The nickel-and-dime reputation of the credit card processing industry is no myth. Business owners enter contracts with merchant service providers (MSPs) thinking they have a solid handle on the terms. But inevitably, as the statements roll in month after month, the fees start to pile up.
Some tanning salon owners charge thousands of transactions per month across multiple locations, so they dismiss the fees as the cost of doing business. Others attempt to dig into the details, only to get lost in the $0.10 to $0.30 costs per transaction. By ignoring the reasons why these fees exist, salon owners are leaving a significant amount of money on the table.
Following are five ways salons consistently overpay for credit card processing and how to make it stop.
- Processing Fees – Every transaction comes with fees from the credit card company and the MSP. These are referred to as “Transaction Fee” and “Discount Rate”. The transaction fee occurs anytime an attempt to process a card whether the card is approved or declined. The discount rate is the percentage the MSP retains only when a transaction is approved. The fees can differ based on whether the card is swiped, uses a PIN, or is manually entered; or using an outdated terminal; There is sometimes a third type of fee called a “gateway fee”. This occurs when you’re using a processor that is not directly integrated with your software that serves as a middle man for your transactions. They add a small fee to each transaction in addition to the other processing fees.
- Card Not Present – This transaction fee can hit salon owners the hardest because it is charged whenever a card number is entered manually or stored for memberships or card on file transactions. This fee is in addition to your regular processing fees. Many tanning salons offer monthly memberships and charge credits cards automatically as a convenience. They also may keep a card on file so frequent customers can checkout faster. Keeping the card on file is a way to provide fast customer service and build recurring revenue, but that comes with a security risk. MSPs like Worldpay and Global Payments tokenize credit card numbers within software systems like TanTrack so cards can be kept on file without the risk of a fraud event. Often, you’ll see processing fees posted but the card not present fees will be in the fine print. For example, Stripe offers a 2.9% + $0.30 processing fee. However, for any card on file transactions such as memberships, there is an additional 0.5% to 0.8% fee added to each transaction. Square charges as much as 3.5% + $0.15 for card on file transactions. With TanTrack, our integrated processors charge 2.7% + $0.10 which INCLUDES all card not present transactions.
| Processor |
Global Payments |
Worldpay |
Stripe |
Square |
PayPal |
Clover Basic |
Authorize.net |
|
Integrations: TanTrack |
 |
|
 |
|
|
|
|
|
Walk-in / card present |
2.7% + $0.10 | 2.7% + $0.10 | 2.9% + $0.30 |
2.6% + $0.15 (Square Free, tap, dip, or swipe) |
Card present 2.29% + $0.09. Keyed in 3.49% + $0.09. |
2.6% + $0.10 (Basic, card tapped, swiped, or inserted) |
No separate in-person rate |
|
Online |
Dynamic pricing | Dynamic pricing | 2.9% + $0.30 (US domestic cards). Manually entered cards are an extra 0.5%, so 3.4% + $0.30. |
3.3% + $0.30 (Square Free, online or invoice). Square Plus and Premium online are 2.9% + $0.30 |
PayPal Checkout, credit and debit cards: 2.99% + $0.49. Expanded Checkout, credit and debit cards: 2.89% + $0.29. |
3.5% + $0.10 (Basic, card information typed in) |
All-in-one 2.9% + $0.30 per transaction, plus $25 a month, subject to eligibility. Gateway-only is $25 a month plus $0.10 per transaction and a $0.10 daily batch fee, not a percentage. |
- Add-ons – Whether your MSP is a bank or an online processor like Square, Stripe, or PayPal, they are always coming out with new features and add-ons to help their customers better run their businesses. Some of these services are automatically added on to an account as a free trial, then charged on a monthly basis unless the business owner cancels. A quick review of monthly statements or account management settings will determine if any services can be cancelled for an immediate cost savings.
- PCI Non-Compliance – Payment Card Industry (PCI) Compliance is a list of mandatory security requirements that all merchants must adhere to if processing credit cards. There are twelve requirements such as implementing firewalls to collect data, appropriate password protection, encryption of cardholder data, regularly testing security systems, and documenting policies. In order for a business to be compliant, it needs to follow all requirements and be able to prove it. MSPs charge an annual fee for PCI compliance companies that goes toward the MSP’s assistance in remaining compliant. However, until a business submits information to the MSP to prove it is following all of the requirements, the MSP charges a PCI non-compliance fee that can be upwards of $100 per month. Businesses following PCI requirements should submit the appropriate proof to their MSP immediately to stop this charge.
- Integration – MSPs often boast integration with business software as a selling point, but this is not always correct. The cost of working with a credit card processor that does not integrate with salon business software is in time and opportunity, not a monthly fee. When software is not integrated, salon employees must manually enter all credit card transactions into the business software and the terminal, which requires double steps, takes time and is prone to error. Before committing to a new MSP – or a new business software provider – take the extra step to confirm how all of the salon business technology can and should work together.
TanTrack tanning salon software was designed to be the central component of a salon’s point of sale system. It offers a client portal with online appointment booking, credit cards saved on file, and online shopping; a back office remote reporting module that can be accessed on mobile devices and manage employee time clocks; a kiosk as a customer self-service platform; and a hardware and software solution to create a programmable menu or waiting area video loop for your waiting area; data conversion from nearly all major tanning salon software; and cloud hosting.
We like to believe we’ve thought of everything when developing this software, and we have when it comes to credit card processing. TanTrack integrates exclusively with The Worldpay and Global Payments MSPs. We work very closely with our MSP partners to ensure our clients have access to the most competitive rates and features available.
When TanTrack customers process credit cards through Worldpay or Global, Nichesoft provides a limited promotional offer to get free terminals to our customers, reducing transaction fees and eliminating surprise costs. TanTrack also allows for two cards to be saved on file for each client, so if one is declined during a monthly membership charge, the system will automatically attempt the second card and make it primary. Other benefits are automatic nightly batching by the processor, so no more risk of losing the day’s transaction data if the power or internet go out.
TanTrack was developed with ease of use in mind, allowing the salon owner maximum control over the salon. To learn more about credit card processing fees or schedule a demo, contact us.
Disclaimer:
The credit card processing rates displayed on this website are provided for informational purposes only and are subject to change by the respective payment processors. We strive to keep this information accurate and up to date; however, we do not guarantee its accuracy, completeness, or timeliness. Please consult the relevant provider directly for the most current rates and terms. Our website does not process payments or enter into financial agreements on your behalf, and we are not responsible for any discrepancies or changes in pricing.