Looking for group airfare deal for 12. Anyone have a good contact?

Toyota’s 2D barcode, ToyoTag, hits big vs QRC codes Target Marketing http://t.co/Xpzv6Q3a

What’s the impact of SaaS and Clouds for IT? http://t.co/zz4JZ5Y3

Merchant fights back about PCI and fines- broad implications http://t.co/kgUpywlU

What are the total costs of using Paypal to accept payments vs a regular merchant account and with another gateway, such CenPOS? Paypal is just another bundled pricing plan which always costs more. ( I still recommend Paypal for small businesses as an easy way to get started accepting credit cards if in a card not present environment. ) All credit card processing fees are subject to interchange rates, but in the case of Paypal, merchants see only one rate. Paypal has calculated an average cost of all interchange fees that will be incurred and then added a profit margin on top to come up with their simplified merchant rate structure. It’s easy for merchants to understand, but it’s not the least cost.

On the surface, it looks pretty straightforward. Just check your business volume and then see which rate you’ll fall under.

$.30 per transaction is particularly hefty if you have a low average transaction, such an online donations.

Here’s 5 Ways a Regular Merchant Accounts cost less, particularly for mid to large businesses, or those processing at least $1 million annually.

1. Fee refunds: With Paypal, the Fixed Fee portion of the Transaction Fee will be deducted from your Account at the time of the refund, in addition to the full payment amount that is refunded to the buyer. With the pricing above, the refund is $.30.  You don’t get back the 2.4% fee. For a regular merchant account, the merchant can have interchange fees refunded ( though not all merchant accounts are set up that way).
2. Debit: As a percentage, Regulated debit is now .05%. Unless you’re strictly B2B, you’re average effective rate will be significantly lower with a regular merchant account, since as much as 30% of  your transactions are likely to qualify for this rate. You’ll never exactly what your costs would be to compare outside of Paypal because there is no breakdown of what types of cards your customers presented for payment.
3. Cross Border or Foreign Card Fees: Paypal charges a 1% surcharge for cards issued outside the US, but the most credit card processors will simply pass through the actual fees which ranges from .40% to .55% depending a the card.
4. Paypal nets fees daily vs monthly. This represents lost opportunity for working capital.
5. Paypal Recurring Billing Monthly Fee: $29.95. This is a free service with many other solutions.

See more Paypal blog articles, such as When should I convert from Paypal to a merchant account?

This is Part 1. At a later date I’ll compare the gateway fees and benefits for Payflow Pro.

The Guy That Created SAP’s Hottest Product Ever Thinks It Will Squash Oracle Like A Bug http://t.co/DUmyd9yv via @bi_enterprise

One of my old web clients in TX is looking for a full time web developer. They have great products, and great people. …http://t.co/msnGFK7F

I previously addressed salon solutions with multimerchant terminals. Is that still the best choice today? Let’s explore the pros and cons of various merchant account options for the salon environment, where most workers are independent contractors renting a chair or a ‘booth’.

Under new IRS reporting requirements, credit card receipts are now reported to the IRS by the credit card processor on schedule 1099k. * This indicates gross proceeds so your tax returns will need to match accordingly or it will result in an audit. This can also result in fines from the IRS over whether the other stylists are employees of the salon or independent contractors. Separate merchant accounts may help prove there are no employee relationships.

Credit card processing options:

1. Single terminal, one merchant account:

• PRO: Contractors can easily be commissioned on product sales since everything is tracked
• PRO: Salon owner always gets their rent on time since disbursements are net
• CON: software is typically required to track sales to an contractor
• CON: Contractors must wait to get paid
• CON: Contractor may not have transparent reports, thus leads to discontent and higher turnover.
• CON: See IRS reporting requirements

2. Single terminal, one merchant account, with CenPOS:

• PRO: Easily track sales by contractor; optionally assign sales to type, including service, product, tip
• PRO: Automatically qualifies transactions for lowest cost, reducing processing fees
• PRO: Add/remove users and contractors on demand
• PRO: contractors can see their sales and estimated proceeds remotely any time
• PRO: 7 years records stored
• PRO: ensures the operation PCI Compliant
• CON: See IRS reporting requirements
• CON: Contractors must wait to get paid

3. Contractors bring their own terminal:

• PRO: Contractors get their money sooner- may reduce churn.
• PRO: Simplified bookkeeping
• CON: How many phone lines will be needed?
• CON: Potential rent collection issues
• CON: Contractors not likely to push high profit product sales without commissions, which cannot be integrated. Customers will have 2 charges if they want to buy products.
• CON: If a contractor has a terminal that is not PCI Compliant, or there is a data breach, can the owner be held liable?
• CON: Space – a wall of terminals takes up space you may not have

4. Multi-merchant Terminal:

• PRO: A multimerchant terminal eliminates need for contractors to invest in hardware.
• PRO: Contractors get their money sooner- may reduce churn.
• PRO: Simplified bookkeeping
• PRO: Owner is in control of hardware PCI Compliance
• CON: How many phone lines will be needed?
• CON: Potential rent collection issues
• CON: Everytime a contractor leaves or comes on board, new programming has to be downloaded
• CON: the terminals start at $499 and new regulations may require future replacement to support NFC

5. CenPOS with multi-merchant:  (signature capture terminal or card reader plus a receipt printer.

• PRO: eliminates need for contractors to invest in hardware.
• PRO: It’s host based so owners and contractors never have to download terminal updates.
• PRO: Contractors get their money sooner- may reduce churn.
• PRO: Simplified bookkeeping;
• PRO: PCI DSS (data security) Compliance for all contractors mitigates risks
• PRO: Mitigate risk of IRS issues
• CON: Unless their next salon has CenPOS, the contractor will have to either buy equipment or sign up for a CenPOS account, an additional monthly fee to bear.
• CON: Each contractor will have a login. Reception can login all users at the start of day, but to switch between accounts, the password will need to be re-entered.

BEAUTY SALON MERCHANT RECOMMENDATION:

The salon must take into account several factors including turnover and overall sales volume to make the best choice. My recommendation is #5, CenPOS with multi-merchant. The overall benefits for the salon owner and the contractors far outweigh any potential annoyance on the  switching.

• Owner can remotely view via web overall sales for the entire operation, including all contractors.
• A sales incentive program can be implemented for products by using a drop down menu to enter sales into ‘buckets’ for tracking.
• No extra phone lines needed, just one high speed internet line.

• 

PIN DEBIT COMMENT:

Pin debit requires an encryption key unique to each processor. Since not all merchants are likely to use the same processor, pin debit should not be used for multi-merchant. The main impact is risk from customer disputes is 120 days vs 14 days. This may not be an issue in the salon environment. Under 2011 law, regulated debit fees are now the same for both pin and swipe so this is no longer an issue.

PRODUCT SALES COMMENT:

Regardless of how you choose to sell products, you’ll want to provide some incentive to involve contractors. The receptionist can be key, but when a stylist tells their customer to buy a product, it carries a lot more weight. A program can be as simple as a chart with each stylists name and then add a check or sticker for each time their customers bought something. The person with the most stickers gets a $100 gift card.

Other articles you might like:

IRS Link  Cash Intensive Businesses Audit Techniques Guide – Chapter 10, Beauty Salon Defined
Salon merchant account solutions SPECIAL DEAL (older)