President Obama’s sent a draft proposal of new financial regulations to Congress today. This 85-page document outlines sweeping reorganization of financial-markets are supervised since the Great Depression. It will touch almost every facet of banking from “how mortgages are underwritten to the way exotic financial instruments are traded” according to Damian Paletta at the Wall Street Journal. Continue Reading»

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If you really want to understand the economics of the payments industry,specifically Interchange, this recent Fed paper offers a good historical perspective from a economic, social, and policy perspective from viewpoint of all impacted parties – consumers, banks, and merchants.  Read the paper here.

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President Barak Obama signed into law on May 22, 2009, the Credit Card Accountability Responsibility & Disclosure Act.  This sweeping legislation has significant implications for consumers, banks, and many businesses who issue gift cards.

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Pricing in the credit card processing industry is very complex and most merchant statements do not make it any easier to understand. There are so many technical and industry laden terms (Interchange, qualification tiers, downgrades, batch fee, ACH fee, authorization fee, settlement fee, AVS fee, PCI compliance fee, etc.) that even a sophisticated financial manager can get cross-eyed. So how do you really understand your true cost of credit/debit card processing, and then use that knowledge to ensure that your company is getting the best value for merchant services? This article will help you understand and manage the effective cost of different payment cards. Continue Reading»

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Optimized Payments Consulting recently wrote a second article for the Association for Financial Professionals (AFP) about the value of leveraging PIN-debit cards to lower overall payment processing costs.  This article appeared in AFP’s Exchange magazine in April 2009.  You can read the article here.  

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Optimized Payments Consulting recently wrote an article for the Association for Financial Professionals (AFP) that discussed its framework for reducing payment processing costs.  This proprietary framework along our methodology and custom software has helped companies with millions to billions in credit card sales reduce their processing fees.  This article appeared in AFP’s Exchange magazine in March 2009.  You can read the article here.  

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Most businesses know the name of their credit card processor or merchant services provider based on the name listed on their monthly merchant statement. What most businesses do not realize is that majority of the companies selling merchant services are resellers, independent sales agents, or referral agents who act as intermediaries for large payment processors. To get the most out your merchant services relationship, it is helpful to understand the makeup of the payments industry. Continue Reading»

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Wholesale clubs like BJ’s, Costco and Sam’s provide fantastic value when you want to buy in bulk, but how competitive are they when you are looking to buy merchant services for your business? Continue Reading»

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The use of ATM or PIN-based debit cards in the U.S. has been rising faster than signature debit cards and credit cards over the past decade. Merchant sales volume for PIN transactions has been growing 21% annually since 2000, slightly ahead of signature debit and significantly ahead of credit cards. And, according to a recent study by Star electronic funds transfer (EFT) network, consumers preferred PIN debit over signature debit, with 54% opting for PIN and 38% for signature. This trend is great for both consumers and merchants. Continue Reading»

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We get a lot of questions surrounding the ability for merchants to charge their customers a surcharge or convenience fee for accepting credit cards. This post will attempt to provide a thorough overview of when convenience fees can be charged according to card regulations.  We have also included excerpts from Visa, MasterCard, Discover, and American Express of the specific rules that govern the application of convenience fees.  And if you are really interested and want nighttime reading, we have also included links to the complete operating regulations of these card brands here. Continue Reading»

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