When a few years ago I began selling fine art photography directly to the public, I often got the question, “Do you take credit cards?” At the time I didn’t and knew I’d be losing a sale from the person who asked. Between shows one year, I researched how to start accepting cards as a business. Eventually I found a company called Thompson Merchant Services. It was a broker offering merchant credit card acceptance through another company called 1st National Processing based in Calabasas, California.
As simple as that, I was accepting Visas and MasterCards for a monthly charge of $7.99 and for a per transaction fee of 3.85%. It sounded great, especially if you are selling regularly. And sure enough, at the next show I had a few customers who wanted to use credit cards to buy photographs. My credit card sales slowly eclipsed my cash sales. And customers seemed happy with the convenience of paying with credit.
Then I noticed that the monthly charge for the service had risen to $17.99 from $7.99. That was alarming, considering my sales were not picking up to compensate for the increase. After a few calls to 1st National, I was able to convince them that my sales were low enough that I should have the cheapest plan available, even if I had to pay more per transaction. They agreed and my monthly fee came back to $7.99 a month but the transaction fee went up to 3.95% percent.
At about this time, there was a lot of news about identify theft and credit card theft, and this caused two things to happen that made it difficult for a small business like me to accept credit cards:
1. Customers were not as comfortable using credit cards to pay an unknown, untrusted vendor
2. The government started a Payment Card Industry (PCI) compliance program
The PCI compliance program forced credit card vendors and companies that accept credit cards to follow very strict rules if they wanted to accept credit cards. This is meant to benefit customers and as a customer, I’m all for it. But 1st National decided to pass on the cost of becoming PCI-compliant to vendors, including me. Last year, the first PCI fee came through, to the tune of $30. At the time, I was still accepting the occasional credit card so $30 did not seem like a lot. That being said, I did find it odd that I was paying $30 to 1st National to make sure my 3-5 transactions were safe.
During this past year, my credit card sales dried up – along with most fine art sales for that matter (and millions of jobs worldwide). Now the monthly fees were starting to add up and there was nothing to balance them out. Then came the news that the PCI fee from 1st National this year was going to be $130! I was infuriated. Not only was I not using the service much (no transactions in the past year), but now they wanted to charge me to make sure I was complaint. I didn’t even have any customer transactions! Needless to say, I called to cancel immediately. However, the process took three months to get finalized, even though they assured me it was going to take 30 days. After a lot of back and forth and time spent arguing on the phone, they didn’t charge me the full $130 PCI compliance fee in the end, but whatever they charged me is a loss.
For what it’s worth, I cannot recommend that you use 1st National for your credit card business. Its customer service is terrible; it took dozens of calls to cancel my account. The fees are very high, given the low number of transactions I have. And, they have no online access to help sort out your account. The original broker, Thompson Merchant Services, now accepts credit cards itself and seems to have a better fee structure and no PCI fee, for now at least.
So, should you accept credit cards as a fine art photographer? It all depends on the your target audience. But beware of merchant service accounts with high fees, bad customer service, and no online access. Just as with your bank account, you want to make sure your merchant account is in good standing by being able to see all fees and all sales clearly. I hope my experience can help you make better choices about whether to accept cards, and if so, what merchant credit card service to use.