Interchange makes up approximately 90%
of the total cost.
Interchange
makes up approximately 90 percent of the total cost associated with your
merchant account. So what is it? More importantly, how does it work? How can
you beat Visa and MasterCard and the issuing/processing bank at their own game?
With Monitoring Plus, MRC not only monitors your statements to ensure
the processor does not return to engaging in unfair billing practices, but we
educate you on how to stop the downgrades and then continue to monitor your
transactions to make certain they all clear at the absolute lowest interchange
possible every month. Moreover, if your bank/processor tries to return to their
old ways, MRC will enforce a new modification at no cost… EVER!
The portion of Visa and MasterCard that is not public is held by
issuing banks, and they issue the cards we all carry in our wallets. They set
the pricing in which cards clear which is known as "interchange". And it is a
very complex method of calculating the rates the merchant must pay per
transaction.
Visa and MasterCard have gone public which means their
stockholders will demand they not only make a profit, but a larger profit year
after year. Currently they run on about .01 and a small transaction fee based
on card type. The question is, how will the stock holders see a higher rate of
return without higher fees getting passed on to the merchant? Not to mention
that banks are currently lobbying Congress hard to give them more freedom to
increase profits. Where will these profits come from? From the Credit Card
Divisions, where they are raising the cost of interest on credit cards as well
as raising the cost of interchange.
When it comes to interchange there
are different rules, per industry and per card type, plus variations in how the
card is passed, the level of data passed, etc. These rules can make a
merchant's price vary by over 1%. Seeing how the processor in most cases, is in
fact an issuing bank, they are actually collecting three times on your
downgrades: 1) the interchange that is passed back to them 2) the mark up on
the interchange - the fee they charge the merchant and 3) their profits from
owning Visa and MasterCard.
Visa and MasterCard and the
issuing/processing banks make larger profits by the merchants
downgrades/mistakes. The more complicated they can make it, the more the
merchant loses their hard earned profits to miscellaneous fees which the
merchant has no idea what they are, or why they happened.
Sign up for
Monitoring Plus today, and let MRC put your company back in control of
your profits. |
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