Guest guest Posted August 20, 2005 Report Share Posted August 20, 2005 As an ex-banker who used to do alot of merchant analyses --I'll add my 2 cents worth to this discussion: 1. Understand your market, and why this would be a benefit to you. For example, in Battle Ground I have very few bad checks and it is customary to pay by cash or check. In a small community, typically patients will not write a bad check. Will people spend more money if they can put it on plastic? Are you losing business because you don't accept debit or credit cards? Even in the retail store, Dr. Stansbury does not accept debit or credit cards. However, the decision to accept or not, should be based on your estimate of the number of debit and or credit transactions per month, and the average ticket (sale) value. (i.e. your market) 2. Estimate the number of debit and/or credit transactions per month and the average ticket (sale) value. For example, 10 debit cards (which will displace 10 check or cash transactions), 5 credit card transactions at $xxx.xx each. This will give you a basis for calculating your new costs for discount rate (percentage of sales) and debit transaction fees (based on number, not dollars.) 3. Shop for services. Merchant services are offered by third party providers as well as financial institutions. Your discount rate and transaction fees are determined by your volume, type of business and your credit rating. 'Keep in mind, because card transactions are a guaranteed payment to you (unlike checks) the provider assumes the risk that the cardholder will not pay for whatever reason. 4. Decide the type of terminal --manual imprinter vs. telephone terminal based on the volume and type of transactions, cost and the service expectations. On-line terminals provide end of day or next-day deposits of your money. Paper drafts may not. Accept the cards which are used by " your market. " Of course, VISA and Mastercard have the most cards issued. Am Ex is typically used for business expenses since typically the balance is paid in full each month. (So hypothetically, these folks could pay you cash?) You can certainly send me a note off-line, if you have more questions or need some help on your analysis. J. Benton, ND Battle Ground, WA. (Family Practice) (and happy to be an ex-banker!) Quote Link to comment Share on other sites More sharing options...
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