Special Report: Credit or Debit?
From February 2005
Community Comments
Spark a community dialogue. Be the first to contribute by adding your comments.
The merchant is assessed a fee ranging from 1.5 percent to 3 percent on the transaction, the same fee assessed for a pure credit card sale. But if the customer elects to use a PIN-based transaction, the cost to the merchant would be minimal, about 50 cents to 95 cents.
For example, a $1,000 purchase from a retailer offering both options can cost the merchant anywhere from $15 to $35 if the customer is “charged” for the item and signs the receipt but only 95 cents if the customer makes a PIN-based transaction.
Convenience at a Cost
Some lenders canvass prospective business clients with slick campaigns that promise convenience, but often at a very high cost to the consumer.
“Oh, man, have I been on the wrong end of those (marketing campaigns),” says Frank Fagundes, an owner/operator of the Mr. Pickles sandwich shop franchise in Roseville.
He was pigeonholed into a five-year lease of an ATM machine from a Texas bank several years ago that ended up costing him more than $1,100, plus the hefty per-transaction charges.
“It was one of the worst experiences we ever had,” he says ruefully. Fagundes’ solution was to go to a PIN-based system that provided customers the option of paying with debit cards. As a result, he says, he’s saved more than $400 a month in bank fees.
Here’s how merchants can save hundreds of dollars in fees: by simply offering a PIN-based option for ATM/credit/debit customers.
Continued...
For example, a $1,000 purchase from a retailer offering both options can cost the merchant anywhere from $15 to $35 if the customer is “charged” for the item and signs the receipt but only 95 cents if the customer makes a PIN-based transaction.
Convenience at a Cost
Some lenders canvass prospective business clients with slick campaigns that promise convenience, but often at a very high cost to the consumer.
“Oh, man, have I been on the wrong end of those (marketing campaigns),” says Frank Fagundes, an owner/operator of the Mr. Pickles sandwich shop franchise in Roseville.
He was pigeonholed into a five-year lease of an ATM machine from a Texas bank several years ago that ended up costing him more than $1,100, plus the hefty per-transaction charges.
“It was one of the worst experiences we ever had,” he says ruefully. Fagundes’ solution was to go to a PIN-based system that provided customers the option of paying with debit cards. As a result, he says, he’s saved more than $400 a month in bank fees.
Here’s how merchants can save hundreds of dollars in fees: by simply offering a PIN-based option for ATM/credit/debit customers.
Continued...
The Magazine
Site Links
Prosper Plus +
- Get Prosper Plus to receive e-mail alerts, special event invites, and content that interests you.
Community
- Join the Community and start participating. It's fast. It's easy. It's free.
Advertise on this site! Show your support for the Prosper Network and reach influential thought leaders and web users like yourself. Contact us to find out how.
© 2004-2007 Prosper Media, LLC. All Rights Reserved. Terms of Use | Privacy Policy
The materials on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Prosper Media, LLC.
Community Comments