Seven Secrets Your Bank Card Processor Doesn’t want you to know!
Tiered VS Interchange plus
Read on to discover the type of card processing rate systems that can
save you thousands of dollars!
o Tiered System
The first and most popular with processors is a tiered discount rate. This
maximizes the profit for the processor. This method is very unclear and
expensive when compared to newer pricing methods. They quote you 1.75%,
but that’s only on certain cards and certain transactions types, which they call
qualified transactions, the other types are mid qualified and non-qualified
transactions. It Looks like this
Qualified Discount Rate: 1.XX%
Mid-Qualified Discount Rate: 2.XX%
Non-Qualified Discount Rate: 3.XX%
This creates bins or rate buckets where purchases are basically lumped
together at these rates. Transactions become downgraded due to the way the
transaction is run and it is impossible to know what rate it will fall into until after it
is already complete. This ends up costing the merchant money. In addition to
this there is a transaction fee typically around 20 cents.
Interchange Plus pricing model;
Traditionally this model was only available to larger volume
businesses that process $300,000 per year or more. Now interchange
is available to everyone and it is what we recommend to all are clients
here at FSG. This method is straight forward with only two rates. The
discount rate which is the interchange markup fee and the transaction
fee which is usually lower than a tiered model. Merchants end up
paying the pass through “wholesale rate” from visa/master card and
the flat interchange markup plus the smaller transaction fee.
In essence, the wholesale rate (with the processor’s markup) is
passed directly to the merchant, so your transaction fees are
calculated on their actual wholesale cost — not arbitrary criteria set by
model always benefits the
and Free credit card terminals
Lets say you lease a real nice terminal for $48 per month for 4 years. That’s $2,304
your paying to use the terminal. Most leases keep going unless you arrange to buy it
out. Are you kidding me buy it out, after paying over 2,000 dollars!
If you need a terminal you can buy a real nice terminal for between $300 and $400.
So why would your bank representative even suggest leasing? One reason the banks
make more money and your agent made about $1,000 commission!
Free terminals sound good but ,who is paying for it? You know who , you are ! A
business usually pays for this terminal in undisclosed, hidden and unnecessary fees
and long contracts with high cancellation penalties. There is no such thing as free
equipment in this business!
Solution ; convert your existing terminal for free or buy a new one between $150-$400
depending how future ready you want to be. You will always come out ahead in long
o All this free stuff may sound good but its never profitable for your
Visa and Master card give certain businesses a special
discount rate according to the market they are in.
It amazes me how many merchants are not getting
the discounted “Emerging Market Rates” that are
designed to save specific business types on
This is called an Emerging markets rate , most bank
representative don’t even know this exists. If your business
qualifies it can save you thousands of dollars every year!
Do I have to?
What is PCI? : The Payment Card Industry Data Security Standard is a
proprietary information security standard for organizations that handle cardholder
information for the major debit, credit, prepaid, e-purse, ATM, and POS cards. ...
Most of all processors charge Merchants PCI compliant fees or noncompliant fees varying from monthly charges to annual charges. On top of this
they require the merchant to do an annual SAQ which most merchants don’t
understand and don’t do, then they are penalized financially. If the merchant
processes using a computer they are required to have quarterly scans. All of this
cost the merchant time and money.
The truth is, most small businesses are not required to go through this
process because their volume is to low, it is recommended but not required by
Visa and Master card. This knowledge saves you time and money.
FSG will help you determine if its required for your business or not. Avoiding
another deceptive fee practice.
costs merchants more money!
Many software programs that merchants are sold are proprietary to only
one processor. These agreements usually only benefit the processor
they are in essence “holding you over a barrel” . They typically charge
whatever they want. When purchasing software make sure its an open
system. This could save you thousands and eventually pay for your
software. You can always do your processing outside the software, this
is what many choose to do, so they can maximize revenue and reduce
costs if they currently have restrictive software.
One of our clients was unknowingly paying a $230 per month gateway
fee and was not hooked to a gateway nor had the need to use a
Many Merchant statements are confusing, they are designed this way by
the banks to hide fees. Most processing companies don’t disclose all the
fees a merchant is paying and often will add fees later that were never
agreed upon. Once a merchant catches on they are usually upset.
Unfortunately most don’t catch on because there busy running a
business. FSG understands the statements and different fee structures,
we can do an analysis on your current processor and show you
unnecessary items you might be paying for.
How much is your business really
The last secret your current processor doesn't want you
to know is, how much are you really paying and why?
FSG will do a free no obligation analysis to help you
understand your current charges, discover your true
effective rate and propose improvements and cost
This is a free consulative service we offer to all
What now ?
click to the next slide
Click on the link below to learn about the 5 myths of
credit card processing.
Get us your processing statement for review
Fax two consecutive months of statements to: 435-239-8527
(Include your name and contact information on cover page)
Email to: firstname.lastname@example.org
Call or email us with questions. Todd’s Cell 435-723-4111