Aggregate data on credit card processing fees

[JBanczak]

Since we are all sharing webstats information, thought this would be pretty useful.
Over the past few years, we’ve enabled more and more small properties to process credit cards. At the same time, we’ve been able to get quite a lot of data on average credit cards costs for our customers, and wanted to release aggregate data to enable innkeepers to make a more informed decision. These are actual figures we are seeing from our properties. The data is across properties since I obviously cannot share individual property data, but it should be valuable nonetheless.
We officially only recommend two credit card processors – PAI (Tom Weiskotten) for our Desktop product, and Intuit/Quickbooks Merchant Services for our GT product. Ignoring product freebies (i.e. if you do CC processing through Intuit you often get free Quickbooks/Rezo GT), here are the ACTUAL costs we are seeing from the few hundred properties that currently use on our our systems. Hopefully these actual statistics can be of some use for innkeepers comparing their own fees or making decisions on others.

Through PAI –

Average fee (weighted – includes actual qualified, mid-qualified, and non-qualified weighted by dollar amount and percentage processed at each rate): 2.63%.
Lowest average fee for any property on the system doing over $1k in processing in the previous month: 2.26%
Highest average fee for any property on the system doing over $1k in the previous month: 3.09%
Average per transaction fee not included in those rates (varies from .12/trans to .32/trans) .17
Monthly statement fee: $6.50
Total cost per transaction including all fees/statement fees/monthly fixed charges/etc. not including up-front/enrollment fees or freebies: 2.73%

Through Intuit/QBMS
Average fee (weighted – includes actual qualified, mid-qualified, and non-qualified weighted by dollar amount and percentage processed at each rate): 2.42%.
Lowest average fee for any property on the system doing over $1k in the previous month: 2.029%
Highest average fee for any property on the system doing over $1k in the previous month: 2.92%
Average per transaction fee is not included in those rates: .20 for everyone
Monthly fee: $12.95
Total cost per transaction including all fees/statement fees/monthly fixed charges/etc. not including up-front/enrollment fees or freebies: 2.63%

There are no additional hidden fees, that is the actual cost from our properties. On average, our two providers are within .1% of each other on an ongoing basis when you consider all costs involved. Hope that properties find this data useful.

 

[Bonne Adresse]

Thanks John for those useful information
Bruno

 

[JBanczak]

No problem. This probably isn't news to anyone, Tom is super well-respected in the industry and it was only a year and a half ago that we came to our senses and named him the only processor we would recommend for our Desktop product. Where I do think this is useful is benchmarking data.
One other thing to keep in mind is that this is all done through a lodging-certified gateway, and MUST use USB swipers at the property location - these are both important factors to get these rates from us.

 

[YellowSocks]

Wow... very interesting information!
Thanks!
=)
Kk.

 

[swirt]

Thanks John, That really does help to see the reality of it. It is often pretty hard to determine (even for a numbers person like me) what the actual cost of credit card processing is going to be. There are so many variations in the system and how fees and charges are applied that it really does help to see the larger picture.

 

[JBanczak]

You're right - it can be incredibly confusing. I believe that is one of the reason that Tom has been so successful - it is very easy to understand his pricing - and he preaches looking at the TOTAL cost of processing. Too often teaser rates are thrown out there for qualified transactions - then you never get them because your get downgraded all the time, or no actual data is placed out there that shows what you can expect your YEARLY percentage to be. That really is the only way to evaluate things.
A good provider should be close to these numbers at the end of the year when you add every charge and fee that they send your way into the actual percentages they charge. It is another reason we like Intuit - they just don't screw around - it is simple, easy to understand, and the fees are rock-bottom like Tom's are.
I'd really be curious to see more data posted from other processors. I think I am preaching to the choir on this forum as I recall most folks here use a lodging gateway and get these rates already through a respected processor - but I have seen some very crazy stuff. One property in California had an average annual over 5%!!!!! Often it is 3.5-4%.

 

[Copperhead]

Thanks for sharing this information John. I have read a lot of good things about Tom in other forums. One question that your original post did not state - What CC's are included in your stats? My processor processes Vis, MC and Discover and collects a small transaction fee to forward AMEX transactions.
I am just now pulling up my statments to see how my processor compares.

 

[JBanczak]

Thanks for sharing this information John. I have read a lot of good things about Tom in other forums. One question that your original post did not state - What CC's are included in your stats? My processor processes Vis, MC and Discover and collects a small transaction fee to forward AMEX transactions.
I am just now pulling up my statments to see how my processor compares..

Sorry - I should have been more clear in this. This does not include AMEX at all. This is Visa/MC only. We only have a few properties that accept and are running AMEX. It is roughly 3.5% for AMEX transactions from what I can see, and that appears all-in charged.

 

[IronGate]

Just out of curiosity, but what is that fee charged against -- the innkeeper's revenue or the entire transaction, incuding taxes?

 

[swirt]

Just out of curiosity, but what is that fee charged against -- the innkeeper's revenue or the entire transaction, incuding taxes?.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.

 

[IronGate]

Just out of curiosity, but what is that fee charged against -- the innkeeper's revenue or the entire transaction, incuding taxes?.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.
.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.

The transaction fee paid to the processor.

 

[swirt]

Just out of curiosity, but what is that fee charged against -- the innkeeper's revenue or the entire transaction, incuding taxes?.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.
.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.

The transaction fee paid to the processor.
.

That transaction fee is paid based on the amount charged to the card including taxes and anything else that leads up to the amount charged to the card.

 

[IronGate]

Just out of curiosity, but what is that fee charged against -- the innkeeper's revenue or the entire transaction, incuding taxes?.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.
.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.

The transaction fee paid to the processor.
.

That transaction fee is paid based on the amount charged to the card including taxes and anything else that leads up to the amount charged to the card.
.

That's what I guessed, but it somehow doesn't seem right that the vendor has to pay a fee on someone else's money (the collected taxes). Correct me if I'm wrong, but I don't imagine the government rebates the cc fee when you remit the taxes to them.

 

[swirt]

Just out of curiosity, but what is that fee charged against -- the innkeeper's revenue or the entire transaction, incuding taxes?.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.
.

Sorry, there are a bunch of Fees mentioned, you may need to be more specific about which one you are inquiring.

The transaction fee paid to the processor.
.

That transaction fee is paid based on the amount charged to the card including taxes and anything else that leads up to the amount charged to the card.
.

That's what I guessed, but it somehow doesn't seem right that the vendor has to pay a fee on someone else's money (the collected taxes). Correct me if I'm wrong, but I don't imagine the government rebates the cc fee when you remit the taxes to them.
.

Cost of doing business with credit cards I am afraid. The fees do come out as an expense, so from an income tax point of view, they come out, but not from a sales or occupancy tax perspective.
Actually our state sales tax does offer a little bit of rebate providing that you file and pay it on time. I know a few other states do this too, but I don't think they all do.

 

[nfpjeff]

I am switching from Desktop to GT at this time. Are you saying we can only use QBMS for GT and not Tom? It is not clear in the program - but I think that is the answer.