About The Durbin Amendment

    As part of the Dodd Frank Reform passed by senate in 2010, The Durbin Amendment was put in place for Merchants to enjoy a discount on processing Debit Cards .  Thus Regulating the Issuing Banks (Beneficiaries of Interchange) by capping Check Card-Debit Card Transactions at at $0.21cents and .05%.   The initial assumptions were that merchants will save big dollars from the decrease in fees given a scenario of an average ticket higher than $20.

However, The What wasn’t mentioned are not only the fact of that merchants current processors will little to none pass the savings along,  But also that the issuing banks have increased interchange on nearly every other interchange level.

For example small ticket merchants (Under $20) who previously enjoyed discounted rates already lower than the 22 Cent cap assessed by the Durbin Amendment  are now being penalized having to pay the higher cap in the banks efforts to regain loss revenue from the amendment.  With all this said the changes to current interchange could end up benefiting merchants if the discounts are passed along properly or this could also open doors for Processors to further Mislead merchants on the different levels of interchange.

  Flat Rate Processing  was created to offer  understanding and piece of mind on the cost of merchant processing.  Following the implementation of the Durbin amendment, Banks and Processors have further complicated the total effect of the new law.  Yet, Flat Rate has proven its purpose by properly calculating savings for merchants and are able to offer an apparent savings or in other cases minimal losses.

Example: of calculated savings and Impact on a given scenario. (showing only Durbin Savings, not including what you are already overpaying)

Based on an average of $30 and 60% check/debit cards: without having to ask for statements and still Again with the ease to calculate what some processors may call “Savings” Flat Rate makes it apparent with the calculations based on the actual savings from by guaranteeing new merchants the a set ratio savings calculated in the average tix and volume of their current processing data.

 1.       Current fees/current volume = current flat rate

2.         Current flat rate – .30% = savings of at least

.30%(savings)  .30%  x credit card volume     = the amendment translated in dollars.

Again with the ease to calculate what some processors may call “Savings” Flat Rate makes it apparent with the calculations based on the actual savings from by guaranteeing new merchants the a set ratio savings calculated in the average tix and volume of their current processing data.

Are You Really Getting a Flat Rate?

Flat Rate Pricing has been endorsed by many Associations and Franchises nationwide because of how simple it is to understand and also calculate the cost of accepting credit cards. Typically what happens in today’s Credit Card Industry owners/merchants are mislead by an initial rate and billed for number of other fees that are rarely discussed.

Today’s Credit Card Companies:

Rep will sell merchants at a rate that sounds like; (example)

1.59% + $0.15 or 1.69% + $0.10 or 1.39% + $0.20

What does this really mean??
Not only the sales reps today but even most business owners are into this lingo. If you ask any Credit Card Rep or Business Owner What their rate is you will get an answer like the examples above. So what ends up happening is the merchant is focused on negotiating the best rate that he/she can find, but what they aren’t told and certainly didn’t discuss is that there are several other fees associated with credit card processing. (examples) Batch Header Fees, Monthly Statement Fees, Administrative Fees, Additional Authorization Fees, Mid Qualified Transaction (up to 2-3% surcharge), Non Qualified Transaction (up to 2-3% surcharge), etc…….

Again there are several fees that are associated CC Processing, it is safe to say that there is never a merchant that only pays that 1.xx% + $0.XX. So the above rates really mean NOTHING. At Capture, we think that the business owner should know exactly what they are going to pay without playing the game described above. Forget what all the different type fees are and just do the Math.

What is your Actual Rate?
Take your total amount of fees paid and divide them by the volume that you did.

Total fees / Visa/MC Volume = REAL RATE

With all the other fees added on to merchant bills we typically see merchants paying around 3-5%

Flat Rate Pricing allows owners to know exactly what they are going to pay. Based on the average ticket amount we can give owners a flat rate with no other fees or surcharges added on (keep in mind that there are also no transaction fees). The owner pays only the one rate that is determined by Ticket Size.
Rates vary from 1.99% to 2.99% Lets Compare!!
Pricing Format Total Fees
Traditional Pricing 1.xx% + $0.XX + ? + ? + ? + ? etc…..

Flat Rate Processing allows merchants to know exactly what they are going to pay to accept credit cards.

• One bottom line rate
• No transaction Fees
• No Mid/Non Qualified Surcharges
• No other fees

Example:
“Flat Rate of 2.39%”
No other fees
$10,000 Sales Volume
Fees = $239

Why Flat Rate Processing
Today’s payment industry has been saturated by street level sales and uneducated reps
that have made the conversation of Credit Card Processing a nightmare. As an Association or a
technology provider, you are frequently in a conversation about credit card processing. Being
in the position of an Association or A POS vendor, merchants many times turn to you for
direction. Being that the Credit Card Business is so difficult to understand, we find that most
merchants still are not satisfied with the partner processor. Not because they are a bad
company, but more so that is just how the industry works (Mid Qualified, Non Qualified, Cost
Plus, etc….). Most credit card reps don’t completely understand this much less the merchant.
When A merchant gets his bill after being quoted a “negotiated rate” of say.. 1.59% + 10 cents.
Is that all they really pay? Of course not! After all the fees are said and done with, we usually
see 2.5% to 5%. Does that make your company or organization look good?
Recently we have developed a Flat Rate Program that has caught the eyes of many
franchises and associations. Flat Rate Processing is designed to allow the merchant to know
exactly what they will pay for processing. With extensive math and analysis, we are able to
quote a flat rate to merchants promising them a set rate. Merchants aren’t sour about the
price they are paying for processing, but rather the game that is played in acquiring these
services. It is not their job to understand the multiple fees that are involved in credit card
processing. With Flat Rate Processing rates may come off sounding higher than what is out
there, but after a merchant understands what they are really paying, they can surely appreciate
a flat rate.
Please contact us to discuss the opportunity of endorsing Flat Rate Processing.
Webinars are available by appointment.
Why Endorse Flat Rate?
• Endorse an honest credit card program and trusted resource
• Simple explanation of fees
• Eliminate the fees and games that exist
• Revenue share
• Full Training on Flat Rate Processing for your understanding
Capture Systems “ Home of Flat Rate Prcoessing”
1-888-592-1110

The Flat Rate Comparison
Do you know what you are really paying to accept cards?
In Today’s Credit Card Industry, merchants are mislead with an initial rate and billed for a number of other fees that are rarely discussed. Is this happening to you? What is your Actual Rate?

A lot of things happen between the time you swipe your credit card and sign the credit card slip. Everything that happens makes it possible to make purchases with your credit card instead of having to go to the bank every time you want to spend money from your credit limit.

A few things are involved in each credit card transaction:

• The customer, you, who presents the credit card for payment.
• The merchant who you make purchases from.
• The merchant’s bank sends credit card transactions for approval.
• The credit card payment network is a liaison between the merchant bank and the credit card issuer.
• The credit card issuer approves and pays transactions.

If you accept credit cards or charge cards in your small business, the fees you pay to the credit card processing company are tax-deductible. You should keep a record of your credit card processing fees or call your credit card processing company and ask them if they will print out your record.

Links

• Credit Card Financing
• Commissions and Fees
• Credit Card Legislation
• Avoid Credit Card Late Fees

A Credit card terminal is a device that can do transactions with a debit card or a credit card. There are several types of credit card terminals available to merchants. Most terminals have the same basic purpose and functions. These terminals allow a merchant to swipe or key in required credit card information and transmit such data to the merchant service provider. The majority of credit card terminals transmit data over a regular telephone line or the internet. Wireless terminals can transmit card data using either cellular networks or satellite networks. Some also have the ability to store data and transmit over a standard telephone line when one becomes available.

There are a lot of credit card processing companies that offer merchant accounts and let small businesses accept credit cards in retail stores and on the Internet. Finding the right one for your business isn’t easy.

Many banks don’t offer merchant accounts directly to small businesses. Instead, small businesses have to go through third party providers that will secure the merchant account for them. Each of these third parties will charge different fees and will have different rules.

To complicate the matters more, if you are processing credit card orders online, the transaction has to pass through an online gateway system. Whatever shopping cart software you are using will have to interface with these gateways. Not all shopping carts work like this. This mean you will have to research and make sure the shopping cart you plan on using will work with the merchant card provider you choose.

Visa and MasterCard discounts rates are around 2.25 to 3 percent for small businesses that accept mail order and phone orders. American Express and Discover Card will charge a higher discount rate than Visa and MasterCard.

Some companies advertise discount fees less than 2 percent. But these lower fees are for swiped transactions which are sales made by running the customer’s credit card through a machine. Some credit card processors charge higher than average fees. Poor personal credit and the type of business you run could possibly cause you to have to pay a high fee. The discount rate isn’t the only credit card processing fee to look at. Compare the application fees and the discount rate, but also the initial cost of equipment, per-transaction fees, monthly minimums, voice verification charges, address verification fees, monthly statement fees, and any other costs that will happen.