Saturday, February 6, 2010

Accepting Credit Cards Online - Fees & Hassles, Three Analyses

I run a small online dot com consumer online services company that has three major sections that accept credit cards. By small I mean that we have around twenty staff and revenues under five million. Most of that comes from one subscription business.

For each of the three major business areas, I'm going to review this month my credit card arrangements. This blog will allow me to record my thoughts, to structure them, and perhaps to get useful feedback.  Maybe other similar businesses might send me their info so we can share and compare.  My email is creditcardsonline101 and it's a Gmail account (yes, the idea is that stating it like that the spammers will not harvest my email address. I gather that they have learned how to skip the spaces and to interpret the "at" and "com" so that "name @" and "name at domain dot com" no longer provide much protection.

I am intending, btw, to revitalize this blog as a general business issues blog for small dot com businesses where we can discuss issues for benefits, high level marketing (no, this won't become an SEO or online marketing blog), staff, operations, in and out sourcing etc etc. Feel free to subscribe and join in. I'm hoping to have a small group of people to chat with.

The metrics and info that I'm going to look at for each business for its credit card.
1. Revenue 2009 and the nature of the revenue (recurring or not, size of average transaction)
2. Total credit card processing expense. Merchant account fees, processing fees, credit card fees etc.
3. Marketing & UI issues.
 - How good a UI and API for building sales funnels.
 - How good a UI for my staff for management
 - How good a API for all the complex functions - declines, recurring, change credit cards, pull reports automatically, refunds
4. Stability, reliability
5 Support
6 Nature of our vendor - ISO,  size, merchant account, PCI compliance, software, gateway etc. I need a better summary of these issues so I'll research this a bit more before I start.

The three businesses:
- One has revenues into the seven figures (that's over a million) and is based on recurring revenue with the average transaction being in the low twenty dollars range. We use a classic small credit card processor hooked into

Friday, February 5, 2010

Credit Cards Notice

Although this blog is focused on my issues and research as a small business owner accepting credit cards online, I'm also a big user of credit cards. As much as possible, I try to run as many expenses as possible from my 15 person company through my American Express Gold card. Frankly, my wife LOVES the miles which gives my life a very pleasant feel.  At one point, the major software that I license, that I pay tens of thousands of dollars for every month, was run through my credit card. That was great.

This post is to point out how messed up the credit card industry is.  It's ridiculous that there isn't a simple summary of Terms and Conditions associated with every credit card. A truth in labelling if you were. If the industry doesn't do it, the government should.  I started thinking about this when I opened this morning's mail and found:

Important notice about prime rate. As a result of new federal credit card regulations, we are simplifying the way that the Prime Rate is dermined for a variable interest rates. Accordingly, effective April 8, 2010, the secon and third sentences of the subsection about the Prime Rate in you Cardmemember Agreement are deleted and replaced with: "The Prime Rate for each billing period is the Price Rate published in The Wall Street Journal 2 days before the Closing Date of the billing period. The Wall Street Journal may not publish the Prime Rate on that day. If it does, we will use the Prime Rate from the previous day it was published."

Am I the only one who wants to fix those last two sentences into:

If the Wall Street Journal may not publish the Prime Rate on that day, we will use the Prime Rate from the previous day it was published."

A trivial point but still, given the millions of people receiving this notice and the number of lawyers and marketers that saw it, shouldn't they write clearly? It feels like I put more effort into this blog (which nobody reads) than they do into their text.