Merchant Card Processing - Nonstandard Agency

[4independence]

Can anyone provide feedback on what I may experience if I sign up for merchant card processing for my nonstandard auto agency? Do you know if there is a set fee per transaction + ____% of the transaction? Anyone have a recommended vendor?

Appreciate any feedback!

 

[djs]

Fees largely depend on volume and number of transactions. Yes, typically there is a charge per transaction plus a percentage of the transaction. In all honesty, it can destroy your margins.

Say the premium is $100. You'll probably pay 3% to 3.5% for the transaction plus $0.50, so $3.50 to $4. If you make 10% commission, you make $10, but give the credit card company almost half of it, unless you are charging a broker fee as well, or doing the broker fee as a separate transaction.

The simplest to get setup on is either paypal.com (virtual terminal or paypal here) or stripe. If you have some decent volume you can get lower rates elsewhere, but again, it will be volume dependent.

There is also 'clearing' time for the transaction and this will depend on your history. For instance, I think Stripe takes 2 bank days to deposit the money in my account. Not the end of the world, but some take longer, some up to 14 days. If you have a lot of chargebacks, they may be slower or require a hold on some of the money.

Dan

 

[Gamecockfe]

Yeah I used to work in the merchant services business. PayPal was my competition and I would highly recommend them over anybody out there for lots of reasons. PM me if you have any further questions of why PayPal is the most transparent and easiest to deal with.

 

[BADTROUT]

$20 a month

legally pass the fees on to your clients...

https://epaypolicy.com/

Works great!


That said... What carriers do you have in your NS Auto agency that don't take cards themselves?

 

[4independence]

All of the carriers take cards. We spend a ton of time processing payments in person and via phone. I am considering agency fees for this...maybe $2 if paying in cash and $5 if credit card. Trying to figure out if I will net a gain on the $5 charge (using my own cc processor and putting transaction through as agency sweep for premium + payment fee) or if card processing expense will make it a wash.

Thank you very much for the feedback!

 

[BADTROUT]

Make your money on the commission... Pretty sure you are asking for trouble if you circumvent the systems that the carriers already provide. You are also running the risk of customers disputing the charge... Had it happen once and it cost me. Customer disputed $400 charge. We paid the invoice but now the processor HAS to freeze that money until dispute is resolved. Since the policy effective date was a future date, they found against us in the dispute and reversed the charge. THEN to make matters worse, the insured called the carrier, cancelled the policy, and received a refund check back.

BE CAREFUL trying to make a couple points on the interest. Also look at the legal ramifications in your state to see if you actually CAN charge a different fee for CC Processing.

You also run the risk of an ethics challenge where free processing to the insured is replaced by your charging a fee.

I just see a litany of problems that in the end would not be worth it. Spend your time just selling more insurance.

 

[indienoise]

In the non-standard auto world, a 3 dollar fee would just barely cover processing costs for single vehicle, liability only monthly installments, in a best case scenario.
The standard CC processing fee carriers are charging now is 5-6 dollars, and they will without a doubt be getting a better rate than you because of volume.
Believe me, I've looked into squeezing dollars out of this market In many ways. This is not it. Your best bet is to sell add-ons if you aren't already. Motor club, ad&d, theft prevention, etc. All fully earned and a nice cash flow supplement.

 

[4independence]

Great advice! I do appreciate it!

 

[joeinsure]

I use Tranzpay.com and have been very happy. They are only $10 a month. They have a hybrid model where I can chose to pay the fees myself or pass them on.