People call and say, just quote me a rate.
We still ask for last month’s statement. That is not us stalling. It is how we stay upfront and honest.
A lot of owners think they already know the number. They’ll tell you they are at 2.5%. Or 2%. Or 1.5%. One clean rate, end of story.
Open the statement and that number is almost never the whole story. Most processors hide cost in a few different places on the same bill. If you only look at the rate they quoted you, you miss it.
So we break down every line. You see, to the penny, what you paid last month.
Then we do a little time-machine test. If you had processed that same month with us, what would you have paid? That comparison is to the penny too. You would have saved X amount.
X is blank on purpose. We do not invent it on a call. We fill it in after we see your statement.
That is why we want at least one full month. It is the only way to give you a true apples-to-apples look.
Start with volume, not the flashy rate on page one
The first thing we look at is volume. How much did you run last month?
Then we look at the mix. How much of that was Visa, Mastercard, American Express, and Discover. Different cards cost different amounts, so the mix matters more than the cover rate.
We do not lean on the rate printed on page one. People in this business call that the discount rate.
That is where a processor likes to put a flashy low number. It looks great in a quote. You almost never actually get it.
What page one leaves out
The cover rate leaves out the extras. Those extras are where the real bill lives.
Some cards cost the processor more than that flashy rate. They come back later and bill you the difference. That extra bill is a billback.
A card that did not “qualify” for the cheap rate gets billed at a higher one. That is a downgrade. Rewards cards, business cards, and sales you typed in by hand get hit here a lot.
The card brands also charge their own fees on top. You will see them as network fees, association fees, or assessments. They are easy to skip if you only read page one.
Monthly fees get stacked on after the rate.
Add those up and it does not come out to the number on the cover. Then we look at the real pile of fees (the discount total) and which pricing program you are on.
You might be on one of five setups
How you are priced changes what the statement can even tell us. Same shop, different program, different story.
Interchange pass-through. The processor shows the card-brand cost and their markup. We can see the cards and the mix. This one is apples to apples.
Flat rate. One rate, usually plus a small fee every time a card is run. Simple to quote. The statement often hides the card-brand categories, so we have to guess some of the mix. We tell you when we are guessing.
Two-tier. A “qualified” rate and a “non-qualified” rate. A lot of cards miss the cheap bucket.
Three-tier. Qualified, mid-qualified, and non-qualified. Same idea, one more bucket.
Billback. They set a low target rate you hardly ever hit. Then rewards cards, business cards, keyed-in sales, and other downgrades get billed on top. That extra is often padded with profit.
We walk the statement until we know what you actually paid. Not what the quote said.
Junk lines we mark
Once we know the program, we mark the junk.
PCI fees. Batch fees. Statement fees. Cards that did not qualify.
Most of those are junk fees. They do not make your customers’ cards work better. They just sit on the bill.
PCI itself is a little different. PCI is the card-security checklist. If you have a traditional merchant account, the processor has a job to keep you compliant. So a PCI fee is real. It is not fake.
What has ballooned is the size of that fee.
Non-compliance is worse. I have seen PCI non-compliance at $100 to $200 a month when the processor’s hard cost may be closer to $13 to $20 a month.
Two more junk fees that hide in the rate
Some of the big-box processors charge you extra just for taking fees once a month instead of out of each day’s deposit. Monthly versus daily discounting.
That is insane to me. You are paying them to bill you less often.
I have seen 50 to 100 basis points for that. In plain numbers, that is 0.50% to 1.00%, just for the billing schedule.
Next-day funding is standard. Everyone does it. Your money should land the next day.
A decent number of processors still mark it up 20 to 30 basis points just to get you your money the next day. That is 0.20% to 0.30%. That is a junk fee.
We also check the extras on discounted cards. Are they passing those through at their cost, or padding them?
A “good rate” on a quote usually misses your card mix
Here is the trick. A “good rate” on a quote is only as honest as the program behind it.
If you are on interchange pass-through, we know how you take cards and what the mix is. The comparison is exact.
If you are on a flat rate, we cannot see every card category. We tell you we are making conservative guesses. We would rather guess low and be clear about it than promise a number we cannot see.
Here is an example. It is not a guarantee.
Say you process $100,000 a month at a 4% flat rate. We use what we know about an industry’s mix. Debit versus credit. The cheap debit cards that get a capped rate. Corporate cards, business cards, rewards cards.
Then we give a reasonable, conservative guess of the monthly savings.
That is a guess until we have the statement. It is not a promised percent. Your mix is the thing that makes the math real.
What to send us
Whether you are in Kansas City or not, we work with merchants across the country.
Send one month’s statement.
We will break it down. We will show you the fees. We will tell you if they are already fair. If they are, we will say so. That is a useful answer too.
If we cannot save you on the fees on that statement, we will cut you a check for $5,000. We are that confident.
Email the PDF. Or a clear photo of the full month. Whatever is easier.
That is the whole first step.
