Partnering with Credit-card-processing Salespeople, Part 3: Weeding Out Unacceptable Parties

When soliciting and assessing a request for proposal for a customer’s credit card processing, I allow the customer include any supplier or salespeople she desires. Clients often need to include their lender or a particular salesperson that’s been calling on them.

I allow any supplier selected by my client to participate in the RFP even when I know from experience that the supplier isn’t reputable. I let any salesperson chosen by my client to engage even if I could tell by the salesperson’s actions and speech that he’s not educated or, even worse, deceitful.

The main reason I allow unacceptable salespeople and providers to participate is simply to educate my client. Credit card processing may well be the most complicated and misleading industry a merchant could possibly face.

This guide is the third installment of a three-part series on identifying acceptable salespeople and compelling them to work with you, not against. The previous installments were”Partnering with Credit-card-processing Salespeople, Part 1: Comprehensive Statements Key” and”Part 2: Setting Expectations.”

Both previous installments are abridged versions of the schooling process and methodology I use to assist merchants find reputable salespeople and providers, obtain competitive pricing, affirm the negotiated pricing, and set expectations for the connection.

Weeding Out Unacceptable Parties

The methodology and procedure explained in this series come down to the next.

  • Neutralize the merchant application. Credit card salespeople do not typically understand all the fees and verbiage on the merchant application. Moreover, many salespeople do not even know how to properly complete the record, which has caused merchants being charged higher rates and fees.

Despite that, merchants must sign the application and, generally, sign a personal guarantee. The purpose of this”confirmation of offer” email, described in my April article, would be to allow the salesperson know that regardless of what the application says, it is the data in that confirmation email the salesperson and merchant have agreed to and the salesperson will otherwise be held accountable.

Many unacceptable salespeople and suppliers will weed themselves out of their selection procedure at this point since they won’t need to answer the yes-no questions in the email and disclose their surcharges, hidden charges, inflated fees, or their lack of knowledge.

  • Neutralize the terms and conditions. Many salespeople don’t understand the terms and conditions. Many have not read them. Merchants should make sure that any agreement they sign, including any equipment or maintenance contracts, might be exited with a minimum or no termination fee. Don’t accept a salesperson’s verbal assurance of no termination fee. Make sure that the document says that no termination fees would be billed for leaving the contract at any time.

The stipulations of a merchant’s processing arrangement are crucial. By way of instance, suppose two providers offer the exact same pricing. The first company does not charge a termination fee. The next charges a typical month of calculating fees times the amount of weeks remaining when your departure the contract. This could easily cause a termination fee in the thousands or even tens of thousands of dollars.

As an aside, past the termination fees, which supplier is more likely to include surcharges or invent new fees? In my experience, it is the one with excessive termination penalties.

Many suppliers that rely on locking merchants into contracts through punitive termination fees will weed themselves from the selection procedure by not removing those fees.

  • Insist on a detailed and itemized monthly processing announcement. If you can’t verify the rates and charges you negotiated, you probably aren’t receiving them.

Providers that don’t wish to disclose the facts each month will probably be hesitant to present a detailed and itemized statement. Weed out any supplier’s offer that can’t be verified with a processing invoice.

  • Make certain the salesperson knows her arrangement with the merchant. The single agreement of any worth is the one between the merchant and the salesperson, as set forth in the above”confirmation of offer” email. You may exit the supplier’s contract at any time (because you have insisted on no excess termination penalties). The contract between you and the salesperson is paramount.

Unacceptable salespeople or salespeople who understand that they represent an improper supplier will generally weed themselves from the selection process instead of face the merchant to assess the statements.

  • Insist on the methodology. Unacceptable salespeople and suppliers dislike the aforementioned methodology because they make their money by tricking merchants. However, fantastic salespeople representing good businesses appreciate the process since they don’t have to worry about falling short on their commitments. They’ll maintain a good business relationship with the merchant which will lead to ongoing referrals and commissions.

Pass-through Fees

The processor must offer a list of its pass-through fees, which are the actual fees which the card companies charge the supplier. But many providers violate these charges. By way of example, it’s not unusual for suppliers to inflate the Access Fee (1.55 cents to 1.95 cents, as shown below) to as large as 10 cents. The MC License fee of 0.0040 percentage, below, is billed to the supplier for a majority fee, but some providers charge up to 0.10 percent for this fee.

Many suppliers have added fees which they predict pass-through fees. By way of instance, some providers add a 0.055 percent”Other Fee” to all transactions. Also, some suppliers add a”processing system fee” into the American Express OptBlue pass-through fees.

Compare the pass-through fees listed below to the list obtained in the salesperson and supplier. More to the point, (a) compare the list of pass-through fees offered by each competing supplier and (b) hold the salesperson accountable to the listing of charges she posed.

The card companies do sometimes change some pass-through fees. By way of instance, Visa just increased the Debit evaluation fee from 0.11 percent to 0.13 percent. If the twice-yearly pricing confirmation (described in”Part 2“) along with your salesperson shows a fee that wasn’t on the first list, it the salesperson’s responsibility to show that the fee is valid and not a fresh one from the supplier.

Dues and Assessments: Visa, MasterCard, Discover

Visa: 0.13%
MasterCard: 0.12% (<$1,000) and 0.14% (>$1,000)
Discover: 0.13% OF PA

Access Fees: Visa, MasterCard, Discover

Visa APF: 1.55 cents (debit) /1.95 cents (charge )
MasterCard NABU: 1.95 cents
Discover Data Usage Fee: 1.95 cents

Additional Pass-through Charges: Visa, MasterCard, Discover

MasterCard License Fee: 0.0040%
MasterCard Digital Enablement Fee: 0.01%
Discover Network Auth Fee: $0.0025
MasterCard Auth Access Fee: AVS CP: $0.010
MasterCard Auth Access Fee: AVS CNP: $0.010
MasterCard Auth Access Fee: $0.005
MasterCard Card Validation Code 2 Fee: $0.0025
MasterCard Account Status Fee (Intra-Regional): $0.025 or $0.03
Visa Account Zero $ Verification Fee: $0.025
MasterCard Processing Integrity Fee: $0.055
Visa Misuse of Authorization Fee: $0.048
Visa Zero Floor Limit Fee: $0.10
Visa Transaction Integrity Fee: $0.10
MasterCard Cross Border Assessment Fee: 0.60percent
Visa Int’l Service Assessment Fee: 0.80percent
Discover Int’l Service Fee: 0.80percent
MasterCard Int’l Support Fee: 0.85percent
Visa Interregional Acquiring Fee: 0.45percent
Discover Int’l Processing Fee: 0.50percent
FANF Fee: Per volume for card-not-present
Visa/MasterCard Visa -Base II/Kilobyte Fee: This fee no longer pertains but some providers still charge it.

Pass-through Fees: AmericanExpress OptBlue

Network Fee: 0.15%
Non-Swipe Fee: 0.30%
Inbound Fee (Int’l cards only): 0.40%
Data Quality Fee (Error with SE/MCC): 0.75%