Virginia Gun Owners Forum - VGOF

No matter what numbers you use to make it seem like a lot, 2.75% is just 2.75%. It's simply the cost of doing business to provide payment flexability to my customers. ANY credit card processor is going to have a fee for their service. But with that fee comes the guarantee that if the transaction goes through my funds will be delivered to my account. I don't have to worry about fraud cases or anything like that. If I sell some merchandise and they pay with a bad check, it's a PITA to get my funds. Fortunately I haven't been burned with any bad checks, but it would only take one or two bad checks to equal what I'd pay in Square fees for the year.

$1M/year companies aren't even using Square. They're using another CC processor that guess what? charges them fees as well. Because they're doing $1M/year I'm sure they're negotiating better rates, but they're still paying fees. Square is a great solution for small businesses who want to accept credit cards but don't accept them enough to justify going with another provider that charges a monthly fee and lower rates.

But my point really was that it either is now or will ultimately be aimed at personal users - consumers. If it becomes as ubiquitous as cell phones, and it might, we may well see the day when most or all the places consumers spend their money do not take anything else (right now, if they get Walmart and 2 or three others they'll have most of it; and, by the way, you can expect people like Walmart to jump into the game with THEIR OWN 2.75% "money tax"). Then the $41,674 yearly income of the guy making the US annual average wage will be subject to a $1,146 charge just for the priveledge of spending his own money. Of course, that assumes he'll spend all his income, but Lord knows THAT'S not much of a stretch.

This makes no sense at all. The idea is that your business wants more ways to accept payments from your customers, not fewer ways. It wouldn't make any sense for me to only accept CC payments where I'm charged a fee and not accept cash or checks where I'm not charged a fee. So if it doesn't make sense for me, you know a place like Walmart who tries to squeeze every penny out of everything won't follow that plan either. It also doesn't fit with their target market (low wage people that tend not to have credit cards or bank accounts). Cell phones in the US are SLOWLY rolling out Near Field Communication technology, but security issues and a very slow network revamp to accept these types of devices will make it a LONG time before it's a viable option.

I don't see where this is a "money tax" since the fees aren't even paid by the consumer. The average Joe who's making his $41k per year is still going to be able to spend his $41k per year. The fees are paid by the business (which fees have been paid to CC payment merchants since they were established in what the 1950s or 60s?) It's the cost of doing business for having that extra flexability and qualifies as a business expense.

You've been on a roll lately with your Marxist "I want something for nothing" comments. Bashing multiple companies in one thread - I think that's a new record for you.

I'm sure it's easier. I'll bet you $10 agin' a good dry horse turd that it ain't a better deal if you ever really put a pencil to it. And as I've already said, it is ShotgunB's decision to make with respect to his business; although if I ever buy anything from him he's gonna have to take the cash.

It just seems to me to be a damned high price to pay so consumers can be too damn lazy to carry cash; and it draws us a little further into cashlessness - which I guarantee you will turn out to have been a HUGE mistake on the part of everybody but the damned guv'mint and the confounded banks.

Curmudgeonly old skinflint, signing off.

Riposite wrote:

dorminWS wrote:Yes, I'm sure all that's wonderful. But they're taking 2.75% off the top. If you do $1,000,000 a year and it's all collected with SQUARE, it's costing you $27,500. It may be a good thing for you in your circumstances and it is certainly your decision to make, but in my opinion that's a BIG cut just to collect your credit card receipts, it seems to me. I might be inclined to take my chances with cash or checks.

.

yeah but Merchant services have always collected a percentage -when you use a visa whether it is run by someone on their cell phone or a card reader, the merchant is never getting the full amount, credit card companies don't settle for interest income-that's why lots of times you can get a cash discount for using cash as opposed to credit (gas stations for example)
2.75% doesn't seem that bad for a small business and I bet the increase in business makes up for the slightly lower profit margin. The one good thing about the digital era is companies like square up can bundle a ton of small business users and get them all better rates - if shotgunblast had gone straight to his bank for a reader and contract he'd probably be paying more. Sure he could not pay the 2.75% , but look at it this way .let's say his profit margin is 10% on cash, and only 7.75 on credit cards, but his sales w/o accepting credit cards are 1,000,000 yearly and 2,000,000 with credit cards..so hes paying that 27,500 to make an additional 77,500 -and hopefully his profit margin is better than that

seems like a no brainer to use it, especially when accepting credit cards lets you be more than a local business, a guy in california who only can pay in cash won't come to virginia to buy his widgets.



Don't get me wrong, there's a lot wrong with our bank and credit card systems, but i don't think squareup is it

Bingo. Square really changed the game for people like me. I did go to my bank and to some other CC processors and the fees and equipment made it where it wasn't a viable option. Square really opened the doors for my business and the other 330,000 merchants that use it. Not only do they do easy CC payments, but I can also configure my account to automatically discount 1st time customers, or track customer payments (make 10 payments, get a coupon) kind of deal. I can't do that kind of stuff from a plain ol CC processor. They really have neat ways to help me build my business.

dorminWS wrote:It just seems to me to be a damned high price to pay so consumers can be too damn lazy to carry cash; and it draws us a little further into cashlessness - which I guarantee you will turn out to have been a HUGE mistake on the part of everybody but the damned guv'mint and the confounded banks.

You're assuming that people are replacing carrying cash with only using debit cards, which I'd agree in that case I'd rather someone pay in cash. For people using credit it's a great way to mitigate the cost over multiple payments. And before anyone says "if you can't pay for it in cash you shouldn't buy it" none of our businesses would ever be able to purchase equipment if we went by that philosophy.

dorminWS wrote:It just seems to me to be a damned high price to pay so consumers can be too damn lazy to carry cash; and it draws us a little further into cashlessness - which I guarantee you will turn out to have been a HUGE mistake on the part of everybody but the damned guv'mint and the confounded banks.

The problem is the consumers are already NOT carrying cash, or certainly not very much of it.

It is becoming more and more common for merchants to charge a a fee to CC users vs the 'cash/check' price, so passing 1.5-2% of the 2.75 on to the consumer doesn't generate much push-back and I'm willing to loose some of the profit on sale, if its the difference between a sale, and no sale... especially on a larger sale.

Since our fiat paper isn't backed by anything of worth, I don't see a reason to carry it with me where it can get lost or stolen. For the last 10 years I have rarely carried cash. I don't think of it as laziness, more like obsolescence.

I agree with jdonovan, if it's the difference between a sale or no sale (especially in this economy)... make the sale!

ShotgunBlast wrote: No matter what numbers you use to make it seem like a lot, 2.75% is just 2.75%. It's simply the cost of doing business to provide payment flexability to my customers. ANY credit card processor is going to have a fee for their service. But with that fee comes the guarantee that if the transaction goes through my funds will be delivered to my account. I don't have to worry about fraud cases or anything like that. If I sell some merchandise and they pay with a bad check, it's a PITA to get my funds. Fortunately I haven't been burned with any bad checks, but it would only take one or two bad checks to equal what I'd pay in Square fees for the year.

……………………………………
OK, Two points here:
(1) The 2.75% is what SQUARE gets for processing a transaction on some credit card or other. The credit card company ALSO assesses a charge, so those two charges cumulate. If you don’t understand how I got to 27.5%, do a Yahoo search on “velocity of the money supply”.
(2) Where you are talking about fraud and bad checks, what you are telling me is that when it come to losses arising from these causes, you are somewhat risk-averse. You state that you haven’t had a loss, but it is worth the 2.75% upcharge not to have to worry about it. In totally rational terms, if your losses from fraud and bad checks were less than 2.75%, it wouldn’t be worth it. If you have had NOP losses so far, then it has not demonstrably been worth the 2.75% YET. But since you are risk-averse, you elect to buy what you perceive as greater certainty that you will not have a loss at the cost of 2.75% of your receipts. No criticism implied, here; you are entitled to be risk-averse if that’s the way you’re made. It’s your monkey-show, and you can run it any way you want to.
………………………………………………….

ShotgunBlast wrote:$1M/year companies aren't even using Square. They're using another CC processor that guess what? charges them fees as well. Because they're doing $1M/year I'm sure they're negotiating better rates, but they're still paying fees. Square is a great solution for small businesses who want to accept credit cards but don't accept them enough to justify going with another provider that charges a monthly fee and lower rates.

……………………………………………………………….
How do you know $1M/year companies aren’t using Square, and what makes you think they’re negotiating better rates? So you’re only doing $100,000/year. It still costs you 2.75%. That’s $2,750/year. Will you miss that less than the guy doing $1M/year will miss his $27,500?

AGAIN, you can do what you want. I’m not trying to tell YOU what to do; I’m just expressing my opinion. I don’t understand why that’s got your panties in such a wad.
………………………………………………………….

But my point really was that it either is now or will ultimately be aimed at personal users - consumers. If it becomes as ubiquitous as cell phones, and it might, we may well see the day when most or all the places consumers spend their money do not take anything else (right now, if they get Walmart and 2 or three others they'll have most of it; and, by the way, you can expect people like Walmart to jump into the game with THEIR OWN 2.75% "money tax"). Then the $41,674 yearly income of the guy making the US annual average wage will be subject to a $1,146 charge just for the priveledge of spending his own money. Of course, that assumes he'll spend all his income, but Lord knows THAT'S not much of a stretch.

This makes no sense at all. [/quote]
……………………………….
Correction: it makes no sense TO YOU. I’m perfectly willing to have you disagree with me. I don’t think it makes you an idiot. I wish you’d give me the same amount of consideration, old buddy.
…………………………………………

ShotgunBlast wrote:The idea is that your business wants more ways to accept payments from your customers, not fewer ways. It wouldn't make any sense for me to only accept CC payments where I'm charged a fee and not accept cash or checks where I'm not charged a fee. So if it doesn't make sense for me, you know a place like Walmart who tries to squeeze every penny out of everything won't follow that plan either. It also doesn't fit with their target market (low wage people that tend not to have credit cards or bank accounts). Cell phones in the US are SLOWLY rolling out Near Field Communication technology, but security issues and a very slow network revamp to accept these types of devices will make it a LONG time before it's a viable option.

I don't see where this is a "money tax" since the fees aren't even paid by the consumer. The average Joe who's making his $41k per year is still going to be able to spend his $41k per year. The fees are paid by the business (which fees have been paid to CC payment merchants since they were established in what the 1950s or 60s?) It's the cost of doing business for having that extra flexability and qualifies as a business expense.

The fees aren’t paid by the consumer? Let’s study ‘bout this for just one dawgone minute, here………… You pay the fee. The consumer pays you. Have you got a magic pot of gold under the bed that you wish money out of to pay the 2.75% with? If you don’t, the money you pay the 2.75% with comes from the consumer, doesn’t it? Same argument applies to those credit card fees established in the 1950s and 60s.

I repeat: that 2.75% is AN EXTRA COST assessed upon the consumer for the privilege of spending his money using SQUARE – over and above the credit card charges. If you’re happy and your customer is happy, it’s OK with me. But I would not be happy if I were either the customer or the merchant. I would opt for that nasty old yankee money.
…………………………………………………

ShotgunBlast wrote:
You've been on a roll lately with your Marxist "I want something for nothing" comments. Bashing multiple companies in one thread - I think that's a new record for you.

…………………………………………………
Who said anything about something for nothing? Where’d you get that at? What I want from outfits like SQUARE is NOTHING FOR NOTHING. I want nothing FROM them and I’ve got nothing FOR them. As for being a Marxist, well, I don’t think I’ve ever known of any remark being further from reality. Tell you what: You can just go ahead and call me an S.O.B. and YOU can be the Marxist, OK?

Well I'm not gonna call you a SOB because you haven't done anything to warrant being called that. The Marxist crack was just a holdover from another thread when someone else called you a Marxist for railing on another company. I'm sorry if you took it as me being serious, didn't make the connection, etc. I guess instead of those hysterical smiles we need one with a big arrow that says "THIS IS A JOKE". I've also learned that if you have to explain a joke it isn't funny so I bombed with this one.

(1) The 2.75% is what SQUARE gets for processing a transaction on some credit card or other. The credit card company ALSO assesses a charge, so those two charges cumulate. If you don’t understand how I got to 27.5%, do a Yahoo search on “velocity of the money supply”.

Just so I understand your words correctly, it's VISA/MasterCard charge + SQUARE charge = 2.75%. It's not SQUARE charge of 2.75% on top of VISA/MasterCard charge. If SQUARE (or any other CC payment provider out there) wants to be the middleman and only net the difference between 2.75% minus VISA/MasterCard charge I'm ok with that. Since I don't have a way to go to VISA/MasterCard directly and bypass Square's fee this will have to do.

How do you know $1M/year companies aren’t using Square, and what makes you think they’re negotiating better rates? So you’re only doing $100,000/year. It still costs you 2.75%. That’s $2,750/year. Will you miss that less than the guy doing $1M/year will miss his $27,500?

OK you got me there. I don't know all the ins and outs of every $1M/year company, but every big retailer I've been to use swipers that belong to other CC payment providers. You can negotiate a lot of terms with CC payment providers, and it would be a good business decision to go to a few and say "you can process this much in sales if I can get a better rate". As for missing the $2750 from my $100k in sales, the point I'm making (and others in this thread are too) is that since fewer and fewer people are carrying cash or would rather finance their purchases we'd rather pay the $2750 in fees to help get $100k in sales than pay no fees only to get $50k in sales from only accepting cash/check.

I repeat: that 2.75% is AN EXTRA COST assessed upon the consumer for the privilege of spending his money using SQUARE – over and above the credit card charges. If you’re happy and your customer is happy, it’s OK with me. But I would not be happy if I were either the customer or the merchant. I would opt for that nasty old yankee money.

That is simply not true as shown by my response to your first point. Square does not charge me 2.75% + VISA/MC charges. It is simply a flat 2.75%. In addition, some buddies that use other CC processing companies say that their fees vary depending on if the customer uses a VISA, MC, Discover, or American Express (AmEx tends to be higher which is why some retailers don't accept AmEx). Also for credit cards that offer cash back, bonus miles, etc. Guess who pays that? The retailer! It gets tacked onto their fee from the credit card processor. With Square there's none of that.

AGAIN, you can do what you want. I’m not trying to tell YOU what to do; I’m just expressing my opinion. I don’t understand why that’s got your panties in such a wad.

It's not about getting my panties in a wad. It's about educating those who don't know how Square works.

If you want to just use cash to make your purchases - awesome! Every retailer would appreciate that. You'll still pay the same price as everyone else, but the retailer will appreciate that slight bump in margin on that transaction. But cash only consumers get fewer and fewer every year. Right now it's credit and debit cards. In the future it could be swiping your phone over a pad or using a thumbprint. Who knows. But whatever methods people use to pay for goods and services, retailers will weigh the sales they can get from implementing those payment options vs the cost of accepting those payment options. Personally as a consumer I think all of those options are neat and a lot more convenient than carrying paper bills and coins, but I haven't gotten my curmudgeon ranking up high enough. I'm barely at the level where I yell at the neighborhood rascals to get off my lawn.

You guys should team up and open your own financial consulting firm. Too bad the office would have to be constructed inside a chain link fence cage.

Now THAT’S a great idea!

[ Post made via Mobile Device ]

This is a response to the Dodd-Frank law. That law limited fees that can be charged on debit/credit transactions -- which had become a cash cow for banks in the last decade or two. The banks are looking for a new cash cow. (BTW - banking fees are how the world used to operate back in the day ... so the wall street reform law reformed us back to ... say 1985 or so....!)

lonestarag wrote:This is a response to the Dodd-Frank law. That law limited fees that can be charged on debit/credit transactions -- which had become a cash cow for banks in the last decade or two. The banks are looking for a new cash cow. (BTW - banking fees are how the world used to operate back in the day ... so the wall street reform law reformed us back to ... say 1985 or so....!)

To be fair, the banks and credit card companies have to pay for the messaging traffic associated with each and every transaction a consumer makes. Roughly 90% of the messaging traffic is controlled by just one international company, the same one who turned over records to the Bush administration to track terrorist money transfers after 9-11.

FYI

What are Square's fees?

Our fees are simply 2.75% per swipe.

Every payment card we accept (Visa, Mastercard, American Express and Discover) has the same flat rate.

Our fees are taken out of each payment as they occur so there is no fee schedule. Square does not require a contract upon signup or have any monthly minimums. It doesn’t cost you anything if you don't use it. If you type in the card information manually, our fee is 3.5% + 15¢.

It appears that that 2.75% is the TOTAL cost to the merchant.