Archive for April, 2009

What is a Fair Rate For Your Citizens?

All Payment Processors have the same wholesale transaction costs regardless if they are Bank of America or a small local merchant services provider. These costs are called interchange and are assessed by MasterCard, Visa,

American Express and Discover. Local governments get special interchange rates. These rates do however vary based on card brand, card type (credit or debit) and method of payment (in person, over the phone, online) and the size

of the transaction. So to offer your citizens a consistent percentage an estimate of the variables above needs to be made.

Municipal processing wholesale costs average around 1.6 - 2.1% depending primarily on volume and card types (number of corporate cards). If you are being offered a rate lower than 2% you either are being mislead (you are actually

being charged more) or your payment processor has for some reason agreed to assume some of the cost (maybe they are making money on other services to you).

Over this past year, significant changes in credit card rules for Municipalities have occurred. Now you can begin accepting credit cards in your offices and assess the fee back to your citizens. If you are like 95% of the towns in the U.S.,

this is a big deal.

Your citizens have…for years…been asking for you to accept credit cards for payment but you haven’t been able to budget the costs. Now you can!

RULE NUMBER 1

Make Sure You are Working With A Company That Understands the Complexities of the New Convenience Fee Programs and Also What You Need for Your In-Office Transactions

Visa, MasterCard and American Express don’t play well together yet when you decide to accept credit cards you will need a processor that helps you work with the continually changing (every October and April) credit card company

rules.

The credit card industry is a vast ocean of mis-information because the barrier to entry for sales organizations of credit card processing services is minimal.

This can be your single BIGGEST MISTAKE! Most Banks, Processors and Third Parties do not understand the new rules nor the issues and will try and sell you a system designed for a retailer or for online transactions.

To see more on this, please click on one of the publication links to the left and do not hesitate to contact me directly by Clicking Here with any questions