Credit Card Processing in a Shared Workspace: an Operator’s Guide
by Barbara Sprenger, Satellite Deskworks founder and CEO
For shared workspace operators, the components of credit card processing can be confusing. This confusion results in a large number of spaces just using Stripe or Paypal to manage credit card processing.
The problem is that Stripe and Paypal are both quite expensive. They appeal to new operators because they bundle all the various credit card processes into one entity—but it comes at a price.
To make the best financial choices for your shared workspace, it’s important to know what makes up the pieces of credit card processing.
1. Credit Card Processor
Your credit card processor is the company you choose to work directly with, and they set up most of the rest for you. They connect with the credit card companies, such as Amex, Visa, etc., and they’ll set up your credit card online gateway.
Most credit card processors are good at hiding their fees. They use the term “discount,” which is really their fee to you. They have fees for checking your Payment Card Industry (PCI) compliance, they have fees for monthly access, they have all kinds of fees.
The way they’ll typically quote to you is an average charge, something like 2.75% of the total charges processed. The problem with a number like that is that every credit card and debit card costs them a different amount. If someone is using a card with a lot of points, that’s an expensive card for them—it might cost them 2.25% for that one card. If they’re charging you 2.75%, they’re making .5%. But if it’s a debit card that only costs .5% to process, they’re making 2.25% on that.
At Satellite Deskworks, we work with a company that charges us a flat amount on top of whatever the debit card or credit card charges are. And we’ve been able to pre- negotiate rates for all our Satellite Deskworks clients that is a flat percentage above actual credit card company charges. This way, your processing fees are completely transparent and it ends up saving space operators quite a lot of money.
How’s your credit?
Your credit card processor is actually going to underwrite your account. You may not even know they’re doing it, but they’re going to check whether you’re a good risk by checking your business’ credit rating and your personal credit rating. For a space operator with a poor credit rating, you may have a hard time getting approved for credit card processing or may pay a higher rate.
Tips for credit card processing:
1. Don’t lock into a long contract with a credit card processing company. They’ll try to lock you into a two or three year contract. We’ve been able to set up month to month arrangements for all our clients, so the credit card processing company is continually earning your business.
2. Be sure you have a phone number for 24/7 service. After the initial setup, you’ll likely not need to contact them much, as most of your dealings will be with your gateway, but you may need help in the beginning. It’s essential to be able to resolve problems quickly and easily when they come up.
2. Credit Card Vault
Your credit card vault is where credit cards are held securely. You want to be sure your credit cards are held in a PCI compliant vault. Satellite Deskworks uses Spreedly. Their entire business is credit card vaulting. They’ve never been hacked, they’re fully PCI compliant, and they work with virtually any credit card processor or gateway.
The other big advantage to Spreedly is that you have the freedom to move to any credit card processing company or gateway whenever you want. There’s never a charge to make changes.
You never want to have your credit cards held on your website directly or on paper. There’s nothing more critical in credit card processing. Satellite Deskworks provides the credit card vault through Spreedly at no cost to space operators.
Satellite Deskworks is shared workspace software designed by space operators. Request a free demo.
Your online gateway is the company that manages the online transaction amongst all the parties: your management software, your credit card processor, your client’s credit card, their bank, your bank and the credit card vault. Payment goes from your customer’s credit card through the processor’s bank and is deposited into your bank account.
The gateway also runs the check with the vault to be sure it’s a good card. So, they have a handshake with the credit card vault, and they have a handshake with the credit card bank, and they have a handshake with your bank to make all that happen.
The gateway sets up your security settings, such as whether you check addresses, zip codes, etc. on a card. The price you pay for credit card processing depends on those security settings. The tighter your credit card security settings, the less expensive your processing fees because there’s less risk. But, of course, you may have to deal with more declines and more chasing of correct addresses.
Warning about gateways:
One of the biggest gateways is authorize.net. They’re fine to use for a gateway, but do not use them for your credit card vault. If you ever want to move from them, they charge you $1000 to get your own credit cards back from them, and they won’t do it for fewer than 250 cards. You’ll have to manually go ask everyone for their cards again.
Satellite Deskworks to the rescue
Satellite Deskworks makes credit card processing in your shared workspace easier. We set up your credit card vault for you so you don’t have to worry about that. You can then choose any credit card processor and gateway. Operators just need to be sure that the gateway they select is one of the over 100 supported by Spreedly. You also get the best prices for credit card processing this way.
Make it easy on yourself
One of the important steps for collecting money is to make it an opt-out, not an opt-in process. You don’t want to have to ask people for payment. You want to send them an invoice and if they have a problem they’ll let you know. Otherwise, you take the payment automatically on the due date. In order to do this, you have to have a simple process for refunding payments in the system. Satellite Deskworks provides this.
With Satellite Deskworks, we’ve picked the best of each world rather than a bundled solution which costs you more and may not provide as good of service. You’re always looking for the best when it comes to ease of use, cost and service and we’ve done the legwork for you.
If you’d like to see Satellite Deskworks in action, request a free demo.
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