I audit hundreds of credit card processing statements every year. I have audited statements from virtually every merchant account provider and probably every industry. I have audited so many statements that I can pretty much determine if a merchant has obtained a good processing deal by simply looking at the merchant account provider’s name on the statement, or by glancing at a couple key numbers, or by asking the merchant a couple quick questions.
In this series, I am going to give you some quick red flags that indicate you may be paying too much for your processing or you may not have the agreement you thought you had with your provider. No calculations or math skills are required. You just need to have your statement in your hands, remember how you chose your current provider, and know a few things about yourself. Here we go.
Red Flag # 1- Misleading Analysis by Salesperson or Provider
Let’s test your cost savings analysis skills (You don’t need a calculator). Below is part of an actual cost savings analysis a salesperson recently presented to a merchant (I added the actual figures below the insert for clarity).
Keep in mind that the merchant is already on Interchange Plus pricing. Also, so you understand what is being presented – The merchant’s monthly volume is $99,993.71, approximately 44% ($44,084.70) is credit card and 56% ($55,909.01) is debit card. The salesperson is telling the merchant that all credit cards will be charged 1.49% + $0.15, all debit cards will be charged 0.05% + $0.28, and all credit cards that downgrade to the Mid/Non Qual level ($25,415.90) will be charged an extra 1.49%.
Now before reading my comments below, I want you to look at the analysis, note the immediate concern the merchant should have had, and identify the misleading tactics used. Focus on the “New Proposed Pricing.” Don’t worry about the “Current Provider” information.
Current Provider New Proposed Pricing