Slideshare.Heartland Presentation

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Details on credit card processing and Heartland Payment Systems

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Slideshare.Heartland Presentation

  1. 1. Heartland Payment Systems Processing 101
  2. 2. Heartland Payment Systems <ul><li>Heartland Payment Systems' CEO Bob Carr Wins Ernst & Young 2007 Entrepreneur of the Year Award. </li></ul><ul><li>Heartland was named the Financial Services Sales Organization of the Year in the Best Run Sales Organization category by Selling Power </li></ul><ul><li>Heartland processes over $80 Billion Dollars every year </li></ul>
  3. 3. It’s Not About Rates! <ul><li>How the Process Works </li></ul><ul><li>How the business owner (aka merchant) is charged </li></ul><ul><li>Industry Secrets </li></ul><ul><li>The Heartland Difference </li></ul>
  4. 4. How it Works! <ul><li>Your Costs … </li></ul><ul><ul><li>=Discount Rate (%) </li></ul></ul><ul><ul><li>+ Per Item Fee ($ amount per transaction) </li></ul></ul><ul><ul><li>+ Network fee (the cost it takes for the processor to move the money to your account) </li></ul></ul><ul><ul><li>+ Processor’s Fees </li></ul></ul>
  5. 5. How it Works <ul><li>Inter Change – the cost of each card decided by MC/Visa </li></ul><ul><ul><li>Will differ from industry to industry </li></ul></ul><ul><ul><li>Visa’s Base Wholesale Rate is Lower than MC </li></ul></ul><ul><ul><li>Visa represents about 65% of the average Merchant volume </li></ul></ul><ul><ul><li>Base Wholesale Price for Visa has not increased in 3 years </li></ul></ul><ul><ul><li>Base Wholesale price for MC was recently lowered </li></ul></ul><ul><ul><li>It is the same for everyone based on SIC code– Wal-Mart to Wally’s Market </li></ul></ul>
  6. 6. All Cards Are Not Created Equal!
  7. 7. Check Cards <ul><li>Money Comes Out Of Checking Account </li></ul><ul><li>Less Risk </li></ul><ul><li>Lowest Base Wholesale Rate </li></ul>
  8. 8. Check Cards Base Wholesale Rate <ul><li>Retail </li></ul><ul><ul><li>Visa 1.12% MC 1.15% + $.15 </li></ul></ul><ul><li>Utility </li></ul><ul><ul><li>Visa .09% +$.75 M/C .09% + $.45 </li></ul></ul><ul><li>Supermarket </li></ul><ul><ul><li>Visa 1.03% M/C 1.05% + $.15 </li></ul></ul>
  9. 9. Consumer Credit Cards Base Wholesale Rate <ul><li>Retail </li></ul><ul><ul><li>Visa 1.63% MC 1.67% + $.10 </li></ul></ul><ul><li>Utility </li></ul><ul><ul><li>Visa .09% +$.75 M/C .09% + $.45 </li></ul></ul><ul><li>Supermarket </li></ul><ul><ul><li>Visa 1.24% M/C 1.48% + $.05 </li></ul></ul>
  10. 10. Consumer Rewards Cards Base Wholesale Rate <ul><li>Retail </li></ul><ul><ul><li>Visa 1.99% MC 1.99% + $.10 </li></ul></ul><ul><li>Utility </li></ul><ul><ul><li>Visa .09% +$.75 M/C .09% + $.45 </li></ul></ul><ul><li>Supermarket </li></ul><ul><ul><li>Visa 1.90% + $.10 </li></ul></ul><ul><ul><li>M/C 1.64% + $.16 </li></ul></ul>
  11. 11. Corporate Cards Base Wholesale Rate <ul><li>Retail </li></ul><ul><ul><li>Visa 1.99% MC 1.99% + $.10 </li></ul></ul><ul><li>Utility </li></ul><ul><ul><li>Visa .09% +$.75 M/C .09% + $.45 </li></ul></ul><ul><li>Supermarket </li></ul><ul><ul><li>Visa 2.20% + $.10 </li></ul></ul><ul><ul><li>M/C 2.65% + $.10 </li></ul></ul>
  12. 12. All Cards Are Not Created Equal! Retail (review) 1.12% + $.15 $100 purchase = $1.27 1.67% + $.10 $100 purchase = $1.77 1.99% + $.10 $100 purchase = $2.09 1.99% + $.10 $100 purchase = $2.09 *Plus Processing Fees
  13. 13. Down Grade Rates <ul><li>Card Not Present (Phone Orders) </li></ul><ul><li>Card Not Swiped (Keyed in) </li></ul><ul><li>Processed Incorrectly </li></ul><ul><ul><li>Lodging as Retail (example) </li></ul></ul>
  14. 14. Industry Secrets What They Don’t Want You To Know & Why it’s not about the rates… <ul><li>On average </li></ul><ul><ul><ul><li>Only10% of your volume will fall under a qualified rate </li></ul></ul></ul><ul><ul><ul><li>If your average ticket is less than $50, as much as 50% of your volume could be check card </li></ul></ul></ul><ul><li>Most Processors charge the same for Visa & M/C transactions </li></ul><ul><li>Most Processors use a three tier platform (Qualified, Mid-Qualified & Non Qualified) </li></ul><ul><ul><li>They will determine which cards fall where </li></ul></ul>
  15. 15. Industry Secrets What They Don’t Want You To Know & Why it’s not about the rates… <ul><li>Batch Fees are a Financial Industry Invention </li></ul><ul><ul><li>They are charging you to deposit your money </li></ul></ul><ul><li>They will often lease $400 equipment for as much as $70/month (for 4 years) </li></ul><ul><li>They will increase all rates whenever Visa or MC increases Any rate. (ex. Visa Supermarket Debit card) </li></ul>
  16. 16. Industry Secrets What They Don’t Want You To Know About Statement Practices <ul><li>Don't list Rates </li></ul><ul><li>Don’t explain designations </li></ul><ul><li>Don’t give CheckCard rebates </li></ul><ul><li>Charge Batch Fees </li></ul><ul><li>Surcharge Everything </li></ul><ul><li>Offer a great Qualified Rate and an outrageous MidQual and NonQual Rate </li></ul>
  17. 17. Statement Practices Rate increase not warranted 90% of Volume Surcharged 20% of Volume qualifies for Check Card discounts Quoted Rate is 100% meaningless
  18. 18. The Heartland Difference <ul><li>Full Disclosure on Pricing </li></ul><ul><li>24/7 Customer Service </li></ul><ul><li>Personal Local Service Professionals </li></ul><ul><li>Lower Overall Costs </li></ul><ul><li>Customer Solution Focused </li></ul><ul><li>3 Year Guarantee Against Fee Increases </li></ul><ul><li>much more… </li></ul>
  19. 19. The Heartland Difference <ul><li>Payroll Services </li></ul><ul><li>Auto Recovery </li></ul><ul><li>HPS Connect </li></ul><ul><li>HPS WebConnect </li></ul>

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