Hypothetical: Earn Points from Merchant Processing (Accepting Credit Cards)

[blessed11]

Hello All,

Hypothetical question aimed at seeking feedback from this community who have current merchant facilities, i.e. a business which accepts credit cards, either online on via an EFTPOS terminal.

Question: If the option was available to pay the same/similar merchant fees as you are currently paying + approximately 1.5c per dollar transacted (incl. GST), however for this extra fee you would earn 1 point per dollar (for example, Qantas/Velocity etc) would you entertain the idea? Effectively, you would be paying 1.5c per mile less GST input credit and the ability to expense the fee to your business. (I am not an accountant!).

What are your thoughts? Looking for critique / interest / further ideas.

Thanks in advance… cheers!

 

[cove]

Has to be a commercial transaction so no contras. You can get your CC facility cancelled. We are at 1.17% plus gst so if I buy something genuinely thru work I can use QCU cc to get a point a dollar.

 

[CJEMNMAC]

Has to be a commercial transaction so no contras. You can get your CC facility cancelled. We are at 1.17% plus gst so if I buy something genuinely thru work I can use QCU cc to get a point a dollar.

Off topic a bit but cove have you pressed the bank for a better deal ? I recently rang our bank and told them we had been offered a better fee deal and they dropped to 0.90%+ GST without a question.

 

[Cruiser Elite]

From an Accounting POV you have GST connotations - this will trip up many a would be smartie. Oh and btw I pay .65% merch fee.

 

[blessed11]

Has to be a commercial transaction so no contras. You can get your CC facility cancelled. We are at 1.17% plus gst so if I buy something genuinely thru work I can use QCU cc to get a point a dollar.

Thank you for the response cove. The facility would be a legitamite merchant account. So, there would be no risk of cancellation. So, in your example you would be charged 1.17% (plus GST) + 1.5c per dollar transacted and earn 1 point per dollar on each transaction.

 

[blessed11]

From an Accounting POV you have GST connotations - this will trip up many a would be smartie. Oh and btw I pay .65% merch fee.

Hello Cruiser Elite, thank you for the response. Do you mind exanding on your above comment please?

 

[cove]

We have commercial customers who are using "premium credit cards' to earn the most frequent flyer points. I blame myself for this but our customers can fly in style. We don't sell to the public.

 

[Cruiser Elite]

Hello Cruiser Elite, thank you for the response. Do you mind exanding on your above comment please?

Which part? Funds coming into a business account via a merch facility or the actual rate we pay on existing merch facility?

blessed11 do you currently own/manage a business?

 

[blessed11]

Which part? Funds coming into a business account via a merch facility or the actual rate we pay on existing merch facility?

blessed11 do you currently own/manage a business?

Sorry, I should have been clearer. Just in relation to your comment on GST.

Yes, I do own a business.

 

[nlagalle]

ok so you are basically saying the merchant terminal would earn FF points for the merchant (as opposed to someone swiping a card to get FF points).

 

[Cruiser Elite]

Sorry, I should have been clearer. Just in relation to your comment on GST.

Yes, I do own a business.

And you have an Accountant? Best you talk to him and garner his opinion as to how funds flowing into a business account will be viewed by ATO - once you are clear on that then you might be in a much better position to plan any dastardly devised plans re FF pts cultivation going forward.

 

[blessed11]

ok so you are basically saying the merchant terminal would earn FF points for the merchant (as opposed to someone swiping a card to get FF points).

That would be correct. The owner of the merchant facility would be earnign FF points for all transactions through their facility.

 

[blessed11]

And you have an Accountant? Best you talk to him and garner his opinion as to how funds flowing into a business account will be viewed by ATO - once you are clear on that then you might be in a much better position to plan any dastardly devised plans re FF pts cultivation going forward.

Thank you for your input

 

[cove]

My final cost is 1.17 cents per point on a genuine transaction so that can be ok. I do prefer 0.42 cents or free. Free is my favourite if you hadn't guessed.

 

[nlagalle]

And you have an Accountant? Best you talk to him and garner his opinion as to how funds flowing into a business account will be viewed by ATO - once you are clear on that then you might be in a much better position to plan any dastardly devised plans re FF pts cultivation going forward.

I think you have mixed up how the points would be theoretically earned. they would be on the terminal transactions, not washing cards through the facility.

 

[Cruiser Elite]

I think you have mixed up how the points would be theoretically earned. they would be on the terminal transactions, not washing cards through the facility.

Oh I am easily confused

 

[medhead]

And you have an Accountant? Best you talk to him and garner his opinion as to how funds flowing into a business account will be viewed by ATO - once you are clear on that then you might be in a much better position to plan any dastardly devised plans re FF pts cultivation going forward.

You seem to have totally misunderstood the thread. The hypothetical proposed is for the merchant facility to earn points for the merchant for a fee. The money flowing into the business is 100% legitimate. So really hard to see any GST issue. It isn't a dastardly devised point cultivation plan.

 

[trippin_the_rift]

There's a few businesses around that have 'bill paying services' mainly for personal/commercial rent.
They charge 1.5% and some are bound by KYC which makes it more difficult to filter points through.

 

[blessed11]

There's a few businesses around that have 'bill paying services' mainly for personal/commercial rent.
They charge 1.5% and some are bound by KYC which makes it more difficult to filter points through.

Correct, there are a few such services around that allow you to pay bills with CC which do not accept CC direct. However, the hypothetical proposed here is for the merchant (let's refer as business owner) to earn points on transactions through their facility, i.e. earn points for customers making payment to them (the business owner) via CC.

 

[cove]

You can become a Qantas loyalty program member for you and your best customers but I think the volume required has changed from a decade ago. Qantas has restrictions on disclosure under their contract. Our customers have found this useful.