Home based business questions - Visa/MC

[kenmyfam]

Re: Home based business questions - Visa/MC

I smell "rip off" !!!!
Be extremely careful !!!!

 

[SgtMaj]

Re: Home based business questions - Visa/MC

As TD said... no legitimate company will ask for money up front like that... run away.

 

[QC]

Re: Home based business questions - Visa/MC

Guys, listen. I am not a sucker. I wanted to evaluate this from the merits of their rate claims. One angle, that's all. Nothing more. My point is, I don't care if they give me $1000 to start AND the leads (remember the leads are supposed to come from me), I am not going to do anything if there is no value proposition i.e. a better deal for the customer. My original question was about comparable rates. If the rates aren't better, then I wouldn't buy it, so why would a potential customer? Very simple.

Also, I don't think a $295 buy in is a reason to back off. It doesn't matter if you're selling 747's, there are costs associated with being a distributor of anything. In the case of dealerships, you buy inventory, or tooling, or training or all three. So, I am not sure how the measure of a legitimate business is one that has no up front cost. That one makes absolutely no sense to me unless I am being hired. I would not pay someone to hire me, but I would pay someone for inventory or anything else to get me a toe hold in a new business . . .

Again, I think this CC deal stinks, but I am investigating anyway. If, it was legitimate, and if there was a value proposition, and if it was compelling enough that I could attract customers, and if I could make money at it, then I might consider doing it. Lotta ifs there . . . I think what I have learned here is that rates are all over the place depending on the program, lease, free, length of contract etc. Makes sense, but a messy pool of stuff to evaluate . . .

 

[SuzukiChopper]

Re: Home based business questions - Visa/MC

QC, if you're going to be the one offering this service to people for "lower" rates and that is going to be your business based on the claims of a company, I would run. The rates that get charged to merchants are determined by a lot of different things, one being the merchants credit rating. I've been dealing with the credit card industry for way too long to begin to even think that a third party can guarantee any merchant a low rate. Anyone can get a good rate by being in business long enough or being able to guarantee enough volume that it's worth while. For example, my buddy owns a motorcycle shop. He does service, custom work, etc and has been in business for 20+ years. He has a rate of 1.5% on swiped, verified transactions. A lot of that is based on the business's credit rating and the fact that most of his transactions are high dollar transactions.

The thing you should know about credit cards and acceptance of them in any business is that the fees you pay are handed down from Visa/Mastercard/Amex/Discover, the merchant services company, the processor and the gateway (if involved). Each one of those is potentially a separate company wanting to make money, they don't coexist as a single entity. It almost sounds like this third party is offering financing on transactions (taking a risk) in the hopes of a big client that offsets the loss.

 

[SgtMaj]

Re: Home based business questions - Visa/MC

Also, I don't think a $295 buy in is a reason to back off. It doesn't matter if you're selling 747's, there are costs associated with being a distributor of anything. In the case of dealerships, you buy inventory, or tooling, or training or all three. So, I am not sure how the measure of a legitimate business is one that has no up front cost. That one makes absolutely no sense to me unless I am being hired. I would not pay someone to hire me, but I would pay someone for inventory or anything else to get me a toe hold in a new business . . .

What "inventory" will you be getting? Especially in a job where you're only getting sales leads for the company? If you need office supplies, you can buy them at any store... that's why the $295 buy in is a scam, pure and simple. Also, NO legitimate distributorships require buy ins like that. If you start a car lot, you just pay for the vehicles you get, but you are also free to sell vehicles without ever buying any up front. While franchises sometimes do require money up front, in those cases you are buying the rights to use their name on your business, as well as the building itself and supplies, and in almost every franchise, you get all the training you need on every part of owning a franchise. But then, if you're just getting sales leads for them, you're not really owning anything, are you? So that's not the same as a franchise. Seriously, you need to run from this... this isn't a legitimate business, it's a scam artist trying to con you out of $300.

 

[QC]

Re: Home based business questions - Visa/MC

Also, NO legitimate distributorships require buy ins like that. If you start a car lot, you just pay for the vehicles you get, but you are also free to sell vehicles without ever buying any up front.

Dude, that's not true . . . You gotta pay or have credit. Also, there are a lot of fees associated with starting a car dealership, I've done the research and have paid the Sate to "allow" me to apply to be a dealer. My only point was, I don't care if the buy-in is a million dollars. That number alone does not disqualify and opportunity. The opportunity defines the opportunity. I am not going to do this by what I see. You guys have helped, but I always find the simple "never do X, if Y" puzzling

Suzuki Chopper is answering my question dead nuts (as have few others). Examples like that refute the story that I am supposed to sell, so I won't go any further. In any business there is a value or nobody buys it. My assessment was only on the rate because that is the only real "value" that I can associate with CC agreements.

 

[Vlad D Impeller]

Re: Home based business questions - Visa/MC

QC, If your intent is to provide better service for less to the merchant, then you are in an up-hill battle, Bank card merchant services have you at an absolute disadvantage from the get go.
Your competition in this business is the one that you will ultimately be buying your services from.
In the long term, the direct Bankcard services works out much less expensive for the merchant, they simply offer better services in a variety of ways that the Third-party Reseller cannot and will not be able to match for a lesser price.
The Banks do hold all of the aces in this card game.

 

[QC]

Re: Home based business questions - Visa/MC

Yup, that makes sense too . . . ^^^^^

 

[Reel Poor]

Re: Home based business questions - Visa/MC

QC, merchants that require a high volume of processing for low dollar amounts are charged higher rates. Merchants that require lower volumes of processing with high dollar amounts get the lower rates. To sum it up, if the processor is doing more work for you (the merchant), they're charging you more to do it. They're banking on interest money from high dollar sales that most likely won't be paid off at the end of the month. This is why ATM card processing is always higher than credit card processing, there is no interest to be earned by the card service company.

BTW, 3-4% is probably a good average with some merchants paying as low as 1.5% while others may pay as high as 9% in some cases (read mom and pop convenient stores accepting ATM cards).

 

[OldMercsRule]

Re: Home based business questions - Visa/MC

QC, merchants that require a high volume of processing for low dollar amounts are charged higher rates. Merchants that require lower volumes of processing with high dollar amounts get the lower rates. To sum it up, if the processor is doing more work for you (the merchant), they're charging you more to do it. They're banking on interest money from high dollar sales that most likely won't be paid off at the end of the month. This is why ATM card processing is always higher than credit card processing, there is no interest to be earned by the card service company.

BTW, 3-4% is probably a good average with some merchants paying as low as 1.5% while others may pay as high as 9% in some cases (read mom and pop convenient stores accepting ATM cards).

I agree with Reel Poor here.

The rate you pay is based on volume and transaction size, (and credit/charge back experience). It is very VERY competitive and I get called or solicited in person (when a sales rep walks through the door ignorin' me "no solicitation" signs all the time) maybe once a week, (so established accounts will be vulnerable to constant price shopping). You can process on a PC so the need fer a leased machine is not a given either. JR

 

[SgtMaj]

Re: Home based business questions - Visa/MC

At least you aren't going to do it... that's the important thing. If you did, you'd lose that $300 and that would be that. At best they might even give you back $10 or $20 of your own money just to make it appear to be a legitimate business, but in the end, you'd still be out a ton of money respective to your returns on it.

PS - Paying the state for a liscense is different than paying someone for a distributorship. One is called the cost of doing business, and the other is called Amway.