What are you really paying for processing services? Pricing in the credit card processing industry can be quite complex and most merchant account statements don't make it any easier to understand. With all the technical terms thrown around...qualification levels, downgrades, surcharges, plus a whole range of potential fees...it's tough to know what you are really paying for processing services.
You can take advantage of the program's free customized savings analysis of your current processing service. This professional tool details in writing how your transactions typically qualify and the true cost you are paying now compared to the negotiated program discounts and services.
We consistently find savings for two out three businesses, but if it turns out we can't save you any money at this time, we'll let you know. But you'll still have the peace of mind in knowing how your current service stacked up to a national benchmark.
Of course selecting the right processing service for your business is about far more than just price. That's why the analysis will help you assess total value and overall costs. Please see the tips below on how to compare multiple processing offers for more information on why this is so important.
The analysis is free, confidential, and there's absolutely no obligation when you take advantage of this professional service. Please request your analysis today to see how much additional profit you could keep on every credit card sale.
How to compare different processing offers Finding your true cost for processing services in today's credit card processing maze is not an easy task. The challenge for business owners is sorting through multiple offers from credit card processors, all claiming to be the best deal. Which is better – a small transaction fee or a bundled rate? What about equipment – should you lease or purchase? The Answer: It depends.
Every business has its own unique set of circumstances that must be considered when making a financial decision like choosing an electronic payment services provider. For example, whether a bundled discount rate or a rate plus transaction fee makes better financial sense depends primarily on the dollar volume your business processes each month and the average transaction size. The lower the average transaction size, the greater the percentage of the sale a transaction fee represents. The same is true for equipment needs – there are benefits to both equipment financing options.
But one factor that can be determined is what you are really paying for your processing services once all additional fees and charges are considered. This is not always as simple as it may seem, since just about every credit card processor prices their services differently. To truly assess your cost for credit card processing, you must look beyond the discount rate you are paying, and instead calculate the effective rate. The effective rate takes into account ALL fees paid for the month in relation to the total dollar volume processed. It is the most accurate measure of what you paid.
The effective rate is found by dividing your total processing charges for the month, including the discount rate amount paid, transaction fees, and monthly fees, by the total credit card sales volume for the month. This calculation gives a comprehensive measure of program cost as a percentage of sales. Once this amount is known, multiple offers can be meaningfully compared, even if they have widely diverse pricing.
Why is this so important? Because a lower discount rate does not necessarily mean a lower effective rate. The following example illustrates the importance of making an accurate comparison:
| Plan 1 | Plan 2 | |||
|---|---|---|---|---|
| Credit Card Sales Volume | $10,000 | $10,000 | ||
| Discount Rate | x 1.75% | x 2.05% | ||
| Monthly Discount Paid | $175.00 | $205.00 | ||
| Transaction Fee | $0.20 | $0.00 | ||
| (@ 500 transactions) | $100.00 | $0.00 | ||
| Monthly Service Fee | $15.00 | $15.00 | ||
| Equipment Lease | $50.00 | $50.00 | ||
| Total Paid For The Month: | $340.00 | $270.00 | ||
| EFFECTIVE RATE | 3.40% | 2.70% | ||
As this simple example shows, a lower discount rate does not necessarily mean you will save more money. Obviously there are other factors to consider when choosing a processor, such as the ability to provide personal service and a comprehensive suite of quality products that meet all of your transaction needs. Considering these factors together with an accurate indicator of price helps you make an informed decision.
Please call 1-800-613-0148 or request information online for help calculating your effective rate and to take advantage of the program's free savings analysis.
How to calculate your effective rate The formula provided below will help you determine the effective rate you are paying for your current service so you can accurately compare it to a competitive offer.
Follow these quick steps to calculate YOUR true cost for credit card processing:
1. Grab several of your last processing statements and a calculator.
2. Enter the TOTAL amount deducted from your account for service. Make sure this number includes ALL charges during the statement periods, including any back billing that shows up in later months.
3. Divide the number entered in step 2 by the TOTAL amount of sales volume processed during the same statement periods.
4. Multiply by 100 to get a percentage rate. This is your effective rate for that time period.