or the Cost of Accepting Cards
Level Pricing
In case you didn’t know, every credit card processor pays the same price to Visa and MasterCard. It is called Interchange and it is public knowledge. What does that mean to you? It means that national companies do not have a competitive advantage in the area of price. Thrive, as a local business has low overhead, giving you lower prices, without sacrificing in customer service. There are many people in business today who do not have the foggiest idea about what or how they are being charged for accepting cards. If you fit into that category or are just new to business, the answers to your questions are here.
It all starts with Interchange.
Interchange is the cost the Card Associations (Visa and Mastercard) charge the Acquiring Bank (the bank who processes your card payments). This ends up being the bulk of the cost to process (90-95% of the total cost in some cases). The Interchange Table, which is published every year by both Card Associations, is a list of over 100 Discount Categories. Each Discount Category represents either a different card type, acceptance method, merchant category, or risk factor. Each of these criteria effect the Interchange Category that the payment fits into, and therefore the transaction cost. After Interchange, the remainder of the fee is split amongst everyone else: The Acquirer, the Front-End Processor, the Back-End Processor, the Member Agent, and so on.
There are 2 Basic systems to calculate the monthly charges and you would be wise to understand both. Bucket Structure and Interchange Plus.
Interchange Plus
This method opens up every available discount category to the merchant, to maximize the savings for the merchant. This rate structure is the most transparent of the billing options and provides that greatest discount to the merchant processing credit cards. This structure generally consists of Interchange Cost and markup. The Interchange Cost is shown prominently on the bill so that you know what Visa and Mastercard is charging versus what is markup.
Bucket Structure
Instead of having every category open to the merchant, many similar categories are lumped together in 3-4 "buckets". It is easy to see why this is a disadvantage. If you have to combine over 100 categories into 3 or 4, you will be paying much too much on the lowest priced categories in order to cover the higher costs of other categories. The bucket structure is actually the preferred method of billing by nearly all entities in the industry as it simplifies the billing process for the companies involved and maximizes profits. It produces a simple bill but you don't really know what you are paying in the end.
Integration
Credit-card acceptance in the business world seems to be the most troublesome piece in the payment process. Most of the time card payments run on their own terminal, seperated from every other process. What would you like to integrate your payments into?
Website? Point of Sale? Accounting? Online ordering system?
On the Go
Thrive has taken mobile payments to the next level! Not only can we provide you with the ability to process credit and debit cards in the field and get swiped rates but Thrive and Lowfat Software have codeveloped a mobile Point of Sale software which will allow you to get a payment, capture a customers signature, print a receipt and sync the transaction into Quickbooks remotely! You’re not going to believe how much time and money this process will save you. Ask for a demonstration today!
Options
If every business plan and every business were exactly the same we would need just one program, but they’re not! Your business is unique and requires pricing, equipment and reporting that makes sense for how you do business.
Thrive’s Quick Service program is just one example of those differences. If you are a quick service restaurant or low average ticket retailer, then the rate, transaction fee and reporting has been modified to speed up the line at the register and save money! We are happy to look at your business and come beside you to help you make the best decision on what program, pricing and method to use to minimize your costs and maximize your sales in the check-out line or on the web. Call for a free consultation to find out how we can custom design a merchant services program for your business! |