Properly, probably not however that’s the form of pitch a gross sales rep for “reverse processing” would probably lead with. If they’ll get your consideration after they come within the door or name on the telephone, they might ask a query like this… “how would you like to process your credit card transactions for FREE. Sounds pretty appealing, doesn’t it? Let’s face it; if you’re like most merchants, they usually aren’t real thrilled with the fees involved with accepting credit/debit cards. But hey, it’s the times we live in. You have to take plastic for payment of your goods or services or you are missing out on sales.So, let’s break this down and see what this really is and then at least, you can make an informed decision whether or not it is for you. Let’s first of all take a look at what current rates are for processing, as an example, a generic/no perks type Visa credit card. This will give us a basis point for the purpose of this discussion. Currently, the Visa Interchange (I hope you have an understanding of what “interchange” is) rate for this type of card is 1.65% + $.10 (that may change slightly in April which is typically when Visa and MasterCard make interchange adjustments). Realize, of course, that other card or transaction types have their own Interchange Rates, mostly higher with a few lower. I’m using this Visa Interchange Rate solely for illustration purposes. So, if you’re processor has you set up on Cost Plus or Interchange Plus pricing (and you should be since this is the most transparent form of processing) and the “plus” portion is.25% + $.10 for instance, your whole value can be 1.90% + $.20. So, in different phrases, for ease of illustration, your whole charges on a $100 transaction can be $2.10. Retaining in thoughts, in fact, that the Interchange Price, or $1.75 of this whole goes on to the cardboard issuing entity. The processor, for offering this service, is making the $.35 distinction.
Now that we’ve got that baseline let’s get a greater understanding of what’s being provided with Reverse Processing. What these reps let you know is that there’s some “new legislation” than allows you to do that. I began on this business over 20 years in the past and have searched and have but to search out this “new legislation” they’re referring to. Apparently, they both give you indicators or say you are actually in a position to put indicators up in your institution that say one thing like “all prices marked are for CASH transactions”. Now, I’ve seen retailers, whereas making an attempt to cut back their general prices of processing playing cards, say one thing like “discounts for cash” (sometimes they’ll give about 2% off when paying for money which subsequently finally ends up netting about the identical quantity if paid for with a bank card much less charges) however this can be a new spin. Let’s face it, once you have a look at the whole variety of transactions that you simply do in a day, what proportion of that’s money? Little or no, am I proper? That is simply the way in which it’s at this time. Individuals have a tendency to hold little or no money and like paying with plastic or by means of some app on their telephone The explanations fluctuate from “it’s simpler” or “I get perks for using my plastic”.Okay so let’s transfer on with this evaluation. The subsequent a part of this “deal” they let you know about is that they provide “unique equipment” that when a buyer insists on paying with plastic, it should robotically add three.95% to the transaction. Now let me ask you this… what number of of your prospects can be happy with you for doing that? Do you need to alienate them from doing future enterprise with you? In all probability not! Moreover, should you did resolve to go together with this program, they cost $35 month-to-month price and you have to buy or lease gear from them. They’re speaking a purchase order of terminal with the suitable software program of within the neighborhood of $2,500. Or, a 3 yr month-to-month lease quantity that varies based mostly on what your present typical month-to-month processing charges are. In different phrases, the upper your quantity of gross sales, the upper your lease charge can be… RIDICULOUS!!! As I discussed earlier, I’ve been on this enterprise for a really very long time and I’ve solely leased one piece of apparatus in that point and it was on the product owner’s insistence. It is an incredible fee generator for reps however, I consider, a complete ripoff for retailers. Fairly truthfully, I favor gifting away gear for FREE and supply no contract time period.
So, remember and, as at all times, do your due diligence after they come calling. And, please know that springtime is when you’ll sometimes be bombarded with new reps contacting you. They get perhaps a day (if that) of coaching (and I take advantage of that time period loosely) after which they’re despatched to the streets. The failure charge is excessive for these individuals as a result of they’re ill-equipped and retailers ship them packing typically merely due to the sheer amount of them that decision. It will get fairly irritating and, let’s face it, you have acquired a enterprise to run and haven’t got time for each Tom, Dick and Harry that comes calling… who’re these guys anyway?To wrap this up, let me simply say that as a long-term skilled on this business, I might avoid this new “game”. There are many processors on the market that may give you this helpful service and people of us that actually care about you, your corporation, and constructing long-term relationships. Till subsequent time, thanks for studying.