Is it Possible to Get a Rate of 1.37% or 1.42%?

Lately, Aug/ Sept 2009, I’ve been getting a lot of Business Owners say that they are being offered 1.37% or 1.42% for a qualified rate for payment processing.  First, I’d like to refer you to the last Blog Post that I wrote on Visa and Mastercard’s Wholesale Pricing to the Six Credit Card Processors in Canada.  The gist of that post is that if the rate that you’re being offered is LOWER than the publicly posted Wholesale Pricing by Visa, then the company that is offering this fantastic deal is probably going to make up for it in other fees or will change this deal on you as soon as you penn your autograph to their multi-year contract.

More than anything in this post- WHY would you want to do business with a Sales Rep or a Company that allows these unethical sales tactics that starts a business relationship in deceit?

These companies are NOT in the business of losing money, and neither are you.  You don’t buy something at $1.65, and need $1.75 to breakeven, then sell it for $1.37 or $1.42.   Remember credit card processing is like short term lending, not anything similiar to purchasing a regular monthly business service like a phone line or internet.

How do they make it up in the end (and on your back)?

These are the things that I’ve seen when Business Owners are sharing with me these wacky quotes that they get.  You’ll get a few, if not all these things together in order to get these “fantastic rates” of 1.37% or 1.42%

1  They may charge 25 cents to 55 cents per credit card transaction instead of the standard 10 cents (‘haulage’ fee for transferring the information).  If you have under $100 in average sale amounts for your business models, then this will add up really fast.

2  $20 per card type minimums imposed each month.  That’s $60/mth total for debit, visa and mastercard.  What does this mean?  This means that no matter what they promised you.  That rate X your volume for that card type (debit/ visa/ mastercard) will have to be $20 or more, or you’ll get charged the difference.  Not good if you do under $1500/mth for EACH Card Type.

3  Their Mid and Non Qualified rates will be over 1% to as high as 1.85% on top of your ‘fantastic’ rate of 1.37% or 1.42%.  What’s 1.85% plus 1.37%?  Answer: A TON HIGHER THAN A COMPETITIVE MARKETPLACE OFFER.

This is a quote from our FAQ’s about Mid and Non Qualified Transactions:

“NOTE: Some companies group reward cards under non-qualified, so you can have the exact looking program (every single fee the exact same) from company A compared to company B, and you’ll pay a lot more in the end.  If they group the card type as “non-qualified”, then it doesn’t matter if it is swiped, it will be charged more.  Mid and Non Rates can be as low as 0.6% to as high as 1.85% on top of your Qualifed Rate.  Some companies categorize keyed-in transactions as mid-qualified and corporate as non-qualified and some have the opposite, keyed-in as non’s and corporate as mid’s.”

4  They will raise your rate within 1-3mths to 1.95%.  Ask them if you can speak to JUST ONE of their Customers that have maintained this rate for 1yr.  Do they have any Happy Customers (like our Customer Testimonials)?

5 You will not get any service, if they can’t make enough money from you each month.

Look for a competitive deal w/ great service, not a bottom of the barrel pricing, because you will always get what you pay for in the end.  And frustration has no price!

6  Annual ‘membership’ fees that make up for their super low pricing.  Lots of little fees like this that will add up.

Come get a real quote without fancy hooks and cloak and dagger tactics.  We’ll explain every fee to you and you’ll get an email w/ the details after our first conversation.

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