annoying automated calls from credit card processors

It’s funny that my business is inundated with direct mail and automated telemarketing from others in my industry. Today’s message was a recording left at 8:20 PM last night. It was from a fairly well known company ( they do a lot of marketing online) and the 1.59% guaranteed rate plus FREE EQUIPMENT was just so enticing, I thought I’d check it out.

MISLEADING ITEM 1: Before starting I looked and looked and read all the terms and conditions, yet still could not find anything that said any other fees than 1.59%.

MISLEADING ITEM 2: Just six items are needed to complete the application. Technically true, but once you start, you’ll see the ‘items needed’ drastically abbreviates what is needed to complete the application. Bottom line: nearly every processor is going to collect the exact same information and anyone who suggests shortcuts isn’t providing full disclosure.

MISLEADING ITEM 3: Everything can be completed online. Again, technically true, but at some point you have to deliver financials either electronically if you have pre-scanned them or via fax.

I sure am glad they offered free equipment on the phone, because their online prices to buy or lease are at 50-100% over wholesale. For example, the Hypercom T7Plus is offered at $750. They don’t mention if you are getting any of the options such as extra memory or a larger screen.

YUCK- Requires 3 year agreement. Early cancellation penalty is to pay everything you would have in fees over the remaining term, including statement fees. Minimum penalty is $295.

Now for the fine print that only shows up AFTER YOU HAVE NEARLY COMPLETED THE APPLICATION (they have all your personal and company information).
– Base rate is 1.59% as advertised, plus $.15 per transaction. Other fees:
– dial pay transactions $.50 (I’ll have to look up what that is.)
– T&E transactions $.25 (that’s OK)
– address verifications $.05- extra cost to provide something they demand in order not to double downgrade. (further explanation below)
– wireless fees: $24.99/mth, $.10/trans
– debit transaction fee $.35. This is high, at about double the norm, and can be especially costly if you have low ticket items.
– debit gateway fee $5- some charge, some don’t
– internet gateway- $20/mth
– internet $.10/trans
– monthly fee $10
– EBT $.20

On the surface not a terrible deal, but not the greatest either. But wait, now that you’ve completed most of the application, there’s a special link to more terms. Let’s examine the extra rate details on this ‘fantastic’ offer:

1.59% is the Qualified Retail Discount Rate for all swiped bankcard transactions that are electronically authorized and closed in a daily batch.

Mid-Qualified transactions (existence never mentioned until now) add 1.05% to qualified rate for a total of 2.65%. definition: All manually keyed bankcard transactions that are closed in a daily batch, have AVS (Address Verification Service), an Order Number and reply to the Mail/Telephone Order prompt with an Exact Match.

Non-Qualified transactions (existence never mentioned until now) add 1.49% to qualified rate for a total of 3.08%. definition: All bankcard transactions that do not meet the requirements stated above. Visa/MasterCard business card transactions and manually keyed foreign card transactions will always be charged the Non Qualified Rate.

The last one is a real killer if you have a B2B. I pulled out a lodging statement I have just for kicks to see where they’d end up with in this deal. A whopping 80% of their transactions would be at 3.08%. I don’t even need to look at the statements from B2B distributing companies. They’d be 90% plus at 3.08%, what we call a full downgrade.

Reading between the lines:
QUALIFIED: This is your debit/check cards.
Mid-Qualified: key entered
Non-qualified: Rewards, Signature, corporate, commercial, and World cards

Who would this be a good deal for? Maybe small businesses? It can’t be retailers with a lot of debit because of the $.35 premium.

BOTTOM LINE: I recommend AGAINST submitting ALL YOUR personal information including SS#, drivers license, annual business sales and such, without seeing a complete schedule of all costs upfront.

Be very careful when comparing ‘rates’. Be sure to get specific rate details for the most popular cards at your business. If you can’t tell what the most popular cards are used from your current statement, you need to call us.

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