This morning as I read through the industry news, I started thinking about how tragic it is that most consumers have no idea how much their favorite businesses pay to credit card companies and credit card processors every time they choose to pay by debit or credit card. Even more tragic is the fact that few merchants really know what they are paying.

But what if there was a way merchants and consumers were able to see this data, right on the bottom of their receipt? I’m at Brueggers this morning. I’ve watched 30 people go through the busy line, paying mostly with debit cards. The last patron paid with a business credit card, he bought bagels and coffee for the office staff (I overheard him talking to the manager). His total was $63.08. I don’t like math, so I’m going to round that to the whole number $63. He used a corporate card, which comes with the highest interchange rate. A conservative estimate would be that Brueggers paid a total of 4% of that purchase to Visa and their merchant processor just to accept the card. This sets up an easy equation: 63 x .04= 2.52. Brueggers essentially “ate” $2.52 of that patron’s purchase. But neither the patron, nor the Brueggers manager, has any way of seeing that cost in real time.

I made some phone calls, and because I’m rather persistent, I can now offer this service to the businesses who process with Swipe-Rite. But I want to challenge the other processors who read my blog to do the same thing. So here it goes: If you are a processor and you want to offer this service, let me know. I’ll tell you what I did to get this service added to our capabilities, just because I’m so passionate about interchange education. Keep in mind, I am essentially giving away a service that our sales staff will use to negotiate new business. All in the name of good business.

If you are a business who wants this service but doesn’t want to switch merchant processing companies yet, I’ll help you too. I’m starting a revolution. Join me?

I am FULL of big ideas. I struggle with finding the time to develop each one to fruition. I want to hear your big ideas. Tell me about them here: @AmySwipeRite And if you like bagels, follow Brueggers on Twitter. Tell ‘em Amy sent you.

Last week, I was out shopping with my Mom at a store to whose customer loyalty program I belong. They have a simple “stamp card” where I earn a little red check mark for every $10 I spend in their store. When I collect 10 check marks, I get $10 off my next purchase. Simple enough.

My Mom is not a member of the loyalty program as she doesn’t even live in this state so, being the savvy shopper I am, I asked the owner “Can I get credit on my loyalty card for her purchase?” He’s a nice guy, he knows me, so he said “Sure!” My Mom used her bank-issued Visa Debit Card to pay for her purchase and he asked her “Do you want me to run this as Debit or Credit?” My Mom, thinking that the only difference between the two options is whether she enters her PIN code or signs the receipt said “Oh, it doesn’t matter.” Here’s where I interject that indeed, my Mom does know what I do in the Merchant Processing Industry but alas, doesn’t find it all that interesting. I saw this as my opportunity to finally repay my Mom for all the great lessons she taught me over the years. I spoke up “Actually, Mom, if you enter your PIN code, it saves him (as in Mr.Owner), money on what it costs to process your credit card transaction.” He smiled, and my Mom entered her PIN code. He then turned to me and said “Thank you, for being an educated consumer. I’m giving you an extra stamp on your loyalty card.” As luck would have it, that extra stamp filled my card and on my next visit to his store, I’ll save $10.

Show your loyalty to the businesses you frequent by helping them save a little money, too.

For more tips like these, or to talk about how the Yankees are going to win the World Series, follow me on Twitter.

*Don’t forget to join me for #ratechat on Twitter, this Wednesday at 4PM CT. I’ll be analyzing a Merchant Credit Card Processing Statement live, taking your questions and showing you how to be sure you aren’t the victim of hidden charges.

Well, the #roadtrip2Bono was a success. In 72 hours, I drove 1500 miles round trip with 4 kids and a kitten. Hey, I’ve never touted my sanity.

A funny thing happened to me while I was on the road: A company named “Rate Clear” (@rateclear) used my Twitter handle when referencing their merchant credit card processing products without consulting me first. My guess is that it was the result of the interview I recently gave to Business Week. How they heard about me isn’t important, what is important is that I actually hadn’t heard of  them until I saw their Tweet, so I am very happy that they took it upon themselves to reference me in their promotion. While most of my research on their products was done at truck stops on the way from Oklahoma to Iowa, I did have a chance to speak to a customer service representative from Rate Clear this morning. I even invited them to join today’s #ratechat. I’m not sure if they will join us, but I will tell you what I learned about their rates, tell you who would benefit from their pricing options, and I’ll take your questions on Rate Clear or any other processor. Can’t figure out how to read your merchant credit card processing statement? I’ll help you with that, too. I look forward to interacting with you today at 4PM CT on Twitter. Follow along by searching for the hashtag #ratechat, or by following me: @AmySwipeRite.

The U2 concert was fantastic, so if you’d rather talk about music than merchant credit card processing rates, I’m happy to do that too, on Twitter.

I am very excited to announce the launch of #ratechat, a Twitter chat designed to teach people who use merchant services to accept credit and debit cards as forms of payment, what they need to know about merchant processing. Beginning next Wednesday, October 21, at 4 pm CT, I will host #ratechat. My plan is to teach users of merchant services how to analyze their own merchant processing statements to be sure they are getting the best rate. I will also cover how to setup a merchant account to accept credit and debit cards, why we are charged to accept credit and debit cards, the transaction cycle, making sure security software is up to date to protect a business’s sensitive information, and how to negotiate with your processor to lower your merchant processing costs. I am excited to see how other participants help shape the content of this chat as we go forward.

I was hesitant to start this chat right away, but always had it in the back of my mind. Now that I know the Twitter community and have familiarized myself with etiquette, I just can’t wait to really use Twitter to provide valuable content to everybody who uses merchant services. I want to make it perfectly clear that I will absolutely not be advertising our business or spewing sales pitches. I am just providing help.  If only one business is helped every week, it will be well worth the hour. Stop in and join the conversation, I guarantee you’ll learn something. I might even save you some money.

#ratechat

Wednesdays beginning October 21, 2009

4pm CT

Hosted by @AmySwipeRite

PayPal, one of the internet's most popular method of accepting credit cards, doesn't give the best deals

This morning, I had the privilege of talking to a leading business magazine about merchant credit card processing and interchange rates. In preparation for this interview, I did some in-depth research on PayPal, one of the internet’s most widely used method of accepting credit card payments.

In the event that you’ve lived under a rock for the past decade, PayPal is a website that allows consumers to send and receive money via credit card or electronic check (e-Check). Largely due to their partnership with eBay, PayPal’s brand recognition makes it a “go to” site for processing these types of payments.

As an eBay Power Seller in the late 1990s, I used PayPal to accept credit cards from my customers. In fact, until I actually became affiliated with a merchant processing company, I recommended PayPal to people who asked me about accepting payment cards. Today, I am officially rescinding my endorsement of PayPal. Here’s why:

Exorbitant processing fees: Let me lay it on the line for you. If you are using PayPal to accept payments through your website using their “Web Payments Standard” option, you will be paying 2.9% of the transaction value plus 30 cents. Of this amount, 1.6325% plus 10 cents of the transaction value goes to Visa/Mastercard (called ” interchange”). The other 1.2675% plus 20 cents goes directly to PayPal as a service fee for them to help you move the money from bank to bank.* Ok, maybe that doesn’t seem like a lot to pay for convenience, right? But the truth is that PayPal’s fees are double what you should be paying. No matter which of their merchant services solutions you use, no matter what your monthly transaction volume totals, no matter whether you use PayPal on your website or send email invoices, if you are using PayPal you are paying too much for merchant services.

Rolling Reserves: This subject came up in my media interview today. I was surprised to learn that “rolling reserves” are now a chief complaint of users of PayPal Merchant Services, mostly because we have never imposed one on a client. A rolling reserve is a contractual stipulation imposed on some merchant accounts, more often than not these accounts are determined “high risk.” In this case, PayPal is withholding funds–sometimes 5% of a merchant’s gross sales–in a non-interest bearing account for 18 months. So if you use PayPal, and you are bound by a rolling reserve,  you will be missing out on 7.9%+ revenue (interchange+PayPal fees+rolling reserve) from credit and debit cards for a year and a half. Now, maybe I’m a dummy, but this just seems ludicrous. Which leads me to my next argument

Wait times: With a run-of-the-mill merchant processor, you can basically assume that funds from your credit card sales will be deposited into your bank account within 48 hours (and very often it is closer to 24 hours). PayPal, on the other hand, holds the funds you receive from these payments until you to transfer them to your bank account, a process that takes 3-5 days. So if you get paid $40 on Monday, it will appear in your PayPal account and be ready for transfer by Tuesday, but it will likely be the following Monday before you have access to these funds. There is an exception, it is their “PayPal Debit Card,” which allows you to have “instant” access to your PayPal funds (once they are approved), and you can use it for purchases or to remove cash at an ATM (after setting up a pin). Please note that if you use an ATM, you *may* be charged…you guessed it…more fees.

Customer Service: Sure, PayPal has a 1-800 number and at some point you may actually get to talk to a human. But, and this is just my simple way of thinking, the most important trust relationships in a merchant’s business life should be with their banker, and their merchant processor. Your merchant processor should know you, your family, your business model, and your business goals and should be dedicated to helping you reach them at any cost.

So why does PayPal have such worldwide acceptance when they have such shady processing practices? Brand recognition is part of the answer. The other part is that merchants simply aren’t educated enough about their options. PayPal underwrites an extraordinarily high number of high-risk merchant accounts (which partly explains why their fees are so much higher). As such, merchants who think that they may have a problem being approved for a merchant account through another processor (whether it is because they are a new business or have less-than-exceptional credit), go directly to PayPal without exploring other options. Don’t fall into this trap. There is a better processor, with better rates and better customer service. PayPal does not offer any service that is unique, they are just really well marketed.

As you should know by now, I don’t make it a habit to “call out” the competition by name, but today I’ve made an exception in the name of good ethics in the merchant processing industry, and the hope of helping businesses save money and get the treatment they deserve.

Do you still use PayPal? Tell me why (I don’t bite). Anybody else ready for a cup of tea? You can always find me on Twitter @AmySwipeRite

It’s amazing how quickly life takes hold and weeks pass by, leaving my blog posts lacking in content. I’m working on my to do list. I’d like to share a brief list of the exciting things I’m working on, and ask for your input in making the content applicable and fresh. Ok? Jump in any time.

1) My vegan experiment led to at least one really fabulous epiphany. I’m working on a synopsis and can’t wait to share what I learned.

2) Have you ever thought about becoming an Independent Merchant Processing Agent? It was a hot “at home” business model at the turn of this century, but the realities of the industry can be harsh. I have a list of things to think about before taking this step.

3) Have you ever started a business and watched it fail? I’m opening up about a failure we experienced, and how social media might have prevented the final collapse.

4) I’m always on the look-out for people who are smarter than me. I interact with them everyday and make notes on how to include them in my Thursday series. Know somebody whose smarter than you? Want to guest post on my website some Thursday? Let me know!

Want to interact about these ideas, or any others? Email me amy@amyfitch.com, or find me on Twitter @AmySwipeRite.

There is something wrong with this pyramid. Where are the meat, eggs and milk?

If you follow me on Twitter or have access to me on Facebook, you know that I have been planning to experiment with vegan eating for several weeks. No, I’m not moving to Vegas, I’m completely eliminating animal products from my diet for one week (to start) , and then I’ll re-evaluate and see how feasible it is for me to continue living this way for the rest of my life. Maybe I’m crazy, or maybe I’m onto something. You can ask me which next Sunday.

Why am I doing this?

I have had many people ask why I am making this choice at this stage in my life. I’m not doing it to call attention to world hunger , or to lose weight, or because I am suddenly regretting all the cows, pigs, chickens and fish that I’ve eaten in my lifetime. I am trying it because, frankly, I am too young to feel as crappy as I do lately.

So I kept a food diary for a week to evaluate what I was putting into my body. Lots of caffeine, too much artificial sweetener, and incredible amounts of dairy (if you read food labels, you might be surprised at how many things contain milk products). Top that off with red meat (I like mine rare), pork, chicken, turkey, fish and shellfish. Now, maybe it’s nothing, but I noticed that when I ate certain animal products (like red meat and dairy), my energy levels plummeted and I had more trouble thinking. Then I realized that on morning when I had, say, a banana and some dry, whole grain cereal (no milk), I felt illuminated. I didn’t feel like I was depriving myself anything by eating fruit instead of bacon and eggs, so I figured–why not at least try life on a vegan diet?

Why this is tricky for me:

Apart from the fact that I was raised believing that a meal is not a meal unless it contains a meat, a starch, and a vegetable, I also have a medical concern that impacts my decision to become a vegan. In 2006, when I was 28 weeks pregnant with my daughter, I was diagnosed with Factor V  (five) Leiden Thrombophilia. You can visit Wikipedia and read the information, but in the event that you don’t have a thing for reading about the genetics of proteins and how they affect blood clotting, I’ll lay it on the line for you: My blood clots at about 8 times the “normal” rate when I have no other mitigating health factors. When I’m pregnant, which is a hyper-coaguable state for any woman, my blood clots about 100 times faster. I should have known about this condition much earlier in my life. Our family has a long history of women, including my own Mother, who have experienced the hallmarks of this mutation: blood clots, TIAs (mini-strokes), pulmonary embolisms, miscarriage. Women who have this condition should not take birth control pills, and should be monitored  and treated with injectable blood thinners during pregnancy.I am very lucky that I made it nearly 3 decades into life before having a single complication.

Why would my Factor V be a consideration when I decided to change to a vegan diet? Vitamin K is a “no no” for people with Factor V, and this particular vitamin comes from…where else? Leafy green vegetables and legumes. This is where I give my Doctor’s disclaimer: I am being monitored closely to be sure that my clotting factors remain optimum while I change my diet. I would never suggest that anyone with Factor V make a dietary change without the involvement of their physician.

There you have it, I went to bed an omnivore and woke up a vegan. I am planning to blog about my experience every day as I discover what this change will mean to me.

Are you a Vegan? Do you really love a juicy steak? Want to know more about Factor V? Find me on here: @AmySwipeRite

I posted on our “Great Transition” with the business on our Swipe-Rite blog. Here, I get to tell you about the personal triumphs in transitioning, and hopefully, a small lesson in starting your own business.

When you have a “Big Idea” that turns into a business, chances are pretty good that your idea will quickly take on the characteristics of an infant, and you, of course, its parent. You spend every minute figuring out how best to feed, teach, and protect your precious production. And then some idiot in the grocery check-out line asks if the baby adorned in pink is “a little boy” and you nearly scream. My point is this: when something is a part of you, you are much more sensitive to criticism. You also instinctively know what is best, and when listening to criticism is a waste of your time.

Recently, our business had become a mess of miscommunication and disorganization. We were offering great products and services, but with the partnership we were pursuing, what we really wanted to do for businesses just couldn’t come to fruition. So we changed what we were doing, who we were working with, and how we were approaching, well…everything.

It was is scary. But it is also exhilarating. Small business ownership is indeed a lot like parenting. The hours are the same, the level of concern is the same, and the pride of having a successful business is probably equal to watching your child graduate from college. But the risks, the worries, and the second-guessing (Am I doing this right?) cannot be overlooked. At the end of the day, those who succeed in both parenting and small-business ownership are a mixture of smart and crazy, fearless but prudent.

Do you have a big idea? When was the last time you did something that was scary and exciting? Tell me here @AmySwipeRite

On Monday, I received my latest edition of Chris Brogan’s Newsletter. I enjoy his newsletters every week, but this week’s newsletter was so good, I shared it with at least two dozen people. It was so good, in fact, that I am sharing my copy of the newsletter with you by hyper-linking the word “newsletter” until you go and read it for yourself (another link for good measure). So go ahead, open it in a new window, then come back so you can finish reading this post.

Read it? Okay great. Let’s continue…

As a busy working Mom, I thrive on patterns. Patterns/routines and all things synonymous keep my house from being completely chaotic. I wake up, get the kids ready for school, put on the coffee, and prepare my breakfast. For pretty close to a year, my breakfast has been the same thing every day: Blueberry yogurt with fiber rich granola. It’s not a bad breakfast, I have actually grown quite fond of my quick morning meal. I do switch it up a little from time to time. Sometimes, I eat it out of a green bowl, sometimes, out of a coffee cup, and sometimes, I stir the granola into the yogurt cup and take it “to go.”

After reading Chris’s challenge to “find three patterns and break them,” I was inspired to make this week into “The Week of Green Chile Smothered Eggs for Breakfast.” You see, I’m from Arizona. My Dad is a native New Mexican (as in, from New Mexico-home of Hatch Green Chile). My dearly departed maternal Grandfather was Spanish-American raised in the Mexican-American cultures of Southern Arizona. Needless to say, I know my chile (notice, I even spell it right). And when you know chile, you know that eggs are naked without being smothered in it. Add some spicy home fried potatoes and a flour tortilla, and you have Heaven on Earth.

So this week, instead of grabbing my yogurt, I grabbed my egg carton. Every. Single. Morning. I tried not to think about the calories or the carbs or the cholesterol. I just savored each bite. And by Thursday, I noticed a funny thing had happened. My jeans were just a hair looser than they were on Monday morning. I headed for the bathroom scale and wouldn’t you know it? I had lost 2 pounds.

I started to think about the patterns in my life that I perceive as being “healthy,” (like my yogurt and granola breakfast) and I came to a stunning revelation: Sometimes even “healthy” patterns weigh us down. We become so accustomed to doing things one way that we fail to innovate, experiment, or excite ourselves. Just because a habit isn’t necessarily “bad” doesn’t mean it’s always good.

I realized that the old adage “if it ain’t broke, don’t fix it,” eventually leads to perpetual boredom. I considered how boredom is currently impacting my life as it applies to my work in the merchant processing industry. There is only so much to say about accepting credit card payments (and getting a good rate). Now, however, I’m inspired to find a new way to approach the topic, help people, and restore trust to the industry. The ideas are popping up so quickly that I can hardly sit still.

Maybe it’s just the capsaicin in the chile, but I’d like to think that breaking my breakfast pattern jump-started more than just my metabolism–it threw my zest for evolution into high gear.

Did you take the Chris Brogan Challenge? Do you want my green chile recipe? I’m easy to talk to, find me on Twitter!