VENMO Issues

 
VENMO, is a digital money-transfer service owner launched in 2009 and operated by PayPal Holdings Inc. For years, VENMO customers have been able to make payments to individuals, free of charge. Consumers just link a bank account, debit, or credit card to their app and pay people directly. Now, VENMO is offering merchants a chance to capture the millennial market (digital payment society) by getting set up as a "partner business"! 

Mobile to Mobile Payments

How do you take advantage of VENMO as a payment source for your business? First of all, VENMO is NOT a in-person payment portal, it is strictly for online purchases via a MOBILE APP.  You would need a mobile app and add VENMO to your list of supported and accepted payments. Mobile savvy users LOVE being able to make purchases using VENMO. 




So what are the fees? While there is NO FEE for the customer to make payments via their bank account from peer to peer, there is a 3% fee if  a users pays someone using a credit or debit card. The consumer actually gets charged the cost of the payment plus the 3% on their credit card. This is NOT what happens when accepting VENMO payments as a merchant. The Merchant pays the fees! If a merchant is a partner partner business, consumers can use any type of accepted payment and VENMO charges the business 2.9% of the transaction plus $0.30. The only good news is that there are no monthly subscription fees, annual charges, nor minimums you must meet.

What's the downside? 

• You have to have a mobile app or online store
• All transactions are public knowledge
• There is no in-person payment acceptance connection
• You must have an IOSv4, Androidv2 or Javascriptv3 to be able to use VENMO App
• VENMO does not have a published list of accepted industries for merchant accounts. A merchant has to apply and wait to see if they are accepted.
• VENMO, like Square, can pull, hold or even freeze your account if they feel that there is any suspicious behavior. 
• VENMO has been linked to consumer fraud issues. The VENMO APP frequently asks its users to re-enter their bank account or credit card info into the app. Recent reports should users have been "hacked" and lost thousands of dollars for their bank account or on their credit/debit cards.
• Consumers who pay a vendors for products or services at least $600 in a year using VENMO, are required to send that vendor a 1099 form unless it was for personal purposes only. 

Bottom line, there will always be a number of ways for merchants to get paid and it may look to be lower fees. However, VENMO is not a free service to merchants! It's actually MORE EXPENSIVE than many typical merchant accounts. The most important thing to remember when setting up a merchant account is being set up correctly with Interchange Plus Pricing to give you the best pricing, minimal monthly fees and transparent processing! 

If you are interested in knowing more, call Merchant Processing Solutions TODAY! 954-938-2420

Looking at Payment Acceptance via a Merchant!

         I KNOW I AM PAYING TOO MUCH FOR MY CREDIT CARD ACCEPTANCE!

Discount rates are made up of three components: 

• Interchange fees - Established by VISA/MasterCard/Discover & AMEX
• Assessment Fees - Established by VISA/MasterCard and given directly to them without that portion of the revenue being shared by the bank or processor. 
• Visa charges: .13% for Credit Card Transactions & .11% for Debit Card Transactions
• MasterCard charges: .125% for both Credit & Debit Card Transactions
• Merchant Service Fees is comprised of a "markup" on the Interchange Rate (MPS charges Basis Points over the Interchange Rate), a transaction fee & a monthly service fee.
• There are also additional fees like PCI Compliance, IRS Regulatory Fees etc. Many of these are mandated by law. 

Many merchants believe they are paying more today for credit cards than they were a few years ago. That is partially true! Here's why:

1. With Globalization, Visa/MasterCard/Discover/American Express are now dealing with a global community. There are now additional fees when money crosses borders.
2. Banks are taking a BIG CHUNK of the Discount Rate as a "kick-back" from the BRANDS for using a certain BRAND on their Debit and Credit Cards Issued to their customers.
3. PCI Compliance, IRS Reporting and other such programs have made it necessary for processors to pass those fees on to the Merchant. Both have also implemented penalties if not adhered to! 
4. Credit Card Rewards Programs is one of the most used programs for consumers. Buy a TV and get money back, get points towards a hotel, cruise, airline mileage and almost anything on the market. Who doesn't want to get something back when they spend money? Unfortunately, those dollars, miles, points etc are ALL paid by increase discount rates for the Merchant! 

     Here are some of the whys you are not overpaying for payment acceptance! 

1. Most companies are no longer charging for start-up, Application or installation fees.
2. Credit card machines are cheaper or given FREE by many companies. No one is Leasing Equipment unless they are looking for ongoing insurance and replacement.
3. In the early 1990s, Interchange rates were averaging 1.75% for debit card purchases and 3.5% for card not present transaction. Today if you go the most economic route, with Interchange Plus Pricing, you will pay .05% - 1.38% for debit card purchases and an average of  2.10% - 2.40%.

Common 2019 Interchange Rate Examples

	Swiped/Dipped	Keyed/eCommerce
Basic Credit	1.51% + $0.10	1.80% + $0.10
Signature/Traditional Rewards Credit	1.65% + $0.10	1.95% + $0.10
Preferred Rewards Credit	2.10% + $0.10	2.10% + $0.10 / 2.40% + $0.10
Small Bank (Exempt) Debit	0.80% + $0.15	1.65% + $0.15
Big Bank (Regulated) Debit	0.05% + $0.22	0.05% + $0.22

mERCHANTs MUST UNDERSTAND: 

• The merchant discount rate is the rate charged to a merchant for payment processing services on debit and credit card transactions.
• The merchant must set up this service and agree to the rate prior to accepting debit and credit cards as payment.
• The merchant discount rate is a fee that merchants must consider when managing the overall cost of their business.
• Customers purchase today and make payments to their credit cards 30-45 days from the date of the purchase. Merchant Processors give the merchant their money USUALLY, the next day! 
• Today's merchant will accept both in person and card not present transactions adding to the complexity and cost of payment acceptance. Therefore, it is important to work with someone like Merchant Processing Solutions that can help you manage both types of sales via multiple connecting devices! 

For more information on how you can save money, call Merchant Processing Solutions Inc. TODAY! 954-938-2420