EXPERT Advice

Credit Card Processing 101: Who Gets the Rewards?

International Payment Solutions, LLC, located in Savanna, IL, has always strived to educate merchants. The first thing that they teach you is that ALL credit card processing companies have the same cost (interchange) which is dictated by Visa/MasterCard. The only difference in processors is integrity, profit margin and customer service.

Interchange is a 22 page document that has pricing based on the type of card and the way you take that card. Types of cards range from debit/check cards, consumer cards, rewards cards, world cards, and corporate cards to name only a few. To only disclose one rate within a pricing structure is deceptive and the primary reason most merchants are being overcharged.

"The most significant difference between International Payment Solutions, LLC and 90% of processing companies are the rewards cards from Visa and world cards from MasterCard

Rewards," said Leo Townsend, President and founder of International Payment Solutions, LLC. He explained that Rewards and WorldCards are the ones your customers use to get bonus miles and cash back. They represent 40% of all credit cards.

"We do not separate them and charge higher pricing, while much of our competition does. With the exception of corporate cards, International Payment Solutions, LLC charges you based on the way you TAKE the card, either swiped or keyed.

"There is a company advertising a 1.59% + .25¢ rate, but after seeing their statement it turns out that only two consumer cards will qualify for the 1.59%. Most others are between 3.50% - 5%. These companies often have a termination fee of $350 or more along with a Loss Profit Clause," Townsend said. "A Loss Profit Clause is just that; they can charge you for how much money they were making monthly and multiply that by the number of months left on your contract. We had one potential client whose processor was going to charge him $4500 to leave. There is no termination fee or Loss Profit Clause with International Payment Solutions, LLC."

There are several ways to tell whether or not you are getting overcharged on your credit card processing, according to Mike Kocal of Lanark, an associate with International Payment Solutions, LLC:

· Is there a separate category for Rewards or World cards?

· Have you seen your Mid-Qualified and/or Non-Qualified totals rise significantly?

· Do you have a rate without a transaction fee?

· Are you going through your local bank?

· Have you been told that you have to "upgrade" your current equipment?

· When you called to negotiate rates, did your bank say you're already getting a great deal?

· Do you have a contract that requires you to pay a termination fee to leave? This is a way for the bank to start you out with a great rate, and then raise your rates throughout the contract, making it too costly to leave.

· Does your statement indicate fees but does not include the dollar amount of the transactions that correspond to those fees? If so, this is a way to hide what rate you're paying on keyed and corporate cards.

"We offer a price match guarantee which states that as long as you are our client we will match any legitimate offer you may receive," Kocal stated. "The key is a legitimate and fully disclosed quote."

International Payment Solutions, LLC has always done spreadsheet comparisons where every rate and fee is not only disclosed but explained. The single biggest reason why most merchants are being overcharged on their credit card processing is that they let someone throw a number at them without an explanation. This isn't always just simple math. Ninety percent of merchants have no idea how to read their statements. Of the 10% that do, most don't understand the terminology or pricing structures that their bank is using.

"Our policy requires a statement be faxed for review as opposed to just throwing numbers at you," Kocal explained. "This is why our national average is a 21% reduction in cost and we have had merchants where we have cut their cost by over 90%. How would you like to never have to switch your processing again and receive honest and wholesale pricing? This is our promise to you and we hope you would give us a chance to earn your business."

For more information, call Mike Kocal, International Payment Solutions, LLC at 866-522-1169 or fax your statement directly to Mike at 815-273-2133. International Payment Solutions, LLC is a registered ISO/MSP of BancorpSouth Bank, Tupelo, MS.

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