Tag Archives: fees

Kroger Will Begin Taking Visa Payments Again

In a not at all surprising turn of events, Kroger has decided to cease their ban on Visa payments across all of their 130 Smith’s Food & Drug stores.

Why the Ban?

Kroger Taking Visa Payments AgainEarlier this year, after slamming Visa’s transaction fees, Kroger decided to take action against Visa. Saying that they’ll “drive up food prices for all customers” and calling them “excessive,” they subsequently banned all Visa payments at all of their California stores, before bringing in a total ban across all 130 of their Smith’s Food & Drug stores located around the country.

Kroger CFO Mike Schlotman said when asked to comment earlier this year, “Visa has been misusing its position and charging retailers excessive fees for a long time. They conceal from customers what Visa and its banks charge retailers to accept Visa credit cards. At Smith’s, Visa’s credit card fees are higher than any other credit card brand that we accept,” and then went on to instigate the ban.

According to Visa, when asked to comment on the situation, “It is unfair and disappointing that Kroger is putting shoppers in the middle of a business dispute.”

Kroger Remains Quiet About the Reversal

Now, in spite of their reasoning for the ban on accepting Visa payments, Kroger has decided to reverse the ban, and will be accepting Visa credit cards at all of their locations across the country according to a Kroger spokeswoman. This includes chains such as Kroger, Fry’s, Dillon’s, Ralphs, Harris Teeter, and all other Kroger owned chains.

There has been no comment by Kroger or their spokespeople as to the reasons behind the ban’s reversal, nor has there been any response from Visa.

Earlier this year, shortly following the introduction of the Visa ban, Kroger went on to launch its mobile payment app Kroger Pay. Kroger Pay is a smartphone-based payment system that combines both a customer’s payment information with the company’s loyalty card with an aim to speeding up checkout times.

The company also launched a Kroger Rewards debit card, with Kroger Personal Finance CEO and corporate strategy integration lead Gary Millerchip saying “Kroger is redefining the customer experience by creating innovative ways to pay at our stores and online.”

Payment Processing No Long-Term Contracts

How to Avoid Common Mistakes When Getting a Merchant Account

Choosing a merchant account can be overwhelming. With innumerable fee structures, not to mention growing varieties of payment options, a business can spend full-time hours simply keeping up with the fast pace of credit card processing trends. If you follow the advice from the steps listed below, you’ll be ahead in the merchant account game:

Look for Reviews

When you begin the discovery process with a merchant account provider, seek references and research reviews. Rather than read testimonials on their website or blog, find forums that objectively discuss merchant accounts. Then, follow up by checking online reviews and by contacting one of their customers whose business is similar to yours to determine their satisfaction with services. 

Once you have your short list, ask your potential merchant account providers for details and processes regarding your potential Account Manager and the overall customer service staff. When and how is the customer support team available to merchants? You will need a contact name and direct number for assistance at any time.

Avoid Hidden Fees

Due to the complexity of merchant services pricing, it’s easy for payment processors to hide fees in their statements. Terms such as “qualified” and “non-qualified” rates are red flags indicating tiered pricing, which allows the payment processor to determine which transactions don’t qualify for the lower rates.

In order to ensure there are no hidden merchant fees on a sample statement, ask them to explain rates and fees, including ancillary fees. They must be open and honest about their merchant account fees. Check the MasterCard and Visa websites to compare their rates to the rate quoted by the merchant account provider to ensure they’re not quoting a low rate to obtain business. Explicitly request the following: application fee, set up fee, batch fee, statement fee, monthly minimums, PCI compliance fee, IRS fee, and annual fee. 

Ask if they bill for additional services. Ask if they auto enroll merchants in free trials that require the merchant to opt out if not interested. Ask if they back-bill for fees versus bill fees in the same month they occur. And ask how often they raise rates.

They May Not Support Your Equipment

Confirm their services are compatible with all terminals, gateways, point of sale (POS), mobile devices, chip & signature, Apple Pay, and eCommerce, among others.

Avoid Long-Term Equipment Leases

If you need credit card machines or payment processing devices, ask if they are new or refurbished. Determine if you are buying or leasing the equipment – and what is the cost? Relative to buying, equipment leases are more expensive in the long run. While a credit card terminal can cost a few hundred dollars to buy, a lease can end up costing thousands of dollars over the course of a few years at $30 per month at minimum.

Don’t Be Just Another Residual

Because your merchant services company should view you as a valuable customer, they should increase your payment-processing efficiency, improve your customer service experience, and save your business money. Ask for the payment processing options available. Note whether or not they discuss building long-term relationships with merchants.

Before Signing the Contract

Before signing the contract, learn the termination process. Ask if there is a cancellation fee or early termination fee. Also, determine if the contract automatically renews. Host Merchant Services does everything month to month, no long-term contracts, allowing you to cancel at any point with no fees.

Host Merchant Services

Host Merchant Services can guarantee the lowest rates while providing the best customer service. With no term commitment, no cancellation fees, no hidden fees, and no obligation, HMS provides the highest level of customer service, earning respect from our peers, as well as from our clients. Host Merchant Services will gift you a $50 gift card if we can’t match or beat another price on the market.

Payment Processing Company Square Raises Fees For Small Transactions

Small Fees Add Up Considerably for Square

Merchants who use the services of credit card processing giant Square, which was founded by a former PayPal executive, can no longer count on flat rates for payment transactions. According to a news report recently published by Bloomberg, Square has rolled out a new fee structure that no longer sticks to the 2.75% in-store transaction charges that the company had in place for years. The fee has been reduced to 2.6%;‌ however, there is now an additional charge of $0.10 per transaction, when the payment amount is $65 and under.

When Will the Change Take Place?

New Square users will be subject to the new pricing structure right away while existing merchants can expect to see the change in early November. In a blog post published by Square in October, the company explained that the new fee schedule corresponds to an effort to align with competitors in terms of transaction costs.

Industry analysts believe that Square is starting to feel the impact of operating costs related to acquiring new merchants, particularly those that have a higher volume of micro transactions. Square is doing business in a sector that sees retailers spending $108 billion every year to accept electronic payments, and the methods the company has widely utilized to sign up new clients include innovative card readers, terminals, mobile apps, and simplified point-of-sale systems;‌ these value-added services, which are heavily geared towards micro companies such as hot dog carts, translate into high operating costs. The $0.10 fee is intended to offset some of these costs, which can hurt a small businesses’ overhead.

Why the Increase?

When compared to other merchant processing companies, the new fee schedule posted by Square is typical; nonetheless, this is a company that has a disproportionate number of users for whom low-ticket transactions are their bread and butter, and they are the ones who are more likely to complain about being charged an extra $0.10. To a certain extent, Square risks losing clients such as the aforementioned hot dog cart operators, coffee shops, and convenience stores, but average retail transactions are estimated to be between $30 and $35. If anything, Square is attempting to gain more new clients, which could be at the expense of their current ones.

According to WCYB, an NBC‌ News affiliate based in Tennessee, small business owners in the region are not happy with the higher fees being charged by Square. The operators of a bakery, a cafe, and a catering provider explained that they will be passing on costs to customers, and they are strongly considering shopping around for a new merchant processor that specializes in small businesses.

US Congress Takes on Resort Fees

Resort fees: you think you’ve got a great deal on a hotel, only to find an extra charge slapped on once you get to checkout. For the most part, there’s nothing we can do about it, however Congress has just introduced an interesting new piece of legislation that could see the days of frustrating surprise resort surcharges coming to an end.

What Are Resort Fees?

You decide to book a one night stay at a hotel, and you go to their website or your favorite hotel booking site and see that it’s advertised at $100 per night. You select your room and continue on to the checkout. One you get to the checkout, however, you notice that the price has now increased by an extra $50. When you check the fine print, you discover that it’s the resort surcharge added to your rate.

Hotel Surcharge Rates and Fees IncreaseIf this is new to you and you don’t know what a resort surcharge is, you may be somewhat surprised. Essentially, it’s just an extra cost, typically mandatory, that covers a bundle of services that you, as a hotel guest, might come to expect during your stay. Services such as “free” Wi-Fi, pool access, morning newspapers, and more are what tend to be part of the resort fee bundle. Even if you don’t want to use any of these services, you can’t decline the surcharge.

In the year leading to July 2018, these surcharges have seen an increase of as much as 11%, with a 14% increase in the number of hotels adopting the practice. For the vast majority of these hotels, the resort surcharges are not at all optional. In some areas like Las Vegas, virtually every hotel has a resort surcharge.

What’s the Issue with Resort Surcharges?

A Consumer Reports survey that questioned over 2,000 adults taken in 2018 showed that more than one-third had experienced a hidden hotel charge within the previous two years. Many consumers are upset with the lack of transparency and what many consider to be sneaky behavior to lure customers in by making hotel rates appear cheaper than they really are.

Other studies show that people are now beginning to avoid areas notorious for their resort surcharges. Resort surcharges have become shockingly common in tourist-heavy areas with places such as Las Vegas, Walt Disney World, and Times Square, New York ranking among the worst offenders. Places like these are obviously some of the most sought after tourist attractions in the world, and many feel that they use that status to prey on unsuspecting tourists.

What’s the new Legislation?

The Hotel Advertising Transparency Act was introduced to Congress in 2019 by Republican Congressman Jeff Fortenberry of Nebraska and Democratic Congresswoman Eddie Bernice Johnson of Texas with the goal of abolishing add-on resort surcharges, and requiring that hotels are upfront and transparent about showing the full, pre=tax price of a hotel room in their advertised costs. This would include short-term rentals immediately at the time of booking without the resort fees being added at the end.

Several major hotel chains, including Hilton and Marriott, have seen lawsuits brought against them following investigations into their hotel surcharges and pricing practices. In Hilton’s case, it was indeed found that their advertisements of resort surcharges, both online and over the phone, were misleading, deceptive, and even in violation of the consumer protection statute held by the state.

How Does Credit Card Processing Work?

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Today The Official Merchant Services Blog gets extra visual with a step by step breakdown of how Credit Card Processing works.

This is the latest installment in The Official Merchant Services Blog’s Knowledge Base effort. We want to make the payment processing industry’s terms and buzzwords clear. We want to remove any and all confusion merchants might have about how the industry works. Host Merchant Services promises: the company delivers personal service and clarity. So we’re going to take some time to explain how everything works. This ongoing series is where we define industry related terms and slowly build up a knowledge base and as we get more and more of these completed, we’ll collect them in our resource archive for quick and easy access. Today we build off of our previous knowledge base entry on just credit cards. We noticed that we’ve been adding to this database for months now and kind of skipped over some of the most basic elements of the industry. So now that we’ve defined credit cards, we want to take you on a journey through credit card processing, detailing exactly how it happens.

CREDIT CARD PROCESSING

Host Merchant Services is able to guarantee its customers savings and the lowest rates possible. By understanding how credit card processing works, where the money gets made off of the transactions themselves and where those hidden fees actually are, you can gain some valuable insight into how Host Merchant Services is able to make its guarantee. Here’s a step-by-step breakdown that sheds light on where the fees from each transaction come from:

How Does Credit Card Processing Work?

The way credit card processing companies make money for themselves can sometimes be a confusing labyrinth where fees are hidden, percentages are tied to things not listed on statements and the deal you think you are getting isn’t the best deal you can actually get. Host Merchant Services is dedicated to giving its merchants the lowest price guaranteed, and the company strives to maintain transparency with no hidden fees. So take a walk with us and see behind the curtain as you learn exactly where the money is being made when you swipe a customer’s credit card.

Step One: A customer visits a store.

Step Two: Customer purchases $10 worth of merchandise.

Step Three: The customer swipes his credit card through a payment processing terminal such as a Hypercom T4205 from Equinox Payments to pay for the merchandise.

Step Four: The card reader recognizes who the customer is and contacts the bank that issued the credit card.

Step Five: The customer’s bank sends $10 to the merchant’s bank.

Step Six: Then the merchant’s bank deposits $9.80 to the merchant’s bank account.

Step Seven: That remaining 20 cents, a 2% fee, is taken from the $10 and given to the customer’s bank.

Step Eight: The customer’s bank then splits the 20 cents with the credit card company.*

* Depending on the specific company, country and merchant, the percentage can range from 1% to 6%. The amount the bank gets and the amount Visa gets is a negotiated deal. Also, Visa and MasterCard charge the banks an annual fee to be a part of their network in the first place.

Where The Money Gets Made

Credit card companies make money in a variety of ways. This graphic lists four of them.

Credit Card Companies make money in a variety of ways. Here are the four most common:

One: The most common way credit card companies make money is through fees, such as the annual fee, overlimit fee and past due fees.

Two: Another way credit card companies make money is through interest on revolving loans if the card balance is not paid in full each month.

Three: As explained above, the card issuer (the bank that issued the card and/or the issuer network, be it Visa, MasterCard, Discover) makes a percentage of each item you purchase from a merchant who accepts your credit card. The rates range from 1% to 6% for each purchase.

Four: The card issuer can also make money through ancillary avenues, such as selling your name to a mailing list or selling advertisements along with your monthly billing statement.

SOURCE: Information for this article was gathered from www.creditscore.net, the movie Superman III, Wikipedia and Authorize.net.

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