Dear Merchant,
The absolute best way to get the best deal on your credit card processing rates is to negotiate pricing on an "interchange plus" basis. Most credit card processing companies use “Three Tier” pricing which is designed to be confusing and often leads to hidden fees. I prefer to use interchange plus pricing when establishing merchant accounts because it allows me to be upfront and honest while showing the merchants that I truly have the best overall offering for their merchant account needs.
Interchange Plus billing is the most transparent way to get billed because it clearly lays out what VISA and MasterCard are charging you (which isn't negotiable) and what your Merchant Account Provider is charging you (which is negotiable). We are offering interchange plus pricing to your company because it is the only way that we can provide a true apples-to-apples comparison and show you that we are offering a real fantastic deal.
Most of our competitors bill their merchants on a 3-Tier price schedule. VISA and MasterCard classify transactions into one of 130+ interchange categories. Until recently interchange rates were kept secret, but now you can get full access to them at the Visa and MasterCard websites: Visa interchange rates , MasterCard interchange rates. 3-Tier pricing allows merchant account providers to separate the 130+ interchange categories that Visa and MasterCard established into even more categories with their own internal fees attached to them (hidden fees). We use interchange plus pricing because we believe that the hidden fees that are associated with industry should be a thing of the past.
Why it matters to you the merchant!
When negotiating a deal for your merchant account it helps to know how much the processor profits off that account for two reasons:
- It lets you know how much they are making off or you and therefore how much room they have to negotiate depending on the risk level and service needs of your account.
- The main rate that a processor will quote is on a standard credit card transaction. With the rise of rewards cards and debit cards, these "standard" cards make up the minority of transactions. If you focus your energy on negotiating a good "standard" rate, with a fair markup for your processor, they probably will sneak in a much larger markup on the rewards and debit cards.
Should you really want to find the best deal on your merchant account then please feel free to contact me directly or go to my website at www.bankcardpos.com and fill out the rate analysis form for more information! I look forward to hearing from you and hope to have an opportunity to earn the business. Have a great day and thank you for your honest consideration!
Regards,
Ph. 877-232-2370 ex. 309
Fax. 866-637-6631
Use Interchange-Plus Pricing
Credit card processors’ largest expenses are the payments they make to Visa and MasterCard. Those payments are set by a complicated formula called Interchange and vary for each transaction (for example, the fee is higher when a rewards card is used). It is set by Visa and MasterCard and cannot be negotiated.
When you use interchange-plus pricing, you agree to pay the processor their costs (interchange) plus a constant markup. Since the markup never changes you ensure that you avoid any tricky fees.
Large businesses such as Wal-Mart and American Airlines have always negotiated on an interchange plus basis because it results in a better deal. Every credit card processor can provide interchange plus pricing and smaller businesses can benefit from this kind of pricing as much as big ones.
Beware of Downgrades
