Author Topic: Credit card fees, small business-Moral dilemma  (Read 2152 times)

slappy

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Credit card fees, small business-Moral dilemma
« on: July 18, 2022, 06:31:05 AM »
I'm curious as to others thoughts...

We had an electrician do quite a bit a work at one of our rental properties. When I went to pay the bill, I noticed that he doesn't charge a fee to pay by credit card. My business partner (my brother) asked me not pay with a card, because the electrician eats the fee. He said the guy did great work and proactively offered a military discount (my brother is National Guard, with 15 years of active duty behind him). I totally agree that we should pay with a check. The cash back we would have gotten would been maybe $100 at max. It just got me thinking about the overall situation. The electrician should probably charge a fee for people paying with a card. But just because there is no fee, doesn't mean people should take advantage of him. Just kind of random thoughts, and figured I would see what others thought.

For what its worth, I paid by check because it felt like the right thing to do. I guess if I was in a situation where I didn't have the cash, I would pay by card and not feel too bad.

dandarc

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Re: Credit card fees, small business-Moral dilemma
« Reply #1 on: July 18, 2022, 06:47:31 AM »
Sounds like it is a large enough transaction to be worth it in this case, but checks and even worse cash are a hassle relative to credit card payments.

Ultimately he is running a business and free to set whatever terms he likes as to what methods of payment are acceptable. So long as you're paying on time and picking one he's offering as acceptable, I wouldn't worry too much about making the perfect choice.

Car Jack

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Re: Credit card fees, small business-Moral dilemma
« Reply #2 on: July 18, 2022, 06:54:04 AM »
I'll use cash at the local mom and pop pizza place.  Low cost transactions cost even more percentage wise than large ones.  A typical transaction might cost 35 cents plus 2% of the total.  That 35 cents can be killer on small purchase costs.  And of course, Discover and AMEX have much higher percentage numbers (up to 5%).

sailinlight

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Re: Credit card fees, small business-Moral dilemma
« Reply #3 on: July 18, 2022, 06:54:58 AM »
I have a contractor friend who does a lot of work for us. He recently switched to some online payment processing system and doesn't charge extra for paying with a credit card. I asked him if he would rather us pay him by check or Zelle and he would rather us use his online payment system since it kept everything organized in one place for his accounting and taxes and that was well worth whatever percentage they charged.

jpdx

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Re: Credit card fees, small business-Moral dilemma
« Reply #4 on: July 18, 2022, 10:13:36 PM »
You can ask what is their preferred method of payment.

Paul der Krake

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Re: Credit card fees, small business-Moral dilemma
« Reply #5 on: July 18, 2022, 11:49:30 PM »
There are real benefits to taking payments by cards.

1) No risk of bouncing checks
2) No risk of getting robbed
3) Somewhat predictable dispute resolution semantics
4) Easy integration between acquirer and bookkeeping and banking software
5) Easier to collect from customers

Some will value some items more than others. But there isn't a single merchant in the universe who isn't 100% aware of the fees they're giving to their card acquirer.

It sounds like you're talking about $20,000 worth of work. I doubt he cares about getting an extra ~2.6% out of this worksite, but hey, ask him if he has a preference and see what he says.

Plina

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Re: Credit card fees, small business-Moral dilemma
« Reply #6 on: July 19, 2022, 01:24:54 AM »
As a business owner everything comes with fees. If you handle cash it has fees for depositing, and it takes time to count.  I guess checks also has it own hassles because they also has to be deposited.

I pay a fee for receiving digital bills as well as for sending them but it takes a lot less time then doing it manually so I am fine with paying for it. Today, you can automate a lot if you do it digitally. My bookkeeping system can be set up to do a lot automatically if I deal with everything digitally.

I donít see it as taking advantage of him by paying with a card. Fees are a cost of business and should be included in his price. Personally, I prefer a price where everything is included instead of a cheaper price with a lot of different kinds of fees as add ons.

former player

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Re: Credit card fees, small business-Moral dilemma
« Reply #7 on: July 19, 2022, 02:48:40 AM »
Every tradesman transaction I have these days is done with an emailed invoice and then an online bank transfer, free for both parties and guaranteed within 2 hours.  Who would do anything else?

slappy

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Re: Credit card fees, small business-Moral dilemma
« Reply #8 on: July 19, 2022, 06:22:45 AM »
I actually just got around to paying the bill last night. I paid via online check, so no risks there. I also noticed that he gave a 12.5% military discount, which I think is quite generous. I'm glad I asked the question though, because I never really thought about the points that have been brought up with regard to the benefits of using a card for the business owner.

Michael in ABQ

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Re: Credit card fees, small business-Moral dilemma
« Reply #9 on: July 19, 2022, 08:21:58 AM »
Most credit card processing fees are going to be 2.5%-3.5%. A lot of the newer ones like Square and Stripe are actually more expensive, but obviously more convenient. Debit cards are usually 1% or less, so if you want to save a merchant some money use a debit card.

We have customers pay via check and while the fees are less, it's a bit of a hassle. The worst is one customer who mails in a money order. I have to go to the bank in person to deposit a $5-6 money order. It's almost not even worth the time.

mistymoney

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Re: Credit card fees, small business-Moral dilemma
« Reply #10 on: July 19, 2022, 09:26:17 AM »
zelle?

Plina

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Re: Credit card fees, small business-Moral dilemma
« Reply #11 on: July 19, 2022, 11:51:50 AM »
Most credit card processing fees are going to be 2.5%-3.5%. A lot of the newer ones like Square and Stripe are actually more expensive, but obviously more convenient. Debit cards are usually 1% or less, so if you want to save a merchant some money use a debit card.

We have customers pay via check and while the fees are less, it's a bit of a hassle. The worst is one customer who mails in a money order. I have to go to the bank in person to deposit a $5-6 money order. It's almost not even worth the time.

Why do you accept money orders then?

Sibley

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Re: Credit card fees, small business-Moral dilemma
« Reply #12 on: July 19, 2022, 12:24:47 PM »
I pay via whatever method of payment they accept that is reasonable for me.

Michael in ABQ

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Re: Credit card fees, small business-Moral dilemma
« Reply #13 on: July 19, 2022, 01:55:00 PM »
Most credit card processing fees are going to be 2.5%-3.5%. A lot of the newer ones like Square and Stripe are actually more expensive, but obviously more convenient. Debit cards are usually 1% or less, so if you want to save a merchant some money use a debit card.

We have customers pay via check and while the fees are less, it's a bit of a hassle. The worst is one customer who mails in a money order. I have to go to the bank in person to deposit a $5-6 money order. It's almost not even worth the time.

Why do you accept money orders then?

We normally wouldn't but a customer mailed it in with a request to buy something from our website written on the back of a receipt. No phone number, no email address. It's basically like they mailed cash so I would have felt bad just throwing it away without fulfilling their order. With a check, if we don't cash it, the customer isn't out any money.

RedmondStash

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Re: Credit card fees, small business-Moral dilemma
« Reply #14 on: July 19, 2022, 02:44:06 PM »
Given that credit cards are such a common form of payment, I suspect that any small business owner builds the fees into what they charge. It's probably a nice bonus for them to be paid by check and not deal with the fee, but I'd bet most of their customers pay with credit cards.

So I wouldn't feel bad about using a credit card.

Loren Ver

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Re: Credit card fees, small business-Moral dilemma
« Reply #15 on: July 19, 2022, 04:03:54 PM »
I too have thought about this quite a bit.  If I catch it in time I generally ask.  Usually they request a check.  If the moment has passed and I just have to go ahead, I just do a check, since all the other businesses have requested checks and if they don't have to eat the fee, then they get a little tip. 

On the funny side, we had some tree work done, and DH paid with a check.  The tree place didn't cash check for over 6 months.  I do our books and didn't think about it since I didn't write the check, but several months into the next year, when the check was cashed I was a little confused and had to do some digging as to what was going on.  It was not at a great time (right when we were paying a lot of taxes so not a lot of float).  But luckily we don't run too lean.  Not sure if they lost then found the check or just wanted it in the next tax year. :).  I'm just glad they got paid, they did good work.

Loren

lutorm

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Re: Credit card fees, small business-Moral dilemma
« Reply #16 on: July 19, 2022, 06:00:18 PM »
Checks are an absurd anachronism. Whenever I talk to my parents in Sweden about having to use a check they can't help but crack up since they haven't heard of anyone using a check since I was a toddler (and I'm over 50!) Just the fact that giving someone a check gives them all the info they need to silently deduct money directly from my bank account means I'm not going to use one unless I have to.

I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.

Cranky

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Re: Credit card fees, small business-Moral dilemma
« Reply #17 on: July 19, 2022, 06:40:09 PM »
A surprising number of tradespersons here only take checks.

Michael in ABQ

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Re: Credit card fees, small business-Moral dilemma
« Reply #18 on: July 19, 2022, 07:32:53 PM »
Checks are an absurd anachronism. Whenever I talk to my parents in Sweden about having to use a check they can't help but crack up since they haven't heard of anyone using a check since I was a toddler (and I'm over 50!) Just the fact that giving someone a check gives them all the info they need to silently deduct money directly from my bank account means I'm not going to use one unless I have to.

I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.

When we get a check for our business, I basically just type in the bank account and routing number and other information (name, address, etc.) and withdraw the money from their bank account through our payment processing system. I don't actually cash the check per se. We have one customer who always pays via check, and I tell him that since I have his information, I can just process the transaction, but he insists on mailing a physical check (and a handwritten invoice).

lutorm

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Re: Credit card fees, small business-Moral dilemma
« Reply #19 on: July 19, 2022, 07:40:08 PM »
When we get a check for our business, I basically just type in the bank account and routing number and other information (name, address, etc.) and withdraw the money from their bank account through our payment processing system.
Frightening.

clifp

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Re: Credit card fees, small business-Moral dilemma
« Reply #20 on: July 19, 2022, 07:43:37 PM »
Given that credit cards are such a common form of payment, I suspect that any small business owner builds the fees into what they charge. It's probably a nice bonus for them to be paid by check and not deal with the fee, but I'd bet most of their customers pay with credit cards.

So I wouldn't feel bad about using a credit card.

I think credit cards is probably the least bad option for most business.

Taking checks exposes you to bad check writers, which especially if you are dealing with tourists are almost certainly a total write-off.
Credit cards obviously have fees, but they have numerous advantages. First, nowadays credit card transactions are significantly faster than cash, especially with young math-challenged clerks,and much faster than checks.   They also provide a backup security check to avoid employee theft or just accounting mistakes.

Cash has many hidden costs.  My non-profit pays $10K a year for armored car service to pick up cash every week. That seems expensive but the alternative is paying someone to deposit the cash
There are also counting fees.  Our auditor charges us several thousand dollars to make quarterly surprise cash audits. Where they check that counts in the cashier's drawers match the records.
That may seem overkill, but about 20 years ago (when credit card usage was lower), one of our employees ripped over $200,000 over the course of a couple of years.  Employee theft is a fact of life for restaurants and retailers. The lower the percentage of cash transactions the easier it is to track.

Yes, you are helping your tradesman if you give him a check or cash for a $500 job, but at your local pizza joint, pay by credit card, you aren't really doing them a favor by giving them cash.

Paul der Krake

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Re: Credit card fees, small business-Moral dilemma
« Reply #21 on: July 19, 2022, 10:36:06 PM »
When we get a check for our business, I basically just type in the bank account and routing number and other information (name, address, etc.) and withdraw the money from their bank account through our payment processing system.
Frightening.
This is what happens behind the scenes anyway. Almost all checks that get deposited in the US are silently converted to an ACH payment. Michael in ABQ is just playing banker and doing it instead of the bank.

Plina

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Re: Credit card fees, small business-Moral dilemma
« Reply #22 on: July 20, 2022, 01:03:25 AM »
Checks are an absurd anachronism. Whenever I talk to my parents in Sweden about having to use a check they can't help but crack up since they haven't heard of anyone using a check since I was a toddler (and I'm over 50!) Just the fact that giving someone a check gives them all the info they need to silently deduct money directly from my bank account means I'm not going to use one unless I have to.

I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.

I havenít seen a check in 20 years at least.

 Swish also has costs but it is more like 20 cents per transaction plus a monthly fee.

former player

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Re: Credit card fees, small business-Moral dilemma
« Reply #23 on: July 20, 2022, 01:29:22 AM »
Checks are an absurd anachronism. Whenever I talk to my parents in Sweden about having to use a check they can't help but crack up since they haven't heard of anyone using a check since I was a toddler (and I'm over 50!) Just the fact that giving someone a check gives them all the info they need to silently deduct money directly from my bank account means I'm not going to use one unless I have to.

I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.

When we get a check for our business, I basically just type in the bank account and routing number and other information (name, address, etc.) and withdraw the money from their bank account through our payment processing system. I don't actually cash the check per se. We have one customer who always pays via check, and I tell him that since I have his information, I can just process the transaction, but he insists on mailing a physical check (and a handwritten invoice).
How is that possible?  I can't authorise an electronic payment out of my bank account without a card reader and pin number.  I know the bank account and name of my payees (and the bank will only pay the transfer if the two match, to prevent people typing in wrong numbers) but I couldn't get money out of their accounts with that info.  Maybe you are typing in the cheque number as well?  Even so that doesn't seem like good security on the bank's part.

sailinlight

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Re: Credit card fees, small business-Moral dilemma
« Reply #24 on: July 20, 2022, 07:06:25 AM »
I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.
Zelle is free and really easy to use

ender

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Re: Credit card fees, small business-Moral dilemma
« Reply #25 on: July 20, 2022, 07:25:18 AM »
There are real benefits to taking payments by cards.

1) No risk of bouncing checks
2) No risk of getting robbed
3) Somewhat predictable dispute resolution semantics
4) Easy integration between acquirer and bookkeeping and banking software
5) Easier to collect from customers

Some will value some items more than others. But there isn't a single merchant in the universe who isn't 100% aware of the fees they're giving to their card acquirer.

It sounds like you're talking about $20,000 worth of work. I doubt he cares about getting an extra ~2.6% out of this worksite, but hey, ask him if he has a preference and see what he says.

+1 this is something where I think people don't realize that in the majority of cases, taking checks is way riskier for the vendor than credit cards.

If you pay 3.3% fees on the transaction all it takes is 1/30 people screwing you out of your check before it makes sense financially, even ignoring the convenience aspects.

dandarc

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Re: Credit card fees, small business-Moral dilemma
« Reply #26 on: July 20, 2022, 08:02:40 AM »
I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.
Zelle is free and really easy to use
Of course the business might have to change banks to accept Zelle. And customer's bank has to support Zelle for them to initiate a payment. And any fees are determined by the bank and the details of transaction sizes allowed is controlled by the bank. https://www.zellepay.com/faq/small-business-using-zelle

Michael in ABQ

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Re: Credit card fees, small business-Moral dilemma
« Reply #27 on: July 20, 2022, 08:48:41 AM »
Checks are an absurd anachronism. Whenever I talk to my parents in Sweden about having to use a check they can't help but crack up since they haven't heard of anyone using a check since I was a toddler (and I'm over 50!) Just the fact that giving someone a check gives them all the info they need to silently deduct money directly from my bank account means I'm not going to use one unless I have to.

I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.

When we get a check for our business, I basically just type in the bank account and routing number and other information (name, address, etc.) and withdraw the money from their bank account through our payment processing system. I don't actually cash the check per se. We have one customer who always pays via check, and I tell him that since I have his information, I can just process the transaction, but he insists on mailing a physical check (and a handwritten invoice).
How is that possible?  I can't authorise an electronic payment out of my bank account without a card reader and pin number.  I know the bank account and name of my payees (and the bank will only pay the transfer if the two match, to prevent people typing in wrong numbers) but I couldn't get money out of their accounts with that info.  Maybe you are typing in the cheque number as well?  Even so that doesn't seem like good security on the bank's part.

I'm just retyping the information already printed on the check along with the amount and picking the authorization type - i.e. was it submitted in writing with a physical check or over the phone. Check # doesn't really matter. I had to get approved by the payment processing platform to be able to have this kind of access. So, while I could say a check was for $1,000 instead of $100. I could probably only get away with that once before the customer complains about a $1,000 charge they don't recognize and then my account gets shut down.

We get customers who put in the wrong zip code for their credit card on a fairly regular basis. Usually because they've moved or forget that their billing address is a PO Box with a different zip code. People get worried about how their name appears on the card, or if there's a middle initial and the reality is that makes no difference. If the card number, expiration date, security code, and zip code match the rest is essentially meaningless.


It still takes 2-3 days for virtually every bank transfer in the US. Even between accounts with the same owner. It feels very antiquated at times. I know other countries have different banking systems and regulations where things can be done faster and/or cheaper. Nothing much I can do to change a trillion-dollar financial industry.

Plina

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Re: Credit card fees, small business-Moral dilemma
« Reply #28 on: July 20, 2022, 12:49:49 PM »
Checks are an absurd anachronism. Whenever I talk to my parents in Sweden about having to use a check they can't help but crack up since they haven't heard of anyone using a check since I was a toddler (and I'm over 50!) Just the fact that giving someone a check gives them all the info they need to silently deduct money directly from my bank account means I'm not going to use one unless I have to.

I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.

When we get a check for our business, I basically just type in the bank account and routing number and other information (name, address, etc.) and withdraw the money from their bank account through our payment processing system. I don't actually cash the check per se. We have one customer who always pays via check, and I tell him that since I have his information, I can just process the transaction, but he insists on mailing a physical check (and a handwritten invoice).
How is that possible?  I can't authorise an electronic payment out of my bank account without a card reader and pin number.  I know the bank account and name of my payees (and the bank will only pay the transfer if the two match, to prevent people typing in wrong numbers) but I couldn't get money out of their accounts with that info.  Maybe you are typing in the cheque number as well?  Even so that doesn't seem like good security on the bank's part.

I'm just retyping the information already printed on the check along with the amount and picking the authorization type - i.e. was it submitted in writing with a physical check or over the phone. Check # doesn't really matter. I had to get approved by the payment processing platform to be able to have this kind of access. So, while I could say a check was for $1,000 instead of $100. I could probably only get away with that once before the customer complains about a $1,000 charge they don't recognize and then my account gets shut down.

We get customers who put in the wrong zip code for their credit card on a fairly regular basis. Usually because they've moved or forget that their billing address is a PO Box with a different zip code. People get worried about how their name appears on the card, or if there's a middle initial and the reality is that makes no difference. If the card number, expiration date, security code, and zip code match the rest is essentially meaningless.


It still takes 2-3 days for virtually every bank transfer in the US. Even between accounts with the same owner. It feels very antiquated at times. I know other countries have different banking systems and regulations where things can be done faster and/or cheaper. Nothing much I can do to change a trillion-dollar financial industry.

Sometimes it really get ridiculous. If I want to pay automatically myself a salary through the accounting system I need to pay a 6 USD monthly fee. If I use the salary payment system in my Swedish bank it takes two or three days (depending on when I donit during the day) to transfer the money to my personal account in the same bank. If I do a regular transfer it is free and I can get the money same day if I do it before 2 pm. The same applies if I want to transfer money from another bank to my regular bank.

Paul der Krake

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Re: Credit card fees, small business-Moral dilemma
« Reply #29 on: July 20, 2022, 01:53:58 PM »
How is that possible?  I can't authorise an electronic payment out of my bank account without a card reader and pin number.  I know the bank account and name of my payees (and the bank will only pay the transfer if the two match, to prevent people typing in wrong numbers) but I couldn't get money out of their accounts with that info.  Maybe you are typing in the cheque number as well?  Even so that doesn't seem like good security on the bank's part.
Payment semantics vary wildly by country. Some are incredibly lax, some are incredibly stringent, and everything in between.

The rule of thumb is that the more lax the semantics, the more reversibility is baked into the protocol. Ultimately you have a a triangle of 3 goals:

1) security
2) ease of use
3) cost of implementation

But even more simply, you can think of the design decisions as "who bears the cost of fraud".

afox

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Re: Credit card fees, small business-Moral dilemma
« Reply #30 on: July 30, 2022, 10:37:13 PM »
All this bad talk about how checks are a hassle, imo they USED to be a major hassle when we had to go to the bank to deposit them. Now I can deposit a check in about 45 seconds with my banks app that uses phone camera to take a pic of the check. I routinely deposit numerous large checks quickly. There are no transaction fees, and it's quick and convenient.

Dicey

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Re: Credit card fees, small business-Moral dilemma
« Reply #31 on: July 31, 2022, 05:25:31 AM »
I am unhappy that the alternative is to feed some middle man a significant chuck of the transaction cost, though. Hopefully one day there's something like Sweden's Swish that's supported by all the banks that can take the place of the credit card middleman.
Zelle is free and really easy to use
Of course the business might have to change banks to accept Zelle. And customer's bank has to support Zelle for them to initiate a payment. And any fees are determined by the bank and the details of transaction sizes allowed is controlled by the bank. https://www.zellepay.com/faq/small-business-using-zelle
Zelle has less protection than a credit card. Far less. It's also subject to daily limits. One of our tenants pays via Zelle and has to pay over two days.

scottish

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Re: Credit card fees, small business-Moral dilemma
« Reply #32 on: July 31, 2022, 06:43:50 AM »
I generally pay by credit card for all the reasons described above.

Sometimes, a tradesperson will offer to waive the HST (Harmonized Sales Tax) if I pay in cash.    It's 13% in Ontario.    In this case, the supplier is not going to report the income from the job.

How do other people deal with this?

Plina

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Re: Credit card fees, small business-Moral dilemma
« Reply #33 on: July 31, 2022, 09:01:32 AM »
I generally pay by credit card for all the reasons described above.

Sometimes, a tradesperson will offer to waive the HST (Harmonized Sales Tax) if I pay in cash.    It's 13% in Ontario.    In this case, the supplier is not going to report the income from the job.

How do other people deal with this?

I donít even have cash to pay with but I would refuse. For several reasons. First of all, I am a lawyer so it would not that good to not pay taxes. I have worked for the government and I had a former boss that advised me to not do anything that I could not explain to a reporter. I donít want to burn any bridges careeer wise. Second, I donít want to contribute to a black market of services. Taxes contribute to a lot of social services. And the final part is what if the person has for some reason done a poor job that leads to damages. How do I prove that he/she has even done the job.

sonofsven

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Re: Credit card fees, small business-Moral dilemma
« Reply #34 on: July 31, 2022, 10:33:22 AM »
I'm a "Tradesman" and I only take checks, or cash, but in my case I generally only bill one client per month, sometimes two or three, max. I deposit the check via my mobile phone almost immediately upon receipt.
 I hate cash because all my banking is online (no physical branches, at least for my main checking account) so I can't easily get the cash into an account. The last cash I got I used to fund a new bonus/churning account that needed to be opened in branch (Chase). Plus I don't like to spend cash because I put all my spending on credit cards. When asked if I have a "cash discount" I say no.
My partner also runs her own business but she sees multiple clients per day. She uses Square and has simply upped her prices to reflect the cost of accepting these payments, since this is the way the majority of her clients want to pay.
So I wouldn't feel bad using a card to pay, if they accept them. If they don't know how the fees affect them then they should learn.

Michael in ABQ

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Re: Credit card fees, small business-Moral dilemma
« Reply #35 on: July 31, 2022, 02:12:04 PM »
I generally pay by credit card for all the reasons described above.

Sometimes, a tradesperson will offer to waive the HST (Harmonized Sales Tax) if I pay in cash.    It's 13% in Ontario.    In this case, the supplier is not going to report the income from the job.

How do other people deal with this?

I donít even have cash to pay with but I would refuse. For several reasons. First of all, I am a lawyer so it would not that good to not pay taxes. I have worked for the government and I had a former boss that advised me to not do anything that I could not explain to a reporter. I donít want to burn any bridges careeer wise. Second, I donít want to contribute to a black market of services. Taxes contribute to a lot of social services. And the final part is what if the person has for some reason done a poor job that leads to damages. How do I prove that he/she has even done the job.

That's on them if they decide not to report income and pay taxes. As long as you've got a receipt for services rendered and whatever implied or explicit warranty exists, then what they do with their bookkeeping is none of your concern. If you pay cash (and whatever associated sales tax) as a normal matter of course and they decided not to report that income or remit those taxes to the government, you have no control in that case.

Plina

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Re: Credit card fees, small business-Moral dilemma
« Reply #36 on: August 01, 2022, 01:04:54 AM »
I generally pay by credit card for all the reasons described above.

Sometimes, a tradesperson will offer to waive the HST (Harmonized Sales Tax) if I pay in cash.    It's 13% in Ontario.    In this case, the supplier is not going to report the income from the job.

How do other people deal with this?

I donít even have cash to pay with but I would refuse. For several reasons. First of all, I am a lawyer so it would not that good to not pay taxes. I have worked for the government and I had a former boss that advised me to not do anything that I could not explain to a reporter. I donít want to burn any bridges careeer wise. Second, I donít want to contribute to a black market of services. Taxes contribute to a lot of social services. And the final part is what if the person has for some reason done a poor job that leads to damages. How do I prove that he/she has even done the job.

That's on them if they decide not to report income and pay taxes. As long as you've got a receipt for services rendered and whatever implied or explicit warranty exists, then what they do with their bookkeeping is none of your concern. If you pay cash (and whatever associated sales tax) as a normal matter of course and they decided not to report that income or remit those taxes to the government, you have no control in that case.

Of course it is, but if they explicitly tell me that I can get it cheaper if I pay with cash I donít want to contribute to that. Normally, you donít get a receipt in those cases.

ender

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Re: Credit card fees, small business-Moral dilemma
« Reply #37 on: August 01, 2022, 07:21:40 AM »
All this bad talk about how checks are a hassle, imo they USED to be a major hassle when we had to go to the bank to deposit them. Now I can deposit a check in about 45 seconds with my banks app that uses phone camera to take a pic of the check. I routinely deposit numerous large checks quickly. There are no transaction fees, and it's quick and convenient.

How does this prevent you as a small business owner from eating the cost of someone writing a bad check?


 

Wow, a phone plan for fifteen bucks!