Please recommend me a payment processing system

[jetway1212]

I'm helping a family member with his business. There are many payment processing systems to choose. So far from my search, Pivotal (sp? ) should be avoided

My bank use Chase. So they recommend it. What do i need to know about the payment processing? Please share any tips or info, we're very new at this.

[flafson]

Is it a physical business or online business? There are lots of different rates which depends alot on how you process the funds. Physical (swipe) is the cheapest of them all for instance.
Don't be quick to pull the trigger as 95% of the companies are not telling you everything and to know that you usually have to go through terms of conditions which are 10-30 pages long.
Many of the companies will offer you to lease to own a machine, i don't like that method because it usually means you are pinned down to them for the next 3+ years and if you want to switch companies, even though the machine will become yours, no one will accept it and they will want you to use their own machine. I prefer to rent the machine, will cost less per month and i'm always guaranteed to get a replacement if something happens.

I personally use a company called Elavon through a Costco deal. They are alright but the down side, they don't want to give me a better rate like some other companies on the market.
There is a person here on RDF named Josh (joshpereira85) who works for PayFirma.com (they are Canadian) and i spent alot of time checking up on him and they are by far the cheapest and fairest company that i have found (i obviously didn't check everyone)

Also another heads up for you, there are companies who advertise rates as low as 1.3% those are all bait tactics meant to lock you in a painful contract. Usually there are 3 tiers to different credit cards so what they would do is give you 1.3% (plus some hidden fees) and then for the next 2 tiers you will see your rate goes up to like 5% plus some other hidden fees. So stay away from those.

[Condoms4Canada]

I've worked with Moneris and SterlingCard for a while. Both are pretty okay - you have to push them to get your rates; but generally they are willing to match rates.

Check out practical ecommerce btw - there's a very good series of articles about interchange rates. It's written with the US in mind; but much of it carries over (though we aren't sadly as competitive).

I truly dislike Elavon - tried setting up with them and their VirtualMerchant system is bad for online sites. I talked to Payfirma - I couldn't even get a quote without 'meeting them inperson'. No e-mail quotes; which is very annoying. I might still check them out when my contract is over; but right now it's not worth the potential savings as I'd have to pay to get out of my current contract anyway.

Worth noting and making sure you read through on contract for details:
a) Monthly service fees. Those differ quite a bit from company to company; make sure you get this as low as possible.
b) Visa / MC minimum charge amounts - generally $20 if you don't hit a certain treshhold
c) Contract breakage fee. ALWAYS make sure it's a flat rate amount (generally 200-300 is decent). There are contracts that try to charge you based on 'lost fees'; which can easily add up to $700+
d) Look at joining your local Chamber of Commerce. They generally can get you really good deal on it (for a starting company) because of their pull.

[flafson]

I talked to Payfirma - I couldn't even get a quote without 'meeting them inperson'. No e-mail quotes; which is very annoying. I might still check them out when my contract is over; but right now it's not worth the potential savings as I'd have to pay to get out of my current contract anyway.

I had no problem getting all the information through Josh from PayFirma here and over the email.

[jetway1212]

Its a physical business.

What the worst can happen if i pick a wrong provider? I thought its just the fees.

[flafson]

Its a physical business.

What the worst can happen if i pick a wrong provider? I thought its just the fees.

The worst contract i've seen, locks you in to a 7 year agreement and if you want to break it will cost you 5-7k, likely to be per terminal.
Usually in most sane companies, it will be a $500 fee per terminal plus whatever you have left to pay on the terminal, so can easily be $2000.
I don't remember what Josh offered me but pretty sure he was taking the risk of me leaving on himself plus the fact that he allows to rent the terminal, makes it almost no brainer.

[jetway1212]

The worst contract i've seen, locks you in to a 7 year agreement and if you want to break it will cost you 5-7k, likely to be per terminal.
Usually in most sane companies, it will be a $500 fee per terminal plus whatever you have left to pay on the terminal, so can easily be $2000.
I don't remember what Josh offered me but pretty sure he was taking the risk of me leaving on himself plus the fact that he allows to rent the terminal, makes it almost no brainer.

I'm looking at Elavon's web site. Every quote is different right? hence they want us to contact them for more details.

What are CC's tiers? can you elaborate it? Also what are usually the hidden fees? can you give some example? I got a quote from Chase it seems very clear. However being new at this, i dont possibly know for sure.

[jetway1212]

Btw, payfirma's logo is very similar to Chase...

Are they reseller? if so who is their provider?

[joshpereira85]

Its a physical business.

What the worst can happen if i pick a wrong provider? I thought its just the fees.

the worst that i ever saw happen is that someone with Pivotal tried to break their contract and was charged a $75,000 cancellation fee. It was ridiculous. And yes were an ISO for Chase and First Data but we are allowed to charge whatever rates we want thats how we are able to beat Chases's rates 95% of the time

[joshpereira85]

http://www.payfirma.com/pricing/interchange_pricing/

Here is a breakdown of interchange + pricing from us versus the regular non-qualification pricing that most people will offer.
Interchange + pricing is recommended by almost every site out there that specializes in giving advice to different merchants

[Cristian_01]

the worst that i ever saw happen is that someone with Pivotal tried to break their contract and was charged a $75,000 cancellation fee. It was ridiculous. And yes were an ISO for Chase and First Data but we are allowed to charge whatever rates we want thats how we are able to beat Chases's rates 95% of the time

Hi Josh,
This is something I was never able to understand, maybe you can explain:

If your company has to use Chase for processing, where is the profit for Chase if you have lower rates than they do? (I do understand very well the "profit split" between banks and providers). Thanks,
Cristian.

[Cristian_01]

http://www.payfirma.com/pricing/interchange_pricing/
Here is a breakdown of interchange + pricing from us versus the regular non-qualification pricing that most people will offer.
Interchange + pricing is recommended by almost every site out there that specializes in giving advice to different merchants

We've been through this before:

For everyone considering this, here is MY OPINION ONLY:

Unless you know exactly what this Interchange plus is all about, and if the "plus" is not higher than 0.1% (not many will offer that - Josh posted that he did sometimes) with no assessment fees or anything else on top, stay away from it. You can get better deals out there, particularly when you deal with Mastercard.

If you are in the grocery or gasoline business, or if your volume is at 1/2 Billion or higher a year (in Visa and Mastercard), yeah, sure, go for it.
Cristian.

[joshpereira85]

Hi Josh,
This is something I was never able to understand, maybe you can explain:

If your company has to use Chase for processing, where is the profit for Chase if you have lower rates than they do? (I do understand very well the "profit split" between banks and providers). Thanks,
Cristian.

We have a cost thats associated with it. It is like any other provider out there, where they bank gives you a cost and then you are able to charge whatever you want
And interchange + is the easiest for the merchant to read by far i find. Any model can offer a lower price than interchange + and vice versa
as always depending on the volume of the merchant

[vaniernepean]

hi there, i did use 3 different company for interact machine, and want to share some with you, go to the bank td is good, and rent the machine, ask for the lower cost, so what you have to paid is rental machine and fee for each of transaction, and very much same as visa, no hidden fee, but before you sign the contract with them, ask them clearly about hidden fee they will tell you all, DON'T ever go to other, bacause they have atleast 3 or 4 defferent hidden fee after you sign up with them, and you will get to stay with them, or you have to pay for penalty, i am with point collective, they are very bad they have 2 hidden fee i have to paid for monthly right now,miimun 19.58/month and service fee 5.00 and same as first data, you better rent machine with bank ( i did it for 7 years) they are very good, if any thing wrong with the machine, they send a technition to help you out quick. if you have any question , don't be shy to ask. I hope this tip can help you

[stasbasko]

I would say Chase