Knowledge is power! Many of our prospective Merchants tell us our presentation is not only transparent but educational! We empower our merchants with external Interchange weblinks which sites our statement analysis audit.
To effectively analyze a Merchant’s payment processing statement is by identifying all the hard costs in accepting bankcards as payment for goods and services. Our process starts by parsing out the largest part of the cost – Interchange, which are the fees paid to the Issuing Banks and Dues & Assessments which are the fees paid to the Associations (Visa, MasterCard, Discover and American Express). The difference would be the discount fees, including any added ancillary processing fees that make up the Processing Expense category.
Regardless of the current rate plan a Merchant may be on, our focus is to reduce their overall rate ... the 'Effective Rate'.
Effective Rate = Total Processing Fees ÷ Net Bankcard Sales x 100.
We calculate your effective rate on “net” sales instead of “gross,” since returns are not accounted for during a particular statement period.
Discount Rate: Revenue share paid to the Processor/Merchant Service Provider.
Acquiring Bank Buy Rates: Auth and settlement fees paid to the clearing bank for Merchant deposited funds, in additional to, other monthly ancillary and PCI related fees.
This section is negotiable and makes up approximately 6% of our Merchant Clients' total fees.
BIN / ICA: License ID fees pass-through by Visa BIN (Bank Identification Number) and MasterCard ICA (Interbank Card Associations) that identify the registered ISO/MSP.
Dues & Assessments: Rates and fees paid to the Associations (Visa, Mastercard, etc.) for sponsoring the Issuing Banks.
This section is non-negotiable and makes up approximately 11% of our Merchant Clients' total fees.
Interchange: Rates and fees paid to the Card Issuing Banks.
This section makes up approximately 83% of our Merchant Clients' total fees.
Interchange is non-negotiable, however, Interchange is a rules-based system, so depending on certain card types, when additional enriched data is provided at settlement, the rates can be much lower.
As illustrated above, Interchange makes up almost 83% of the total cost. Typically, sales agents only sell by reducing a prospective Merchant’s “discount rate”, which is a small amount of what a Merchant pays in total processing fees. OptiPayments take it a step further by identifying any Interchange inefficiencies that would otherwise qualify a prospective Merchant for a better Interchange clearing rate. Interchange is non-negotiable, however, since it is a rules-based system, certain card types can be managed at lower rates when additional enriched data is submitted at settlement – this is a process that we automate on behalf of our Merchant Clients and what separates us from our competition!
Once we have collected the processing data from a Merchant's statement, OptiAnalyzer identifies any possible Interchange inefficiencies, also known as Interchange Downgrades. These inefficiencies or downgrades occur when certain enriched data is missing at the point of sale and/or at the settlement. Such missing data includes, missing or mis-matching the cardholders billing address, commercial cards not setup in Level II/III format, when or when not to accept PIN Debit, being setup with the incorrect SIC (Standard Industry Codes) / MCC (Merchant Category Codes), and/or FSC (Fee Sequence Codes). Our presentation will illustrate to our prospective Merchants’ their current Interchange inefficiency as a rate which translates to additional savings when processing on our payment processing rails.
What is Interchange Elevation? It is the inverse of Interchange downgrades as defined in the passage above. We first make sure that every one of our Merchants are properly setup with the correct SIC/MCC/FSCs that best qualifies them to receive the most favorable Interchange clearing rates. Secondly, our platform identifies any missing enriched data for
certain card types, such as, Commercial Cards, Business Cards, and Purchasing Cards to ensure they clear for the lower Level II/III rates. We do this by removing the clerk or the customer from the equation by populating the required data in an automated process.
A key ingredient in our strategy is market specialization and Interchange Elevation focusing on providing a complete treasury management enterprise level experience to our Merchants. An integral component in delivering these enterprise solutions begins by way of our gateway OpitConnex.
After a few months of processing, we review your statement with us to assure we promise what we deliver.
Summay Analysis
Detailed Analysis
Multi-Month Comparison
New Account Obligation
Post-Account Rate Monitoring
Interchange Elevation
Guaranteed Effective Rate
We guarantee our fixed pricing over cost. Since Interchange is marginally variable month by month, our future effective rate quote three months-out has a small margin of error of ±0.00035 basis points and in most cases is in the favor of the Merchant.
Illustration above, “Cost Plus Interchange”, is one of three models we have available depending on the statement and pricing type for a prospective Merchant.
