Why do you need my Statement? Just give me a quote on your rates!!!

Why are merchant processing salespeople ALWAYS asking me for copy of my statement? 

There is a legitimate reason why GOOD sales reps will ask you for 1-3 months of merchant processing statements (NOT YOUR BANK STATEMENTS!). It is to understand how you process and make sure they CAN and DO offer you better rates, fees and solutions! You see, there are hundreds of interchange rates (wholesale rates offered by Visa/MC/Discover/AMEX), and acquirers/processors can potentially mark-up these wholesale rates, assessments and additional fees. Most merchant would really not know the difference unless they knew what you were looking for! That is why statement analysis a critical component of the merchant sales process. A careful, line-by-line analysis of a merchant's monthly processing statement will reveal a true, effective per-transaction rate inclusive of marked-up dues, assessments and other fees, experts stated.*

Merchant Processing Solutions Inc. is all about educating our merchants and prospective merchants on understanding how different components of our industry impact their pricing model.

• Card Data Entry - Swiped or Key-entered
• PCI Compliance - Payment Industry Data Security Standard Compliance 
• Credit Card Types - Debit, Credit, Rewards, Business, Commercial, Purchase Cards
• MCC Code Set-Up -  A Merchant Category Code (MCC Code) is a four-digit number used to classify a business by the type of goods or services it provides. A MCC number is assigned to a merchant by the credit card processing company when the business first starts accepting credit cards. It determines the type of transaction being performed and rates associated with those transactions. 
• Entering ALL requested and required information during the transaction - Is your transaction asking for a Zip Code or Address? Is your transaction asking for an Invoice #?
• Settlement promptly - Always batch/settle approved transactions within 24 hours to get the best rates.
• Equipment, Technologies and Integration Partners - Terminal, Mobile Devices, Point of Sales Hardware and Software, Gateways, Virtual Terminals and Mobile apps. 

It is a critical part of the business relationship for merchants to work with reps to educate them about the differences between OFFERED RATES (ADS & GIMMICKS) and what they see when their statements come in. But understanding and demonstrating how pricing strategies or models benefit merchants isn't simple. Their banks and merchant services companies fill their heads and have made promises of lower rates that seem reasonable but when they sign on the dotted line, the fees NEVER REFLECT the promises given!

As mentioned before in a previous blog article, understanding your merchant statement can seem overwhelming! Leaving merchants confused, frustrated, angry and mistrusting of the industry. All they really want to know is what the bottom line is!!! Unfortunately, it is not uncommon to find inflated rates & fees on statements, particularly among processors that advertise very low rates. These additional fees are in hidden pricing models like "Bundled" or "Flat" rates, "Bill-Back", "Enhanced Bill Back" or "Differential" Rates. Companies like these believe that the MORE CONFUSING they can make their statements....THE BETTER! (And the also sign you to a 3-5 year contract and make your life MISERABLE!)  

For some of these struggling processors or agents, the only way they can make any money is by padding everything. We ALL know about Rate Padding but little is know about the Additional Fees Padding! Brand Assessments (added by Visa/MC/Discover/AMEX as additional fees on top of the rates) typically range from .12 to .14 percent (these are separate than the actual wholesale rates) but many processors are pricing their assessments higher at .15 to .19 percent. Another area of assessment is a fee called a MC NABU fee or the Visa Access fee, which normally falls into the range of $0.0195 to $0.0155, but is frequently marked up. And FINALLY, some merchant processing companies are adding their OWN Assessment Fees to charge you even MORE!!! When assessment fees are doubled and sometimes tripled, the amounts may appear to be small, but everything adds up.
During a recent statement analysis, MPS Inc. found that a merchant was paying 30% higher in additional fees plus higher rates! We were able to save that merchant $63 just on the assessments and even more savings on the rate over their current processor; all due to Rate & Assessment Padding!

One of the biggest challenges we have with merchant prospects and reviewing their statements comes down to matching interchange (Visa. MC/Discover/AMEX wholesale rates) categories and descriptions with published rates (See Visa or MasterCard Interchange Rates online). Merchant processing statements that have UNIQUE PRICING MODELS like bundle rates & fees with nothing broken out to compare to brand published fees, make it nearly impossible to determine true effective rates, because they can carry over fees from previous months or fail to break out related costs.

Bottom line: Currently, No simple formula for credit card payment acceptance pricing exists, but armed with knowledge about pricing practices, a statement analysis, your company's payment acceptance specific needs and a trusted industry rep you can help your business find and work with a company that offers GREAT SERVICE with fair and reasonable rates, fees and assessments.


Only having a trusted, qualified merchant services rep analyze your statement, can a YOU really know what you are paying and how to decrease your fees.

Call MPS Inc TODAY @ 954-938-2420 for more information! 

*Information derived from The Green Sheet: E-Magazine. (http://www.greensheet.com/emagazine.php?emagazineIssueNumber=NULL )