posted on October 5, 2008 09:10:36 AM new
It's not that far fetched.
I signed up for our merchant account through similar claim (from an independent salesman off of ebay) and found my monthly bill dropped by 1/2. What was once $325-350 is now only $150-175.
The debit card rate of 0% is what we have. It is PIN based processing... but it does charge a Flat 18 cent processing fee and a Flat network fee which averages about 60 cents to $1.00 per transaction (depending on the network). Debits in our retail business are great, especially when the purchase is over $30.
On a $1000 purchase, PIN debit only costs about $1.00 whereas non-PIN is around $16.40 because it is 1.64%. Obviously a $15 savings on this size of transaction is a huge win for the merchant.
Guaranteeing the rate for 3 years is also what we have... but that is a "prime" rate done by the processing company. If VISA or MC raises the rate they charge for transactions, then your rate will likely go up. What you have to monitor on a monthly basis are "pass through charges". A few months ago VISA/MC automatically charged a $59.50 pass through fee with some disclaimer that it was for their added costs of fraud protection. The money was automatically deducted from our bank account without advance notice. We received notification about 2 weeks later. I immediately called the Merchant Processor and blasted them for it. They refunded the money, but it took another 2 weeks.
As for their claim that they cut out the middle man... that is funny. They are the middle man unless they are actually VISA/MC offering the processing. What they refer to there is that you are cutting out a 2nd middle man. Many banks contract out their merchant processing, which means you have two middlemen in the process taking your $$$. You're not going to avoid a middleman, but you can cut one of them out.
