Credit card swipes can add up to big bills for businesses

Credit card swipes can add up to big bills for businesses
by Laura Adelmann THISWEEK NEWSPAPERS
 
Businesses charged credit card processing fees are likely paying much more than necessary for the service.
Complex and confusing, monthly bills to businesses accepting plastic often include overcharges, excess fees and errors, said Jeff Zellmer, president of Financial Mitigation Services, Burnsville.

FMS offers detailed analysis of hundreds of unique cost categories, which can vary greatly depending on the type of card used and the item purchased, to uncover these unnecessary processing costs. If little or no savings opportunities are discovered, the review is free.

But if the review unveils significant savings, as 75 percent of their reviews do, FMS offers to recover those funds, accepting a percentage of the money the business saves as payment for the service. “We are independent and processor-neutral,” Zellmer said, meaning his company is not paid on commission, and doesn’t suggest businesses switch processing companies. “We work with their current processor. Most businesses prefer not to switch because they have a system in place. We can come in and allow them not to switch and to pay the least amount for processing,” Zellmer said. 
Merchant complaints about interchange fees, charges to the business accepting credit, have increased recently, with many calling for new legislation governing how fees are imposed. The changes in credit card rules that are set to be employed this year don’t regulate the swipe fees businesses pay, and they vary widely, ranging from 1.5 percent to 4 percent of each transaction cost.  

According to a November 2009 study by the Government Accountability Office, those fees have increased 24 percent since 2005. Many businesses negotiate lower processing rates, but ignore other ways to cut their bills. For example, depending on the contract, retailers may be eligible for emerging market discounts or other discounts that they are unaware of. 
And Zellmer said FMS examiners often find the large processors have provided swipe discounts for various types of entities, such as utility companies or schools, but those were not passed on to the business. While some businesses have protested the fees by offering cash-paying customers discounts, accepting plastic makes shopping more convenient for their customers who may spend more when not using cash. 

Zellmer said accepting credit cards also helps business access cash immediately while avoiding handling costs and trips to the bank. He said his company can help businesses keep more of that cash they earn. “(Processing companies) are putting money in the business’s bank account, so basically what we do is we get them to put more money in the business’s bank account,” Zellmer said. “Our goal is exactly the same as our clients’.” 

For more information, visit www.financialmitigationservices. com or call 952-224-8972.

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Mastercard & Visa Planning Price Increases in 2010

Similar to our nation's tax code, the Interchange Rates and qualifications for businesses that accep credit cards will continue to increase in 2010, adding to the complexity and confusion in credit card processing costs.

Some of the scheduled changes for April of 2010 include a 15% increase in Mastercard's Assessment fee from a current level of 0.095% to 0.11%. Mastercard is also revising the qualification criteria for Commercial Face to Face and Commercial Data Rate II transactions, making it more difficult for businesses to qualify for preferred rates in these categories.

The changes above and the continual addition of new rate categories, ever-changing qualification procedures and the resulting increase in costs to businesses is why Financial Mitigation Services is greatly appreciated by our clients. Each month, our analyst team performs a detailed analytics review of our clients' processing charges and protects our clients from paying more than they should to process credit cards. A vast majority of businesses will be unaware of these changes and how they affect their costs. Financial Mitigation Services clients will be armed with the tools and knowledge to combat these price increases.

To learn how Financial Mitigation Services can help your business minimize the cost of accepting credit cards, visit our website at www.FinancialMitigationServices.com or call us at 1-800-797-5642.