The Illusion of a Good Deal
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Information on how to keep from overpaying the processor.
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The Illusion of a Good Deal
- 1. The information presented in this online seminar is for information purposes only, and is not intended as legal or financial advice. The information does not amend or alter your obligations under your agreement with Fifth Third Bank, or under the Operating Regulations of any credit card or debit card association.
- 2. Can you relate? Your Profit
- 3. POP Quiz Terms like Non-Qualified and Mid-Qualified are Interchange Categories. False Terms like EIRF and Standard are Interchange Categories . The customer CVC code will help qualify your transaction at a lower interchange. True MasterCard and Visa charge for AVS. MasterCard and Visa charge an Auth fee. The customer’s address has to match his/her billing address to get the best rate (CNP/MOTO Merchant). Level III/Data III has the lowest interchange cost on non- consumer cards (CNP/MOTO Merchant). False False False False True
- 7. Breakdown of Cost Interchange represents 92% of the cost of this transaction. * Based on Average Ticket currently qualifying for the Visa Credit Retail Rate, 1.54% + 0.10 Total Cost = $0.94
- 8. The Number One Mistake!
- 11. Number One Trick
- 12. Number One Trick A processor can give you a very attractive base rate (the rate on page one of your statement) if they don’t have to disclose the rate they charge for downgrades. Another way of looking at it: Does it matter how much you pay for the base price of a new car, if they don’t have to disclose any of the add-ons? Interchange 01/31/08 0201014016 VI- CPS/Retail 2 (Emerging MKTS) -1,318.78 Transaction Volume 2% + .16 (data rate II) = 2.16% 1.89% + ? (data rate II) = ??? (a.k.a. whatever we debit your account) Over 80%
- 14. Visa Consumer Card Not Present *Transactions originating from a Corporate or Purchasing cards do not require AVS. Also, recurring payment transactions do not require AVS as long as the transaction is not the first payment and the time between payments is less than a year. Consumer card transaction where card/ cardholder are not present No CPS Card Not Present Yes Yes Cleared within two days? No Yes One authorization per clearing message? Yes No AVS performed?* Electronically authorized? No Yes EIRF No Shipped within 7 days and trans includes order number and ECI? Yes No Authorized through intl. Automated Referral Service? Standard No Cleared within three days? Yes
- 15. MasterCard Consumer Card Not Present Yes No Yes No No *For MC MO/TO transactions, the authorization and settlement amounts MUST match unless the MCC is a Direct Marketing MCC. Consumer card transaction at MO/TO or E-Commerce location where card/ cardholder are not present Authorized? MCC in auth and settle match? Yes Cleared within three days? Merit I Standard
- 23. What is Pad Processor A Processor B (re-seller/ ISO) Swiped Transaction 1.75% Swiped Transaction 1.55% Keyed Transaction .31% Keyed Transaction .61% Total Total Processor A Processor B (re-seller/ ISO) Swiped Transaction 1.75% Swiped Transaction 1.55% EIRF Transaction .76% EIRF Transaction 1.20% Total Total 2.75% 2.51 % 2.16% 2.06% .30 Pad .44 Pad
- 24. From Best to Worst Sometimes things are not as they appear Statements
- 30. Convenience Fees Rules When Where Why
- 33. What or Why Level/Data III?
- 34. Purchasing Card Usage: Buyer Benefits Streamlines the Purchasing Power Eliminates Paperwork Reduces Costs Increases Employee Productivity Provides Automated Controls Offers Customized Reporting
- 35. Card Acceptance: Supplier Benefits Increased Sales Volume Improved Cash Flow Fewer Credit Approvals and Collection Activities Increased Productivity New Sales Channel Less Paperwork to Process Customer Acquisition and Retention Reduced Costs Enhanced Competitive Position Improved Customer Service
- 41. The Evolution of Credit Cards in B2B Transactions Presented by: Robert L. Day, AVP Commercial Interchange 1-800-884-0353 ?
Notas do Editor
- The Visa System is comprised of Issuers and Acquirers. Each of these entities has important roles and responsibilities. Issuers Financial institution that issues the cards to buyers Acquirers Have the direct link into Visa that facilitates each transaction Take transaction information from the supplier Format transaction information Process transaction information through VisaNet Check with the Issuer that the card is good Visa is an association that functions as the intermediary between Issuers and Acquirers. It provides three basic functions: Branding, including advertising and promotions Product development The VisaNet system that processes the transactions VisaNet is: The fastest and largest payment processing system in the world. Capable of processing 5,000 messages per second over 3,300 VisaNet Access Points (VAPs), four Visa Processing Centers and five Network Operation Centers worldwide. One of the largest, most reliable and sophisticated global communications systems ever created. Only NASA and the IRS have systems larger than VisaNet! The stand-in processor for all the other card brands, including MasterCard, Amex and Discover. VisaNet processes $830 billion in annual transaction volume
- Using Visa cards for B2B purchases can also enhance the bottom line of your customer’s businesses by streamlining their purchase process and eliminating paperwork, such as purchase requisitions, purchase orders, invoices and checks. With less paperwork to handle, their employees will be more productive and they will be able to reduce costs. By using Visa Purchasing cards, companies set spending parameters for each card, so they can maintain control over card use. And Visa Purchasing reports provide companies with enhanced information that helps them with vendor management, program administration and spending control and audits
- Visa Card acceptance can help to boost your bottom line in several ways: 1. Increased sales from companies that either want the convenience of using a payment card for B2B purchases or are starting to factor in purchasing card acceptance when they choose suppliers. Also, your company can be listed in Visa’s Supplier Locator directory on our Web site. Buyers can search this directory to find businesses that accept purchasing cards. 2. Improved cash flow thanks to faster payment. Suppliers receive payment usually within two business days of every transaction. 3. Accepting Visa cards simplifies the order process by eliminating paperwork and the need to process purchase orders, invoices and checks. 4. You can also minimize the need for costly credit approvals and collection activities since the financial institution that issues the Visa card assumes the credit risk. 5. When you combine the reduction in paperwork with minimizing credit approvals and collections activities, your transaction costs are reduced and employee productivity is increased. 6. As more and more companies go online to order products, Visa card acceptance opens this new sales channel for your company. 7. And of course, suppliers have a distinct advantage over competitors who do not offer their customers the speed and convenience of Visa card acceptance. 8. Visa acceptance also helps you acquire new customers and strengthen your relationship with existing customers. 9. Accepting Visa Purchasing provides suppliers with the ability to collect additional data that your customers can use for cost allocation, expense reconciliation, and compliance with sales and use tax reporting, thereby improving the level of service you provide.