Good post from the previous writer, many valid points. A few,however, merit further comment and clarification:
Interchange Plus or Interchange Cost (also known as Passthrough pricing) happens to be our preferred pricing mechanism as well. I agree it is probably the fairest deal for many (but not all) merchants if set up properly and honestly.. However, let's be realistic here. To infer the that ANY processor is going to offer the very same pricing to the typical small business or 'mom and popper' as WalMart or "ALL the big companies" get is absurd. Obviously this is unrealistic and impossible since..a processor grossing a few pennies on every hundred dollars processed for one merchant doing $10,000 per month vs another merchant doing untold hundreds of millions per month represents two entirely different scenerios in terms of pricing, overhead factor, and every other conceivable variable....agreed? It should also be clarified that Interchange Plus is a pricing
mechanism, not a rate structure in and of itself. I've seen many a merchant statement featuring 'interchange plus" pricing that are supreme gouge jobs for many reasons.....margins too high, add-on fees, you name it.
Re the " lower rates from a Direct Processor" claim. Sounds good but in essence not much more than a contrived sales pitch.. The problem is it grays the difference between "Acquirer" and"Processor",which aren't necessarily the same. All credit card services, no matter who the front or back end processor, originate from an Acquirer who in turn has licenses with the bankcard associations, Visa and MC. The bankcard associations set the rates that are the same for all Acquirers and therefore for all processors, the rate structure is called "Interchange". So when someone is selling off Interchange or Passthrough, whatever you want to call it, the Interchange rate on which the re-sold pricing structure is based is EXACTLY the same since there is only one Interchange, regardless of whether or not it's being resold by a "direct processor" whatever that means or not. For the record, we and countless other Agents have access to and sell the services of those identified as "direct processors" every day with no 'middleman fees" whatsoever, including Global, First Data, Vital, etc., and we sell off true interchange if that's the best solution for the merchant.
I need to point out that the claim that Heartland Payment Systems is " the ONLY full disclosure pricing provider in the industry." is what's known in the sales biz as 'puffing', which means it's opinion for selling purposes, not documented fact by any stretch. '. I know Heartland very well and agree they are a first-rate honorable company. But for anyone to claim that they are the ONLY honest guys out there and nobody else honestly discloses their pricing is incorrect. True there are lots of bad guys out there in our industry, but there are many honorable people as well. I consider myself to be in the later category, please don't lump me with the bad guys. As far as full disclusure of rates and terms goes, one of the Acquirer contracts we represent is 40-something pages long ! I can't imagine fuller disclosure.
The website mentioned by the previous poster was excellent. I'd also like to direct readers to
www.MerchantServices-help.com which also contains a vast amount of useful information regarding credit card processing glossary and terms, FAQ's, ecommerce and rate structure info sites etc.
I too would be happy to answer any inquiries. Email to
amspcs@juno.com.
B. Godofsky
AMS, Inc.
in response to: chatterboxj
