Well, not really, but it's the kind of terrain that a sales rep for the "reverse treatment" would likely lead with. If they manage to get your attention when they come in the door or call, they can ask a question like this … "How do you treat your credit card transactions for FREE? That sounds pretty appealing, is not it? " "Let's face it, if you're like most merchants, they're generally not happy with the fees associated with accepting credit / debit cards, but we live in that era. plastic for the payment of your goods or services or you lack sales.
So, let's break that down and see what it really is and then at least you can make an informed decision, whether for you or not. Let's take a look at the current rates for treatment, such as a generic / no-benefit Visa credit card. This will give us a basic point for the purpose of this discussion. Currently, the Visa interchange rate (I hope you understand what is an "exchange") for this type of card is 1.65% + $ 0.10 (this amount can slightly change in April, usually when Visa and MasterCard make interchange adjustments). . Be aware, of course, that other types of cards or transactions have their own interchange rates, usually higher with a few lower ones. I use this Visa interchange rate only for the purpose of illustration. So, if you are a processor, have you set up pricing at Plus cost or Interchange Plus (and you should do it since it's the most transparent form of processing) and that portion " plus "is 25% + 0.10 for example, your total cost would be 1.90% + $ 0.20. In other words, for the sake of clarity, your total costs for a $ 100 transaction would be $ 2.10. Of course, interchange fees, or $ 1.75 of this total, go directly to the card issuer. The processor, for the provision of this service, makes the difference .35 $.
Now that we have these basic data, we better understand what is proposed with reverse processing. What these representatives are telling you is that there is a "new legislation" that allows you to do it. I started in this industry more than two decades ago and have looked for and have not yet found this "new legislation" to which they refer. Apparently, they provide you with placards or indicate that you are now able to place signs in your establishment stating: "All prices are quoted for cash transactions". Now, I have seen merchants, while trying to reduce their overall card processing costs, such as "cash purchase discounts" (they typically give about 2% off cash purchases, which allows them to earn the same amount if they are paid with a credit card less fees) but it is a new round. Let's face it, when you look at the total number of transactions you make in a day, what percentage is it? Very little, am I right? It's like this today. People tend to carry very little money and prefer to pay with plastic or via certain applications of their phone. The reasons range from "it's simpler" or "I get benefits to using my plastic".
Okay so let's move on to this analysis. The next part of this "offer" they are talking about is that they offer a "unique equipment" which, when a customer insists on paying with plastic, automatically adds 3.95% to the transaction. Now let me ask you, how many of your customers would be happy to do that? Do you want to stop them from doing business with you? Probably not! Plus, if you decide to follow this program, they charge a monthly fee of $ 35 and you must buy or rent equipment from them. They talk about a terminal purchase with the appropriate software of about $ 2,500. Or, a monthly rental amount of three years that varies based on your usual monthly processing fee. In other words, the higher your sales volume, the higher your rental rate will be … RIDICULE !!! As I mentioned earlier, I have been in this business for a very long time and I only rented one equipment at that time and it was on the insistence of the trader. It's an excellent commission generator for reps but, I believe, a real scam for traders. Very honestly, I prefer to donate equipment for FREE and not to offer a contract.
So, be aware and, as always, exercise due diligence when they come to call you. And, be aware that it is in the spring that you will usually be bombarded by new representatives who will contact you. They may receive a day (if this) of training (and I use this term vaguely) and then they are sent to the street. The failure rate is high for these people because they are poorly equipped and traders often send them in their luggage simply because of the amount of these calls. It gets pretty annoying and, let's face it, you have a business to run and you do not have time for every Tom, Dick and Harry who just call … who are these guys anyway ?
To conclude, let me say that as a longtime professional in this industry, I would like to avoid this new "game". There are many processors capable of providing you with this valuable service and those of us who really care about you, your business and building long term relationships. Until next time, thank you for reading.