Credit Card Processing Cost Reduction

[Negotiator]

Hello everybody. Trying to cut expenses I came across my credit card processor’s statement, which I couldn’t understand at all. I’ve decided to learn. It took me a long time to understand the process, learn how to read statement, calculate an actual cost (not that simple), effective rate and read fine print (had to use magnifier glass) and a lot more. I’ve got involved and excited and became quiet an expert in this field.
I know how to renegotiate existing contract with existing processor, optimize all transactions and as a result significantly reduce overall processing cost. It’s a bullet proof strategy with no side effects. In worst and rare case scenario existing processor will not agree with my reasonable offer and then you have a choice to leave everything like it is or switch to another pre screened and pre negotiated processor. Amount of saving will make decision for you.
Don’t get me wrong. Today most businesses heavily rely on accepting credit cards and with all respect processors are providing valuable services. They have expenses and risk and they must stay profitable.
I just don’t think any business should be overcharged because busy owner do not have time and energy to make an informed decision.
I’m planning to start offering merchant credit card processing cost reduction and cost monitoring services at reasonable price soon and would like to test it. Any participation is highly appreciated. Thank you for reading and have a nice Memorial Day!

[cconsulting]

Hi Negotiator,

I'm a consultant looking to partner with an analyst to perform the type of work that you described. Would you be interested in speaking with me in person about your service and fee schedule?

cconsulting

[MattIPS]

Hi guys,

I actually work in the CC Processing field. Just a little advice. To get a clear and cheaper rate make sure you are processing on an Interchange-Plus Pricing structure. Merchants who are billed under a Tiered Structure tend to pay quite a bit more and this is where fees can be hidden of misguided and complicated.
InterchangePlus pricing is simply a cost plus system. As such you pay the fees set by Visa and MasterCard plus a flat markup from your Processor. Markup is in what is called basis points. Each basis point is equal to 0.01%. So if you are paying 30 BP then you pay the fees to Visa and MasterCard (generally between 0.90% and 2.50%) plus the 0.30% to your processor.
It can be very confusing but the more you know the better your negotiating skills.
Also keep in mind that the Frank-Dodd act is going to take affect soon. As part of this act, the Durbin Amendment is going to drastically reduce Debit rates.

Hope this is helpful information.

Matt Ward
Account Executive

[BeSeenLocally]

Negotiator,

There is a new program where the business owner can get 25% of the commission/basis points back for using their terminal, free terminals (if you need them), up to $295 cancellation reimbursement, lowest rate guarantee and 24 hour deposit. The lowest rate guarantee is if you get a lower rate quoted by someone else, all you have to do is fax over the quote and they will adjust to your new rate. It takes 7 minutes for the change.

[Negotiator]

Hi cconsulting, Sorry for not checking this forum for a while. Yes, I would be interested. Please contact me at aaa13850 at yahoo dot com Thanks

[Negotiator]

Hi Matt,
Thank you for info. Interchange & Assessments Pass Through is the only transparent pricing model. It’s all depending on monthly volume and number of transactions. If business doing $30,000 in 200 transactions, I would suggest 10 basis points and 10 cents per item plus maybe $5 statement and no any other monthly or annual fees.
In this case Effective Rate will be about 2 – 2.25% for face to face card present and about 2.25 – 2.5% for card not present.
I can’t agree more about Debit cards. The only mistake I see all the time is when cashier asking customer debit or credit. Transaction should be assumed as debit and customer should be asked to enter pin. If not, cancel and run as credit. This will increase number of pin debit transactions and save money for business.

[Negotiator]

Hi BeSeenLocally,
It looks like this program is powered by North American Bankcard. Personally, they are not one of my favorite processors. They trying to lock you in 3 year contract with cancellation fee of $295 or by multiplying your monthly minimum fee by the amount of months left on your contract. So, if you decide to leave in 6 months and your minimum monthly fee is $45 you will be charged $45 x 30 remaining months = $1,350 Some providers don't even charge cancellation fee.
They offering free equipment and this is always alarming since we all know that free cheese is in mouse trap only. They have to charge you somewhere else.
They offering lowest rates, but not interchange & assessments pass through pricing model.
I’m not saying they bad, just not my favorite.
Thank you for sharing anyway.