Your laundromat needs a credit card processing terminal, but which one is right for your business? Once you've done your homework and understand the difference between a credit card reader and a credit card machine, your focus will need to shift to the processing fees that you'll pay with your chosen unit each time a customer swipes their card. If you aren't sure about the differences between a credit card machine and a credit card reader, see our previous post.
While there is no easy way to know exactly how much your business will pay on average for credit card processing fees, there are a few factors that can help you estimate how much your laundromat can anticipate paying. The type of card you accept, how you accept cards, and whether your customers sign for their debit cards or use their PIN number all impact how much you will pay for processing the transactions through your servicer. Rough numbers are available to help you determine what you can expect to spend on your fees. This information can help you decide which credit card processing option is right for you.
These numbers are indicative of average credit card processing fees.
- Discover, Visa and Mastercard Transactions - 1.95% - 2%
- Card Not Present Transactions - 2.3% - 2.5%
- American Express - Fees are typically higher than Discover, Visa, or Mastercard but the company does offer a program called OptBlue which is designed to lower the cost of the per transaction fee making it closer to the fees for Visa or Mastercard. However there are drawbacks to the program, so explore the costs carefully before you decide to accept American Express cards.
The method by which your business processes credit cards also has an impact on the fees you can expect to pay. If your business only accepts payments when a customer's credit or debit card is present, you can expect to have lower monthly fees and lower transaction fees. Requiring cards to be present at the time of purchase also means that your business is at a lower risk of chargebacks and fraud claims that can impact your overall transaction costs. You'll also pay lower interchange fees. Interchange fees are the processing costs established by Mastercard, Discover, and Visa to cover the cost of transferring the money from one bank to another.
For laundromats that utilize e-commerce business models or allow their customers to phone in their credit card numbers to pay for their orders, you can expect to pay slightly higher interchange fees. This method will also require the use of a card processing system that charges a little more per month and per transaction than a card present system. You're also at risk for incurring higher fraud and chargeback fees.
Accepting debit card charges versus credit card charges also impacts the fees your business can expect to pay. Card processing companies typically charge less for debit card transactions while credit card transactions are processed at a higher rate. Knowing the average ticket amount for your customer can help you determine how much you can expect to spend in fees for handling these two types of cards.
How to Invest in a NC Laundromat
Before you select a payment processing company, get a clear list of their transaction fees and evaluate whether they are right for your business based on your per ticket average, the types of cards you accept, and the type of transactions your company performs. Another crucial choice you have to make for your laundromat is who will provide your commercial laundry equipment. For more than 40 years T & L Laundry Equipment has been helping laundromat owners run successful businesses. From the latest in laundry equipment and technology to unmatched parts and service, T & L works hard to ensure that they are a partner in your business now and in the future.
Call or come by the showroom today to meet with one of our laundry experts and put our experience to work for you in learning how to invest in a NC laundromat!
