Recently IAN HARVEY wrote an very interesting article on smart card/ chip card technology for Canadians.  It is a worth while read if you want to know who the new technology will affect your business.  Click here to read it.

 
 

"The Interac network is among the safest systems in the world, however
debit card fraud can occur, and that's why we're involved in this initiative -
to educate Canadians about steps they can take to protect themselves," said
Tina Romano, Public Relations Manager, Interac Association.

Click here for Cardholder Safety Tips


 
 

Setting up merchant accounts is often a last minute task for most small business owners in Canada and often over looked on being one of the most important administrative tasks to  implement into one's  business.  A merchant account in today's market place can cost a small business at least 2% of their total sales and more often closer to 4%, so understanding what questions in essential in capturing low rates.

The first question you will want to ask is what are all 3 discount rates for the credit cards.  There are typically in Canada 3 discount rates a merchant will be charged depending what type of card is being used and how it is processed to pay for goods and services.  The categories are:

1. Qualified
2. Mid-Qualified
3. Non-Qualified

An over simplified break down is: Qualified is "card present", Mid's are "keyed in", and Non's are international cards.  It actually breaks down to specific cards, but with over 35 levels of interchange it can get really confusing fast. 

The main reason you must ask this first question is often times Canadian merchant account providers will only mention or market on the 'card present' discount rates, which is traditionally the lowest advertised rate.  However, they could be charge huge margins on the "Mid's" and "Non's", which means you could be paying through the nose in fees.  Not knowing can hurt you.

The second question you must ask is:

"What are their support hours?" 

If you are a restaurant and they close at 9pm and all your business is after 9pm then having your merchant services with that particular company would be useless regardless of how low the rates may be, if you needed assistance.  Also, you want to find out how soon before they will dispatch a new debit machine to you if your equipment goes down.  Again if it takes a week, then how long will your business stay in business not being able to accept debit and/or credit cards...?

Now do not forget some of the other basic questions like: statement fees, transaction fees, monthly admin fees, annual membership fees, contract/agreement lengths, cancellation fees, warranties, etc.

If you cover the above and get a few referrals & testimonials you probably will be in a good educated position to make a good decision for your business.

 
 

Merchant's ask me all time if they should surcharge and my usual answer is..."It depends."  For the most part I think is not widely accepted by the general public and you may risk turning a customer off by surcharging.  I understand that the only reason a merchant wants to surcharge is to be able to off set their own payment processing expenses, but I still think is is better to raise your prices on the front end then it is to try to compensate as your customers go through the check-out.  The customer doesn't understand that you are just trying to minimize your expenses so you can continue to stay in business, they see it as though you are charging them to pay and sometimes this can be a large enough turn-off that they may never return. In my opinion it is not worth the risk of losing returning customers. The only time I condoned this is when the merchant is in an extremely competitive market and they can not raise their front end prices on products and services without losing business to the competition so they must do it on the backend/check-out.