The Critical Payment Processing Guide for Canadian Merchants
March 30, 2010 by Admin · Leave a Comment
The Critical Payment Processing Guide for Canadian Merchants
Discover how this Guide has helped 100’s & 100’s of Canadian business owners cut their payment processing fees by 10-30% and sometimes much, much more. If you are brand new to merchant account services, then this is the perfect guide for you… it’s takes most people about 15-20 minutes to read.
In this guide you will learn…
- What a Merchant Account is & Why Essential You Know How Your Business Will Transact Before Applying for Merchant Services
- How Not to Be Fooled by Ethically Questionable Merchant Account Companies’ Marketing Tactics
- How to Avoid the 3 Most Common Mistakes Merchants Make When Choosing a Payment Processing Provider
- The 18 Essential Questions That Will Protect You from Costly Hidden Fees
- How to Become a Seasoned “Pro” at Understanding How Credit Card Processing Rates Work Through Real Life Case Studies
- How to Save On Merchant Processing Fees with These 3 Insider Tips
- Learn How to Find the Perfect Payment Processing Solution for Your Business Needs Without Having Any Remorse Buying
Ready to get started on the guide…? Click here to become a merchant service pro.
Canadian Credit Card Processing Wars
April 28, 2009 by Admin · Leave a Comment
Tim Wilson at the NationalPost wrote yesterday an interesting piece on Canada’s Credit Card Wars over regulating interchange and allowing Visa to introduce debit cards in Canada.
Tim states, “While we respect businesses’ desire to manage their expenses, government intervention is not the right solution in a functioning industry.”
I know many Merchants who would be as fast as a wild cat and pounce on this statement. However, after reading more of what Tim had said in his article reminded me how important credit cards are to a business. Tim states:
“Retailers benefit from the speed, efficiency and reliability that only electronic payments can bring. They also receive guaranteed payment and can avoid the need to extend credit directly to their own customers. According to the economics firm Global Insight, over the past two decades, electronic payments have contributed $122-billion to the Canadian economy, which represents nearly 20% of our total GDP growth over the same period.”
In reality, without credit cards businesses would not be able to be as profitable as they are. Just try and imagine how a website would be able to transact without the ability to accept credit cards or even by phone. How would your business sales be without credit cards…?
The REAL ISSUE (if you read between the lines) that merchants are really complaining about is they feel they are paying too much in fees. It always comes down to the “$”.
Now I am all for keeping Merchant processing fees as low as possible. The issue really isn’t Visa and/or Mastercard with their Interchange rates because the interchange rates are not that high. If you have really high rates it’s usually due to your credit card processing company. This is Moneris, Global Payments, Chase-Paymentech, Elavon, First Data, TD Merchant Services, and other sub ISO’s who also broker credit card processing services. They make their money by marking up on top of the interchange rates and they really understand interchange.
Let’s use Tim’s example of:
“Visa Canada’s premium product, the Visa Infinite card, is available to a small subset of cardholders and its interchange rate, which is the small amount of money transferred from one financial institution to another each time a Visa product is used, is one fifth of one percent (0.2%) higher than other card products.”
What merchants don’t understand is how interchange really works and how the Merchant Account companies that sell/set-up merchants are the ones who can sometimes mark-up those rates big time. So if the card present buy rate for a non-reward card is approximately 1.6% for most categories of business and then the infinite card is 0.2% higher that would make the buy rate 1.8%.
Now many Merchant Account Companies will offer those card present cards at almost cost (let’s say 1.7% – only 10 basis points higher than cost) but they’ll mark all infinite cards by a full 1% higher making the Merchant pay 2.8% on those transactions. Now this could be good or bad for your business, it’ll depend on how many of your customers will pay using an infinite card – which you will not know until you are processing.
The question again is do you really understand how your customers transact with you…? If not you will want to figure it out.
This is where it is important that the Merchants understand how interchange works for their type of business category and/or the way their business will transact. By understanding this they will have a better chance at securing competitive rates because they can then look at the interchange tables and understand what the buy rates are from their type of business. However, as long as the Merchant remains uneducated on how all this merchant processing really works they will continue feel confused, alienated and over charged.
Now there have been some major shifts in the industry that have compounded these issues.
“In 2008, Visa introduced the first significant change to its interchange rate structure in 30 years, which resulted in some transactions attracting a higher interchange rate and others attracting a lower rate. Even with the change in structure and the introduction of the Visa Infinite cards, Visa Canada’s effective interchange rate has remained relatively flat at 1.6%. Interchange rates for Visa Canada are transparent and are available on our Web site.”
What people don’t realize is the change in the interchange structure is not really the problem. The REAL challenge is in educating merchants on how all the fees work. They are really just upset because they don’t understand why they are being charge more for some cards and how all their fees have change so much over the last year. The transparency has not been there and so they feel lied to or even like they have been swindle.
And sending a merchant in fine print 60 days before the change that their rates are going to change is NOT being transparent nor is that any kind of education on how it all works.
I don’t blame Merchants – I’d feel the same way if I were in their shoes. Again, as usual with anything in life – it breaks down to poor communication between the card processors and merchants. Which is fine with me – because it’s this type of poor communication that keeps me in business. 
I take the time to explain and help merchants understand how all these complex merchant MDR’s work and how to structure an application that is competitive and fair to both the merchants and the card processors.
Regardless, of what I think…what do you think…? Let me know in the comments below.
Is Your Business Going to Ottawa This Week?
March 25, 2009 by Admin · Leave a Comment
The “Stop Sticking It To Us” Coalition, representing over 200,000 Canadian businesses, small, mid and large, says it is gathering in Ottawa this week to combat overcharging by VISA and MasterCard.
The reason why is because the U.S.-based credit card companies have been pushing worldwide to take over the debit card business and increase service charges on credit card transactions. For or example, currently in the U.S. Visa and MasterCard now control over 75% of the debit card market. U.S. merchants and customers pay heavily for the card company’s dominance of that market. Debit transaction fees are (on average) anywhere from 20-50 cents in the U.S. In contrast, most Canadian Merchants pay from 8-15cents on average for a debit transaction – that’s a huge percentage increase!
My question to you is will your business be in Ottawa this week…?
Is protecting our Made-in-Canada, not-for-profit debit card system (Interac) a key objective for your business…?
Love to hear the thoughts directly from the Merchants. Add you comments below.
Visa, Mastercard Offering Debit in Canada…?
March 2, 2009 by Admin · Leave a Comment
I found a link on Interac News that lead me to article recently published by
Canadians have a had a sweet deal with Interac pricing on debit transactions. If Visa and Mastercard are able to break into the debit processing industry in Canada, then Merchants will most likely have to expect an increase in debit transaction fees. This will most likely also affect consumers too because small business owners will need to raise their pricing to cover the additional costs.
Currently most merchants in Canada pay anywhere from 8 cents-15 cents per transaction when it comes to debit, however our southern neighbors (where Visa and Mastercard offer debit processing services) the average transaction fees on debit are 15 cents-30 cents. That’s quite the increase. We are talking billions of dollars more in fees to Merchants.
What can Merchants do about…?
Not sure.
But I wanted you to be away of this looming payment processing news. It should be interesting to see how this will play out. My guess is that Visa and Mastercard will break into the Canadian debit processing marketplace sooner than later.
Credit Card Terminals in Canada
May 2, 2008 by Admin · Leave a Comment
A credit card POS Terminal is often a stand-alone piece of digital machine which enables a merchant to swipe or key-enter a credit card’s information at the same time as supplemental details necessary to process a charge card sale A Visa or Mastercard POS Equipment is a dedicated piece of apparatus that only processes credit cards although it really is typical for similar transactions such as gift cards and examine confirmation to also be performed.
A credit card Point of Sale Terminal usually should be plugged straight into a electrical power supply and connected to a telephone line or internet connection Nevertheless, some terminals might be driven by batteries, communicate more than the internet or via the cellular phone companies. Each time a bank card is processed (either swiped via the magnetic stripe reader or keyed inside the keypad), it contacts the network to verify if the credit card can be authorised. The purchase is then filed on the POS Terminal until the polling window is opened. The machine will either upload the electronic funds straight to the vendor financial institution, or even a polling service provider will dial directly into collect, process then submit the data towards the vendor bank.
Probably the most well-liked charge card terminals consist of a modem, keypad, printer, magnetic stripe reader, power supply and memory card. They have had the same basic design since the 1980s. As with computers, there’s a wide variety of memory capacities and other features like built-in printers and debit card pinpads that affect the manufacturing cost of a charge card terminal.
