Credit Card Processor

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Browsing the forums it seems like most people are using square.for processing credit cards. Is that the consensus? What other options are people using and why?

ChrisandShelley's picture
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04/13/2014

Even though we use Lighthouse (used to be Shift4) because they integrate easily into our booking system and offered us a great deal on processing, we still use Square in our event center. Easy to use and easy to teach an employee how to use.

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OnTheShore's picture
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I have seen analyses that suggest the cut-off point where a traditional merchant account does better than the flat-rate processors, like Square, is something like $12,000 to $15,000 per month in transactions; that's every month of the year -- if you are above that during your peak season, but below it for the other 9 months of the year, you'll have to do your own calculation to see what's better.

We push alternative forms of payment -- you know, like cash, or check -- which helps keep our transaction processing expenses low Eye-wink

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gillumhouse's picture
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I switched to Square when I did the math and discovered a month with NO CHARGES cost me $21.99 in fees. the last processor was OK about teh cancel but the previous one, even though I was long out of contract, kept taking money even after I went to the bank to block charges. It took me threatening the bank with moving my account adn filling out paperwork TWICE to dump them. Those thrird party cards (ie Sierra Club, Sam's, whatever MC/VS) - anything other than the bank's card - had fees I could not calculate and they were lumped into "categories" on the statement with some costing me between 4 & 5%.

Whatever card using Square is flat rate as Copperhead spelled out, no contract, and no fee until used.

Generic's picture
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02/24/2011

I used a traditional processor we got through the cost wholesaler and we have both GetPayd and Square as a backup and for Amex. Our percentages are pretty low, though they keep on changing things, but the national government has made them lower their percentages twice, so far. Every time they put them up, the government threatens to open up an enquiry. Get don't have a statement fee, just a minimum and it's almost impossible not to hit it. 

There are two reasons that I keep the traditional processor. First, our debit card system is not related and I need a traditional processor for debit. Debit transactions cost 7c, so I love when people pay with debit. Secondly locals don't feel secure with swipe transactions... around here, it is either chip & PIN or contactless. We are usually over the limit of contactless. But there is a natural suspicion related to swipe, especially with debit cards in this country. We also use swipe

I asked Amex, they won't match their own rate through GetPayd, so we use GetPayd for Amex. I know, it's silly, but that's their choice.

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Lee2014's picture
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12/11/2014

  We use Square and Stripe (website) and have been totally and completely happy with them.

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Lee2014 wrote:

  We use Square and Stripe (website) and have been totally and completely happy with them.


Why do you use 2.  Is there something we need to know? 

 

Lee2014's picture
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Copperhead wrote:

Lee2014 wrote:

  We use Square and Stripe (website) and have been totally and completely happy with them.


Why do you use 2.  Is there something we need to know? 

  We use the card processor that the website designer offered.  When we needed another card processor for the house, we were told to go with Square from here.  If I was electronically comfortable it would change... 

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We were using a traditional bank processor and kept seeing more and more monthly fees tacked on as the years went by.  When they they told me we would have to purchase a new machine due to new regulations (that was real) and the cost of a new machine was going to be around the $1k mark we switched to Square.  
2.75% swipe/chip  3.5% +.15 keyed.   No other charges - NONE
No different % costs for AMEX, or so-called discount cards some most people carry.  (contrary to Jim's comment in his #3)
Additionally you can send invoices to the customer if you prefer that to keying in the payment...when they pay the invoice via the Square system the % is the same as swipe/chip - 2.75%
They also have a great reporting system that keeps improving.  (maybe the bank processors have improved as well, but back when I used them not much was available)
I do think there is a $ point where using a bank processor will save you $ but I don't know what that point is as I have not reached it - no where close!  I would say IF you are in a very busy location with higher end rates and good number of rooms, you need to calculate the cost as you may save more by using a traditional processor.  

JerseyBoy's picture
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12/29/2016

We have tried a few processors over the years and haven't been able to get below about 3.2%.   We've generally been using the cost plus method and the expensive rewards cards have been killing us.    I'm in the process now of switching over to InnPayments to give it a try.  Its similar to square in that its a fixed rate of 2.75% no other fees.   (Amex  and international cards are a higher rate but we have very few of those).

I'll know in about a year how it works out.

Morticia's picture
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05/22/2008

We run around 35% of our transactions from Amex cards. Having the same rate for all cards is great. Only issue is debit cards should be a few cents and they are also charged at the same rate as a credit card.

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Morticia's picture
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05/22/2008

We originally kept the processor the previous owners had because it was easier than switching. A few years ago, that processor started tossing random fees into to the bill.

2 years ago they a added a $170 fee one month. We called to find out what that was for. 'Doing business with us,' was the response.

With all the additional fees, not including that last one, we were paying between 4-6% per month. We got Square the following month.

Used it all of last year and saved ourselves $3000 in fees. Even if we ran 100% of our transactions as 'card not present' we would still save money.

Plus, the money is in our account in 2 days. 

Stripe is another similar option.

Do not sign a contract! The horror stories I've heard about getting out of a credit card processing contactc would curl your hair! (Ours had a contract that allowed us to cancel in the month of November. That was it. No other time. And they had to 'accept' our cancellation. We ended up having to close our checking account so they could not access it to take more money.)

JimBoone's picture
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12/18/2014

I don't use Square, but my guess would be that part of the appeal is that they say the fee is a simple percentage, easy to see what you are paying (commission or use fee), I think an inexpensive card reader that connects to your cell, while on the other hand most regular processors have a base fee, commission/use fee per sale, and a multitude of various small charges depending on the type of card the customer is using and you may have to purchase the equipment you use.

Okay, why do I use the bank/other service as my processor?

[1] I don't believe Square was an option years ago when we started business, creature of habit, lazy, perhaps. All done by telephone and pen and paper when we started.

[2] When we did change processors several years past I went with the folks that were willing to actually sit down and talk with me and assist in setting up a process that suited me, national bank, but a young local person I can call, email or see face to face if I have a concern, I chose the lodging business because I like personal connections with people.

[3] If I'm doing my math correct, total credit sales divided into the total fees (for year), looks like my costs were about 3%, seems like Square was saying 2.75%, but still some variation depending on card type or if the user keyed in the card rather than swiped the card or used the chip. Card present vs card not present.

The way we operate, if a guest makes a reservation online (Reservation Key) they pay a $10 charge at that time processed through Authorize, I get a token (? ability to charge that card without actually holding that card number), same process if guest calls and I enter their info, that deposit is not refundable to the guest. I have the option of charging for a no show or charging the balance when the guest arrives, however I also have the normal credit card machine on the desk, I prefer to let the machine read the chip on the guest's card and then make a manual entry of that payment in RK. I'm sure everyone has a favorite method, but this suits us.

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