Merchant Credit Card Processing Fee Analysis and Reduction
Merchant Credit Card processing fees are very complex and difficult to evaluate without extensive industry knowledge. Businesses are frequently unaware that processing fees can be negotiated in order to obtain optimal pricing.
For example if a client performs an RFP and obtains a reduction of 10% how do they benchmark that reduction in fees to other businesses with similar credit card sales and transactions?
The answer is a business can not compare the offered rates to other similar businesses and therefore often leave money on the table. The client is happy with a 10% reduction and the processor is happy that they did not have to offer their best pricing.
Due to our extensive dealings with Merchant Credit Card services we have built a proprietary pricing data base that allows all processing proposals to be cross referenced and benchmarked against best in class pricing.
BMS employs a Senior Manager from the Financial Services Industry that oversees every audit/review to ensure that clients obtain the best pricing, contract terms, and service levels. BMS negotiates with our clients’ processors to achieve maximum annual savings and recoveries.
Merchant Processing Fees Analysis.
BMS reviews six to twelve months of a client’s processing statements and their current processing contract to identify billing errors, unfavorable contract terms and conditions, and opportunities for fee reduction negotiations.
Contract Terms and Condition
Merchant Processing agreements often have terms and conditions in them that are not favorable to the merchant/client. Our consultants review contracts to identify:
- Length of Contract
- Termination fees or penalties
- Refund pricing policy
- Timely deposit of receipts
- Requirements for Reserve Accounts
Best In Class Pricing:
Processors often have unpublished processing rates that are not routinely offered to their clients. BMS has negotiated with all of the major processors and are very familiar with their pricing models and pricing strategies. Our previous engagement with the major processors uniquely positions us to be able to negotiate world class pricing for our clients.
Our goal is to allow our clients to maintain their existing credit card processor to avoid any potential service disruptions with payment processing.
Risk Free Reduction of Processing Fees
No individual or business wants to pay more for a service than is fair market value. For this reason BMS works on a pure pay for performance pricing model. BMS identifies savings opportunities and presents them to our client and they decide what opportunities they want to implement. BMS only earns a fee once findings and price reductions are implemented and the client has realized savings. If a client chooses not to implement a BMS finding then there is no cost to the client. BMS is confident that we will find savings that will be so compelling that the client will be happy to implement our solutions.
Class Action Settlements
There has been an ongoing legal battle for the past twelve years waged by businesses, merchants and organizations that accept credit cards as form of payment against MasterCard and Visa. The Merchants in their lawsuit alleged that MasterCard and Visa individually, and together with their respective member banks violated antitrust laws by charging excessive Interchange processing fees and colluded to fix processing rates and fees. The legal battle between MasterCard and Visa and the merchants was originally filed as a lawsuit, but later was awarded Class Action status in 2005. Any business, organization or individual that accepted MasterCard or Visa credit cards or debit cards between 2004 and 2012 are entitled to share in the settlement funds.
There have been numerous twists and turns in the litigation on this issues and more than a few reversals by the judicial system that have made following this case a long and winding journey. Some CFO’S and executives that started following this case have long been retired. Executives have differing opinions as to if there ever will be a settlement and if a settlement is arrived at if the settlement will be significant enough to pursue. Because of the length of time this case has been winding through the courts and its uncertain outcome it is very easy for businesses to loose track of and or interest in a potential settlement because there are always more pressing issues and opportunities to occupy their time.
BMS Ventures therefore offers selected clients a service to represent them in filing appropriate paperwork when such action is required by the courts. BMS also works with a client’s processor to capture annual processing transactions and credit sales for the time periods in question (2004 -2012) so that when a settlement is approved by the courts BMS clients will be prepared to file in the class and obtain a maximum settlement. If a business waits until a settlement is reached to start the data collection the filing window will likely close and leave the business with no settlement or a diluted settlement.
By engaging BMS to represent your business in this class action suit you will avoid missing filing deadlines and will ensure a maximum pay out. BMS will conduct all of the data gathering associated with your future claim and will only earn a fee when a client is awarded a settlement. Since any settlement dollar value is unknown BMS will perform our service at no cost to the client until the client receives a settlement.