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OUR LATEST PRESS RELEASE:
Transparent Financial Services (TransFS.com), a leading marketplace for businesses seeking financial services, has today announced that small retailers may overpay an estimated $73 million for credit card processing during an already tight holiday season. As a result of weak predicted sales, retailers are looking to cut operating costs as much as possible in order to maximize revenue.
The National Retail Federation (NRF) predicted at least a 1% drop in retail sales for the holiday season due to continued consumer uncertainty regarding job security and housing values. The American Research Group predicts sales to drop between 2.5%-4.5%.
One area where retailers can easily cut costs is payment processing. An analysis of TransFS visitors shows that retailers are expected to overpay for credit card processing by more than $73 million in December alone.
Retail Businesses with Less than 250 Employees – December 2009
Est. Processing Fees as % of Revenue 2.18%
TransFS.com Savings 42%
Overpayment for Credit Card Processing $72,830,000
TransFS helps retailers quickly and easily cut processing costs with comparison shopping for credit card processors. Retailers go through a simple auction process and in minutes receive highly competitive bids from top quality processors who can save them an average of 42% on current processing costs. These savings represent almost a quarter of the estimated drop in revenue that is expected due to the sluggish economy.
The smallest retailers often get the worst deal on credit card processing and have the best opportunity to save by getting a better deal. Bookworm, a bookstore in Edwards, CO (population 10,000) is another TransFS customer. By having processors bid for their business on TransFS, Bookworm was able to cut 0.60% from its processing costs, saving around $5,000 per year. “As an independent local business we knew in a tighter economy we needed to save on some of the necessities of running our business,” says Nicole Magistro, an owner of Bookworm. “We had tried shopping around credit card processing before and it was always a big time drain and hard to compare the various rates. Especially during the holidays when we are incredibly busy, we don’t have the time to spend comparison shopping. TransFS gave us some great options for credit card processors, saved us a lot of money and made it really easy, saving us time.”
Online retailer RightChannelRadios.com, a leading retailer of mobile and handheld 40 channel CB radios also utilized TransFS to save money. Andrew Youdarian, of RightChannelRadios.com, was impressed by how simple the process was. “While I knew I was likely paying too much for credit card processing, the complex nature of the industry kept me from exploring my options,” he says. “After using TransFS’ online calculator, I quickly learned I was likely spending significantly more on processing than I needed to! I applied with them the same day, and was up-and-running quickly with a new, reputable processor that is saving me literally hundreds of dollars in fees each month! The best thing about TransFS’ service is the money they save us goes directly to our bottom line. Using TransFS was, by far, the easiest thing I’ve done all year to increase our company’s net income.”
“TransFS.com is one of the easiest and fastest ways that a retail business owner can make up for lost revenue this holiday season.” explains Sean Harper, CEO of TransFS.com.
TransFS services are available free of charge at TransFS.com.
About TransFS.com
TransFS.com is an online comparison-shopping service that enables business owners to shop for credit card processing services quickly, efficiently, and at no cost. TransFS evens the playing field for business owners, letting them keep more of their money without time-consuming, annoying sales calls from service providers. TransFS employs instant reverse auctions to quickly negotiate better deals, automated bill analysis software to identify unnecessary or undisclosed fees, a stringent certification program and an online ratings and reputation.
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Contact:
Stella Fayman
309.368.5987
stella@transfs.com
A customer recently asked this question:
My processor had loads of hidden fees that I was not
aware of…view bill online fee, terminal rental, etc. I’ve read the
contract on your site, but what additional fees are there besides the
monthly fees you have stated?
Our answer:
The bids are inclusive of all fees, meaning that there are no extra
hidden fees such as the ones you mentioned encountering with your
current processor. We screen the processors allowed to bid on the site
for transparent and fair pricing practices in order to make sure that
doesn’t happen.In fact, there are only 3 kinds of fees (included already in the bid)
that we allow our bidders to charge:1) Interchange- This is the portion that Visa/MC card receives. We can
very accurately estimate how much this will be, however, it varies
monthly based on your transaction mix.2) Proessor markup- This is a percentage per item charged, and is
plainly disclosed in the contract.3) Monthly fee- Plainly disclosed in the contract.
Since we have many different processors on the site, once you select
the processor of your choice, they will send you their contract to
read. Start an auction here.
Like any other company proud of its value proposition, we really love to get satisfied customer feedback. A recent blog post from Ketharaman Swaminathan shows how TransFS worked to save his business money on credit card processing. Ketharaman compared TransFS’s bids with CreditorWeb, a comparison engine. Here is what he found:
Not only has TransFS found the lowest bid but, interestingly, even its next four bids ranging US$ 236 to US$ 246 per month, are cheaper than the lowest quote on CreditorWeb. While this is by no means an exhaustive comparison, it surely lends strong credence to TransFS’ claim that it helps small businesses save a lot of money on their credit card processing costs.
How was your experience using TransFS ? Has using TransFS saved your business money on credit card processing? Email stella@transfs.com to let us know what you think.
For several months our free auction software has been helping business owners get a better deal on their credit card processing. Today we launched a new version that is significantly improved. The improvements are mainly in the user interface, reducing the number of steps from 7 to 3 and providing better responsiveness and error feedback. If you own a small business and would like a better deal on your credit card processing, give it a shot.
Here is a link to the press release.
Below is a Youtube screencast – the quality isn’t that good, but a higher quality version is available here.
How we get paid.
Customers often ask us how we get paid. We are a free service to our customers, small and medium sized businesses.
When we connect a business with a service provider and they begin a relationship, we collect a commission from the service provider. The commissions that we collect (for a credit card processing deal) are:
- Unbiased – we make the same amount of money from all of the service providers, we have no incentive to steer our customers to one service provider over another.
- Small – for a typical customer we collect between $50-$300 over the course of several years. This fee is less than the service providers are used to paying their brokers and salespeople. Since we are a low-cost method of distribution, the service providers pass along the savings to our customers
Anchoring – a Cognitive Bias
Anchoring, a cognitive bias, is the tendency of most humans to overly rely on a specific value and adjust further decisions in the direction of that value.
Wikipedia explains:
The anchoring and adjustment heuristic was first theorized by Amos Tversky and Daniel Kahneman. In one of their first studies, the two showed that when asked to guess the percentage of African nations which are members of the United Nations, people who were first asked “Was it more or less than 45%?” guessed lower values than those who had been asked if it was more or less than 65%. The pattern has held in other experiments for a wide variety of different subjects of estimation. Others have suggested that anchoring and adjustment affects other kinds of estimates, like perceptions of fair prices and good deals.
Anchoring applies to shopping for small business financial services because, when you shop around, the provider you are shopping with often says: “well, that’s a pretty good deal, but we can do slightly better” and offer you a slightly better deal. Your subconscious pressures you to accept their offer while their subconscious keeps them from offering a better deal, even if it means potentially losing your business.
Two good strategies for overcoming this cognitive bias are:
1. let the salespeople know that you are shopping broadly, understand your requirements and they won’t get a second chance to give a better offer – if possible avoid telling them what your current rates are – bluff if necessary. This is basically the strategy that the government uses in auctioning off wireless spectrum, it is also the strategy that transfs uses to our customers good deals on small business financial services
2. anchor the salesperson to a number more beneficial to you – take your first quote (the one slightly better than your current deal) and take it to another vendor, and then a third, play them off against each other until you can’t get them any lower – here is some data on how such a strategy works for credit card processing
Speed of TransFS Auctions
Currently TransFS auctions can take as long as 24 hours. Several customers have asked if that is a permanent situation, as they would prefer a faster response time.
It is not a permanent situation. Most TransFS auctions take only a few hours, but we currently check the bids manually before allowing the auction to complete. This ensures that the software is working properly and that our customers get a good result, however, it increases the time of each auction. In the near future we will relax this constraint and allow more auctions to complete without first checking them, which will speed things up considerably and allow customers to see the results of their auctions within a few hours of entering their information.
Purchasing small business financial services, such as credit card processing, insurance and payroll processing, is a lot like buying a car. One of the best pieces of advice I have been given about buying a car is to negotiate on the “Drive it off the lot” price. Car dealers love to quote a price, have you test drive the car, fill out all the paperwork and then, when you are about to sign the loan documents or write the check, a bunch of other fees (taxes, delivery charges, etc) appear. As a shopper, if you want to get a good deal, you must make sure that you are being quoted a final price.
TransFS helps you get the “Drive it off the lot” price because it forces the financial services providers to disclose all of their fees. We also prohibit any cancellation fees in the contracts of the providers that use our system. If the provider tries to sneak a fee past one of our users we have the following recourse:
1. The business can immediately re-submit for new bids. All their information is already in the system, so there is minimal hassle.
2. We will kick the service provider off TransFS. As an aggregator we have significantly more bargaining power than any one small business on it’s own.
So far we have never had such an incident, so you can be confident that with TransFS you are getting a “Drive it off the lot” offer.
