Welcome to the Business Owner's Little Known Facts .
This site will be of value to seasoned merchants and to those who have asked the question, "Where can I get information about setting up my business to accept credit cards like VISA and MASTERCARD?"
You probably have already discovered the reality that by not accepting credit cards or debit cards your business is going to loose a lot of customers. Please read the article written by a friend of mine on debit card use in America . But first we will get into the nuts and bolts of Merchant Services.
You need to know that there is a merchant services cost sheet for Visa and MasterCard that is available. You also need to know how many "fingers are in the pie" or in other words how many hands get to spend your money when you accept charge cards.
Who pays for the rewards on the VISA Rewards Card or the MasterCard World Card? You need to know what to ask when approached by a salesperson wanting to set up your business with a terminal and processing. You need to know about leasing or free equipment or should you purchase equipment, early termination fees, and hidden charges. Educating you is my goal!
Let's start with an example of a merchant services cost sheet. If your sales representative or bank has not made you aware of this fact then why? Mmm... No comment.
So let's get right into who get's the money when a charge card or debit card is swiped. If the card swiped is a generic VISA or MasterCard, one that does not have rewards (i.e. air miles or free toasters included in membership) then look at the first line of the cost sheet that says: Visa: cps/retail (swiped) 1.5400%. (click cost sheet button top of page)
Let us use $100.00 as a sale example. The charge would be $1.54 on the $100.00 that you swiped through your terminal (machine). Look at the card just swiped. On the card is the name - for example (Capital One or Wachovia Bank, Bank of America or Wamu or Juniper) they issued the card to the card holder and get the $1.54.
Yes, there is a Visa / MasterCard Cost Sheet and it is FREE to you!
Of course the card issuer gets the 19% interest charged to the card holder too. You pay them and the card holder pays them too. Pretty good deal for the card issuer as long as the card holder does not go into default.
Now look at the bottom of the VISA column and see: add dues and assessments of 0.11 % . Out of a $100 sale VISA gets $ .11 cents (notice that MasterCard get slightly more). Doesn't seem like much but every day hundreds of millions of dollars are scanned through terminals around the world.
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