Thursday, November 25, 2010

The Problem With Paypal

Many small businesses use PayPal because they are not familiar with a traditional merchant account. PayPal may be a cheaper option for someone that only processes $500 a month, since there are no monthly fees. PayPal makes money on their high percentage rates which range from 3-4% depending on the credit card type. One of the major issues with Papypal is their lack of real customer service and thier ability to just hold on to your money with little reason. Take this email I recently recieved:

Your payments will be held in a pending balance
We're writing to let you know about a change to your PayPal account.
Starting Nov/23/2010, money from payments you receive will be placed in a pending balance for up to 21days. By doing this, we're making sure that there's enough money in your account to cover potential refunds or claims.
Even though you can't access the money right away, please ship orders quickly and communicate with your customers. After 21 days, you can withdraw money from each payment as long as the customer hasn't filed a dispute, chargeback, claim, return, or reversal.
The money may be available sooner if:
  1. We can confirm that the item was delivered.
  2. Your buyer leaves positive feedback. (Applies only to eBay items)
This change isn't necessarily permanent. We'll review your account every 35 days and re-evaluate if we should continue to hold your payments. If we decide to stop holding payments, we'll email you to let you know.
Why are my payments being held?
We reviewed your account and determined that there's a relatively higher than average risk of future transaction issues (such as claims, or chargebacks, or payment reversals). We understand that it may be inconvenient to have your payments temporarily held but please know that we didn't make this decision lightly.
Before deciding to hold payments, we consider many factors. These factors include account and transaction activity, the rate of customer disputes, the type of business a seller runs, average delivery timeframes, customer satisfaction, performance and history.

Many people after seeing letters like these,  will see the light and switch to a traditional merchant service provider. Try to find the phone number to PayPal and you"ll begin to understand why it's so hard to find.

Wednesday, November 10, 2010

Square Mobile Credit Card Processing. How good is it?

Square has certainly been making a big splash in the news. With promises of allowing just about anybody to accept credit cards simply by signing up and getting their little square plastic swiper to accept credit cards. Before you jump on the square bandwagon however, there are some things to consider. How serious are you about accepting credit cards? If you think you'll only be processing $1,000 or less a month it might be a good move. If however you are processing more than that,  you may be best be served with a traditional merchant account. The reasons are many:

1) Square rates are expensive 2.75% for swiped and 3.50% for key in:traditional merchant accounts could get you rates of  as little as 1.29% for debit cards and 2.15% for key in.

2) Square has had issues working with new Iphones.Square only has 128 bit encryption as opposed to a blue-tooth reader which has Features Triple DES data encryption.  

3) Square for many is considered a very fragile piece of equipment. 

4) They may have issues with their underwriting departments. 

5) Square might be promoting drug use (ok maybe, maybe not). 

5) Square being a new company may not have the best customer service.

Wednesday, November 3, 2010

Mobile Credit Card Processing: So Easy Even a Caveman Could Do It!

It amazes me that more people are not taking advantage of this fabulous new technology. There are applications that can turn your smart into a mobile credit card machine. This will allow many business to really get out there and pound the pavement and accept new business in ways they couldn't afford to before. It's really inexpensive and rates can be especially low  if you are swiping the credit card. You can now avoid having to lease or purchase a very expensive wireless credit card reader and also pay wireless fees. This technology is a must for people who accept credit cards on the go i.e. plumbers, electricians or even people who simply want to sell outdoors. You no longer have to carry a laptop either. This technology can be used on droid and Iphone, Itouch type phones. You do need to open a merchant account to get one but that's easier than opening up a bank account in most cases.

Tuesday, November 2, 2010

What College Students Should Know About Credit Cards

I always hated the way credit card companies would prey upon college students. They would set up shop right on campus, offering free items if you signed up. You could get a nice credit limit regardless of you credit history. The college of course gave no courses on finance that dealt with debt-to-income ratio or credit scores.Here is a great article on the 10 things college students should know about credit cards. Click here for the article.