U.S. District Court approves multi-billion settlement between merchants and credit card companies

Posted on February 28, 2019 by Christine Speedy

The U.S. District Court for the Eastern District of New York has given preliminary approval to a settlement reached in a lawsuit between merchants and credit card companies. Merchants alleged Visa and Mastercard, separately, and together with certain banks, violated antitrust laws and caused merchants to pay excessive fees for accepting Visa and Mastercard credit and debit cards. Both groups agreed to the settlement.

The original settlement, worth up to $7.25 billion for merchants who accepted payments from 2004 to 2012, was vacated by the Second Circuit. The new settlement includes all merchants who accepted Visa or MasterCard branded debit or credit cards from January 2004 to January 25, 2019, the date the agreement was reached.

Unless merchants want to opt-out by the July 25, 2019 deadline, there’s nothing to do right now. It’s too early to file a claim and merchants will automatically be notified later.

visa mastercard settlement — Paymentcardsettlement.com is the official site for merchant information and future claim registration.

Is your industry association merchant services partner deal, really a deal?

Posted on July 28, 2015 by Christine Speedy

Industry associations bring a lot of value to their members, but are selected partners the best for their customers? Merchant services partners are a perfect example of what’s wrong with some relationships designed to increase buying group power. On the surface the ‘rates’ are great, but there are other factors at play that impact profits. This article addresses the needs of the omnichannel merchant in the building supply industry, including plumbing, electrical, lumber, windows, doors, stone, marble, flooring, insulation, lighting, fencing, roofing, gutters, appliances and more.

Negotiated Merchant Fees and Merchant Discount

The associations usually put together an excellent package for merchant services fees. This includes interchange plus pricing as a standard, with no surprises. More and more include a processing partner that supports level III processing, critical for the commercial side of building supply sales.

The problem is interchange rate qualification, which can impact profits far more than the negotiated merchant discount. Examples:

Merchants need level III processing for retail. Virtually no companies have a solution to support this. The commercial side of the business will have a very high number of transactions that benefit from level 3 interchange rates.
Merchants need mandatory payment processing rules. Most solutions rely on employee optional actions to reduce fees; history shows this doesn’t work.
Traditional desktop terminals are inappropriate for this industry, if for no other reason than NOT ONE supports level III processing.

PCI Compliance For Building Supply Industry

This industry historically is not PCI compliant. While many commercial customers are on account and pay via check, there’s also a huge need for tokenization for variable payments. Most virtual terminals support that, but what about the authorization form to store the card and use for billing on demand?

Merchants want a signed record of the customer authorization to use the card. Virtually none have a solution for this critical need.
Eliminating salespeople from collecting credit card numbers by offering customers alternative ways to self-pay and self-store their card data is crucial to improve compliance.

Cash Flow and Collections

Everyone has a story about collecting from their customers. The typical merchant processor has no solution to help merchants manage this. Examples of solutions:

Hosted pay page
Electronic bill presentment & payment
Scheduled variable billing with tokenization

SaaS Technology Partners

A payment technology partner with end to end payment engine, can bring exceptional value to the building supply industry, driving profits, mitigating risk, and creating efficiencies. With a processor neutral solution, merchants have the flexibility to change financial partners at will, without disrupting operations. As the industry expands the point of payment acceptance to include mobile, online and other sources, merchants with a technology partner are able to more quickly adapt and change to meet customer needs.

The Future of Association Partnerships

By selecting both a technology vendor and a merchant services vendor, associations can deliver more value to their members and increase their profits. Associations must address the end user need to maximize profits, which extends beyond a negotiated merchant services agreement.

Free Yeti Rambler with new merchant account or gateway

Posted on November 17, 2014 by Christine Speedy

Get a free Yeti Rambler, the coolest drink tumbler on the planet. Get one for yourself and one for your referrals.Get a free Yeti Rambler when you open a new merchant account or CenPOS Payment Gateway account with Christine Speedy. Keep it for yourself or give as a holiday gift that will last generations. But don’t wait, because these stainless steel tumblers are as popular as their coolers and stock is limited!

Terms:

Limit one Rambler for each new account. (If you open multiple accounts, you only get one Yeti.)
Limit one Rambler for each referral. (If multiple accounts are opened by the same person, you only get one Yeti, but if you refer multiple businesses, you get one for each, woohoo!) Tell the buyer to expect my call, and they can get a free Rambler too!
No cash value. When supplies are gone, they’re gone.
Must mention the free Yeti promotion to get the gift.
Buyer must sign within 30 days. (Interested prospects almost always sign on the 1st or 2nd conference call.)
Available in USA only.
We reserve the right to substitute products after January 1, 2015.

FAQ: What if I refer you a WHOPPER account and it takes longer to close the deal? As long as the sales process is moving along, an extension is a virtual certainty.

What kind of companies should I refer? Manufacturers, distributors, business to business. If you have a supplier that mails you invoices via USPS, that’s a good sign they need to update their technology. Christine does not provide services to fuel, quickstop, restaurants, or very small businesses.

For a free consultation to improve your company’s EBITDA and get your free Yeti, call 954-942-0483 today.

Need custom logo Yeti coolers and Ramblers for your company? Contact CEOpromos.com to order.

Debunking Misleading Information About Law Firm Merchant Accounts

Posted on April 30, 2013 by Christine Speedy

I was reading the copy on a popular merchant accounts for lawyers web site and there was so much false information, it’s amazing. Many law firms are fairly new to accepting credit cards, so maybe it’s easier to believe what’s written from a vendor that has an attorney for an owner. Below I clarify information about fees that I found misleading.

What are the costs associated with accepting credit cards? Fees include:

Discount Rate or Sales Discount: Negotiable. This is the fee the Merchant/Acquiring Bank keeps for profit. For example, you call a credit card processor and open a merchant account. The credit card processing company you deal with charges a discount rate, which is itemized on better prices plans, but buried in other costs on more profitable price plans. How much profit is fair? Every business has overhead and needs to make a profit. What’s fair? That’s negotiable, though some businesses may have internal rules for their sales force. The fee can be a combination of a per transaction fee or percentage of transaction, and other itemized fees that include a combination of actual cost plus profit.

Interchange. Non-negotiable, but can be influenced. Interchange is a fee paid between the merchant’s acquiring bank and the card issuers bank that serves to balance costs in the payments system. The rates depend on the card, the payment method (sometimes) and many other factors. It’s complex and every card has multiple interchange rates associated with them, except regulated debit.

On the best price plans, the merchant will typically have a discount rate and itemized interchange fees. On others, typical of small businesses, they’re combined into a merchant discount fee.

Merchant Discount fee: Negotiable. It is not simply the cost of moving money. It’s interchange plus profits (discount rate) bundled. Quite simply, it’s easier for the merchant to understand and easier for the salesperson to explain. It’s never the best deal for the merchant, because to keep it simple, everything is rounded up to be sure all costs are covered.

Network Fees: Non-negotiable if on a pass through interchange price plan, which will be indicated on your merchant agreement. Non-negotiable examples include DISCOVER DATA USAGE FEE, MC NETWORK ACCESS AUTH FEE, M/C INTERNET AUTH FEE,MC ACQUIRER AVS BILLING. VI TRANSACTION INTEGRITY FEE, and many others. These add up up but are still a minor part of what merchants pay overall.

REGULATORY PRODUCT FEE. Non-negotiable. Some processors are now charging this as an annual fee.

Other fees: Sometimes negotiable. These may be hard costs for vendor, as fees can vary by banking relationship, or they may be negotiable. AVS (address verification service, needed for card not present transactions, statement fee, authorization fee.

How do I know if I have a good offer on a merchant account? This is the $10 million dollar question. Here’s my critical requirements checklist for you:

Get a virtual terminal (works with swipe and mobile if needed). Find out how long data can be searched for. They range from 6 months and up. Ideally 7 years access to data to match IRS audit needs.
Does it support expenses from operating account and deposits to second account?
How will the solution help you manage interchange fees, the largest component of accepting credit cards? This is where most solutions will fail and sales knowledge weaknesses become evident.
How will the solution help you reduce the burden of PCI Compliance, mandatory data security standards? (Hint: online pay page, client managed payment method storing and updating, fax authorization forms that replace sensitive payment data with a random alphanumeric ‘token’)
check out my videos, including 60 seconds to see if you have a great deal (for existing merchant accounts)

Protect your firm and protect your client relationships. Just because a merchant services provider specializes in legal credit card processing relationships does not mean they have the best solution for you. Without innovation and change, they’re just a company that had a great marketing years ago.

5 Questions To Ask Before Opening A New Merchant Account

Posted on April 10, 2013 by Christine Speedy

Do you know the route your application takes to get to underwriting for approval? Data security is presumed in the merchant services industry, but it shouldn’t be. Background checks are required to sell merchant services, but what kind of training do salespeople get on data security? A lot of salespeople work from home, using their personal computers and smartphones. Since your application will contain all the information needed to become a victim of identity theft, ask questions about how it will be secured. If you’re given the option to send your application via email, don’t bother asking these, call a different company.

Do you work from home? (Salespeople review applications for accuracy and add additional internal documents before turning in to management.)
Do you personally keep a copy of my merchant application? (HIGH RISK: Only corporate should have access to your personal data.)
What kind of shredder do you have? (Whether stored at home or not, sensitive data WILL be printed at home. Who hasn’t brought work home at least occasionally? A cross cut shredder is an essential part of a secure home office.)
How long do you store my application on your computer? (If it’s ever stored on the computer, the answer should be no longer than ‘until it’s approved by underwriting’. )
What’s your process to remove from your computer? (Secure delete or Erase is critical. Moving to the trash can or recycle bin is not secure at all, as the data is still on the computer. )

There’s lots of other questions that could be asked, but if the person passes the above, he or she is likely following other security steps too. In my opinion, if the salesperson doesn’t know this much about data security, they probably don’t know a heck of a lot about how to help you mitigate fraud or identity theft risk, or manage the cost of accepting credit cards either. Digital security and merchant services are synonymous.

Card Not Present, CenPOS, credit card processing

B2B Cloud payment processing technology blog about increasing profits, efficiency and security.

Tag Archives: merchant account