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[Music] hi I'm mark Dunn your merchant services trainer in this video we'll discuss the essential points of merchant services pricing the most important thing you should know about merchant services pricing and fees is that you don't have to be the expert grana payments is competitive on price and has pricing experts on staff so if your merchant is already processing you should ask the merchant for two to three recent processing statements and submit these to granted payments will analyze the statements and prepare a competitive pricing proposal then we'll send the merchants the proposal which will show them how much money they can save by switching their processing to granted payments now pricing for merchant processing can be complex so we want you to understand the basics and so we'll focus on four major areas of pricing these are interchange pricing programs merchant discount and statement analysis so let's talk about interchange we've said in several of our other training videos that interchange is the mechanism for balancing the fees between the card issuing and merchant acquiring banks it's a bank to bank fee and it forms the foundation for merchant pricing the card brands calculate interchange on every single bank card transaction there are hundreds of interchange categories and deciding which category applies can be rather complex the fact is that interchange categories depend mostly on what type of card is used and what type of merchant is processing the transaction so let's look at a real world example if you use a Visa rewards card to buy two pairs of shoes at a shoe store you're creating a card present transaction provided this transaction to settle promptly the interchange category that applies will be what is called CPS rewards won and the current rate for that interchange category is one point six five percent and ten cents per transaction that means that if the two pairs of shoes cost a total of $100 the interchange fee is a dollar 65 plus ten cents for the transaction a total interchange cost of $1 75 now please note that this is not what the merchant pays this is the bank to bank fee for the transaction so if interchange fees are not what the merchant pays why do we bother to talk about them well it turns out that interchange fees make up about 70 to 80 percent of the final cost of processing to the merchant that's why qualifying for the lowest interchange rate is pretty important the next important fact about merchant services pricing is called pricing program with hundreds of interchange categories that might apply to any single transaction processors have attempted to simplify birchen pricing and pricing programs do that there are two pricing programs we want to discuss tiered pricing and what is called interchange + or cost + tiered pricing usually has three categories qualified mid qualified and non-qualified qualified transactions are card-present transactions mid qualified are card not present such as e-commerce and non qualified transactions is a catch-all category for transactions that don't fit into the qualified or mid qualified categories each category has a rate and a fee per transaction interchange + or a cost + is a simpler method of pricing with interchange plus a margin or markup is added to the interchange fee that is calculated for each transaction thus interchange plus the margin is what the merchant pays what the merchant ends up paying is what shows up on their merchant statement at the end of the month and this is what is called merchants discount don't get hung up on the word discount here that's just banker speak for what turns out to be a fee the merchant statement typically will show four basic types of fees these are processing rates and fees monthly services and fees event or program driven fees and other bank fees there are many different ways to create a merchant processing processing statement and they can be very confusing granite payments experts can take the merchant statement and analyze it in detail from this analysis granite payments will produce a competitive proposal that will save the merchants money on their monthly bill so let's go back to our most important point about merchant pricing you don't have to be the expert if the merchant is already processing get copies of their statements and submit them granite payments will do the rest thanks for watching this training video I'm your host Mark done