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  1. #1
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    Interchange Plus Pricing. Current best effective rate / basis points?

    Hello, every year I evaluate my CC processing and see if better rates are available.
    I am currently at 12 basis point.
    The last time I calculated it, I think the effective rate was around 1.6.

    We do have a brick & mortar store with an actual credit card machine.
    But 99.9% of the transactions are card not present, via website payment gateway.
    Average 35K per month in credit card transactions being handled though my payment processing..
    We do have other payment transactions but they are handled through amazon and paypal.

  2. #2
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    Send over your January and February credit card processing statements and I will have my Strategic Programming department run a rate review.
    Jason H l Sales & Business Development
    Quikstone Capital Solutions l Tampa FL
    Direct Line & Mobile 813-371-8233 l Fax 813-371-8233 l Text 727-492-8812
    Jason.Hausle@quikstonecapital.com
    www.quikstonecapital.com


    Direct Lender Since 2005

  3. #3
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    PM sent Jason! Thanks

  4. #4
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    Quote Originally Posted by Winning View Post
    Hello, every year I evaluate my CC processing and see if better rates are available.
    I am currently at 12 basis point.
    The last time I calculated it, I think the effective rate was around 1.6.

    We do have a brick & mortar store with an actual credit card machine.
    But 99.9% of the transactions are card not present, via website payment gateway.
    Average 35K per month in credit card transactions being handled though my payment processing..
    We do have other payment transactions but they are handled through amazon and paypal.
    Send over your last 3 statements - if you are indeed at 12 basis points - you have a good rate.
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  5. #5
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    No way your effective rate is 1.6 with 99% card not present. As stated above if you have cost + 12 bps pricing, you have a VERY good rate for a CNP merchant. Unless you are not receiving other value added services from your current processor I would be happy and stay where you are.

  6. #6
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    There are Fees stuck in there somewhere

  7. #7
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    Quote Originally Posted by MCA View Post
    No way your effective rate is 1.6 with 99% card not present.
    Let's put some money on it!! Just Joking...

    But seriously

    My Feb statement..
    Sales Total = 35532.66
    Amount deducted total for fees and basis points = 541.29
    Effective rate = 1.523%

    Am I not calculating something right?

    Thanks...

  8. #8
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    Also to be 100% transparent and to calculate a true cost of the money, we need to add in the Gateway fees..
    The February Gateway Statement.
    Monthly Fee $5.00.
    244 Transaction @ $0.05 per transaction = $12.20.
    Total Fee for gateway = $17.70.

    Now lets recalculate the effective rate.
    Sales Total = 35532.66
    All fees ($17.70 gateway + $541.29 processing) = $558.99
    Effective Rate = 1.573%

    Is that right?

  9. #9
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    Quote Originally Posted by Winning View Post
    Also to be 100% transparent and to calculate a true cost of the money, we need to add in the Gateway fees..
    The February Gateway Statement.
    Monthly Fee $5.00.
    244 Transaction @ $0.05 per transaction = $12.20.
    Total Fee for gateway = $17.70.

    Now lets recalculate the effective rate.
    Sales Total = 35532.66
    All fees ($17.70 gateway + $541.29 processing) = $558.99
    Effective Rate = 1.573%

    Is that right?
    Whomever your agent is, they are treating you just fine. 1.573 on Card Not Present, you are in good hands.
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  10. #10
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    Quote Originally Posted by Yankeeman07 View Post
    Whomever your agent is, they are treating you just fine. 1.573 on Card Not Present, you are in good hands.
    LOL,, They didn't just give me that rate... I had to work and fight for it, and remain diligent in my pursuit to make it even lower. 12 years ago I was not on an interchange rate.. I did not even know what that meant.. But I learned what it was and how it worked. Then asked my agent about it, and over the years have made strategic decisions to get me where I am as regard to the rate I am at. I am very grateful that some of the members here have PM'ed, and are trying to see if they can do a better deal for me.

    If I left to my agent I would be in a flat rate 3% and 2 day funding plan, leasing equipment etc...
    Last edited by Winning; 03-29-2018 at 05:19 PM.

  11. #11
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    Quote Originally Posted by Winning View Post
    Also to be 100% transparent and to calculate a true cost of the money, we need to add in the Gateway fees..
    The February Gateway Statement.
    Monthly Fee $5.00.
    244 Transaction @ $0.05 per transaction = $12.20.
    Total Fee for gateway = $17.70.

    Now lets recalculate the effective rate.
    Sales Total = 35532.66
    All fees ($17.70 gateway + $541.29 processing) = $558.99
    Effective Rate = 1.573%

    Is that right?
    Again, no way that is right. You are missing some other fees. True interchange cost for Card not Present transactions is 1.80% + $.10 and that is for a regular card, rates are even higher for reward and corporate cards. The above is the actual cost your processor would receive from Visa. Assuming they add 5bps and $.03 per tran then your effective rate would be somewhere around 1.9 - 2.10%. If you want to send me your statement, I will show you what your true cost is. I am not even in the CC processing industry anymore but spent 13 years in it. I will not ask for your business, just point out what your true cost is. I would also look at your bank statements and see if there is an additional debit every month from your processor

  12. #12
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    I wasn't stating his numbers were correct, just that if his numbers were correct, he had a great rate.
    Since he states 99.9% is CNP, I agree with you he is not @ 1.573

    Link to current MasterCard Interchange :

    https://www.mastercard.us/en-us/abou...terchange.html

    Visa Interchange :

    https://usa.visa.com/support/small-b...ions-fees.html

    BTW, I am currently involved in merchant processing, but, I do not participate in the race to the bottom.
    If the only item important to the merchant is the "lowest rate" I'll pass on the account.
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  13. #13
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    Quote Originally Posted by MCA View Post
    Again, no way that is right. You are missing some other fees. True interchange cost for Card not Present transactions is 1.80% + $.10 and that is for a regular card, rates are even higher for reward and corporate cards. The above is the actual cost your processor would receive from Visa. Assuming they add 5bps and $.03 per tran then your effective rate would be somewhere around 1.9 - 2.10%. If you want to send me your statement, I will show you what your true cost is. I am not even in the CC processing industry anymore but spent 13 years in it. I will not ask for your business, just point out what your true cost is. I would also look at your bank statements and see if there is an additional debit every month from your processor
    They don't take anything out of my bank account until the end of the month... I kid you not, those are my numbers.. Those numbers are right from the invoice from the merchant them self, which matches the amount that they deduct from my account once a month.

  14. #14
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    Here is a redacted version (all my identifying info removed) of my Feb 2018 Statement...
    https://www.dropbox.com/s/viomaakpnq...ement.jpg?dl=0
    Take a look at it and let me know my error in figuring out my effective rate..

    There is 1 fee on there that I did not include in my original calculation.. because it is a fee that will no longer be on my statements..
    The 19.99 SAQ/SCAN INCOMPLETE Fee. That was on there because I did login and answer the pci compliance questionnaire and scan.
    That has been done, and the fee will not reappear for at least 12 months.
    So according to that invoice, the total amount deducted is 561.28. take away the 19.99 fee, the total would have been 541.29. I used the 541.29 to come up with my effective rate.

    Please take me to school, if I did something wrong. I am here to learn!

    Thanks
    Last edited by Winning; 03-30-2018 at 04:29 PM.

  15. #15
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    There is the answer, $28k of the $35k in monthly processing was via debit cards. Which has a much lower interchange rate. As long as you keep taking that % of debit cards your effective rate will stay below 2%. Congrats on those rates, very good for CNP merchant with that amount of montly volume.

    Agree with Dave, race to the bottom is one of the main reasons I sold my portfolios a couple of years ago.

  16. #16
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    Those rates are fine. Your agent probably only makes $5 a month off of you in residuals. He probably dodges your phone calls lol!
    Archie Bengzon
    Jumpstart Capital
    archie@jumpstartcapital.biz
    www.jumpstartcapital.biz

  17. #17
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    Quote Originally Posted by MCA View Post
    No way your effective rate is 1.6 with 99% card not present.... Unless you are not receiving other value added services from your current processor
    Quote Originally Posted by ryan $ View Post
    There are Fees stuck in there somewhere
    Quote Originally Posted by MCA View Post
    Again, no way that is right. You are missing some other fees.
    Quote Originally Posted by Yankeeman07 View Post
    Since he states 99.9% is CNP, I agree with you he is not @ 1.573
    Quote Originally Posted by MCNetwork View Post
    Your agent probably only makes $5 a month off of you in residuals. He probably dodges your phone calls lol!
    What's up with all the negativity & the assumptions?
    Be honest, For the most part do you all think your clients are "not to sharp" (to put it nicely), and most of the time don't know what they are talking about?

    To me, it seems like a better way to respond would have been something like..
    "Wow, that is a great rate. Do you mind sharing one of your statements? Would love to see exactly how your processor is acheving that for you." VS "You don't know what you are talking about, it's no way in hell you are at a 1.573".

    Just Saying... Sometimes it's not what you say, it's how you say it..

  18. #18
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    So looking at my newest statement for March.. I calculated an effective rate of 1.442. Last month I calculated it at 1.523. Is that normal for it to change that much month to month?

    32,122.98 Sales
    463.22 Deducted
    equals 1.442 Effective rate

  19. #19
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    Quote Originally Posted by Winning View Post
    So looking at my newest statement for March.. I calculated an effective rate of 1.442. Last month I calculated it at 1.523. Is that normal for it to change that much month to month?

    32,122.98 Sales
    463.22 Deducted
    equals 1.442 Effective rate
    You might have processed more debit cards than credit cards that month, usually debit has less fees built in per transaction

  20. #20
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    Quote Originally Posted by Winning View Post
    What's up with all the negativity & the assumptions?
    Be honest, For the most part do you all think your clients are "not to sharp" (to put it nicely), and most of the time don't know what they are talking about?

    To me, it seems like a better way to respond would have been something like..
    "Wow, that is a great rate. Do you mind sharing one of your statements? Would love to see exactly how your processor is acheving that for you." VS "You don't know what you are talking about, it's no way in hell you are at a 1.573".

    Just Saying... Sometimes it's not what you say, it's how you say it..


    I think it’s less negativity and more just experienced businessmen hearing numbers that don't "seemingly" make sense and just responding with their input. Of course, you can have a lot of experience doing something a long time, but the wrong way, so what do I know.

    I'd love to meet your processing agent though. I'm also curious how you're getting so many debit card transactions with the card not present.

  21. #21
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    Interchange Rates

    Quote Originally Posted by Winning View Post
    So looking at my newest statement for March.. I calculated an effective rate of 1.442. Last month I calculated it at 1.523. Is that normal for it to change that much month to month?

    32,122.98 Sales
    463.22 Deducted
    equals 1.442 Effective rate

    Sure, there a numerous Interchange Rates, review your detailed Merchant Statement,
    it will show you the various card types you accepted.
    Dave Lambert, Business Development
    dave@fcbankcard.com
    Merchant Services Consultant
    High Risk Merchant Payment Solutions
    SBA 7(a) Loans & Short-Term Funding
    T/VM: 727-291-7890
    Office: 727-233-1111
    Skype: fc-financial

  22. #22
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    Quote Originally Posted by DonMcGrath View Post
    I'm also curious how you're getting so many debit card transactions with the card not present.
    I have a direct to consumer manufacturing company. The customers login to shop and pay directly on our website, or they call in and place orders by phone. So I guess most of our customers use their own money that's in their bank account vs using traditional credit card.

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