
Why We Stopped Accepting Credit Cards - dirwiz
https://www.dirwiz.com/news/273
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jeffmould
While I understand and respect your motives for moving away from credit cards
for a B2B company that does not do a high volume of transactions, your other
reasons are, for lack of a better term, uneducated.

1\. Development effort - there are many off-the-shelf carts available. And,
even easier, is a processor like Stripe that offers the ability to simply
create a "Buy Now" button that is placed on your page and they handle the
rest. Shoot, even PayPal is easy and will allow you to accept credit cards.

2\. Security - you don't have to store numbers. Stripe, Braintree, etc... all
handle this for you. In fact, the credit card number and financial details
should never even touch your server. In fact most processors handle this for
you.

3\. Service fees - true, debit and ACH can be done a lot cheaper.

Finally, you bring up development effort as an issue, yet the second to last
paragraph touts a processor like Dwolla. Dwolla is a great service and I have
helped clients in the past get hooked up with them. But there is a development
effort there as well, so you sort of contradict yourself.

No offense, by the title of the article I thought you were going to give me
some never heard before advice on why accepting credit cards is bad for
business. Instead you simply told me that transaction fees are high and your
company is no longer accepting credit cards.

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freehunter
I'm confused. So they stopped accepting credit cards, but partnered with a
credit card payment processor. So what payment methods do they accept if not
credit card? Are businesses supposed to send them cash? Wire transfer? It says
they stopped accepting credit cards but didn't say what they now accept other
than naming the company they're partnered with, which is a credit card
processor.

Also:

> It baffles us why a larger sale should cost more than a smaller sale. The
> storage and transfer of an digit or two on a computer is negligible.

Represents a massive misunderstanding of what a credit card company charges
for. A larger payment represents a larger risk if the payment is never
received or is received fraudulently. It's one thing if $5 is fraud. It's
another if $5000 is fraud and needs to be returned. You're not paying someone
to move bits around, you're paying someone to take the risk that someone could
issue a chargeback and demand their money returned.

~~~
aianus
> You're not paying someone to move bits around, you're paying someone to take
> the risk that someone could issue a chargeback and demand their money
> returned.

I don't follow. The merchant pays the credit card fees AND is on the hook for
fraud. The card processors even charge you a $15 or more fuck-you fee on top
of clawing back the money when a customer does a chargeback on you.

~~~
sk5t
I would argue that the merchant is pretty much on the hook for fraud, or even
borderline chargeback situations, but where the credit processors add some
proportional value is in loosening the purse strings generally. They are
taking their bite out of the value side, not strictly the cost side. It's
harder for a lot of customers to turn over $2,000 in hard cash than it is to
swipe and pay $200 a month for a year.

~~~
HiYaBarbie
Payment fees are high and plentiful because banks are a state-maintained
cartel everywhere.

For example, it's outrageous that they charge us something like $30 - $60 for
a wire transfer, but that's what happens when they can charge just about
whatever the fuck they want, because there is no competition!

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lemevi
> We would have to store credit card numbers!

Haven't they heard of Stripe? It's really easy to use Stripe. They should just
use that. I'm not sure they looked at all the available solutions out there
for processing payments.

~~~
larrysalibra
If they're storing credit cards they're doing something wrong.

~~~
viraptor
Don't you need to keep the card number for processing refunds?

~~~
steveklabnik
Nope. You just save a token for that transaction, and tell your processor
you'd like to refund that transaction. They have the associated card on file,
not you.

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mkozlows
The short answer is "because we don't sell to consumers, and credit cards
aren't necessary or even particularly desirable for business customers."

Okay, that's nice, but... not sure there's really a larger takeaway.

~~~
vacri
Sure there is: "Don't support credit cards unless there's a reason to do so".
People do a lot of things by default without thinking it through first.

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larrysalibra
It really depends on your target customer. If you're selling one off to
businesses with POs/invoices like directory wizards apparently is, your
customers don't want long payment terms, and your invoices values are high (>
$x000) then credit cards probably don't make sense.

It's silly to pretend checks, wire transfers, and dwolla don't have costs.
You're asking the customer to pay a month or two earlier than they would
credit cards - many businesses will then ask for net 30 terms (or 60 or 90!).
If you're providing terms, you have to run an accounts receivable department
and make sure customers pay on time. You're also now in the position of tying
up your own working capital providing vendor financing. With credit cards,
these things are included in the price.

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vtlynch
This seems like a very short-sighted post that mainly serves as a dig on the
credit card industry for an ideological reason.

They can use systems like Authorize.net and the fees are very reasonable.
There are LOTS of reasons that credit card companies charge you fees based off
the transaction: fraud protection costs scale, as do the "cashback bonuses"
that they give to customers as an incentive to use credit (can you imagine how
many billions are spent on credit that people cant afford on debit??), etc,
etc.

The most obvious reason, as they say, is because they mainly work with B2B
customers who prefer to pay another way. They just wanted an opportunity to
rag on credit cards.

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vtlynch
One of this accounts only comments is on the thread "Business Credit Card for
Startup".

They wrote:

"Can't recommend AMEX highly enough. Did the online application and got the
card fedex'ed to me the next morning. Never an issue and points tie to Amazon
directly. Best decision I've ever made."

And they wonder why there are fees...

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wyattjoh
I'd switch to this solution in a heartbeat if it were available in Canada.
Stripe is great, be we deal mostly with businesses that would rather use their
bank accounts as funding sources.

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elwell
I wonder if on-demand apps, like Uber, will ever switch to this method of
payment. Wouldn't they save a lot of cc fees?

~~~
jsjohnst
Companies which do higher volumes pay significantly less. It's not uncommon
for very high volume merchants to get very close to 1%, some even less.

~~~
aianus
I don't see how you make money charging less than 1% when the cashback/rewards
alone is 1%. You can make free money fall from the sky making bogus charges to
your own credit cards and pocketing the difference.

