Every processor out there has the same base cost for any given credit card transaction. This cost is known as interchange. Processors make money to pay their bills and turn a profit by marking up this cost and passing it along to its merchants. How much your rates are marked up can vary greatly, and there are a lot of factors that can go into how much of a markup you’re paying.

This is a bit of an over simplistic view of it, and it assumes that all processors are created equal. While they all do in fact have the same, Visa and MasterCard mandated costs when it comes to the processing of a transaction, but there is something else to it. They will all need to cover their costs on each individual transaction, but they will also have to mark up interchange more or less depending on how much other overhead they have. Therefore, the processor who is able to run its operation most efficiently is likely going to be able to offer you better rates.

So what can you do to make sure that your credit card processor is up there with some of the most efficient processors around? Unfortunately, at the business owner level, there is not a whole lot that you can do. Many processors are privately held, so they have no obligation to provide audited financial statements to the SEC. All you can really do is to take a look at your own credit card processing rates and do your best to figure out if they’re marked up too much.

How Much is Too Much

That begs the next question, or questions. First, how can you tell how much your transactions are marked up, and secondly, how much is too much? Certainly, it is going to vary depending on your situation. One thing I can tell you is that the Card Associations, (Visa, MasterCard and Discover), who are the ones that dictate what interchange actually is, they disclose the current interchange tables on their websites. You can take a look and try to figure it out, but it really is very complicated. Your next best bet is to give us a call here at Sure Payment Solutions. We’ll be able to take a look at your most recent processing statement and let you know if you’re paying too much. If so, we’ll show you exactly which line items we think are too high, and we’ll even let you know what you would pay if you were to process with us. It’s fast and easy, and there are never any obligations or costs associated with this.

If your business is a cash cow, and you’re ready to take it to the next level by deciding to accept credit cards from your customers instead of just cash, you should do a bit of research on which merchant service provider you’re going to set your account up with. If you’re doing a ton of business, the last thing you want is to set up a merchant account with someone who’s going to freeze your account if you start processing too many transactions. It happens from time to time and it’s way easier to deal with beforehand than it is after-the-fact.

Where to Go for a High Volume Merchant Account

Your bank may be an obvious choice. It would certainly be a safe one. As the institution that handles your bank accounts, they will probably jump at the opportunity to process credit card transactions on your behalf. First of all, their risk is significantly mitigated compared to a typical merchant service provider because they have direct access to all of your capital in the accounts that they’re holding in your name. So again, your bank is a safe choice, but we find that most people who process credit cards with the same company that does there banking tend to pay more than they need to for this privilege.

We’ve seen it hundreds of times: businesses being charged 2%-3% more than they have to just for the convenience of processing and banking with the same company. Most of the time it’s out of convenience, or because they have a level of comfort there, but trust me, especially if you’re going to be processing a lot of transactions, it’s not worth what it’s going to cost you.

Maybe you just don’t want to shop for a merchant account. You may be scared that you’re going to get ripped off, or may be uneasy dealing with a new person. The trick is finding a reputable company that knows what they’re doing. Search the Better Business Bureau for accredited companies because they’re likely to provide you with a great user experience. Even harder may be finding someone who knows what they’re doing. After all, whether or not the processor decides to hold your funds has a lot to do with how your account representative sets up your account.

You won’t regret working with Sure Payment Solutions. Our rates are more competitive than your local banks’, and we’ll set you up the right way so you don’t have any headaches down the line. Give us a call today to find out what we can do.

Every 6 months or so, the Card Associations including Visa, MasterCard and Discover, review their table of Interchange rates and make changes based on new risk models, industry trends or internal data. For many merchants, this usually results in a slight increase in the credit card processing rates that they signed on for. Seems sneaky, right?

If and when you notice this rate increases, you may be quick to blame your current credit card processor, but the fact is that they are usually just passing along their own increased costs to you, the customer. Whether or not they have the right to do this may be up for debate, but generally, merchant processing agreements contain some fine print about such interchange increases.

If you think that your rates have been raised in error, an account representative here at Sure Payment Solutions would be happy to give you a free, no obligation rate analysis based on your most recent credit card processing statement. Do not pass this up, even if you aren’t sure that your rates have been increased. Merchants and business owners usually end up saving a huge chunk of change just by getting this rate review, regardless of whether they end up switching their merchant service provider.

For a rate review, just fill out a “Get Started” form by clicking the green button at the top of this page.

This week marks the first time business owners will receive their credit card processing statements and have something new to look at in a long time.  For some, the October 2011 processing statement will reveal vast savings passed through from the Durbin Amendment automatically, while others will look at their October 2011 processing statement expectantly only to be disappointed and find that they have paid the same as they did in September.  As if credit card pricing and costs were not complicated enough, this new amendment adds an additional layer of complexity that we will attempt to break down.

I mentioned above that some people will see instant savings.  The business owners who are seeing changes in their rates are most likely on an interchange plus pricing model, this pricing model maintains a fixed markup above cost on every transaction, and since the Durbin Amendment essentially lowered “cost” on debit and check card transactions, the savings are built in to the existing pricing structure.

For those business owners who are on a tiered pricing model, the savings will not be instant or passed along in the same way.  If you look at your statement, and you can’t tell much of a difference in how much you are being charged, then chances are you have not received any discount owed to you from the Durbin Amendment.  The best way to achieve this goal is to establish a new contract with new pricing that will pass along the Durbin savings.  At Sure Payment Solutions, we have been preparing for the Durbin Amendment to go into effect and are prepared with a variety of tools to help business owners understand their rates and just how much money they can save.

The full effect expected from the Durbin Amendment has yet to take shape, but it is clear that from a consumer standpoint, Debit cards are not what they used to be.  Banks have begun charging monthly fees and usage fees to card holders to offset some of the losses suffered by the cap on interchange fees for debit and check card categories.  Historically, Debit cards were a cheap and easy alternative to carrying cash, but now that there is a cost associated, it is likely that debit cards will become increasingly less popular.  The snowball effect from this essentially reduces the effectiveness of the Durbin Amendment as fewer consumers use debit cards, fewer merchants accept them (despite the savings) and suddenly all the “good” Durbin did will be null and void.

At this point there is very little we can do to change any of that.  Instead, what we can do is ensure that our clients receive the best and lowest rates available thanks to the Durbin Amendment.  The average customer is saving hundreds of dollars every month and all it takes is a simple phone call.  Account representatives will be standing by to speak with you.  Let us analyze your October statement with you and we’ll be able to tell you if you’re getting the Durbin Savings already or not.  From there, its simply your decision whether or not you want to take advantage of this historic amendment or allow it to pass on by.

In the beginning of October the Durbin Amendment affecting debit card rates went into effect.  The Durbin Amendment was a much debated topic in the merchant processing space over the past year or so as there was a lot of speculation that it would hurt banks, which when passed along, would hurt consumers and consequently eliminate the benefit intended for small businesses.  While it has only been a few weeks and most large banks have yet to initiate major changes to their card issuing, it is likely that this will have a domino effect, though probably not as severe as initially anticipated.

So the question we are getting asked by many of our clients and prospective clients is “What does Durbin mean for me?”  There are many sales organizations out there calling small businesses claiming that the durbin amendment is going to save you tons of money if you just switch to their processing services.  Its important to be careful of these companies as they are using this new amendment to acquire your account with no intention of saving you any money.  However, the durbin amendment does mean savings for you.

As discussed in many of our previous posts, there are two primary methods of billing for merchant services: Interchange Plus pricing, and 3-tier pricing.  If you are on Interchange Plus pricing, then the durbin amendment savings will passed through to you automatically and you won’t have to do anything.  However, if you are on a 3-tier pricing model, then you may be eligible to save some money.  Specifically, the Durbin Amendment has affected the cost of running debit and check cards.  The transaction cost and percentage that visa/mc are allowed to charge has been reduced greatly but these savings will not be passed through to you unless you adjust your pricing to interchange, or speak with a representative about establishing a new tiered pricing rate for your check and debit cards.

This may be a little confusing, but at the end of the day, you may be able to receive some savings on your merchant processing, and we will be able to help you determine what kind of savings you are eligible for or if they are already built in based on your current pricing structure.  No matter what it’s a good idea to get a pricing analysis done even if you think you’re already receiving your savings.  Our trained account representatives are standing by to discuss your credit card processing rates and help you cash in on extra savings so fill out a form on our website today or call us at 800-991-3917 to get started.