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By stella

Have you ever wondered how much a fast food shop pays in credit card processing fees?  I have, since transaction size tends to be small (one component in the calculation of fees is transaction size). Since healthy sandwich shops seem to be the craze, let’s examine a sandwich shop.

So for an example, let’s look at Jimmy John’s, which has about $850,000 in revenue per store. About a quarter of that is collected in credit card and debit card sales according to the 2008 Hitachi Consulting Study of Consumer Payment Preferences (for fast food restaurants).

The average interchange rate that TransFS expects such a restaurant to have is in the neighborhood of $0.1255 + 1.56% for transactions greater than $15 and about $0.04 + 1.60% on transactions less than $15.

If we assume that 50%  transactions are < $15 that the average size for such a small transaction is $7.50 while the average size of a transaction > $15 is $20 (which means that this restaurants overall ticket size is about $14) then the average interchange rate for this restaurant is about 2.16%.

TransFS’ proprietary software has read thousands of customer bills, only to find that the average restaurant pays around 0.75%+$.20 markup above interchange, meaning this is about 2.2% for a sale of $14.

If we apply the overall rate of 4.36% (2.16% + 2.2%) to the 27% of this restaurant’s $850,000 in sales we can calculate that this restaurant will pay $10,006 per year in credit card processing fees.

Yikes!

Restaurant owners can get the best deal on credit card processing by comparison shopping for a processor using TransFS. Start an auction now to keep more of your hard earned money!

Image thanks to http://www.flickr.com/photos/28233229@N00/1407449118/

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By stella

How can I help you? by travelstar.Being a newbie to customer service, I wasn’t quite sure what to expect, or what was expected of me. However, after hundreds of phone calls and chats with TransFS users, I’ve learned some general guidelines make customer service one of the most satisfying parts of my day. Here are some tips from lessons that I learned:

1) What is your personality?- As face-to-face interaction decreases and digital communication increases, a lot of behavioral cues taken from body language and human contact are lost. This means that language used in email is critical for getting not only your message across, but projecting whatever attitude or personality your business embodies. I had to tone down my professional speak a bit for TransFS, since we like to be seen as casual and approachable.  On the telephone end, voice cues are your way of getting personality and message across. I like to smile before dialing a user, it just makes the whole interaction more pleasant. Even when you’re discussing something as seemingly mundane as credit card processing (trust me, it’s actually fascinating!) that extra bounce in your voice lets the users know you actually care.

2) Politeness and Energy Go a Long Way- Think extra polite in your interactions with users. Making jokes and laughing are always appropriate, but having that extra bit of respect will make you stand out. Adding more “thank you’s” is an easy way to show your appreciation and concern for your customer’s problem. Use your voice to show how excited you are in helping your customer deal with their issues and see value in your service.

3) Think Like the Customer- When customers ask questions, try to understand their context. Why are they asking this question? Maybe there is a deeper issue they mean to address. If you can get at this deeper concern, you’ve done your job. You’ve also assuaged the customer because they feel that you understand and care for their issue to be resolved. Another approach is to make sure you do not sound salesy. Speak to your customer with phrases that imply agency vs commitment. For example, “feel free to check out this feature…”  ”we have a cool iPhone App that is free to download…if you want.”

4) Speak to Your Customer- Especially in an industry as technical as merchant account services, knowing at what level to speak to your customers is critical to their happiness. Try to gauge their level of understanding from what they tell you, and make them feel knowledgable. For example, it’s nice to say “As a dentist’s office, I’m sure you already know that accepting a variety of credit cards is important to meet the payment needs of your patients, but did you know….” Or end with…”but you probably already knew that.”

5) Make Sure They Are Satisfied- Always end your interaction by asking if your customer is 100% satisfied with your service, and ask if there is anything else you can do. Doing this ensures your customer will hang up the phone feeling particularly comfortable with your service. Asking this may also bring to light other issues they might have.

6) Go the Extra Mile- Follow up with your customers; show them you care. Speaking with customers is an important way to drive innovation, referrals, and keep your business in check. Working in your bubble can make decision making narrow sighted, but by broadening and really getting to know your customers, you will understand your business more completely.

Are you completely happy with this post? If not, feel free to email me at Stella@transfs.com   :)

Image thanks to http://www.flickr.com/photos/10159709@N07/2566010605/

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By stella

TransFS uses Interchange Plus pricing in our credit card processor marketplace. The biggest chunk of change that processors charge is Interchange, but what does that really mean?

Two of the things that confuse merchants the most are:

  1. Why they are charged different amounts when different kinds of cards are used
  2. Who gets to keep the 1.5% – 3.0% of their hard-earned sales that are siphoned away as “discounts” and “fees”

A big part of the answer to both of those questions is: “Interchange”.

What is Interchange?

Interchange is the set of rules that define how much of a cut the issuing bank (the bank that issued the customers’ credit card, big issuing banks include Capital One and MBNA) gets to keep from the credit card transaction.

The part of the transaction that you see:

interchange_explanation-1

The back-end of the transaction (where the money flows):

interchange_explanation-2

How big is interchange?

Interchage is the largest piece of the transaction, usually 70-90% of processing fees. Basically, the card issuing bank captures most of the economics of the transaction.

Why should I care?

When negotiating a deal with your credit card processor it helps to know how much of a cut they are getting for two reasons:

  • It lets you know how much they are making off or you and therefore how much room they have to negotiate
  • The main rate that a processor will quote is on a standard credit card transaction.  With the rise of rewards cards and debit cards, these “standard” cards make up the minority of transactions.  If you focus your energy on negotiating a good “standard” rate, with a fair markup for your processor, they probably will sneak in a much larger markup on the rewards and debit cards. An example of that can be found in “Reading a Merchant Processing Statement

Until recently interchange rates were secret, but now you can get a full description of them at the Visa and Mastercard websites: Visa interchange ratesMastercard interchange rates.For a chart of different interchange rates, click here.

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By stella

TransFS is pleased to announce the addition of Paypal Website Payments Pro to its arsenal of top quality processors on its online credit card processing marketplace.

Paypal Website Payments Pro is the industrial strength version of Paypal, in that users are not redirected to Paypal’s site upon payment acceptance, and can pay directly through a merchant’s site. This is great for merchants as it helps boost their conversion rate.

Although Paypal Website Payments Pro does not utilize interchange plus pricing, TransFS is able to include the processor since TransFS’s software allows translation between different pricing mechanisms, meaning users will still get an apples-to-apples comparison.

The processor joins a growing list of stringently screened merchant account providers.

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By stella

A TransFS user recently asked:

Do processors on TransFS require reserves?

Our answer:

Our processors usually don’t have reserves, and when they do it is only in legitimate, non-abusive circumstances.   We can’t guarantee that our processors won’t have reserves because it’s possible that if the customer does something risky, the processor uses the reserve to protect themselves.  As always, TransFS monitors your merchant account for abusive behavior on the part of the processor and will step to assist if necessary.

A reseve is when a processor notices “risky” behavior from a merchant and keeps money in a special account to account for any special circumstances. Learn more about reserves here.

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By stella

A TransFS user recently asked this question:

” I run a quarterly business and only take in credit card payments a few times a year over the phone. As a result, I’m looking for a processor who does not charge monthly fees. What do you recommend?”

Our answer:

“We could potentially set up a zero monthly charge contract with a processor but that would really increase the discount rate you’d receive, making it not beneficial for you. The reason that processors are usually unable to waive monthly charges for seasonal businesses is that you pay for their infrastructure with the monthly fee, and they have to keep that up even when your business is in the off season.

Another option is using Paypal and emailing them the invoices. However, depending on your volume this may also not be the most cost effective choice. The lowest monthly fee in the TransFS marketplace is just $8/month so in this case, it might be more cost effective to just pay a low monthly fee to avoid higher rates.”

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By stella

The New Jersey Star-Ledger reported yesterday that some gas stations in the area were employing a two tiered pricing structure to fight credit card processing costs. A sign outside one station showed two numbers representing different forms of payment; $2.93/ gallon or $2.49/gallon, an almost 20% difference.

The different payment types? Cash or credit of course. Gasoline industry experts have noticed an increase in the number of people employing plastic to pay for gas in recent years, especially when gas hit sky high records of almost $4 a gallon. For example,  70% of New Jersey gasoline purchases are made with plastic, leaving gas stations with smaller profit margins due to extra costs for processing that are not included in gas prices.

“Too often credit card fees are a cost of business customers rarely appreciate,” Sal Risalvato, who is the executive director of the New Jersey Gasoline C-Store Automotive Association, said. “Today everybody uses a Visa or MasterCard.”

The two-tiered system is completely legal, however is not an option for many gas station owners. Pumps that have the technology able to track dual-prices cost anywhere between $12,000 to $15,000, meaning many small stations simply cannot afford such a luxury…and are stuck with smaller margins due to processing costs.

An easy way gas stations can save money on processors is to comparison shop processors on TransFS.com.

Image thanks to http://www.flickr.com/photos/65013758@N00/26603770/

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By stella

Just in case you missed it, TransFS has been getting some great media coverage in the last week regarding the launch of the Credit Card Processor Directory, the Yelp of processors where business owners can rate and read reviews from other business owners regarding their experiences with processors.

Today, Brad Spirrison for the Chicago Sun-Times highlighted TransFS in an article called “TransFS Shines Light on Credit Card Processors”

The Better Business Bureau also featured TransFS in “Looking for a Legit Credit Card Processor Just Got Easier”

And last but certainly not least, The New York Times article “The Damage of Card Rewards” featured a sister site of TransFS, truecostofcredit.com where consumers can see how use of credit cards affects merchants

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By stella

PayLeap is an innovative online payment processing solution. The company proudly announces its partnership with TransFS, a credit card processing fee comparison company.

Chicago, IL (PRWEB) January 6, 2010 — PayLeap, an ecommerce payment gateway that allows businesses to sell goods online with ease, and TransFS, an innovative company that offers credit card processing fee comparisons to merchants, are proud to announce a partnership. The partnership should not only make it simpler for merchants to sell goods on the Internet, but it should also help save them money by avoiding unnecessary fees. PayLeap is an online payment gateway that hosts credit card processing that allows merchants to rest easy when selling goods online. It also can host gift cards processing and similar forms of payment. TransFS is a comparison shopping website that helps business owners compare credit card processors by easily sorting and filtering capabilities, overall price and quality ratings to find the best match. “The average cost savings is about 35 percent” for companies that pick their card processors through the bid system at transfs.com, according to TransFS co-founder Sean Harper. “Nearly every business needs to accept credit cards and picking the best provider with the right features and the most attractive price can make a big difference to your bottom line. Payleap is a great addition to our marketplace since they have a good capability set, aggressive pricing and a solid reputation.” This partnership upholds the missions of both companies: to allow ecommerce to be both safe and affordable for merchants. About PayLeap Priding itself on service, the PayLeap mission is to be an outstanding corporate citizen in the electronic payments industry. Transparency, simplicity and service are the core values of the innovative payment processor. Visit http://www.payleap.com to learn more about the PayLeap’s services.

About TransFS

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.

Visit http://transfs.com to learn more about TransFS.

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By stella

CHICAGO, Jan. 05, 2010— Transparent Financial Services (TransFS.com), a leading marketplace for businesses seeking financial services, today announced the launch of the TransFS Credit Card Processor Directory, the first comprehensive website through which businesses can research, rate and review credit card processors.

In the past, researching the quality of a new credit card processor required a business owner to conduct hours of research across processors’ own websites, BBB ratings, message boards and discussions with fellow business owners. The TransFS.com Credit Card Processor Directory dramatically simplifies this process by aggregating all of that information into a single place, and making it simple to sort, filter, and compare processors side-by-side.

“While review sites like Yelp.com have become indispensible tools for consumers, it is still hard for business owners to find good, honest information about services such as credit card processing,” said Sean Harper,CEO of TransFS. “We wanted to give business owners the same opportunity to learn from the experiences of others and share their own reviews, and this centralized resource achieves that goal.”

The TransFS Credit Card Processor Directory enables business owners to:

  • Search the TransFS database of more than 800 credit card processors, both nationwide and locally across more than 320 U.S. cities
  • Filter processors by performance ratings provided by the Better Business Bureau (BBB) and by other business owners on TransFS.com
  • Quickly and easily rate their own processors on a five-star scale and through detailed comments about their experiences if desired.

“Research suggests that the recommendations of fellow users are more important than any other factor in decision-making,” said Joshua Krall, CTO of TransFS, “but for credit card processing, the decision is infrequent and business owners may not have a deep network to draw upon for opinions. Our directory solves this problem, making it easy to exchange reviews with users from all around the country.”

The release of the TransFS Credit Card Processor Directory continues the mission of the company to bring transparency and ease to the process of shopping for credit card processing services. The directory is available free of charge at www.TransFS.com. Also available at TransFS.com is the company’s free credit card comparison shopping service, through which business owners can reduce their merchant fees by an average of 40 percent.

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

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