QR Codes

Will QR Codes and smartphones change the credit card processing industry? A sea change is definitely on the horizon, and as the number of smart phones in circulation grows, we will see the use of mobile wallets replace hard plastic...if a merchant isn't accepting QR codes for some type of benefit at this point, you are behind the curve...

Continued problems with merchants not understanding there is a cost called interchange; when I put a merchant on interchange 'plus' they still get frustrated and still have a hard time understanding rate structures; ...they want a rate..they do understand that rewards cost more in general to process than other type cards.

The IRS, 1099-K and you....

So now the IRS, in another Orwellian move, is going to track merchant credit card sales , and send a 1099-K to merchants processing over a certain threshold...according to trade journals it will cost the processing industry 100 million to reprogram their computers to meet this requirement.
But the processors will mark up the fee for the 1099-K...and make an additional 300 million in revenue...I want to say only in America....

Ramblings

Just back from a sales call on Saturday night. I have been prospecting a restaurant forever. They had been on a bundled pricing plan with a local bank...
and I started prospecting the owner right before Durbin came out-I was advocating an interchange plan but the owner felt like there was no predictability in that quote, so I quoted a similar bundled plan...then I went back to suggestng interchange..I just didn't get the business..later I found out he indeed went with an interchange plan, ye gods..then he called me out of the blue, and wanted back on a tiered plan....so I presented a more competitive pricing, signed the application tonight...the real reality is, stick to interchange...there is a learning curve but that is ok...uniform markup is the key!

Old Salt

I prospected a furniture store owner the other day operating out of a large warehouse...he was willing to discount rapidly to move a piece of furniture...
yet when I asked him why he did not accept credit cards, he looked at me like I was crazy! 'They can go to the bank' he roared crustily..maybe this old salt has a point...but his discount's were a lot larger than any discount he would have payed to Visa or Mastercard...I'm just sayin...

Bank Credit Card Processing

In my part of the world, I find that bank credit card processing (using your local bank) for credit card processing has a major plus and a major minus....the plus is next day settlement into your bank account. The big minus is banks are keen on annual fees, PCI fees that are outrageous, Breach Insurance fees, and leases....and they have almost no incentive to reduce any of these fees...so the next time a credit card processing rep comes in at least get a rate comparison and you may really for the first time notice what you are paying your so called friendly bank...then, insist the salesperson give you an interchange quote....make sure and find out how many basis points are being proposed to be added to the interchange (cost) and the per transaction cost.

Trade journals note that overall processors make 40 per cent of their revenue from junk fees.

Interchange vs. Tiered pricing

The average merchant has no idea if the credit card processing pricing plan being used in his or her business is based on what I call 'bottom up' pricing (interchange plus) or 'top down pricing' - (tiered pricing). Tiered pricing herds transactions into slots that many be drastically higher than basing price on an Interchange plan...
interchange refers to what all processors must pay to Visa, Mastercard and Discover...when using a pricing plan bases on interchange there is no 'herding' and each transaction has an uniform markup. Of course one must be aware of the mark up being charged and per item cost!