Merchant credit card processing fees

Kareem

So I started a new business and I got in touch with Areeba, they delivered the CC machine and told me there's a 1.75% commission ( processing fee) on any transaction.

Is anyone familiar with that ? Does it mean that all merchants are being charge for any payment by VISA/MC ?

elserge82

Yeah that's normal . I guess you didn't check the commission with ccm and areeba before picking the right one :)

xazbrat

Kareem wroteSo I started a new business and I got in touch with Areeba, they delivered the CC machine and told me there's a 1.75% commission ( processing fee) on any transaction.

Is anyone familiar with that ? Does it mean that all merchants are being charge for any payment by VISA/MC ?

That sounds about right--yes, you do get charged a commission as a merchant for people to use credit cards. That commission is usually offset by more sales (convenience) and not having employees go to the bank to make deposits and deal with the risk the money doesn't make it there. Usually credit card sales pass through a merchant account which may take 3 days or more for you to get the money into your account and you just have to be aware that a $100 sale will net you $98.25. Accounting is sometimes a pain in the ass.

It is the price of convenience, but a few merchants here still charge you for it--ogero for example charge you .9%. for it. Lebanon is still behind the times with this.

Kareem

Actually I did, but I am not sure if the commission is negotiable. They told me it's BDL that controls it ? 1.75% seems too much. It's like if someone wants to pay 8000 USD, I'll be paying $140 USD of fees... too much honestly if the profit isn't anything above 10%.

Not sure if asking the client to pay for the commission is appropriate anyway.

potato

If i were you i wouldnt use areeba but thats none of my business.

Kareem

potato wroteIf i were you i wouldnt use areeba but thats none of my business.

Would you elaborate please? Actually it was the banque who sent me to Areeba.

rolf

potato wroteIf i were you i wouldnt use areeba but thats none of my business.

What alternatives do you recommend?

A fee on credit card processing is pretty standard practice. Have a look at the pricing structure for Stripe, probably the most popular option for Europe and USA (Note: Lebanese bank accounts are not supported):

https://stripe.com/pricing

Companies like Stripe are not banks. They are just middle men for Visa, Mastercard, etc. They need a source of income to fund their operations.

Personally I do not like passing the fees to customers, I feel that it reflects badly on the customer experience and the image, but some companies do it.

Think of it as an investment. By offering this extra convenience you should increase your business. For example by allowing customers to make orders online and internationally.

I have set up an e-commerce site for a company, and really 3% is nothing, they are happy to pay to have access to the global online market. But of course there are many other concerns such as shipping, web development, customer support, etc.

Kareem

rolf wrote
potato wroteIf i were you i wouldnt use areeba but thats none of my business.
What alternatives do you recommend?

A fee on credit card processing is pretty standard practice. Have a look at the pricing structure for Stripe, probably the most popular option for Europe and USA (Note: Lebanese bank accounts are not supported):

https://stripe.com/pricing

Companies like Stripe are not banks. They are just middle men for Visa, Mastercard, etc. They need a source of income to fund their operations.

True but there should be a flexible rate. Commission is rarely fix rate, even at the banque. The more you deposit the more commission you get.

rolf

Kareem wrote True but there should be a flexible rate. Commission is rarely fix rate, even at the banque. The more you deposit the more commission you get.

Yes definitely, but you are just getting started! When you have huge volumes where .5% will make a big difference, then you can try to renegotiate with them or move to another provider - I mean you are already enrolled.

Kareem

rolf wrote
Kareem wrote True but there should be a flexible rate. Commission is rarely fix rate, even at the banque. The more you deposit the more commission you get.
Yes definitely, but you are just getting started! When you have huge volumes where .5% will make a big difference, then you can try to renegotiate with them or move to another provider - I mean you are already enrolled.

I already asked them about flexible rate if the total amount of transactions is 100K USD and above, they said no. Rate is fixed and not negotiable.

rolf

If you have a volume of 100K and growing, and the rate is non-negociable and set by BDL, then apply for Stripe Atlas which will give you a company incorporated in the US and a US bank account with access to all facilities available in the USA including payment solutions.
Or just talk to me and I can help you incorporate your business in Europe and have access to the solutions there.
But I cannot guarantee anything as far as the rate goes, just that you could have more options.