Debit Cards

[Donanita]

Just got a e-mail from NATP with an offering from COCARD for credit/debit card use. I had a lot of client ask last yr about using debit cards. Just wondering if any of you use card machine and do you have a large % of your clients use them

[taxmandan]

We've been accepting cards for two years now, and it was a good move, no more "I forgot my check book, can I mail a check to you?" excuses. Price shop the rates, COSTCO has the lowest rates around, anyone who wants your business, just hand them the COSTCO brochure and tell them to match it or forget it. Discount rate (what you pay on each transaction) is 1.67%, no per-transaction fee, no monthly statement fee. Our bank agreed to match the terms and we've been happy with their service. Oh yeah, forget about American Express, they charge twice what VISA/ MC charge and a monthly fee. Everyone who has an AMEX card also has a VISA, so we apologize for no AMEX and they hand us the VISA card.

Don't rent a machine or buy one from the company. Too expensive, check eBay, we bought ours for $188 with a 1 year warranty. It still works fine. Don't let the bank tell you it won't work with their system, if they say that don't do business with them, their liars. I've seen businesses that were paying $200/month for machine rent on a five year contract!

[Golden Rocket]

Debit Cards

The original concept was that debit cards would be honored just like a credit card. I won't have a credit card -- I'm just too conservative, but have had a debit card for a few years.

In recent years, I've run into some problems. Everywhere at a cash register nowadays, the cashier asks "Debit or Credit?" Obviously, it matters to the store, or they wouldn't ask. They might be paying a different percentage.

This spring, one motel would not honor my debit card. Said they had too much hassle with their bank. Something about the bank holding up their money for 30 days, etc.

Anyone know what's going on?

[veritas]

Costco See the small print

There is a $20 a month minimum.

http://www.novainfo.com/costco/index.asp

You can also interface with Quickbooks. This is handy. You just go into Quickbooks and enter the card info and process over the internet. No swipe machine is necessary. Quickbooks keeps the information stored so the next time you do not need to enter card info.

However there is also a monthly fee for this service.

[Black Bart]

Credit/debit cards

...I had a lot of client ask last yr about using debit cards. Just wondering if any of you use card machine...

I don't have a machine, but my wife has a small shop next door and I use hers when needed.

...do you have a large % of your clients use them...

Only two out of about 500 clients paid by credit card. I had no debit cards presented at all.


This is an interesting question you've posed, but my client base is very conservative and so may not be typical. My financially solid clients (about 85% -- both young and old) usually have bank accounts and pay by check. The other 15% paying cash are those doing it for convenience or because they're too economically shaky to maintain a bank account.

But anyway, I'm expecting an eventual (or maybe a PDQ) change. I've asked grocery store clerks here -- they say 1/2 their business now is debit cards. Nobody here liked check-imaging when banks stopped returning cancelled checks, but it was cheaper, all the banks began doing it, and people had to accept it. It can only be a matter of time until the obviously much cheaper processing of debit cards (no paper checks--no imaging-a one page bank statement) becomes the norm. Older folks (including me) will cling to their paper, but I suspect that banks will introduce "special handling" fees for them and that'll eventually be the end of checks.

[Donanita]

Thanks

Taxman, I didn't think of EBAY. Will check on a machine as the company I checked with charges $350 for the machine but you can get a 4 month term with them and the statement fee is $5 a month. Their rates are 1.59% on debit cards and 1.89% on credit with a .25 per tranaction.Don't mind the % rates,.25 fee or the $5 statement fee but didn't want to pay $350 for the machine and not have a lot of my clients do this.
Like Black Bart my clients have paid with check or cash and just now getting some of them to e-file.Older people(me included) are like old dogs. Hard to teach them new tricks but as BB said I think this will be the no check future.

[taxmandan]

There is a $20 a month minimum.

http://www.novainfo.com/costco/index.asp

You can also interface with Quickbooks. This is handy. You just go into Quickbooks and enter the card info and process over the internet. No swipe machine is necessary. Quickbooks keeps the information stored so the next time you do not need to enter card info.

However there is also a monthly fee for this service.

Only if you let them, I negotiated to remove the monthly minimum and they agreed. The merchant account business is very competitive and negotiating terms is possible. When I checked, the online process had a $400 up front setup fee, and the discount rate was higher. It is always higher if the card is not swiped.

[veritas]

Thanks for the info

I think I will call our bank and do some negotiating.

[Lion]

Credit Cards

If you're not sure how many clients will pay by credit card, you could use the non-swipe method to save the cost of a machine at this time. Your per transaction fee will be a bit higher, but if you think you'll have only a few takers your first tax season taking credit cards it might make sense. If you're doing the volume that gets you past the break-even point of non-swipe higher fees vs. buying/renting a machine, then you get a machine at that time. I'm going to take credit cards this tax season, but many will give me their number over the telephone. I'm not going to get a swiper until I see how many clients I might use it for.

[Black Bart]

Lion

If you're not sure how many clients will pay by credit card, you could use the non-swipe method to save the cost of a machine

How do you process a debit/credit card like that? I thought you had to have some sort of machine just to key in the Visa numbers -- like when you're ordering something by phone and they take your numbers, I assumed they were punching them into a machine.

[Larmil]

How do you process a debit/credit card like that? I thought you had to have some sort of machine just to key in the Visa numbers -- like when you're ordering something by phone and they take your numbers, I assumed they were punching them into a machine.

I used a 'virtual terminal' from PayPal for a time. I just set up my laptop for using it. It is more expensive, but if like me, you want test taking cards with no upfront cost for a while it can help.

[Donanita]

Non-swipe vs swipe

I have checked with a few companies and you can get a terminal starting at $59 up. I have ordered one for $99. Company has a .21 cent batch fee and 1.69% fee with a statement charge of $7.95 @ month. If 80% of my client base goes with the debit card( which no doub they will) my cost per client will be around 2 to 3 dollars. Non swipe will be time consuming for me during peak tax time.

[MAMalody]

Why not just just use ProPay or PayPal? The only real major difference is that you have to arrange to have any balances transferred to your bank...it is not direct deposited like the charge card companies. I accepted cards for about 5 years and in the end it turned out that the service cost pretty close to what the total value received was...I did not have too many who used the service. Now when one comes in or a debit card, I simply contact my daughter who has a ProPay account for her business and that is all it takes. Three days later the funds are available. Works for me.

[Lion]

Swipe vs. Non-Swipe

I'm expecting many to give me their numbers over the telephone, so I won't be swiping many actual cards. It'll take me time to punch in the numbers, but less time than to telephone to verify a charge, which would be my alternative since the customer isn't present. I do need an internet connection, which I of course have, to accept via non-swipe. After I see how it goes for a season, who and how many charge, what my clients want to do, what it costs me, etc., I'll be better informed to decide what I need for the following season.