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Merchant Account Rate Reality Robb Lejuwaan - US Merchant Services
Presentation Outline <ul><li>Where do merchant account rates come from? </li></ul><ul><li>How is a merchant account rate b...
Where do the rates come from? <ul><li>They come direct from Visa and MasterCard </li></ul>
Where do the rates come from? <ul><li>They come direct from Visa and MasterCard </li></ul><ul><li>The official name for th...
Where do the rates come from? <ul><li>They come direct from Visa and MasterCard </li></ul><ul><li>The official name for th...
Key Point <ul><li>ALL MERCHANT ACCOUNT PROVIDERS  </li></ul><ul><li>HAVE THE SAME COST  </li></ul><ul><li>FROM VISA AND MA...
Key Point <ul><li>ALL MERCHANT ACCOUNT PROVIDERS  </li></ul><ul><li>HAVE THE SAME COST  </li></ul><ul><li>FROM VISA AND MA...
How a rate is built <ul><li>Example #1 </li></ul><ul><li>Transaction Type: Card Swiped </li></ul><ul><li>Normal Visa Consu...
How a rate is built <ul><li>Example #2 </li></ul><ul><li>Transaction Type: Visa Rewards Card Swiped </li></ul><ul><li>Visa...
How a rate is built <ul><li>Example #3 </li></ul><ul><li>Transaction Type: Visa Commercial Card Swiped </li></ul><ul><li>V...
How a rate is built <ul><li>Example #3 </li></ul><ul><li>Transaction Type: MC World Key Entered </li></ul><ul><li>MC base ...
But, you have a 1.19% rate! <ul><li>Currently, you have a rate that is </li></ul><ul><li>.4425% -  1.15% </li></ul><ul><li...
But, you have a 1.19% rate! <ul><li>Currently, you have a rate that is </li></ul><ul><li>.4425% -  1.15% </li></ul><ul><li...
How do you have a 1.19% rate? <ul><li>If you would have paid that rate in August of 2007 </li></ul><ul><li>The merchant ac...
How do you have a 1.19% rate? <ul><li>I call this type of rate a “Hollywood rate,”  </li></ul><ul><li>it has a great looki...
How do you have a 1.19% rate? <ul><li>I call this type of rate a “Hollywood rate,”  </li></ul><ul><li>it has a great looki...
How do you have a 1.19% rate? <ul><li>The 1.19% rate is for swiped, regular, </li></ul><ul><li>consumer card transactions ...
How do you have a 1.19% rate? <ul><li>Then there is a another rate for “non-qualified” transactions, maybe 4.25% </li></ul...
How do you have a 1.19% rate? <ul><li>Let’s see the numbers on this comparing the 1.19% rate to 1.95% using your July Merc...
July 2007 Category 1.19% 1.95% Qualified $146.66 $240.33 (1.19% vs. 1.95%) Mid-Qualified $244.26 $155.40 (3.25%  vs. 2.06%...
So the 1.19% rate does not lower costs It causes them to go up  $100.95!
$100.95 Loss? How can this be?
It is very simple They make all their profit by padding the surcharges from Visa and MasterCard We, on the other hand, off...
So even when our base rate is  .76%  higher than our competition our fees are still considerably lower Their “mid-qualifie...
<ul><li>Merchant account providers  </li></ul><ul><li>have conditioned merchants  </li></ul><ul><li>to focus on the base d...
So What Is Our Offer? <ul><li>Base Rate – 1.95% </li></ul><ul><li>Surcharges – at cost from Visa and MC </li></ul><ul><li>...
Who Is US Merchant Services? <ul><li>US Merchant Services is a Registered Member Service Provider for MasterCard Internati...
Who Is US Merchant Services? <ul><li>US Merchant Services provides the following processing solutions: </li></ul><ul><li>P...
Want More Information? <ul><li>This was a presentation created for a specific client that had been offered a rate of 1.19 ...
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The Truth Behind Merchant Accounts Rates

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Here is a presentation I created for a potential client that was promised a discount below cost - 1.19%. How can this be? Watch to find out.

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The Truth Behind Merchant Accounts Rates

  1. 1. Merchant Account Rate Reality Robb Lejuwaan - US Merchant Services
  2. 2. Presentation Outline <ul><li>Where do merchant account rates come from? </li></ul><ul><li>How is a merchant account rate built? </li></ul><ul><li>Rate cost examples </li></ul><ul><li>How were you offered a rate below cost? </li></ul><ul><li>A look at my price model </li></ul><ul><li>Who is US Merchant Services? </li></ul>
  3. 3. Where do the rates come from? <ul><li>They come direct from Visa and MasterCard </li></ul>
  4. 4. Where do the rates come from? <ul><li>They come direct from Visa and MasterCard </li></ul><ul><li>The official name for these rates is INTERCHANGE </li></ul>
  5. 5. Where do the rates come from? <ul><li>They come direct from Visa and MasterCard </li></ul><ul><li>The official name for these rates is INTERCHANGE </li></ul><ul><li>Here are links to the web sites with this information: </li></ul><ul><li>Visa Interchange Guide </li></ul><ul><li>MasterCard Interchange Guide </li></ul>
  6. 6. Key Point <ul><li>ALL MERCHANT ACCOUNT PROVIDERS </li></ul><ul><li>HAVE THE SAME COST </li></ul><ul><li>FROM VISA AND MASTERCARD </li></ul>
  7. 7. Key Point <ul><li>ALL MERCHANT ACCOUNT PROVIDERS </li></ul><ul><li>HAVE THE SAME COST </li></ul><ul><li>FROM VISA AND MASTERCARD </li></ul><ul><li>THERE IS NO SUCH THING AS A </li></ul><ul><li>“ Wholesale Rate” </li></ul>
  8. 8. How a rate is built <ul><li>Example #1 </li></ul><ul><li>Transaction Type: Card Swiped </li></ul><ul><li>Normal Visa Consumer Card: 1.5400% + $.10 </li></ul><ul><li>Visa Acquiring Fee: .0925% </li></ul><ul><li>Cost for this transaction: 1.6325% + $.10 </li></ul><ul><li>Normal MC Consumer Card: 1.5800% + $.10 </li></ul><ul><li>MC Acquiring Fee: .0950% </li></ul><ul><li>Cost for this transaction: 1.6750% + $.10 </li></ul><ul><li>These are considered to be the BASE RATES </li></ul>
  9. 9. How a rate is built <ul><li>Example #2 </li></ul><ul><li>Transaction Type: Visa Rewards Card Swiped </li></ul><ul><li>Visa base rate: 1.6325% + $.10 </li></ul><ul><li>Rewards 1 Surcharge: .11% </li></ul><ul><li>Cost for this transaction: 1.7425% + $.10 </li></ul>
  10. 10. How a rate is built <ul><li>Example #3 </li></ul><ul><li>Transaction Type: Visa Commercial Card Swiped </li></ul><ul><li>Visa base rate: 1.6325% + $.10 </li></ul><ul><li>Commercial Card Surcharge: .66% </li></ul><ul><li>Cost for this transaction: 2.2925% + $.10 </li></ul>
  11. 11. How a rate is built <ul><li>Example #3 </li></ul><ul><li>Transaction Type: MC World Key Entered </li></ul><ul><li>MC base rate: 1.675% + $.10 </li></ul><ul><li>Commercial Card Surcharge: .47% </li></ul><ul><li>Cost for this transaction: 2.145% + $.10 </li></ul>
  12. 12. But, you have a 1.19% rate! <ul><li>Currently, you have a rate that is </li></ul><ul><li>.4425% - 1.15% </li></ul><ul><li>lower than cost? </li></ul><ul><li>How is this possible? </li></ul>
  13. 13. But, you have a 1.19% rate! <ul><li>Currently, you have a rate that is </li></ul><ul><li>.4425% - 1.15% </li></ul><ul><li>lower than cost? </li></ul><ul><li>How is this possible? </li></ul>
  14. 14. How do you have a 1.19% rate? <ul><li>If you would have paid that rate in August of 2007 </li></ul><ul><li>The merchant account provider would have lost $179.42 </li></ul><ul><li>on your account! </li></ul>
  15. 15. How do you have a 1.19% rate? <ul><li>I call this type of rate a “Hollywood rate,” </li></ul><ul><li>it has a great looking facade </li></ul><ul><li>but with out all the makeup it is scary! </li></ul>
  16. 16. How do you have a 1.19% rate? <ul><li>I call this type of rate a “Hollywood rate,” </li></ul><ul><li>it has a great looking facade </li></ul><ul><li>but with out all the makeup it is scary! </li></ul><ul><li>Here is how it works… </li></ul>
  17. 17. How do you have a 1.19% rate? <ul><li>The 1.19% rate is for swiped, regular, </li></ul><ul><li>consumer card transactions </li></ul><ul><li>Then there is a another rate for “mid-qualified” transactions, maybe 3.25% </li></ul><ul><li>Card transactions such a swiped rewards cards and keyed in regular consumer cards </li></ul><ul><li>fit into this category. </li></ul>
  18. 18. How do you have a 1.19% rate? <ul><li>Then there is a another rate for “non-qualified” transactions, maybe 4.25% </li></ul><ul><li>Card transactions such a corporate cards and Visa EIRF fall into this category </li></ul>
  19. 19. How do you have a 1.19% rate? <ul><li>Let’s see the numbers on this comparing the 1.19% rate to 1.95% using your July Merchant account statement… </li></ul>
  20. 20. July 2007 Category 1.19% 1.95% Qualified $146.66 $240.33 (1.19% vs. 1.95%) Mid-Qualified $244.26 $155.40 (3.25% vs. 2.06%-2.10%) Non-Qualified $267.13 $161.37 (4.25% vs. 2.61%) Totals $658.05 $557.10
  21. 21. So the 1.19% rate does not lower costs It causes them to go up $100.95!
  22. 22. $100.95 Loss? How can this be?
  23. 23. It is very simple They make all their profit by padding the surcharges from Visa and MasterCard We, on the other hand, offer “ straight pass through” which means we pass through the surcharges from Visa and MasterCard at cost, without any padding.
  24. 24. So even when our base rate is .76% higher than our competition our fees are still considerably lower Their “mid-qualified fees are 1.15% higher and Their “non-qualified” fees are 1.64% higher than our rates
  25. 25. <ul><li>Merchant account providers </li></ul><ul><li>have conditioned merchants </li></ul><ul><li>to focus on the base discount rate… </li></ul><ul><li>… when there actually two price points to focus on: </li></ul><ul><li>Base rate </li></ul><ul><li>Surcharges Fees </li></ul>
  26. 26. So What Is Our Offer? <ul><li>Base Rate – 1.95% </li></ul><ul><li>Surcharges – at cost from Visa and MC </li></ul><ul><li>Here are some surcharge examples: </li></ul><ul><li>Visa swiped rewards - 1.95% +.11% = 2.06% </li></ul><ul><li>Visa card not present - 1.95% +.31% = 2.26% </li></ul><ul><li>MC Comm. Face to Face - 1.95% +.47% = 2.41% </li></ul><ul><li>Visa debit card swiped - 1.95% +(.51%) = 1.44% </li></ul><ul><li>MC debit card swiped - 1.95% +(.53%) = 1.42% </li></ul>
  27. 27. Who Is US Merchant Services? <ul><li>US Merchant Services is a Registered Member Service Provider for MasterCard International and a Registered Independent Sales Organization for Visa USA through Fifth Third Bank. </li></ul><ul><li>14 Years in business. </li></ul><ul><li>BBB member with a “AAA” rating. </li></ul><ul><li>$1.8 Billion in annualized volume (new business) in 2006. </li></ul><ul><li>Reprogram 200-250 merchants per month. </li></ul><ul><li>5 th 3rd Bank – 145 years old; over 1100 locations. </li></ul><ul><li>T-SYS – The original Visanet, created by Visa. Now owned by Total Systems, is the largest single payment platform in the world. </li></ul>
  28. 28. Who Is US Merchant Services? <ul><li>US Merchant Services provides the following processing solutions: </li></ul><ul><li>Prioritized 24/7 Customer Service. </li></ul><ul><li>No Hidden Fees. </li></ul><ul><li>Full Visa/MasterCard Check Card Rebates. </li></ul><ul><li>A Straight Pass-Through from Visa/MasterCard on Surcharges and Interchange Reductions. </li></ul><ul><li>Premiere 24/7 On-Line Reporting. </li></ul><ul><li>Discount Charged Monthly, Not Daily. </li></ul><ul><li>No Switching Costs. </li></ul><ul><li>Full Disclosure of all Processing Fees. </li></ul><ul><li>Easy to Understand Monthly Statements. </li></ul><ul><li>An Account Executive Permanently Assigned to you. </li></ul>
  29. 29. Want More Information? <ul><li>This was a presentation created for a specific client that had been offered a rate of 1.19 %. If you have “mid-qualified” and “non-qualified” fees on your merchant account and you want to get rid of your hidden fees please click the link below and fill out the form. </li></ul><ul><li>Get a Straight Pass Through merchant account </li></ul>

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