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Staying Alive: Processing Credit Cards and Anger

April 10, 2013 by Leave a Comment
Staying Alive

The struggles of a business trying to survive.

I’d like to thank everyone who took time to comment on my posts on searching for credit card processing. Many of those comments shed additional light on aspects of the experience that I, for the sake of brevity and clarity, left out. As I hope I made clear, the world of card processing is extremely complex. Here are a few further thoughts, in no particular order:

Obviously, there is no one best solution for everyone. You will need to identify the size of your typical transaction and project a monthly charge volume in order to start the shopping process. My situation is unusual in that my transaction size is large and I never swipe cards. If I were running a restaurant or a store, I would have different needs. But I am sure that every merchant would benefit from a deal that has no fixed term and that you can get out of at minimum cost. Many providers are willing to waive term requirements and cancellation fees.

It also seems that leasing a terminal is a bad idea — it is much less expensive to buy one. Another warning that everyone should heed is to enter a personal identification number with debit card transactions. If you don’t, you will be charged very high interchange fees, instead of the low costs mandated by the Durbin Amendment.

My posts concentrated on the structure of the deal and short-changed discussion of pricing alternatives. Commenters were divided into two camps: those who favored interchange-plus pricing and those who liked a fixed fee, as offered by services like Square and Stripe. Nobody had anything good to say about tiered pricing (that link goes to an article that is informative but has a definite point of view). And there are still other pricing options out there. If you are looking for a short, authoritative look at all of the pricing alternatives, I wish you luck. The most comprehensive page I found was at Wikipedia. It offers concise definitions for the terms you might run across in your search but little guidance as to what might be the best choice. All of the other information I ran across was provided by someone who was trying to sell a particular type of transaction and should be understood in that context.

That said, I was intrigued with the service offered by CardFellow. This site allows you to submit information about your business and get offers from various processors. I tried it out and was quickly contacted by a company that promised me interchange plus .1 percent, a very attractive rate, along with a no-term contract and waiver of all cancellation fees. That seems to be about as low a price as anyone will offer. The accompanying agreement that I reviewed had all of the usual unfair provisions — the acquiring bank can levy a reserve account and change the deal any time it wishes. I have not seen an agreement that omitted all of this, but perhaps someone, somewhere, is offering one (let us know!). What I liked about CardFellow was the opportunity to get a variety of quotes and the site’s well written blog (not unbiased, but informative).

If you are looking for a single place to see reviews of various merchant service providers, take a look at Merchant Maverick. I came across this site while searching for information on CardFellow, and I read a few reviews. I liked the format. I have no idea whether it is doing a good job, but at least it offers a point of view. It didn’t offer reviews of PNC or Emerald World, but it did review Wells Fargo and WorldPay, both of which I have dealt with — and those reviews seemed to comport with my limited experiences. Merchant Maverick also has reviews of point-of-sale systems and shopping-cart providers — something for everybody!

Nobody had much to say about American Express. It seems as if we are all stuck with the company’s high fees and slow payment. Last year, about a third of my card transactions were American Express transactions, and I paid a little less than 4 percent in fees. I should probably stop accepting American Express — it is of no benefit to me, as a merchant. I would bet that most of the people who offer us an American Express card also have a regular credit card and that refusing it wouldn’t cost me sales.

One point that did not come up in comments but that I thought about a lot during this ordeal was whether worrying about credit card fees was a good use of my time. Here’s the sad math: even if I cut my card processing costs in half, my savings would be 2 percent of $400,000. The $8,000 savings is not insignificant, but there are many issues I could have spent time on that might have yielded similar or greater savings.

The more I learned about the credit card industry, the angrier I got, but rage is not a great reason to burn a lot of hours on a project. My free time is precious. I always have a list of things I can do to improve profitability. For example, I could have been working on my pricing spreadsheets to make our quotes more accurate. Or I could have dug deeply into our labor costs, or spent time on the shop floor making sure our procedures are as efficient as possible.

Credit card costs are on that list, but a rational analysis probably wouldn’t place them at the top. There is much more money to be saved elsewhere. Of course, the service providers know this, and the market is clearly structured on the assumption that this is true for the vast majority of small businesses — it takes a huge amount of time to figure out what is going on, and at a certain point, most merchants will give up and accept the deal that is being offered, just to get it over with. That’s what I did – after all of the time I spent with Wells Fargo and Citizens, I decided to just pull the trigger on Emerald World. It was a much better deal than I had at the time with PNC, so I went ahead with it. Now that commenters have exposed more options for my consideration, I may or may not revisit the issue. I’ll work with Emerald World for a while and see what happens.

I hope that the hours I spent on this project are of use to you. If anyone has anything further to add, please comment.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

Article source: http://boss.blogs.nytimes.com/2013/04/09/processing-credit-cards-and-anger/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: Processing Credit Cards and Anger

April 9, 2013 by Leave a Comment
Staying Alive

The struggles of a business trying to survive.

I’d like to thank everyone who took time to comment on my posts on searching for credit card processing. Many of those comments shed additional light on aspects of the experience that I, for the sake of brevity and clarity, left out. As I hope I made clear, the world of card processing is extremely complex. Here are a few further thoughts, in no particular order:

Obviously, there is no one best solution for everyone. You will need to identify the size of your typical transaction and project a monthly charge volume in order to start the shopping process. My situation is unusual in that my transaction size is large and I never swipe cards. If I were running a restaurant or a store, I would have different needs. But I am sure that every merchant would benefit from a deal that has no fixed term and that you can get out of at minimum cost. Many providers are willing to waive term requirements and cancellation fees.

It also seems that leasing a terminal is a bad idea — it is much less expensive to buy one. Another warning that everyone should heed is to enter a personal identification number with debit card transactions. If you don’t, you will be charged very high interchange fees, instead of the low costs mandated by the Durbin Amendment.

My posts concentrated on the structure of the deal and short-changed discussion of pricing alternatives. Commenters were divided into two camps: those who favored interchange-plus pricing and those who liked a fixed fee, as offered by services like Square and Stripe. Nobody had anything good to say about tiered pricing (that link goes to an article that is informative but has a definite point of view). And there are still other pricing options out there. If you are looking for a short, authoritative look at all of the pricing alternatives, I wish you luck. The most comprehensive page I found was at Wikipedia. It offers concise definitions for the terms you might run across in your search but little guidance as to what might be the best choice. All of the other information I ran across was provided by someone who was trying to sell a particular type of transaction and should be understood in that context.

That said, I was intrigued with the service offered by CardFellow. This site allows you to submit information about your business and get offers from various processors. I tried it out and was quickly contacted by a company that promised me interchange plus .1 percent, a very attractive rate, along with a no-term contract and waiver of all cancellation fees. That seems to be about as low a price as anyone will offer. The accompanying agreement that I reviewed had all of the usual unfair provisions — the acquiring bank can levy a reserve account and change the deal any time it wishes. I have not seen an agreement that omitted all of this, but perhaps someone, somewhere, is offering one (let us know!). What I liked about CardFellow was the opportunity to get a variety of quotes and the site’s well written blog (not unbiased, but informative).

If you are looking for a single place to see reviews of various merchant service providers, take a look at Merchant Maverick. I came across this site while searching for information on CardFellow, and I read a few reviews. I liked the format. I have no idea whether it is doing a good job, but at least it offers a point of view. It didn’t offer reviews of PNC or Emerald World, but it did review Wells Fargo and WorldPay, both of which I have dealt with — and those reviews seemed to comport with my limited experiences. Merchant Maverick also has reviews of point-of-sale systems and shopping-cart providers — something for everybody!

Nobody had much to say about American Express. It seems as if we are all stuck with the company’s high fees and slow payment. Last year, about a third of my card transactions were American Express transactions, and I paid a little less than 4 percent in fees. I should probably stop accepting American Express — it is of no benefit to me, as a merchant. I would bet that most of the people who offer us an American Express card also have a regular credit card and that refusing it wouldn’t cost me sales.

One point that did not come up in comments but that I thought about a lot during this ordeal was whether worrying about credit card fees was a good use of my time. Here’s the sad math: even if I cut my card processing costs in half, my savings would be 2 percent of $400,000. The $8,000 savings is not insignificant, but there are many issues I could have spent time on that might have yielded similar or greater savings.

The more I learned about the credit card industry, the angrier I got, but rage is not a great reason to burn a lot of hours on a project. My free time is precious. I always have a list of things I can do to improve profitability. For example, I could have been working on my pricing spreadsheets to make our quotes more accurate. Or I could have dug deeply into our labor costs, or spent time on the shop floor making sure our procedures are as efficient as possible.

Credit card costs are on that list, but a rational analysis probably wouldn’t place them at the top. There is much more money to be saved elsewhere. Of course, the service providers know this, and the market is clearly structured on the assumption that this is true for the vast majority of small businesses — it takes a huge amount of time to figure out what is going on, and at a certain point, most merchants will give up and accept the deal that is being offered, just to get it over with. That’s what I did – after all of the time I spent with Wells Fargo and Citizens, I decided to just pull the trigger on Emerald World. It was a much better deal than I had at the time with PNC, so I went ahead with it. Now that commenters have exposed more options for my consideration, I may or may not revisit the issue. I’ll work with Emerald World for a while and see what happens.

I hope that the hours I spent on this project are of use to you. If anyone has anything further to add, please comment.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

Article source: http://boss.blogs.nytimes.com/2013/04/09/processing-credit-cards-and-anger/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Jane Goodall Admits Borrowing Passages for New Book

March 20, 2013 by Leave a Comment

The Washington Post reported the borrowed passages on its Web site on Tuesday, saying that the expert it asked to review Ms. Goodall’s book had noticed the problem and informed the editors.

The book, “Seeds of Hope: Wisdom and Wonder From the World of Plants,” is not about chimps but about plants and their impact on human lives, an area outside Ms. Goodall’s area of expertise. It was written with a co-author, Gail Hudson, who has worked with Ms. Goodall on two previous books.

Ms. Goodall acknowledged the duplication and apologized. “This was a long and well-researched book,” Ms. Goodall told The Post in an e-mail, “and I am distressed to discover that some of the excellent and valuable sources were not properly cited, and I want to express my sincere apologies.”

The Post said the book’s publisher, Grand Central, said it was surprised to hear of the unattributed passages and that it had not yet decided on a course of action, ‘’beyond crediting the sources in subsequent releases.”

The Post article reports that the borrowed passages in the book are not from Ms. Goodall’s narrative but come when she adds scientific detail behind her personal tales.

The Post cited the example of a discussion of the 18th-century Philadelphia botanist John Bartram. Ms. Goodall wrote: “’Bartram’s Boxes,’ as they came to be known, were regularly sent to Peter Collinson for distribution to a wide list of European clients.”

An entry on Wikipedia reads: “Bartram’s Boxes as they they became known, were regularly sent to Peter Collinson every fall for distribution in England to a wide list of clients.”

Ms. Goodall told The Post that she would discuss the issue on her Jane Goodall Institute Web site blog.

Article source: http://www.nytimes.com/2013/03/20/business/media/jane-goodall-admits-borrowing-passages-for-new-book.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Bits Blog: Wikipedia to Go Dark on Wednesday to Protest Bills on Web Piracy

January 17, 2012 by Leave a Comment

The wave of online protests against two Congressional bills that aim to curtail copyright violations on the Internet is gathering momentum.

Wikipedia is the latest Web site to decide to shut on Wednesday in protest against the two Congressional bills, the Stop Online Piracy Act, often called SOPA, and the Protect IP Act, which is often called PIPA. The bills have attracted fierce opposition from many corners of the technology industry. Opponents say several of the provisions in the legislation, including those that may force search engines and Internet service providers to block access to Web sites that offer or link to copyrighted material, would stifle innovation, enable censorship and tamper with the livelihood of businesses on the Internet.

Nearly 800 members of Wikipedia have been debating and voting  whether the site should participate in a blackout since December.

Jimmy Wales, co-founder of Wikipedia, confirmed the site’s decision on Monday on Twitter, writing: “Student warning! Do your homework early. Wikipedia protesting bad law on Wednesday!”

In a phone interview late Monday, Mr. Wales said that the Wikipedia community hoped to send a clear message to lawmakers and regulators in Washington that people who worked on the Internet and used it daily were not happy about the potential effects of the bills.

“What will make a difference is for ordinary people to pick up the phone and send an e-mail or a letter to their representatives about this,” he said. “When you consider the magnitude of how many people use Wikipedia globally, there is a potential here for really creating some noise and getting some attention in the U.S.”

Mr. Wales said that if passed, the bills could censor what information and links that sites like Wikipedia would be permitted to publish.

“The government could tell us that we could write an entry about the history of the Pirate Bay but not allow us to link to it,” he said, referring to the popular file-sharing site. “That’s a First Amendment issue.”

Wikipedia will go dark at midnight Eastern time on Tuesday and remain unavailable until midnight Eastern time on Wednesday. Visitors who try to reach the Wikipedia home page will be greeted with information about the bills and details about how to reach their local representatives. Mr. Wales said 460 million people around the world visited the site each month, and he estimated that the blackout could reach as many as 100 million people. Right now, the blackout is planned only for American visitors to the Web site. The Wikipedia community is still deciding whether or not to limit access internationally to the English-version of the site, he said. Some international Wikipedia communities, including the one in Germany, have decided to post notices on their home pages leading to information about the protests, although they will remain functioning as usual.

Mr. Wales said the decision to take the site down was an unprecedented move by Wikipedia. In October, the Italian version of Wikipedia staged a similar online protest in response to a similar bill proposed by the Italian Parliament, but the scale of Wednesday’s demonstration would be significantly broader, he said.

Wikipedia’s protest will join several other Web sites, including Reddit, the social news site, and BoingBoing, a technology and culture blog, that also plan to black out their sites on Wednesday. Some sites that are not planning to go offline are still finding ways to participate in the protest. For example, WordPress, a blogging platform, is supplying its users with a widget that will add a banner to their Web sites and blogs showing support for the protest.

It is not yet clear whether any of the biggest Internet companies, like Facebook or Google, will also participate. Dick Costolo, chief executive at Twitter, responding to inquiries on Twitter, suggested that although the company had been among those in the industry to oppose elements of the bill, it would not  follow in Wikipedia’s footsteps.

The groundswell of technology leaders, venture capitalists, entrepreneurs and public policy advocates galvanizing around a central political issue is unique to the technology industry, which has largely been inactive in lobbying and activities in Washington.

But that is changing, Mr. Wales said.

“What we’ve seen across the world, with the Arab Spring, is that people are now more aware of the tools that are available for people to make a big noise and make their voices heard,” he said. “Ten years ago, the Internet was quite big and didn’t have the infrastructure for the public to express their voice in this way, and that’s fundamentally changing.”

Article source: http://feeds.nytimes.com/click.phdo?i=1699fae27b0f58a99b7a8ee3d7039aff

Filed Under: Business News Tagged With: , ,