PCI Fee - 1st National Processing - Forum

mea rhee September 16, 2011 at 9:45am

It's important to understand why PCI compliance exists. It is an educational campaign for merchants. I bet you (or someone close to you) has gotten that phone call asking if you had just made a dozen online purchases, and you realize someone has stolen your credit card number. The weak link in the security system was merchants like us, big and small. Merchants were storing their customers' credit card info in ways that a disgruntled employee, or a hacker, could easily steal them.

The process of getting your PCI compliance certificate is supposed to educate you on where the weak links are in your business. You are charged a fee for this to a) help recover the cost of all the funds lost to fraud, and b) to weed out merchants who can live without it. The amount of your fee varies by processor, so shop around. The more secure your system, the lower your PCI fee. Say if you use a terminal that never prints the customers credit card info, and deletes it as soon as it's batched, your fee will be lower than for someone who uses a knucklebuster. I use a terminal that erases its memory after a batch, and my PCI fee is $84/year, which I pay monthly $7/mo.

Square does not charge PCI fees because they are not obligated to make a profit yet. They are flush with venture capital and operate at a loss. At some point they will be expected to return their investments, and I bet a modest PCI fee will become part of their service too. (I know it sounds like I hate Square, I don't hate them I just have doubts. I'd rather have my money handled by a solid, profitable bank than a VC funded startup.)

I do agree with all of you that 1st National should disclose their PCI fees when you sign up. It's not fair for them to surprise you with it later.

Barry Bernstein > mea rhee September 16, 2011 at 10:26am

First of all, I don't need anyone educating me about the "weak links" in my system. Second, if I should ever take a bad credit card, I will never see a penny of that money so who am I protecting by being forced to pay this? The credit card companies, of course which means we will never get anything in return for what we are giving them. I could see paying this if we only paid a few dollars each. But, they are collecting billions of dollars more than they should be. This is scam and nothing more. It's what the credit card companies cooked up to keep getting their obscenely excessive profits after the President and congress passed the last round of regulations on the credit card companies. If we had a President who did what he said he would do, meaning fix the financial system and a congress that wasn't incompetent, we wouldn't have this fee/tax/scam.
- Gary Haynes > Barry Bernstein September 16, 2011 at 11:51am
  
  I'm solidly with Barry.
  
  Mea, PCI only applies when the system the merchant uses 'stores' information. Square stores NOTHING on your phone or iPad. So they probably won't ever need to charge this fee. Don't think for a moment that they aren't making money so that's why they don't charge it. You pay a fee since you use store and forward.
  
  Brian, I switched from 1NB, who gave me great service to Square. The $25-30 per month data plan on a phone or iPad is similar if not cheaper than $22/month for wireless service, $8/month for a statement, xx cents per transaction, % that varied by card type and finally a PCI fee. I added up all of my fees charged for the year divided it by my total charges and the the resulting charge % was more than Square by about 1/2%. If my sales volume increases I will re-do the math because at some point Square is more expensive than the alternatives like 1NB.
  
  Mea is right that nothing in life is free but shopper beware. There is a website that has some great information. www.feefighters.com They have some tools to help you determine the most cost effective solution for your situation.
  - Michael Reimer > Gary Haynes September 16, 2011 at 1:41pm
    
    Plus, you actually get something for the $25-30 a month data plan. If it soley existed for square use only, it is an apples to apples comparison, but there are lots of other uses for the IPhone and the required data plan. On ther other hand, I don't think you get any added benefit from your PCI fee or your monthly statement fee or your monthly minimum or your setup fee or your early cancellation fee, blah, blah, blah.

Barry Bernstein September 16, 2011 at 2:34am

The PCI is not new. We've been paying it for 2 years. Look at it as a tax that does nothing for you except that it created a bureaucracy that's sole purpose is to collect the fee from every entity that takes credit cards. It's a huge scam cooked up by the credit card companies to make you pay for their secure networks. There are 4 levels that determine what you pay. We are in level 4, which includes everyone who takes less than 20,000 credit cards, which to me is part of the joke. What do we take? Maybe 50-100 credit cards. I've been complaining about this since I got hit with it the first time. At first, I thought that it was a new set of government regulations that we had to comply to. But, no, there's no law on the books.

S Brian Berkun September 15, 2011 at 10:53pm

I too was irritated with the PCI compliance fee! I was thinking of going with "Square" which uses your Smartphone and only charges minimal fees with each transaction and apparently no PCI compliance fee (but don't take my word for it, check it out yourself). HOWEVER, I don't have a Smartphone and if I did the minimum charge per month for web access with Verizon that I would incur would be $30. Over a years worth of Smartphone web access and I would rack up $360 in additional cell phone usage fees. With that in mind I felt I would continue to use 1st National and pay the PCI fee until I can justify paying Verizon more of my money! Otherwise I must say that 1st National has always been very responsive and helpful with whatever concerns I have had with their equipment.

Molly Bitters March 25, 2011 at 8:42pm

I, too, was rather miffed to find the PCI compliance fee popping up after doing careful cost/benefit analysis on switching from paypal, only to find an extra $129 mysteriously appearing to skew my figures. There was not one word of PCI compliance in 1st National contract, but it is not a 'new' charge. The other thing that annoyed the hell out of me was they split the fee for me across Dec and Jan, so I couldn't even claim it as a full deduction in one year, or at least not in the first year. $65 in Dec, $60 in Jan. They also made me do the questionnaire loooong beofre the charges showed up, so I was half hoping they weren't going to. They will. Altogether though, if PCI compliance is the way we have to go, as long as you are being conscientious about credit card info, the questionnaire isn't so bad. And if you can't protect customers credit card info, then you probably shouldn't be trusted with it anyway.

Marguerite McGrath June 5, 2010 at 9:28pm

I signed up with TransFirst through my bank and the rep sat down with me and explained every fee to me. I found the PCI charge on my first statement and my rep had told me I would not be charged that, so I called their 800 number and I was told that I could opt not to have the PCI, so I had it removed. Right now, I am not doing shows and am only accepting credit cards on line through a gateway, so I am not ever even seeing credit card numbers, so I do not believe that I have exposure and I do not currently need the insurance. I will likely reinstate the insurance when I start accepting cards in person, simply because there is a small risk that data can be intercepted from my terminal or my equipment lost or stolen and I don't want to lose my house in a lawsuit.

bonny hawley June 5, 2010 at 5:55pm

I was with First National last year and was charged $250 in May- because I was under my year contract I could not cancel ( or I could cancel and pay $350). I just canceled my account with them this May after recieving the $129 charge and will be without a charge system till next season in Florida.

Michelle Sholund June 4, 2010 at 8:51pm

I don't know if anyone address this to you Madison or anyone one else... When you are new to accepting credit cards it seems glossed over pointing out the fees that one can acrue. It just sounds "neat" - "now that I can accept credit cards, I will earn more money". This is true however many turn a blind eye to all that goes into working with a credit card merchant. There are fees - they pop up. When you have been accepting credit cards for at least 1-2 years you understand it more - why this happens, how credit card companies work, etc. It wasn't but 2 years or so ago PCI and other similar fees started creeping into statements. It all is a trickle down effect from the economic melt down. Too many people racking up so much debt because credit card companies allow them to have a high credit limit and now that people are loosing their jobs, homes etc. and living beyond ones means is more "normal" now it effects everyone. And when I say everyone, even us simple living - HONEST living art fair sellers. Credit card companies - and I am talking about Mastercard, Visa, etc. don't see "us" or the mom and pop shops as ones who "need a break" they see you have a company, you need to pay the fee just like everyone else. It just happens. This is where I stress to all people you have to read the fine print - the fine print is pages long. In the fine print there are clauses that state they can bill you extra fees or up your current fees at any time - it is the risk you take doing this type of agreement. Most likely it never happens, but on those rare occassions, it does and when things like the economic melt down occur they have the ability to do what they want - and when I say they I am talking about Mastercard, etc. All merchant processing places have tons of info on this on their websites - read up on it. I am not saying this should deter anyone from accepting credit cards or make others think about switching companies it just happens. It is what happens when you cross the line of turning a hobby into a business. The nice thing is since these places consider you a business like "Target" or "Joe's Plumbing" you have more of a say in how you do not like this mistreatment. Use this as ammunition to let the lawmakers know this is unacceptable!

Michelle Sholund
www.bythebaybotanicals.com
www.quickcraftartisttips.blogspot.com

Morgan Madison said:

That is interesting that you were told the PCI compliance fee was new as an explanation for why it was not disclosed when you signed up. Especially in light of the fact that I was informed of and subsequently charged this same fee by 1st National in October of last year. This makes me wonder if it is their standard practice to land new clients by offering reasonable rates and concealing fees that will be assessed once an account is established. Have others had the same experience?

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