Seven secrets


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Seven secrets

  1. 1.   Seven Secrets Your Bank Card Processor Doesn’t want you to know!
  2. 2. 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.   
  3. 3.  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 the processor.  This model always benefits the merchant!
  4. 4. Equipment  Leasing o o o o 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 run. o All this free stuff may sound good but its never profitable for your business.
  5. 5. Emerging Markets 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 processing fees 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!
  6. 6. PCI compliance 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.
  7. 7. Processing  Exclusive software 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.
  8. 8. Hidden Fees 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 gateway, ever! 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.
  9. 9. How much is your business really paying?    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 saving strategies. This is a free consulative service we offer to all merchants. What now ? click to the next slide
  10. 10.  Click on the link below to learn about the 5 myths of credit card processing. OR 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) or Email to: or Call or email us with questions. Todd’s Cell 435-723-4111