2.75% has to be one of the most expensive rates I've seen and it's obvious why that's the case... your customers are paying more for you to get points.
The most expensive banks are around 2% so... I unless points were necessary then I wouldn't do it.
I guess it also depends on what you're selling, $5 products would only attract 13c at 2.75% but then a $1000 product would attract $27 of credit card fees.
If your margins are phenomenal it's something to consider, but 2.75% is a big hit to take for processing Visa or Mastercard (heck, even AMEX can often be below 2% if you don't 'differentially surcharge'), but if you'd otherwise be paying 1% on these transactions, each point would be 'costing' you 1.7c over and above the merchant rate you'd otherwise be paying via this system.
Many people pay credit card surcharges higher than that to earn the same or a similar number of points, but it would really depend on the size of your business, your margins and your ability to use those points in way that brings value to the business (and at that rate, you'd need to be using those points to book business class or first class travel). For very large businesses the costs would probably outweigh the benefits, but for smaller businesses it may make sense under the right circumstances, depending on your transaction volume and other factors.
Thank you for your feedback. I agree that 2.75% is the highest i have seen. When i look at my eftpos statement, when you add interchange fees and bank fees, it is hard to tell what one exactly is paying as the interchange fees vary between different types of cards, even with platinum, they have few varieties and some Visa cards are being charged at around 2%
When airlines sell points in bulk, what is a good deal per point on cents basis?
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Qantas Points-Live Eftpos
mspcooper
mspcooper
Qantas - Qantas Frequent Flyer
Member since 09 May 2013
Total posts 442
What do you guys think of the new Live Eftpos machine that gives qantas points for eftpos transactions.
henrus
henrus
Qantas - Qantas Frequent Flyer
Member since 23 Oct 2013
Total posts 766
Chris C.
Chris C.
Member since 24 Apr 2012
Total posts 1,116
If your margins are phenomenal it's something to consider, but 2.75% is a big hit to take for processing Visa or Mastercard (heck, even AMEX can often be below 2% if you don't 'differentially surcharge'), but if you'd otherwise be paying 1% on these transactions, each point would be 'costing' you 1.7c over and above the merchant rate you'd otherwise be paying via this system.
Many people pay credit card surcharges higher than that to earn the same or a similar number of points, but it would really depend on the size of your business, your margins and your ability to use those points in way that brings value to the business (and at that rate, you'd need to be using those points to book business class or first class travel). For very large businesses the costs would probably outweigh the benefits, but for smaller businesses it may make sense under the right circumstances, depending on your transaction volume and other factors.
mspcooper
mspcooper
Qantas - Qantas Frequent Flyer
Member since 09 May 2013
Total posts 442
Hi Chris,