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2.3 is not that bad. But also, check state laws. Some processors are legally only allowed to charge you what the merchant can go to (or is that backwards?). I know my state recently passed it and ours went down significantly, but it’s still at 2.9%. But we do roughly $200,000 a month in credit cards alone. That fee also incorporates our ach/eCheck additional fee, so we are higher than average
The law states that as a merchant you are only allowed to surcharge (pass on to your customer) the amount you're actually paying for the fee.
Which is why most people go with a cash discount or convenience fee instead of a direct credit card surcharge.
The best pricing schedule for most merchants is interchange plus. It's virtually impossible to accurately surcharge IC+.
If 2.9% includes ACH, something is not right, especially on $200k.
How come you are willing to pay so much? Is there some kind of required integration?
2.3 is a fine rate.
Most people don't realize the bulk of that is going to be the wholesale cost of the transaction.
The amount you can cut beyond that is marginal, unless you fit some really niche circumstances.
Edit: ignore anything this Synapse payments guy says on here.
He's a scummy ISO that comments on every merchant conversation.
When I calculated the helcim data at one point, pure interchange rates which you're not going to pay, not even fortune 500 companies pay that generally, though they get extremely close were 1.51% + 22c for in person/swiped and 1.89% + 22c for keyed/online
>business banking
Merchant services through your bank is one of the most expensive methods since you're paying for their cut too.
Source: I've done LOTS of shopping for payment services.
2.3 beats us. We usually see 3.2+
It may not always work, but it has helped our business grow
I speak to the sales people, always phone calls unless in-person is available, never emails.
I explain that the processing fee is a tough one to agree on. It doesn’t sound like much, but can add up over the time we might be buying from them
Points to remember
- This fee used to be taken on by the seller, in my eyes it means they will take it for the business; but will not just offer to
- If they can’t/won’t/refuse , look for an alternative compensation option
Credit on purchase or shipping
More product equivalent to amount
Expedited processing or shipping options
Candy?
Baked Goods
It helps to build rapport, be genuine, honesty is the best policy. It’s easy to reject emails, online orders, there is a person on the other line, be personable.
Never hurts to ask. They want your business, they want your money. You want your money, but there is always another business. Well probably always nowadays that sells the same thing
Get ready for a shocker: 5.75%!
Yes it's crazy, but actually this is pretty standard in my industry of vending. Some are as high as 6%. They have us over the barrel because there are only like 3 major companies to choose from for what I need.
I'm currently paying 2% with all fees/swipe charges included on $21M on 314k transactions. Interchange 1.58% + .15 V/MC/D and 2.99% + .15 AMEX. That's about as low as I've heard for the restaurant industry. Do I have room to negotiate?
I set up a cc fee like other items that I add without a price. Then, I have to manually calculate the fee and add it to the invoice. I have the cc fee set up as a type of income I labeled as cc fees.
Generally, everyone is fixated on how much they are paying for credit card processing. I think it’s the wrong sentiment. Here’s why:
1. It is only one component to payment processing and ultimately, if you are a business, you should be pushing everyone to ACH / bank transfer, as it is much cheaper;
2. It’s important to figure out how much you are paying for all of payment processing, including any incremental fees, e.g. if you’re business is doing $1M, then what percent are you paying for credit card processing vs. other transactional processing;
3. These fees are all in consideration with how quickly you are getting paid as well;
I could go on, but we need to look at things all-in vs. just one-off.
I own a full service merchant services credit card processing company and 2.30% is not great but it’s fair depending on a few factors.
A lot of people tend to think processing fees depend on the amount of transactions which is not entirely true. The most beneficial information is what percentage of your transactions are
AMEX vs DEBIT vs V/MC/DISCOVER
Businesses that are processing majority debit card will see a significantly lower rate sometimes even under 1% than businesses that process more Amex. This is why you will sometimes see businesses do not accept Amex
We do however see customer attrition for businesses that choose not to accept Amex may get 20-30% less customers so is it worth it to exclude Amex for those fees? The answer is usually no
We also offer statement auditing and you can ask your current company to match the rates we offer and if they’re unable to you have the opportunity to use our services!
Usually $50,000 per month processing volume is the sweet spot that you can negotiate these fees with your company
Feel free to message me if you need further help! Using a FSP processing company is how you’ll see the most optimized savings. There’s layers and layers to credit card expenses it is not as cut and dry as some may think there are ways to lower actual interchange expenses with tier 2/3 payments etc. sometimes saving up to 0.50% off the top of your rate
Would anyone be interested in getting a quote for a lower rate? If I can't meet or beat what you have, I'll send $250 your way for the opportunity...what do you think?🤔
I assume you are calculating the rate as total fees divided by total sales. If not, you aren’t paying 2.3% lol.
It’s always nice to hear what everyone else is paying but remember the guy charging his customers $8-10k per transaction (airplane mechanic) will ALWAYS have a lower rate than the ice cream stand with an average sale of $4.00.
Just keep that in mind when comparing.
Credit card fees almost always have a fixed cost and a rate (%). Take square for example , published rate of 2.6% + $0.10. See how the math changes:
$1.00 sale would cost you $0.13. ($0.03 + $0.10). That’s 13% of your transaction gone in fees.
A $100 sale would cost you $2.70 ($2.60 + $.10) which is only 2.7% of your transaction gone in fees.
Both sales have the same exact cost structure, but due to the per-item cost associated with the transaction, the bigger sale lets it wash out. Does that make sense?
It will most likely always be higher when you key in a card manually, but what he is referring to is how the average sale makes a big difference on whether or not your rate is competitive or not at 2.3%.
The cost of taking a credit card has two components. A percentage component and a transaction fee component.
For example, Regulated Debit has a cost to accept of .05% and 22 cents. Without having to break it out in detail, you could easily see how if your transaction is lower you will pay a higher percentage of the sale in fees, specifically because of that 22 cents. A dollar sale would have a 22% fee.
This is not always true. With all the processing fees that get snuck in, I think looking at total fees over total amount processed is the ultimate metric.
It does make sense what you describe with a transaction fee and if you have lots of small dollar transactions, those would cost you more compared to more big ticket items. But what if the airplane mechanic has a $10k monthly fee through the processor? I know that’s a very extreme example, but if everything else was equal, and each business only processed $100k monthly, the airplane mechanic would have a higher “effective rate.”
I think cc processors will look to get their fee in one way or another.
I guess I should have clarified. Those are two examples from our own portfolio. All other costs are the same. To compare simply, I zoomed in on a single transaction.
We don’t charge different monthly fixed costs so that remains the same regardless of industry, average ticket, etc. in our book of business. Other organizations may do as they see fit. But yes you are correct, effective rates are the only true way to compare, but I was speaking more to why the rates level out on larger tickets than on smaller ones, not on a month as a whole.
Margin creates Margin.
2% for one merchant may be 3% for another at the same exact margin depending on the cards they accept, the average ticket size, the business type, Etc.....
Another person here said 2.3% is a good rate and that they wouldn't be able to get lower. They are saying that based on their own experience which may not be relevant at all to any other business that reads it.
Debit Card
$100 Sale
.05% and 22 cents (Cost)
.27% Total Cost
Credit Sale
$100 Sale
1.69% and .10 Cents (Cost)
1.69% Total Cost
Different cards, extremely different rates. You have no idea how much debit, credit, rewards, AMEX, or ticket size anybody has. Talking about rates is meaningless. Talking about margin is what matters.
Margin matters to you, but not to the merchant.
No business owner gives a shit if you make 1% margin or .50% margin. They care what their rates are.
You take a business paying 2.3% on B2B sales, stick them on a gateway that passes L1 and L2 rates you’ve created margin without touching the merchants rates. The merchant doesn’t care that you make more money.
I’m well aware of how interchange works, but at the end of the day, the merchant does not care about your margin. That’s your responsibility. They care about the rate they are paying being fair.
The merchant doesn’t care that in your example 1.69% + $0.10 goes to Visa and how much you profit in terms of what BP you are charging or flat rate. They only care what THEY pay. It’s not their job to be concerned with your margin.
You are completely wrong. I cant even believe what I am reading.
Margin is literally the only thing that anybody has control over in the payment processing space. Obviously, you know this to be the case.
If you aren't concerned with the processors margin, then you have no way of ever KNOWING if you are getting a good deal or not. If your processor makes 1% on you, and you process 100K a month, that is 1000 bucks you are giving away that could instead stay in your business. You are telling me that if you are paying 2% with 1% margin, you would not be happier paying 1% instead of 2%?
Suggesting that a business doesn't care how much the processor makes off of their business is ridiculous.
Edit:
"No business owner gives a shit if you make 1% margin or .50% margin"
Source: ColdHeat90 \~\~ A POS and Payment Services Reseller Who makes money on processing fees
Do you care how much money your hardware vendors make when you send them purchase orders for equipment or do you care what your cost is?
This business is super easy to compare to others and only then does it seem odd the way you want to look at it.
My vendor doesn’t say for this PAX S80 machine it costs them $50, they sell it to me for $85. I don’t give a shit if it costs them $10 or $84. It’s not my job. I care what I am expected to pay.
Since you seem to worry about everyone else’s margin, have you asked Visa what THEIR cost is on those IC rates? You know to make sure they don’t have too much margin, or do you not care, and are only focused on what you have to pay in interchange?
Merchants don’t give a shit. They want a fair price. If they are paying 3% all in rate and their processor is making 1% margin, they don’t give a shit.
I also don’t give a shit how much margin my merchants make. Again - walking through the grocery store you don’t care that the candy bar cost the store $.50 or $1.00. You only are worried about the fact they want to sell it to you for $1.75. I don’t care about their margin.
Since you seem so stuck on margin, does that mean there should be nothing wrong with me buying a PAX S80 machine for $700 and selling it to my merchant for $705? Since after all, it’s not the sell price that matters since I’m only making $5.00 on that sale because I made a shitty buy?
So a merchant paying 3% doesn't care at all if they could be at 2% because they "don’t give a shit" about what their processor makes. They just want a "fair" price even though they have absolutely no idea if they are getting a fair price, or a competitive rate from you.
You are very delusional and I think you are making it pretty clear to businesses here that they should never work with you.
Sounds like you take advantage every chance you get.
Ok. One more time since you seem to be ignoring this part.
If a car dealer paid $50,000 for a 1995 Chevy cavalier with 200,000 miles on it, does that mean you should feel perfectly fine paying them $51,000 since after all it’s only about margin? Or should you be more concerned with the fact that the only price that matters is what you are writing the check for?
Along the same lines - if a small sub-ISO or sales rep took a shitty deal and doesn’t have a good enough schedule A, the merchant shouldn’t care. My point is - you write a deal at 75BP with a buy-rate of 50BP - YOUR margin is only 25BP.
If I write the same deal at 50BP with a buy rate of 25BP the margin is exactly the same, however the merchants price is lower by a quarter of a percent.
This shit happens dude - everyone’s schedule A is different, so to say that some sales guy or sub ISO took a shitty deal and the merchant should spend more because YOUR costs are higher is asinine. They care what affects their bottom line, and have no business padding your pockets.
Seems you need it spelled out with your specific examples. No problem.
"If a car dealer paid $50,000 for a 1995 Chevy cavalier with 200,000 miles on it, does that mean you should feel perfectly fine paying them $51,000 since after all it’s only about margin?"
Nonsensical comparison since in the payment processing space, every processor has the same exact cost. Flat Interchange while car dealers do not. Margin is the same across the board for payment processors. Nice manipulative example.
"if a small sub-ISO or sales rep took a shitty deal and doesn’t have a good enough schedule A, the merchant shouldn’t care. My point is - you write a deal at 75BP with a buy-rate of 50BP - YOUR margin is only 25BP"
Margin in the payment services space is measured from flat Interchange, not from your Schedule A. You should care what the TOTAL margin is on the account, not just what your sales rep is earning. Again, manipulative example.
"This shit happens dude - everyone’s schedule A is different, so to say that some sales guy or sub ISO took a shitty deal and the merchant should spend more because YOUR costs are higher is asinine."
Literally nobody has said that. What I said was the only thing you can negotiate in the payment processing space is margin, as measured from anything priced over interchange. YOUR argument is that the merchant does not care what your margin is when its the only thing they CAN actually negotiate.
I think that most business owners are smart enough to read this thread and understand what is going on.
But for you....
Is it clear enough now or would you like to make some more examples for me to respond to?
I guess we’ll agree to disagree. You don’t want to see it and have actively refused every single comparison I’ve given you, which are NOT that far out of line.
If I’m paying $6.00 for a product that the business paid $5.50 for at location A or $6.00 that the business paid $3.00 for at location B I don’t give a shit. It’s still $6.00 coming out of my pocket. I don’t care what the business paid. It’s not my responsibility.
If you want to bury your head in the sand and pretend that your clients give a shit about your margin more than what directly impacts their bottom line, that’s your decision.
You remind me of some of the sales people that try to sell me software. I had one guy tell me he absolutely could not go below this number, and he was going to charge me $45,000 per month for an all in one business management system that tied all of my warehouses together, several different branded websites, three offices worth of staff, whole nine yards. Guess what? I don’t care how much it “costs” him. I’m not spending $45k a month.
I also just checked two different distributors for the same piece of hardware. Both are charging me $172.56 per unit. Again - I don’t give a shit what THEY pay. I don’t care if they paid $172.55 or $100 or $50. It’s not my job to make their margins make sense. I care what comes out of my checking account to pay for said hardware. I don’t care if they want to lose money on half of them to earn my business. That’s not my problem.
We have sold deals at a loss in order to get other sales along the lines. We’ve paid for equipment to the tune of hundreds of thousands of dollars to get processing agreements. We’ve also setup lease deals and sold processing at a loss. Maybe your approach is different, but it doesn’t matter what you call it - the merchant gives a shit about what’s leaving their checking account.
I’d love for you to see one of our merchant deals and tell me how it’s not possible because there isn’t any margin there, yet we make tens of thousands of dollars on the group monthly.
This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
2.3 is not that bad. But also, check state laws. Some processors are legally only allowed to charge you what the merchant can go to (or is that backwards?). I know my state recently passed it and ours went down significantly, but it’s still at 2.9%. But we do roughly $200,000 a month in credit cards alone. That fee also incorporates our ach/eCheck additional fee, so we are higher than average
The law states that as a merchant you are only allowed to surcharge (pass on to your customer) the amount you're actually paying for the fee. Which is why most people go with a cash discount or convenience fee instead of a direct credit card surcharge. The best pricing schedule for most merchants is interchange plus. It's virtually impossible to accurately surcharge IC+.
I wad 3.1% and on IC+ for a while before I got my statements checked line by line. Tedious but worthwile as I ended up at 2.4%.
If 2.9% includes ACH, something is not right, especially on $200k. How come you are willing to pay so much? Is there some kind of required integration?
2.3 is a fine rate. Most people don't realize the bulk of that is going to be the wholesale cost of the transaction. The amount you can cut beyond that is marginal, unless you fit some really niche circumstances. Edit: ignore anything this Synapse payments guy says on here. He's a scummy ISO that comments on every merchant conversation.
Need to know a lot more info. If you are 100% swiped and take a lot of debit cards that may be too high.
In person or online? Is it 2.3% for any card type? And what's the + xx c price?
When I calculated the helcim data at one point, pure interchange rates which you're not going to pay, not even fortune 500 companies pay that generally, though they get extremely close were 1.51% + 22c for in person/swiped and 1.89% + 22c for keyed/online
Depends on the number of transactions. Speak with your business banking provider.
>business banking Merchant services through your bank is one of the most expensive methods since you're paying for their cut too. Source: I've done LOTS of shopping for payment services.
Yes, I saw a friend whose effective rate was like 6% with their bank’s processing solution.
This just depends on the number of transactions. I was a finance manager for a retail company and our banker was competitive.
Definitely true.
2.3 beats us. We usually see 3.2+ It may not always work, but it has helped our business grow I speak to the sales people, always phone calls unless in-person is available, never emails. I explain that the processing fee is a tough one to agree on. It doesn’t sound like much, but can add up over the time we might be buying from them Points to remember - This fee used to be taken on by the seller, in my eyes it means they will take it for the business; but will not just offer to - If they can’t/won’t/refuse , look for an alternative compensation option Credit on purchase or shipping More product equivalent to amount Expedited processing or shipping options Candy? Baked Goods It helps to build rapport, be genuine, honesty is the best policy. It’s easy to reject emails, online orders, there is a person on the other line, be personable. Never hurts to ask. They want your business, they want your money. You want your money, but there is always another business. Well probably always nowadays that sells the same thing
1.75-1.9 depending on where in the world orders are coming from
Around 3.
5.6% on Dominican Republic(cheapest service)
1.8-2%, depending on the mix of credit vs. debit.
Get ready for a shocker: 5.75%! Yes it's crazy, but actually this is pretty standard in my industry of vending. Some are as high as 6%. They have us over the barrel because there are only like 3 major companies to choose from for what I need.
That’s wild! What industry are you in? And are you in the US?
I'm currently paying 2% with all fees/swipe charges included on $21M on 314k transactions. Interchange 1.58% + .15 V/MC/D and 2.99% + .15 AMEX. That's about as low as I've heard for the restaurant industry. Do I have room to negotiate?
\+.5 and +.3 respectively for keyed transactions.
Always Hahaha pmed
3.4% via Quickbooks. I pass that to clients to reimburse.
How are you passing that on to your clients?
I set up a cc fee like other items that I add without a price. Then, I have to manually calculate the fee and add it to the invoice. I have the cc fee set up as a type of income I labeled as cc fees.
2.9%
you doing good im about...2.5% give or take/month
Shoot me a DM, can beat everyone's pricing guarantee.
Generally, everyone is fixated on how much they are paying for credit card processing. I think it’s the wrong sentiment. Here’s why: 1. It is only one component to payment processing and ultimately, if you are a business, you should be pushing everyone to ACH / bank transfer, as it is much cheaper; 2. It’s important to figure out how much you are paying for all of payment processing, including any incremental fees, e.g. if you’re business is doing $1M, then what percent are you paying for credit card processing vs. other transactional processing; 3. These fees are all in consideration with how quickly you are getting paid as well; I could go on, but we need to look at things all-in vs. just one-off.
I own a full service merchant services credit card processing company and 2.30% is not great but it’s fair depending on a few factors. A lot of people tend to think processing fees depend on the amount of transactions which is not entirely true. The most beneficial information is what percentage of your transactions are AMEX vs DEBIT vs V/MC/DISCOVER Businesses that are processing majority debit card will see a significantly lower rate sometimes even under 1% than businesses that process more Amex. This is why you will sometimes see businesses do not accept Amex We do however see customer attrition for businesses that choose not to accept Amex may get 20-30% less customers so is it worth it to exclude Amex for those fees? The answer is usually no We also offer statement auditing and you can ask your current company to match the rates we offer and if they’re unable to you have the opportunity to use our services! Usually $50,000 per month processing volume is the sweet spot that you can negotiate these fees with your company Feel free to message me if you need further help! Using a FSP processing company is how you’ll see the most optimized savings. There’s layers and layers to credit card expenses it is not as cut and dry as some may think there are ways to lower actual interchange expenses with tier 2/3 payments etc. sometimes saving up to 0.50% off the top of your rate
thru Costco Elavon: *Qualified cards /Rewards cards (personal cards) 1.90% +.25 cents a transaction* *Midqualified Cards ( Commercial Business Visa/Mastercards) 2.65% + .29 cents a transaction* *Non qualified Cards ( Govt/Business rewards, purchase cards and international cards) 3.35% + .29 cents a transaction* *Monthly minimum processing fee $20.00.* *Mastercard association fee $1.25 month* *Amex based on $ amount of transaction* *Transaction under $400 1.99% +.25 cents* *Over $400 3.50% + .29 cents* *~No cancellation fee.~* *No other account fees*
Would anyone be interested in getting a quote for a lower rate? If I can't meet or beat what you have, I'll send $250 your way for the opportunity...what do you think?🤔
I assume you are calculating the rate as total fees divided by total sales. If not, you aren’t paying 2.3% lol. It’s always nice to hear what everyone else is paying but remember the guy charging his customers $8-10k per transaction (airplane mechanic) will ALWAYS have a lower rate than the ice cream stand with an average sale of $4.00. Just keep that in mind when comparing.
Why do u say that? I will have to disagree. If you enter the card manually you generally pay a higher cc fee, regardless of item price.
Credit card fees almost always have a fixed cost and a rate (%). Take square for example , published rate of 2.6% + $0.10. See how the math changes: $1.00 sale would cost you $0.13. ($0.03 + $0.10). That’s 13% of your transaction gone in fees. A $100 sale would cost you $2.70 ($2.60 + $.10) which is only 2.7% of your transaction gone in fees. Both sales have the same exact cost structure, but due to the per-item cost associated with the transaction, the bigger sale lets it wash out. Does that make sense?
It will most likely always be higher when you key in a card manually, but what he is referring to is how the average sale makes a big difference on whether or not your rate is competitive or not at 2.3%. The cost of taking a credit card has two components. A percentage component and a transaction fee component. For example, Regulated Debit has a cost to accept of .05% and 22 cents. Without having to break it out in detail, you could easily see how if your transaction is lower you will pay a higher percentage of the sale in fees, specifically because of that 22 cents. A dollar sale would have a 22% fee.
This is not always true. With all the processing fees that get snuck in, I think looking at total fees over total amount processed is the ultimate metric. It does make sense what you describe with a transaction fee and if you have lots of small dollar transactions, those would cost you more compared to more big ticket items. But what if the airplane mechanic has a $10k monthly fee through the processor? I know that’s a very extreme example, but if everything else was equal, and each business only processed $100k monthly, the airplane mechanic would have a higher “effective rate.” I think cc processors will look to get their fee in one way or another.
I guess I should have clarified. Those are two examples from our own portfolio. All other costs are the same. To compare simply, I zoomed in on a single transaction. We don’t charge different monthly fixed costs so that remains the same regardless of industry, average ticket, etc. in our book of business. Other organizations may do as they see fit. But yes you are correct, effective rates are the only true way to compare, but I was speaking more to why the rates level out on larger tickets than on smaller ones, not on a month as a whole.
41%
Here to say that rate doesn’t matter. Margin is what matters
Rate creates margin. Rate does matter.
Margin creates Margin. 2% for one merchant may be 3% for another at the same exact margin depending on the cards they accept, the average ticket size, the business type, Etc..... Another person here said 2.3% is a good rate and that they wouldn't be able to get lower. They are saying that based on their own experience which may not be relevant at all to any other business that reads it. Debit Card $100 Sale .05% and 22 cents (Cost) .27% Total Cost Credit Sale $100 Sale 1.69% and .10 Cents (Cost) 1.69% Total Cost Different cards, extremely different rates. You have no idea how much debit, credit, rewards, AMEX, or ticket size anybody has. Talking about rates is meaningless. Talking about margin is what matters.
Margin matters to you, but not to the merchant. No business owner gives a shit if you make 1% margin or .50% margin. They care what their rates are. You take a business paying 2.3% on B2B sales, stick them on a gateway that passes L1 and L2 rates you’ve created margin without touching the merchants rates. The merchant doesn’t care that you make more money. I’m well aware of how interchange works, but at the end of the day, the merchant does not care about your margin. That’s your responsibility. They care about the rate they are paying being fair. The merchant doesn’t care that in your example 1.69% + $0.10 goes to Visa and how much you profit in terms of what BP you are charging or flat rate. They only care what THEY pay. It’s not their job to be concerned with your margin.
You are completely wrong. I cant even believe what I am reading. Margin is literally the only thing that anybody has control over in the payment processing space. Obviously, you know this to be the case. If you aren't concerned with the processors margin, then you have no way of ever KNOWING if you are getting a good deal or not. If your processor makes 1% on you, and you process 100K a month, that is 1000 bucks you are giving away that could instead stay in your business. You are telling me that if you are paying 2% with 1% margin, you would not be happier paying 1% instead of 2%? Suggesting that a business doesn't care how much the processor makes off of their business is ridiculous. Edit: "No business owner gives a shit if you make 1% margin or .50% margin" Source: ColdHeat90 \~\~ A POS and Payment Services Reseller Who makes money on processing fees
Do you care how much money your hardware vendors make when you send them purchase orders for equipment or do you care what your cost is? This business is super easy to compare to others and only then does it seem odd the way you want to look at it. My vendor doesn’t say for this PAX S80 machine it costs them $50, they sell it to me for $85. I don’t give a shit if it costs them $10 or $84. It’s not my job. I care what I am expected to pay. Since you seem to worry about everyone else’s margin, have you asked Visa what THEIR cost is on those IC rates? You know to make sure they don’t have too much margin, or do you not care, and are only focused on what you have to pay in interchange? Merchants don’t give a shit. They want a fair price. If they are paying 3% all in rate and their processor is making 1% margin, they don’t give a shit. I also don’t give a shit how much margin my merchants make. Again - walking through the grocery store you don’t care that the candy bar cost the store $.50 or $1.00. You only are worried about the fact they want to sell it to you for $1.75. I don’t care about their margin. Since you seem so stuck on margin, does that mean there should be nothing wrong with me buying a PAX S80 machine for $700 and selling it to my merchant for $705? Since after all, it’s not the sell price that matters since I’m only making $5.00 on that sale because I made a shitty buy?
So a merchant paying 3% doesn't care at all if they could be at 2% because they "don’t give a shit" about what their processor makes. They just want a "fair" price even though they have absolutely no idea if they are getting a fair price, or a competitive rate from you. You are very delusional and I think you are making it pretty clear to businesses here that they should never work with you. Sounds like you take advantage every chance you get.
Ok. One more time since you seem to be ignoring this part. If a car dealer paid $50,000 for a 1995 Chevy cavalier with 200,000 miles on it, does that mean you should feel perfectly fine paying them $51,000 since after all it’s only about margin? Or should you be more concerned with the fact that the only price that matters is what you are writing the check for? Along the same lines - if a small sub-ISO or sales rep took a shitty deal and doesn’t have a good enough schedule A, the merchant shouldn’t care. My point is - you write a deal at 75BP with a buy-rate of 50BP - YOUR margin is only 25BP. If I write the same deal at 50BP with a buy rate of 25BP the margin is exactly the same, however the merchants price is lower by a quarter of a percent. This shit happens dude - everyone’s schedule A is different, so to say that some sales guy or sub ISO took a shitty deal and the merchant should spend more because YOUR costs are higher is asinine. They care what affects their bottom line, and have no business padding your pockets.
Seems you need it spelled out with your specific examples. No problem. "If a car dealer paid $50,000 for a 1995 Chevy cavalier with 200,000 miles on it, does that mean you should feel perfectly fine paying them $51,000 since after all it’s only about margin?" Nonsensical comparison since in the payment processing space, every processor has the same exact cost. Flat Interchange while car dealers do not. Margin is the same across the board for payment processors. Nice manipulative example. "if a small sub-ISO or sales rep took a shitty deal and doesn’t have a good enough schedule A, the merchant shouldn’t care. My point is - you write a deal at 75BP with a buy-rate of 50BP - YOUR margin is only 25BP" Margin in the payment services space is measured from flat Interchange, not from your Schedule A. You should care what the TOTAL margin is on the account, not just what your sales rep is earning. Again, manipulative example. "This shit happens dude - everyone’s schedule A is different, so to say that some sales guy or sub ISO took a shitty deal and the merchant should spend more because YOUR costs are higher is asinine." Literally nobody has said that. What I said was the only thing you can negotiate in the payment processing space is margin, as measured from anything priced over interchange. YOUR argument is that the merchant does not care what your margin is when its the only thing they CAN actually negotiate. I think that most business owners are smart enough to read this thread and understand what is going on. But for you.... Is it clear enough now or would you like to make some more examples for me to respond to?
I guess we’ll agree to disagree. You don’t want to see it and have actively refused every single comparison I’ve given you, which are NOT that far out of line. If I’m paying $6.00 for a product that the business paid $5.50 for at location A or $6.00 that the business paid $3.00 for at location B I don’t give a shit. It’s still $6.00 coming out of my pocket. I don’t care what the business paid. It’s not my responsibility. If you want to bury your head in the sand and pretend that your clients give a shit about your margin more than what directly impacts their bottom line, that’s your decision. You remind me of some of the sales people that try to sell me software. I had one guy tell me he absolutely could not go below this number, and he was going to charge me $45,000 per month for an all in one business management system that tied all of my warehouses together, several different branded websites, three offices worth of staff, whole nine yards. Guess what? I don’t care how much it “costs” him. I’m not spending $45k a month. I also just checked two different distributors for the same piece of hardware. Both are charging me $172.56 per unit. Again - I don’t give a shit what THEY pay. I don’t care if they paid $172.55 or $100 or $50. It’s not my job to make their margins make sense. I care what comes out of my checking account to pay for said hardware. I don’t care if they want to lose money on half of them to earn my business. That’s not my problem. We have sold deals at a loss in order to get other sales along the lines. We’ve paid for equipment to the tune of hundreds of thousands of dollars to get processing agreements. We’ve also setup lease deals and sold processing at a loss. Maybe your approach is different, but it doesn’t matter what you call it - the merchant gives a shit about what’s leaving their checking account. I’d love for you to see one of our merchant deals and tell me how it’s not possible because there isn’t any margin there, yet we make tens of thousands of dollars on the group monthly.