I just received a robo call pitching how due to changes under the Durbin Amendment I could now save money and process direct from Visa & MasterCard, not from a broker. Most deposits are the next day.
I couldn’t resist. I pressed 1 to speak to an operator. A nice man came on the line, whom I’ll call Eric, and said “We have new national pricing” and I can “lower your rate to .5% and save you $1000’s per month.” That was in Eric’s first sentence. I asked and Eric said he was with North American Bancard. The phone number and ID matched up to the company.
Just for the record, North American Bancard is a registered Independent Sales Organization/Merchant Service Provider for HSBC Bank USA,National Association, Buffalo, NY and Wells Fargo Bank, N.A.,Walnut Creek, CA.
I’m not sure what the difference between a broker and an ISO is. Individuals cannot decide they want to be in the merchant services business and then just start accepting contracts. Everyone has to be part of a registered company. But let’s leave that aside.
The biggest savings potential for merchants under the Durbin Amendment is via debit. Merchants can achieve maximum savings only under these conditions:
- They have a “pass through interchange” price plan that enables the merchant to fully take advantage of the new debit fees.
- Their processor must pass the savings on to them. Some will, some won’t. It’s entirely up to the processor.
- The card is swiped- the magnetic data must be read, and the consumer can sign or enter their pin.
Don’t be suckered by misleading sales pitches. What rate was Eric talking about? Effective rate? Rate above interchange? Rate for signature debit? if you want to save money under the new rules, you need an expert not only in interchange, but in help to convert more sales to lower cost debit. That’s where we come in.