Visa and MasterCard have made changes to their merchant acceptance practices effective January 27, 2013 as a result of the Merchant Class Action Litigation Settlement.
Merchants will now have the choice to add surcharges for some card based transactions. With the exception of pre-paid & debit cards, a merchant can now add a fee for accepting credit cards not to exceed the cost to process the card. Visa has determined that the surcharge should never exceed 4%. For full details on each brands rule and regulations regarding the new surcharge visit www.mastercardmerchant.com or www.visa.com/merchantsurcharging.
Before you choose to add a surcharge, you would want to take a few things into consideration. Your customers may find that your competitors have chosen not to add a surcharge on their products or services. This may lead to losing your customers to the competition. Another issue to look at is the complexity of training your sales representatives in adding the surcharge to some cards yet not on others such as debit. If your staff would miss-recognize a card, it could lead to penalties enforced on to you from Visa or MasterCard.
Your best route of travel is to insure you have the best rates available to you, so that the cost of credit card processing is at a minimum. Contact me at 800.51.TOTAL / 800.518.6825 if you would like to have your processing rates evaluated. Feel free to visit my website at www.totalmerchantservices.pro to view information on our free credit card terminal programs and other services I offer.
Have a fantastic day!
Thursday, January 24, 2013
Friday, January 18, 2013
Simple Way To Determine Credit Card Processing Costs
An easy way to keep tabs on your processing costs is by simply taking the total you were charged for credit card processing and dividing it by the amount you processed. This gives you your effective processing rate. Many merchants already know this simple trick, however if you do not, I ask you to give it a try now.
There are many variables involved that could make your rate higher or lower. One is the fact that Visa, MasterCard, and Discover all have per items that are charged that range from $0.05 to $0.22 in addition to the network processing fee charged by your processor. This results in a higher effective rate for merchants that have small average transactions, conversely merchants who have a high average ticket will have a lower effective rate. Another major factor is dependent on if the merchant processes cards by swiping or by key entering the transactions.
The following is a few examples of each:
Card Present Transactions
A merchant who processes credit cards card present swiped and has an average transaction of $25 should have an effective rate of right around 2.25% give or take a few basis points.
A merchant who processes credit cards card present swiped and has an average transaction of $1000 should have an effective rate of right around 1.25% give or take a few basis points.
Card Not Present Transactions
A merchant who processes credit cards card present swiped and has an average transaction of $25 should have an effective rate of right around 2.53% give or take a few basis points.
A merchant who processes credit cards card present swiped and has an average transaction of $1000 should have an effective rate of right around 1.68% give or take a few basis points.
Summary
Based on the above examples you should be in the below range once you have calculated your effective rate.
Card Present Transactions - 1.25% to a 2.25%
Card Not Present Transactions - 1.68% to a 2.53%
If you found that your effective rate is much higher than the above mentioned the most likely reason is the Durbin Amendment that went in effect October 1st, 2011.This amendment to the Dobbs-Frank Wall Street Reform and Consumer Protection Act of 2010 significantly reduced the cost of debit card processing.
The effective rate is by far the easiest way to determine what you are paying to process credit cards. This is why each and every custom savings analysis I prepare for a merchant includes their current effective rate and the new effective rate based on the proposed new credit card processing costs.
If you do the math and your current company just doesn't add up contact me so that I can prepare a custom savings analysis for your company. Visit this link where you can upload your current processing statement to have one prepared for you today. You have nothing to lose but everything to save!
Have a safe and happy weekend!
There are many variables involved that could make your rate higher or lower. One is the fact that Visa, MasterCard, and Discover all have per items that are charged that range from $0.05 to $0.22 in addition to the network processing fee charged by your processor. This results in a higher effective rate for merchants that have small average transactions, conversely merchants who have a high average ticket will have a lower effective rate. Another major factor is dependent on if the merchant processes cards by swiping or by key entering the transactions.
The following is a few examples of each:
Card Present Transactions
A merchant who processes credit cards card present swiped and has an average transaction of $25 should have an effective rate of right around 2.25% give or take a few basis points.
A merchant who processes credit cards card present swiped and has an average transaction of $1000 should have an effective rate of right around 1.25% give or take a few basis points.
Card Not Present Transactions
A merchant who processes credit cards card present swiped and has an average transaction of $25 should have an effective rate of right around 2.53% give or take a few basis points.
A merchant who processes credit cards card present swiped and has an average transaction of $1000 should have an effective rate of right around 1.68% give or take a few basis points.
Summary
Based on the above examples you should be in the below range once you have calculated your effective rate.
Card Present Transactions - 1.25% to a 2.25%
Card Not Present Transactions - 1.68% to a 2.53%
If you found that your effective rate is much higher than the above mentioned the most likely reason is the Durbin Amendment that went in effect October 1st, 2011.This amendment to the Dobbs-Frank Wall Street Reform and Consumer Protection Act of 2010 significantly reduced the cost of debit card processing.
The effective rate is by far the easiest way to determine what you are paying to process credit cards. This is why each and every custom savings analysis I prepare for a merchant includes their current effective rate and the new effective rate based on the proposed new credit card processing costs.
If you do the math and your current company just doesn't add up contact me so that I can prepare a custom savings analysis for your company. Visit this link where you can upload your current processing statement to have one prepared for you today. You have nothing to lose but everything to save!
Have a safe and happy weekend!
Thursday, January 10, 2013
News - Total Merchant Services Acquires Fanminder
Purchase Underscores Company's Commitment to Help Merchants Grow and Manage Their Businesses
BASALT, CO--(Marketwire - Jan 8, 2013) - Total Merchant Services (Total) announced today the purchase of California-based Fanminder. The acquisition adds a social, mobile marketing tool to Total's existing portfolio of innovative payment solutions. Fanminder will immediately provide Total's entire base of small to mid-sized merchants with enhanced social media, email and text messaging abilities -- that help stimulate sales via personal interaction with their customers and prospects.
"Merchants are demanding more, and our industry can no longer strictly sell on price and service. ISOs and Sales Agents need to forge partnerships with a company that helps businesses manage and grow their top and bottom lines," said Joe Kaplan, CEO, Total Merchant Services. "The acquisition of Fanminder helps accelerate our business strategy and competitive advantage. Now our sales partners can provide merchants with strategies for driving social media promotions to help grow their businesses. This results in more meaningful customer engagements through digital offers, quickly distributed through social media networks and mobile devices."
Fanminder is a multi-channel, mobile marketing platform that enables business owners to easily design and publish everyday promotional offers to Facebook, Twitter, SMS, email and even their own websites. The platform provides simple-to-follow templates, eliminating the need and expense for a professional graphic designer. Customers redeem promotions at the store of origin and all redemptions are tracked in a dashboard, "closing the loop" for the business owner and helping them grow sales. The company is adding more than 1,000 small business customers per month and is used by 10,000 small businesses ranging from clothing boutiques to pet shops, and casual restaurants.
"We built our company to provide merchants with a turn-key system for producing engaging promotions that drive the success of their businesses," said Paul Rosenfeld, Co-Founder and CEO, Fanminder. "We see many synergies between our offering and Total's current services; we look forward to integrating our perspective offerings for the benefit and growth of all small businesses."
About Fanminder
Fanminder powers fan relationships for small businesses and is leading the way for Fanbase marketing. Launched nationally in 2010, Fanminder is privately-funded and based in Silicon Valley, California. The company is happily satisfying artisan donut shops, hip urban clothiers, and edgy tattoo parlors, among its thousands of customers. From one easy, do-it-yourself place on the web, Fanminder helps businesses publish gorgeous offers that reach and reward their fans on social networks and through mobile and other devices.
Keep a look out for exciting new services that I will be able to offer due to this acquisition. Once they become available I will publish a new page explaining the offers available on www.totalmerchantservices.pro.
Chris Judy
National Sales Manager
Total Merchant Services
800.51.TOTAL / 800.518.6825
BASALT, CO--(Marketwire - Jan 8, 2013) - Total Merchant Services (Total) announced today the purchase of California-based Fanminder. The acquisition adds a social, mobile marketing tool to Total's existing portfolio of innovative payment solutions. Fanminder will immediately provide Total's entire base of small to mid-sized merchants with enhanced social media, email and text messaging abilities -- that help stimulate sales via personal interaction with their customers and prospects.
"Merchants are demanding more, and our industry can no longer strictly sell on price and service. ISOs and Sales Agents need to forge partnerships with a company that helps businesses manage and grow their top and bottom lines," said Joe Kaplan, CEO, Total Merchant Services. "The acquisition of Fanminder helps accelerate our business strategy and competitive advantage. Now our sales partners can provide merchants with strategies for driving social media promotions to help grow their businesses. This results in more meaningful customer engagements through digital offers, quickly distributed through social media networks and mobile devices."
Fanminder is a multi-channel, mobile marketing platform that enables business owners to easily design and publish everyday promotional offers to Facebook, Twitter, SMS, email and even their own websites. The platform provides simple-to-follow templates, eliminating the need and expense for a professional graphic designer. Customers redeem promotions at the store of origin and all redemptions are tracked in a dashboard, "closing the loop" for the business owner and helping them grow sales. The company is adding more than 1,000 small business customers per month and is used by 10,000 small businesses ranging from clothing boutiques to pet shops, and casual restaurants.
"We built our company to provide merchants with a turn-key system for producing engaging promotions that drive the success of their businesses," said Paul Rosenfeld, Co-Founder and CEO, Fanminder. "We see many synergies between our offering and Total's current services; we look forward to integrating our perspective offerings for the benefit and growth of all small businesses."
About Fanminder
Fanminder powers fan relationships for small businesses and is leading the way for Fanbase marketing. Launched nationally in 2010, Fanminder is privately-funded and based in Silicon Valley, California. The company is happily satisfying artisan donut shops, hip urban clothiers, and edgy tattoo parlors, among its thousands of customers. From one easy, do-it-yourself place on the web, Fanminder helps businesses publish gorgeous offers that reach and reward their fans on social networks and through mobile and other devices.
Keep a look out for exciting new services that I will be able to offer due to this acquisition. Once they become available I will publish a new page explaining the offers available on www.totalmerchantservices.pro.
Chris Judy
National Sales Manager
Total Merchant Services
800.51.TOTAL / 800.518.6825
Wednesday, December 12, 2012
Increasing Sales - Gift Cards
One of the best and easiest ways to increase your sales is to add a gift card program. By setting up a gift card program you can bring in new customers who often will spend more than the face value of the card. Statistically 61% of gift card users spend more when redeeming the card. The customers who do not use the full value will then have a reason to come back to your store to use the rest of the card. In some instances you may sell a gift card and never see it come in your store again. In this case you make the full value of the card without moving any of your merchandise.
Over 50 million people purchased gift cards last year. Gift cards are growing in popularity year after year. Many merchants incorporate a gift card in a particular sale. Such as offer gift cards when a specific item is purchased or dollar amount is spent. As result increasing initial response to the ad and creating returning customers.
Overall gift cards will help you with increasing your bottom line, improving your companies image, eliminate fraud & theft (by issuing gift card in store credit) and billboard advertising.
For more information on how your business can grow by using gift cards contact Chris at 800.51.TOTAL / 800.518.6825.
Monday, October 22, 2012
Free Credit Card Terminals - Contracts & Cancellation Fees
There are many companies that offer free credit card terminals along with their credit card processing services. Most of them offer it to encourage you to sign a long term agreement with high cancellation fees to retain your services even if you want to use another processor. This is just as bad as signing a long term lease agreement. So be aware before signing any agreement.
Look & ask about the following two things:
1. Is there a cancellation fee? As I mentioned above some companies lure you in with a free terminal. They then have tons of hidden charges that eat your hard earned revenue away costing more than the purchase of a credit card terminal would have.
2. Is there a length to your agreement? Even if you are told there is no cancellation fees make sure they do not have a length to their agreement. Unless it is month to month they could be hiding something and end up having some type of cancellation costs.
I tell everyone that I quote to watch out for this as too many times a merchant chose a different processor due to a deal that looked more attractive to find they are now stuck with a high cancellation cost.
Total Merchant Services offers our free terminal program with no cancellation fees and a month to month agreement. Whats the catch? That's the best part... there are no catches. We want to earn your business and we are so confident you will stay with our company that we are willing to invest in your business by providing the best credit card terminals out there - for free.
For more information on our services feel free to give me a call at (800) 518-6825 or visit my site at www.totalmerchantservices.pro.
Look & ask about the following two things:
1. Is there a cancellation fee? As I mentioned above some companies lure you in with a free terminal. They then have tons of hidden charges that eat your hard earned revenue away costing more than the purchase of a credit card terminal would have.
2. Is there a length to your agreement? Even if you are told there is no cancellation fees make sure they do not have a length to their agreement. Unless it is month to month they could be hiding something and end up having some type of cancellation costs.
I tell everyone that I quote to watch out for this as too many times a merchant chose a different processor due to a deal that looked more attractive to find they are now stuck with a high cancellation cost.
Total Merchant Services offers our free terminal program with no cancellation fees and a month to month agreement. Whats the catch? That's the best part... there are no catches. We want to earn your business and we are so confident you will stay with our company that we are willing to invest in your business by providing the best credit card terminals out there - for free.
For more information on our services feel free to give me a call at (800) 518-6825 or visit my site at www.totalmerchantservices.pro.
Wednesday, October 3, 2012
Credit Card Processing Interchange Costs
Interchange Explained
Interchange can be complicated to understand. Simply put merchant services interchange is the cost that issuing companies like Visa, MasterCard and Discover charge merchant service providers to process credit cards.
Each card that is issued to a consumer or business falls under one of the above brands. Each brand has multiple different types of cards. Some examples would be debit, rewards, corporate, standard and the list goes on and on. There are 100's of different card types and each one of these categories of cards carries its own cost based on interchange that ranges from 0.05% + $0.22 up to 2.95% + $0.10.
How Do Processing Companies Make Money?
There are a few different ways a credit card processing company charges a merchant to process credit cards. To keep it simple we will look at two common examples.
Credit card processing statements can be so confusing and often have hidden fees that are missed by an untrained eye. It is best no matter what type pricing you have now to send your statement to a professional merchant services company to have it analyzed. I am constantly looking at statements of companies that thought they had a decent deal to find there are hidden costs that could be cut saving them money month after month.
If you have any questions or would like me to prepare a savings analysis for your company feel free to contact me at 800.51.TOTAL / 800.518.6825. Or you can complete a custom quote request and attach your credit card processing statement HERE.
Make it a great day!
Interchange can be complicated to understand. Simply put merchant services interchange is the cost that issuing companies like Visa, MasterCard and Discover charge merchant service providers to process credit cards.
Each card that is issued to a consumer or business falls under one of the above brands. Each brand has multiple different types of cards. Some examples would be debit, rewards, corporate, standard and the list goes on and on. There are 100's of different card types and each one of these categories of cards carries its own cost based on interchange that ranges from 0.05% + $0.22 up to 2.95% + $0.10.
How Do Processing Companies Make Money?
There are a few different ways a credit card processing company charges a merchant to process credit cards. To keep it simple we will look at two common examples.
- Tiered Based Pricing - This type of pricing group's cards in to several different categories based on their interchange cost. Each group of cards would fall in to Qualified, Mid-Qualified or a Non-Qualified grouping. Since individual card types carry different costs the only variable is the amount that the processing company makes off of the transaction. The statement you would get from your company if you have this type of pricing would be simple with only 3 rates. The downfall is thought that you would be paying excessive fees for many of the cards you accept.
- Interchange Bases Pricing - This type of pricing does not group the individual card types. You would pay a fixed amount above the actual cost for each card you accept. The fixed amount that you are charged above cost depends on the volume you process and the amount of transactions and could be anywhere from 0.00% on up. The statement on the other hand with this type of pricing would be much more detailed and could look confusing. This is due to each of the many card types being outlined at cost. Even though it looks a lot less simple than the tiered pricing you only pay a fixed amount above cost.
Credit card processing statements can be so confusing and often have hidden fees that are missed by an untrained eye. It is best no matter what type pricing you have now to send your statement to a professional merchant services company to have it analyzed. I am constantly looking at statements of companies that thought they had a decent deal to find there are hidden costs that could be cut saving them money month after month.
If you have any questions or would like me to prepare a savings analysis for your company feel free to contact me at 800.51.TOTAL / 800.518.6825. Or you can complete a custom quote request and attach your credit card processing statement HERE.
Make it a great day!
Tuesday, October 2, 2012
Credit Card Terminal Leases Explained
There are some companies out there that are still signing terminal lease agreements! Unbelievable!
A normal term on a lease agreement for a credit card terminal is 48 months and in many states these agreements are non-cancelable. I have seen prices on these agreements range from as low as $19.95 a month to as high as $160 a month with some extra fees charged by the leasing company. That would bring the total cost for the terminal to $957.60 to $7,680 plus those extra fees.
This is how leasing a credit card terminal works: The agent from the credit card company has the merchant sign the lease agreement upon setting up their merchant account. The merchant account gets set up, the agent purchases the terminal and the terminal is sent to the merchant. On average credit card terminals only cost anywhere from $100 to $499 at the maximum (for standard credit card terminal). Once the terminal is received the merchant services agent will send a lease confirmation to the merchant. The confirmation is signed and sent back to the agent who then forwards it to the leasing company. The leasing company then funds the agent for the lease.
Let's look at how much the agent now makes off of the lease. Once the confirmation is received the agent is funded. The agent gets paid a large amount of the total that will be collected over the term of the lease. The actual amount funded varies dependent on the credit score of merchant. For the high cost $160 a month lease mentioned above the agent could take home up to $6,650!! In that example the terminal would have cost the agent about $299 dollars new. That leaves the agent with $6,351 profit.
Well we see why it's a good idea for the agent to set up a lease, but is there any reason why a merchant would want one? In the case of a credit card terminal the answer is simply NO!
I personally do not know how the agents that run around tricking people in to signing a costly leases sleep at night.
Total Merchant Services offers the best state-of-the-art equipment at no cost to the merchant with a month-to-month agreement and low monthly fees. Why sign a lease when you can get it for free?
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