• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
What Is Straight Pass Through
 

What Is Straight Pass Through

on

  • 5,831 views

Learn about straight pass through merchant accounts and signifigantly lower your credit card processing fees.

Learn about straight pass through merchant accounts and signifigantly lower your credit card processing fees.

Statistics

Views

Total Views
5,831
Views on SlideShare
5,822
Embed Views
9

Actions

Likes
0
Downloads
29
Comments
0

1 Embed 9

http://www.slideshare.net 9

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    What Is Straight Pass Through What Is Straight Pass Through Presentation Transcript

    •  
    • It is when you, as a business, receive surcharges from Visa and MasterCard at true bank cost
    • Let me explain …
    • With a merchant account there are two price points: 1. Your base discount rate
    • With a merchant account there are two price points: 1. Your base discount rate This is the rate for transactions when a normal consumer credit card is used
    • With a merchant account there are two price points: 2. Surcharges
    • With a merchant account there are two price points: 2. Surcharges These are added to the base discount rate on transactions where a rewards card, corporate card, etc. are used or when the credit card in not swiped.
    • First let’s look at a typical merchant account without straight pass through… Often called a " tiered rate " account.
    • Your merchant account would have fees like this… base discount rate of 1.89% and $.20 per transaction mid-qualification rate of 2.50% and $.30 per transaction and non-qualification rate of 3.20% and $.40 per transaction
    • Let’s define what these terms mean…
    • Base Discount Rate = the rate for generic consumer cards that are present and swiped
    • Mid-Qualified Rate = the rate for swiped rewards cards or generic consumer cards that are keyed in
    • Non-Qualified Rate = the rate for corporate and business cards or for any other type of transaction not meeting guidelines or transactions that were not batched in a timely manner
    • So let’s review those rates again… base discount rate is 1.89% and $.20 per transaction mid-qualification rate is 2.50% and $.30 per transaction and non-qualification rate is 3.20% and $.40 per transaction
    • Now let’s see how rates on a straight pass through account work base discount rate is 1.89% and $.20 per transaction + surcharges direct from Visa and MasterCard
    • So how much of a difference does straight pass through make?
    • EXAMPLE #1 Swiped Visa Rewards Card 2.50% + $.30 2.00% + $.20 Actual Rate (mid-qualification) .11% Visa Surcharge 1.89% + $.20 1.89% + $.20 Base Rate Regular Account SPT Account
    • EXAMPLE #1 Swiped Visa Rewards Card With a $100 purchase the straight pass through account fee would be $2.20; for the tiered account $2.80. So a straight pass through account would give you a .60% reduction on this type of card!
    • EXAMPLE #2 Keyed in, card not present Visa or MasterCard 2.50%+$.30 2.20%+.20 Actual Rate (mid-qualification) .31% Surcharge 1.89%+$.20 1.89%+$.20 Base Rate Regular Account SPT Account
    • EXAMPLE #2 Keyed in, card not present Visa or MasterCard With a $100 purchase the straight pass through account fee would be $2.40; for the tiered account $2.80. So a straight pass through account would give you a .40% reduction on this type of card
    • EXAMPLE #3 Visa EIRF 3.20%+$.40 2.65%+$.20 Actual Rate (non-qualification) .76% Visa Surcharge 1.89%+$.20 1.89%+$.20 Base Rate Regular Account SPT Account
    • EXAMPLE #3 Visa EIRF With a $100 purchase the straight pass through account fee would be $2.85; for the tiered account $3.60. So a straight pass through account would give you a .75% reduction on this type of card
    • EXAMPLE #4 Corporate Cards 3.20%+$.40 2.55 %+$.20 Actual Rate (non-qualification) .66% Visa Surcharge 1.89 %+$.20 1.89%+$.20 Base Rate Regular Account SPT Account
    • EXAMPLE #4 Corporate Cards With a $100 purchase the straight pass through account fee would be $2.75; for the tiered account $3.60. So a straight pass through account would give you a .85% reduction on this type of card
    • EXAMPLE #5 MasterCard Check or Debit Card 1.89%+$.20 1.36%+$.25 Actual Rate -.53%+$.05 MC Surcharge 1.89%+$.20 1.89%+$.20 Base Rate Regular Account SPT Account
    • EXAMPLE #5 MasterCard Check or Debit Card No, the minus sign was not a mistake; with check cards you, as a business, are entitled to receive a rebate from both Visa and MasterCard. With a $100 purchase the straight pass through account fee would be $1.61; for the tiered account $2.09. So a straight pass through account would give you a .48% reduction on this type of card
    • Effective Rate Allows you to see what you are really paying for your merchant account. Here is an example: Total bank card Volume - $72,053.25 Total merchant account fees – $1942.52 Effective Rate: 2.695% Base Rate – 1.79%
    • Now it’s time for a quiz
    • Question #1 When shopping for a merchant account, what price point is more important? A. Base Discount or B. Surcharges
    • Answer: You need to pay attention to both price points. For years merchant account providers have made the focus the base discount rate and have made most of their profit on the surcharges. It is time for that to change.
    • Question #2 How can you make your merchant account straight pass through? A. Contact your current provider and renegotiate or B. Contact a new provider that will provide you with a straight pass through merchant account
    • Answer: Why would you contact your current provider if they have been hiding fees from you. Do they really deserve any more of your business? The answer is to go with a company that is transparent and only creates straight pass through merchant accounts.
    • To get your very own straight pass through merchant account