charge we can guess what an average sale might be based on past sales. 5 out of the 21 months since January 2005 have average sales > $25 (if you exclude the < $5 sales.) For donations, this was number is 7 out of 21. This means that it's likely we'll have credit card sales (and/or donations) that exceed the $25 boundary put forth by Innovative Merchant Solutions.

Total sales totals range from $9,600 to $19,000 per month. Total donations (including monitor fees) range from $10,400 to $20,300. The mean would be about $13,000 (sales) and $16,000 (donations). We could guess that half of those would be credit or debit card sales.

The number of transactions we process range from 425 to 760 sales and 439 to 804 sales. Means are 632 (sales) and 581 (donations).

What Oui Thinks

We'll talk to Total Merchant, and if the cancellation policy is as easy as it seems, we want to go with them. They're a little bigger, seems more well-established, and if one worker from the company is hit by a meteorite, we most likely won't have to rethink our credit card agreement. We'd also like to not pay as much for termination (this is all new, and we might want to switch companies!).

Implementation Journal

We signed a contract with TMC, got phone lines wired up properly, etc.
The phone line in use for the two terminals is shared with the fax machine. If this turns out to be a problem we can get another phone line installed.
We tried using our two Eclipse Quartet's from Verifone. One of them failed (likely bad RAM). TMC took a couple of Tranz's (a 330 and a 380) to test and we should have all hardware sometime today. RfS 08:38, 2 November 2006 (PST)
Once installation is complete, Michael and I will learn the basics and start teaching others how to use the two systems. See Processing credit cards for instructions. RfS 08:38, 2 November 2006 (PST)