Sign Montana Banking RFP Simple

Industry sign banking montana rfp simple

[Music] hello and thank you for participating in today's webinar preparing a request for proposals for credit card processing services our speakers today are Dennis Hoyt and Tim Chitwood tim has more than 12 years of experience providing financial reporting and assurance services as well as consulting on complex business transactions in internal controls he worked with family and private equity owned businesses ranging from transportation and logistics companies to multinational manufacturers and retail organizations spanning multiple states recently Tim assisted with developing a new benchmarking tool for independent grocers he is a member of the American Institute of CPAs Missouri Society of CPAs and is a Certified Fraud examiner and member of the Association of Certified Fraud examiner's Inc at this time I'd like to introduce Tim Thank You Luke and thank you everyone for joining us today with the continued increase in competition within the retail industry several of our retail focused clients have continued to evaluate the cash inflow cycle to ensure effective and efficient processes are in place we have asked Dennis hoy to present today and going through the process of evaluating a credit card processor dennis is president of hawaii treasury services and has consulted on treasury engagements with retailers and brochures nationally for over 20 years in his practice he has worked on and led numerous Treasury related projects including financings cash management reviews credit card RFPs electronic payments risk management financial modeling and forecasting dennis holds an MBA is a CPA and a certified Treasury professional at this time I'd like to introduce Dennis Thank You Tim hi everyone thank you for attending the webinar as Tim mentioned over the last 20 plus years I've performed credit card projects r.fp type projects many times retail and other industries the purpose here today is to show you my approach in developing a credit card RFP mostly for medium and larger corporations a small business very small business may not want to go through this route just due to some of the work involved upfront although the presentation itself will give you many ideas to consider in discussing with your processor you are both incumbent and candidates high level a little bit about me against Howe proprietor in Grand Rapids Michigan Treasury consulting for most companies of all sizes but mostly focus on small and middle market again mostly retail related national practice and a member of the National Crozier's Association what is Treasury consulting outside of the daily management of cash most treasury workers project related financings develop in cash forecasts or reporting models RFP projects of course work out situations for maybe struggling companies do cost-benefit analyses and help implement uncertain new projects and their new products I'm sorry and then due diligence and integration of functions maybe on an acquisition basis again on a large for a large very large multinational say a lot of these processes or functions are performed internally because they've got a lot of they've got enough staff to do that but again I work mainly with those that are a smaller and middle market that don't have that expertise in-house getting on alternatives to an RFP there's a few you could do you could resize with your current processor obviously re-signing is the easiest but it's not necessarily going to fix any problems and it may be as a result it may be the most expensive in the long run or you could just give other processors your candidate that is your current statement and let them propose the problem is you may be it just be giving them kind of a snapshot in time and that also may hide some problems and true volumes it also requires the candidates to make many assumptions and then also you may not be fixing any problems or you could just let the processors present some of the candidates come in and present what you'll do there though is find out they've got just phenomenal presentation skills I remember one client a few years back we had gone through the RFP project and it was you know down to the point where we had three the three finalists we invited in the incumbent two candidates we invited in the first candidate came in and he just wowed the audience he was very very good at what he answered all the questions everything looked great so he one of the other client people suggested that we just kind of stop everything right there and bring this guy on board hire the UM that company and I said well candidate number two waiting on the lobby right now so let's hear what they have to say so we did that and then after candidate number two spoke this same person at the client said yeah I'm glad we waited because I want to go and now go ahead and and bring this company on and I said I can't go okay we've gotta no wait another hour and what's let's hear the third one so but like I said the the bottom line is they're they're very good at prison presenting and very very good at saying yes we can do that you need to be leery of some of those things or you can do the RFP project the RFP route requires more effort upfront but just one time because once you do it do all the work upfront one time then the next time around be it three years five years six years down the road you can basically brush off that template the information and use that again man it should also get you the best processor for your business and the best pricing so that's obviously well that's what I recommend okay why else would you do an RFP well you know that mortgage ad the I don't know if it's one or two dummies you know but it makes you know where the banks have to compete for your business the same thing here it makes him know England compete for your business in an orderly way that you can dumb you know monitor another client going back a few years now I talked to the CFO this was a retailer out west and talked to the CFO said let me do an RFP for you for credit card processing and he said well the controller had just talked to the incumbent processor and the incumbents said this is as low as we can help pricing wise so again okay I said to the CFO again let me do an RFP for credit card processing for you so we said okay go ahead and do it I did that long story short the company ended up saving about three hundred thousand dollars over the term of the contract of a new contract and the kicker was they stayed with the current processor so that current processor lo and behold was able to go a lot lower levels the playing field basically you are going to give all of the candidates the same information that the incumbent has except for maybe the pricing that you're paying the incumbent right now so if the playing field is level it's it's a fair way to do it and again keeps everybody gives everybody the same amount of information and helps them in that regard helps merchants know their business better helps you learn about some of your own process and problems you and your position may not be talking or you know your IT people or whatever or your store ops people whoever maybe may not be telling you and now that they're hiding anything but they may not just be telling you some of the problems they're having with the current processor and this helps you become aware of those things and also the easier to compare proposals because you're given them all a consistent format to respond to responding both in pricing and non-quantitative issues okay can you make a change a few questions to ask yourself if you should really has anything changed since we moved to our current processor hardware or software security etc I'm guessing here the answer is yes on some of these and that's just looking at things from your side what about changes that the processor may have that is one processor may buy another or decide to move into or out of your industry both any of these could mean better pricing for you any problems with our current card processing you know problems downtime customer service issues reporting chargebacks EMV security issues you name it there can be quite a few different things they're authorized ations etc are you getting the best pricing you know going back to the said about the TV mortgage banks compete you and sort of thing are you getting the best pricing and RFP will help you make sure that you are going to get the best pricing that's out there and again can you switch processors if your contract expires in the next 12 months it's definitely time I would say to consider bidding out the business if it expires two years now you want there's probably no hurry to do that but like I said within 12 months I would definitely do that the other thing you've got to do is watch out for the auto renewal clause and the auto renewal clause your agreement deadlines there's two of them basically the contract expiration date let's have 12 31 of 17 let's say June 30 of 18 and also the notice date or timing where you need to get back by which you need to tell your current processor that you're not going to automatically renew with them that would be maybe say um say if the contract expires June 30 of next year then the auto renewal clause maybe the date maybe I'm March 31st of next year something like that anywhere 30-day is to 180 I've seen another client and again the processors your incumbent they're not going to ask you for what you want to renew they're just going to rely on the auto renewal clause kicking in because you weren't paying attention to them the expiration date of the contract one time a client and this was in Ashland Grand Rapids here I had lunch with the CFO and we're talking about credit card processing after lunch he sends me the contract to look at and I looked at it I looked at the expiration date and the contract or the auto renewal date and looked at my calendar look back at the contract back at the calendar it's headed that etcetera did that a few times turns out that he had three days to get back to the processor to give notice that they were not going to renew so you know I told him that they did that and then none went the RFP round save money that way so but it the auto renewal it can be if you let the contract Auto renew it could be that it auto renews on a month-to-month basis or maybe even successive one to three year periods but the thing is even if it's month-to-month whatever you're going to be staying at your current pricing which is usually going to be higher than you could get by going through the RFP and competitively bidding the deal out okay we are at polling question one how long have you been with your current processor pretty new just a year maybe two to three years four or five years more than five years or you're just not sure okay half of you pinging with your current process more than five years two to three you're probably still within the contract period four to five it's iffy more than five years you may want to consider unless you've done that recently okay you are now 25% on the way to getting your CPE okay ah the outline here what we'll do this is what I'll cover today again this is a full-blown approach I've used many times again more work upfront that it will save you money and you can customize the RFP listen what I say and then you can make changes as you see to fit your needs and again keep in mind here that I might use credit card but it really includes debit and other types of cards that you would accept as well okay the approach here's what I do roughly seven steps in my approach today I'm going to cover the first four in some detail the last three steps are mostly self-explanatory and I can talk to anybody offline about those later on okay on the information in developing the information you want to send to the processes you want them to know everything about how you process except for the prices you pay currently okay number one keep in mind that's confidential information between you and your card processing vendor anyway the purpose is to give the other candidates the same information as the incumbent so again everybody is on the same level playing field as the incumbent but again also it's also designed to give you the best pricing because they can remove any contingencies that can inflate their pricing for instance you know if they're you know if they don't know exactly how you process or other issues problems you have etc then or hardware you have what have you then they may need to keep their pricing a little bit higher because they're not sure of what other issue is that they may have to deal with in you know being your vendor but on the other hand if they know everything about your business or you know processing wise then they can come in with the with the thinnest pricing margins and hopefully you know you'll benefit that way and again by everything I mean dollars in transaction volumes chargebacks returns volumes by card type Visa Mastercard Amex discovered gift EBT etc the hardware used the software used and the version of the software how IT processes concerns you have with your current set up potential changes forecasted volumes again everything you want them to know again everything except for the prices that you pay ok gathering the information timing if you can I'd say start up a good six months before you'd convert ok or maybe not quite six again a month or so to prepare the RFP these are elapsed times not actual time spent maybe a couple times just a couple months to select the processor and a couple months to convert so it's you know maybe six months before you need to be converted over and obviously holidays or a consideration to this can be done faster and again these are elapsed times not total time spent on the team basically everyone at your organization that has anything to do with card processing needs to have a voice in this obviously IT department store ops accounting Treasury loss prevention internal audit legal you name it if they've got some kind of finger in that pie they need to be included on the team authorization settlement in detail for all cards with security that is involved for all channels you know whether it's brick-and-mortar internet even trade shows things like that or maybe a kiosk when heavy recent and projected dollars and transaction volumes in detail you'll want to present that or I'm summarize you'll prepare it in detail and some and give them summaries and then also possible problems you might have examples would be slow authorization lace settlement high prices charge backs poor service downgrades anything EMV related okay on the candidates I would say select five or six processors that should be enough now there's an exception here a client I had there were a federal government agency and they I prepared the RFP information and questionnaire for them things like that and and then they put it with some other information sent it out and kind of took it from there like I find and they got back to me and said I found out that they had selected or they had used 23 candidates the incumbent 23 so there's a total of 24 and I thought this that's ridiculous why so much I mean I didn't say that and so I went back and talked to my said why I'm why did you have so many and he said well there are federal government agency US federal government and they will one time they didn't include you know another type of RFP for another product or service they didn't include certain you know a certain um possible vendor or - for whatever reason and they ended up getting a phone call from the congressional representative of that vendor and he said it was a very unpleasant phone call so he said from now on they tend to do a little bit on the overkill side and you know ask quite a few de to bid out so anyway but unless your federal government I would say five or six okay so who do you invite current processor you definitely want to include the current person even if they're a bit of a problem in worst case they may be the only one to respond highly unlikely but anyway and you'll want them anyway you'll want their pricing as a benchmark because remember if you'd stay with them you don't need to convert see them after you you may have other issues but so anyway I would definitely include the current processor your cash mana ement Bank if not your current processor because if you were to go with them that may get you a day of availability one day sooner of availability which is important you can quantify them other banks you've been talking to them maybe your organization may be working with down the road let's say you're talking to some bank that you're going to be investing with or is going to sell you some other banking product or whatever I would definitely include them okay on the other hand be careful of others that you're going to be inviting to the party just because some processor has been contacting you it doesn't mean you need to include them remember the more processors you include the more work for yourself in answering their questions and reviewing their proposals so that's why I say five or six should be plenty okay the RFP package the cover letter I'd keep it fairly simple one to one page you know here's the project goal here's the project contact person a little bit of information about us high-level and maybe include an end a nondisclosure agreement because you are going to be providing them some confidential information they may come and they'll tell you also their proposal is on confidential as well so keep that in mind the timetable I've got an example and then on the next slide that answers a lot of questions that the processors would otherwise I ask current pricing or processing I'm sorry the write-up and flow chart to show how you authorize and settle your transactions on a detail level the security involve the hardware the software etc again volumes to be provided in detail for the most recent it's a full year or twelve months maybe an estimated current year and then future projections you it's a moderate level of detail you'll have a full detail on an Excel model you would be preparing for yourself with them you'll get kind of a a summarized level of that also potential changes to authorization settlements are software hardware security things like that and then finally a questionnaire and we'll get into that a little bit later along with some problems any problems you're having and that want two of them to address okay here's a sample timetable after sending out the RFP I typically give the processors a couple of weeks to review the information get back to me with their questions and because they always have some and then I'll answer all the questions send the Q&A back to everybody against what everybody's on a level playing field and then when I'm sending out the answers to the questions I'll ask them for their proposals in a week so they'll have had basically four weeks to develop their proposal which should be plenty of time now what candidate may ask they may come back proposals are due November thirtieth or whatever they may say I'm sorry can I get it to you and December 1st December 4th or whatever I don't have a problem with that because I can't you can't whatever analyze all of the proposals at the same time so if somebody's a day late or two as long as they let me know in advance that's I don't have an issue then remember that federal agency that I was telling you about something else they did they again they sent out about two dozen RFPs and got three responses back they called me up and asked me to find out on so I called a couple of processors and again I didn't send out the RFP just put the RFP package together and let them send it out and so what the processors told me was that they had this this agency they took they said they were fine with my RFP but what they did was they took that the agency did and embed it within about a hundred pages of government regulations and so at that point a lot of the processors told me they just wanted to take a pass it just wasn't worth it to them okay fine so I get back to the agency and my contact I told him that and he said yeah that they've heard that before okay great and then I said by the way three did any did you get any others that's all you got and he said well no actually we got two others I said I really what happened and he said that well the deadline in this case was Wednesday at 2:00 p.m. Eastern Time and one of them came in late two of them came in late one came in 4 p.m. that same day they rejected it because it was late and the other came in much later came in on Friday of that week and so I'm and so they rejected those and I'm thinking well you know they could have just probably no they could have just rejected the two very best proposals and we'll never know but anyway like I said unless you're of government agency don't tell the processors I said that but if they want to be a day or two later so that doesn't bother me last thing on the timetable if you want to change that timetable certainly feel free at some point I mean once you're in the middle of the project and you want to do so but make sure to notify all the processors of them okay next polling question here when it's time to renew your contract how do you determine the best process for going forward you know just really sign with them with your incumbent give a few processors your statements and ask for the best pricing ask for presentations only RFP project etc or just not sure okay um here we go so half said that they just give the processors your statements again you might be I don't know if you do that with other vendors but you're giving out confidential information and all your going at that point is getting those processors to come in and just beat your current pricing that may not be the best pricing they could otherwise offer so keep that in mind you know just residing with the current processor again that um may not give you the best pricing and there may be some other issues you have so anyway um okay next question here on the current processing again part of the RFP package and the current processing right up again by sales channel even little trade shows you want to have them because you same locators you know the connections we use the hardware we use etc etc again the purpose of this if they know exactly how you process they're in a better position to propose their best solution and address your problems so you want to include what cards are accepted what steps specific steps you take you the merchant take at the store level again at corporate etc etc again what store software software version hardware you use how and when you settle the transactions EMV status and your PCI payment card industry data security standard level and status you also want to include transaction timing such as when your latest time is that you send your settlement file to the credit card processor and again keep in mind time zones say you're out on the west coast and your stores closed at midnight if a processor candidate is or maybe your your incumbent for that matter is on the East Coast there are three hours ahead of you and if they're cut off for a settlement file is 2 a.m. then you're going to miss it because you're not done until 3 a.m. so again keep that in mind also in this write up with this write up with this summary I would consider a flow chart that show is providing flow chart of them shows all the information flowing back and forth you know the flows of data again readers used hardware software encryption issues tokenization things I clam okay um detail the best way to document your current total pricing is to build an Excel model that's what I do to input your pricing and volumes in detail the model again would show pricing safer 2016 by detail and volumes in detail you know gross sales returns chargebacks any other all the other fees you're being hit for and so that you build up and say okay here's the total and this agrees to what the charge the credit card processing company was charging me for 2016 do that for 2017 also you'll use this data really in two ways number one to summarize the volumes for the RFP package you know here's my total visa total MasterCard etc and then secondly you'll use the detailed pricing is to give yourself a benchmark to compare what you'd otherwise pay for say 2018 to what your incumbent and candidate B and C and D would charge you for 2018 so you can see price-wise who's going to give you the best deal okay credit card volume data so again all cards that means gift EBT debit cards etc give them data for your most recent year or you know it could be and let's say you're going to do an RFP start again you know or your for you want it your in place maybe your contract and this 1231 of 2018 so you didn't bark on this maybe in um July 1st of 2018 etc so what you'd want is you'd want to give them data for the most recent year which could be full 2017 or maybe the most recent 12 months and you'll have that from your current processor for year one data then you'd say okay in the project for for 2019 here's our best estimate and I'll show you this on the next slide here's our best estimate of volumes that will be you know dollars and volumes that we'll be generating on cards in 2019 and then you'd also want to say for 2020 and 2021 for 2020 we would expect your our volumes to increase by say 3% or decreased by 2% or what-have-you and then for 2021 the same thing you don't need to show detail just general increases or decreases okay one thing also you could provide a current statement but if you do I would strongly recommend that you black out or redact the pricing that you pay both your item pricing and your extended pricing okay so if you're showing and because then that will give them a better idea the candidates a better idea of the interchange types that you're incurring and paying for and maybe other fees that you're paying as well not the amount but the types of fees okay which again then can ask you or allow you to ask how they better help how they could better help your interchange lower your interchange rates and other phase etc okay this is what the volume summary would look like that I'll send out you know for the most recent 12 months of Akron you know actuals or best estimates you know that this is 2016 could be 2017 or where again by card type on the Left column I'll have the gross sales dollars and then the sales transaction amount so they can see average ticket and things like that again returns returns in grocery probably not real high but still I put those in there because you never know and then charge back its charge actually it also be pretty low but still I might put those in them and then again for the I'd have this in and then for year one again say 2019 I might show the same table but increase it again by you know three percent negative to whatever it is and then based on why just briefly why you're making that change and then again four years two and three twenty and twenty one again just say okay for those years you expect increase by you know four percent or one or whatever might be one other thing too if you're contemplating large store growth maybe an acquisition something like that mmm-hmm this would be the time to mention it not in any detail but to communicate that your volumes could increase significantly at some point so at that point you'd want to ask for some kind of a tiered pricing and by tiered pricing that's what I said okay based on you'd tell the processors okay based on old you know current volumes you know five hundred thousand transactions per year or whatever we also would like to get your pricing if our transaction count went from five hundred to six hundred thousand per year that kind of thing the purpose is the more transaction usually the better pricing so they might come back and say okay for five hundred thousand transactions here your pricing might be you know two cents per transaction or someone like that and but at once he has 600 it may be 1.8 cents or whatever okay so that's to your benefit conversely if you expect your volumes to decrease significantly and let's say you've got a hundred stores but your played in closing 15 of them in a year or 2 years you may want to mention that at some point and the reason I say that is they will come back once you decide on a processor they will come back to you and say that okay here's the our pricing is based on these assumptions which is what you give you gave them but at the same point you want to at the same time you want to make sure they're comfortable that that same pricing will work if your volume decreases by 15% or what have you because otherwise they maybe if you didn't tell them that they may feel free to I increase your pricing during the term of the contract okay potential changes again basically it's time to mention in the package potential changes to anything again hardware software new sales channels cards etc you name it anything you're going to be doing differently or might and I describe those as changes that are are in process currently mm-hm or may be likely in the next one to three years or being considered problems and other considerations any hot issues in the rollout that go badly for you any problems you might having this is where the operations people the IT people can give you some ideas you know reporting is an example from current processor service levels may be excess charge backs security issues fraud EMV etc in the questionnaire you know you're telling them this information but in the questionnaire then you'll want to ask them how they can help you solve those problems okay developing the RP the questionnaire okay so now they know who's in charge of the project when you want to receive your proposals how you authorize and settle in detail what hardware software's use the volumes processing changes you're considering and any problems you're having so now it's time you get to ask them some questions okay on this I'd start off by asking them for some kind of a executive summary they're just a couple pages or so moved their Pitt their position your specific industry things like that conversion obviously that's critical it's probably the most important aspect but it's sometimes overlooked you need strong IT involvement both in this section and later when the finalists are presenting security critical of course pricing you want that today I'm mainly going to discuss the pricing and then just kind of touch on some of the other issues and you can look at the slides a little bit later on your own polling question 3 ok what are your biggest concerns on this pricings - hi I hear that a lot or it's just hard to understand some of the charges returns or charge backs are a problem fraud compliance EMV conversion or maybe none of the above okay pricing gets 50% I kind of figured that fraud another 25 EMV conversion okay all these really again every one of these is probably a really good reason to consider an RFP to find out and again an RFP doesn't mean you have to switch at a minimum you're going to see what the pricing is out there what competitive pricing is and otherwise you're also going to be able this is the neat thing about it you're going to be able to get from other processors things they could do and it could be things they could do for you that you're incumbent cannot or will not for whatever reason so keep that in mind okay on the pricing again this is on the questionnaire unbundled bundled fees etc you'll want to ask for unbundled pricing that's the interchange also known as interchange plus it's the base interchange rates plus other fee detail problems with unbundled or maybe discount pricing is it's grouped by tier the mark-up is often hidden chargebacks and other fees are usually extra and then I'll tell you about that all the time but it may be best for business with small card volumes real small volumes okay they see is here the fee Basie's you want to be careful here when you're doing your calculations interchange is based on net sales dollars assessment typically on gross sales dollars authorization is ghost's gross sales transactions and processing is gos gross sales plus return transactions example of those if you sell a hundred units and get ten returns you've got a hundred gross transactions ninety net and 110 total transactions and again each one of these is priced on a different fee basis or many of these are again on interchange I'd ask in the RFP ask for a schedule of interchange pricing prices typically change twice a year interchange pricing not ll of them but some are added and some are changed or disconnect not discontinued what have you typically it will change every April model October years ago there were maybe 50 25 to 50 different classes of interchange and rates now there's a couple hundred or so large volume increases again ask for price breaks if you expect your volumes to increase significantly another one is ask how and when or rather when the new rate would be calculated you would think and let's say again you start off in January 2019 and in June of 2019 you increase your volumes through acquisition whatever it is by twenty percent so you would expect at that point that you would be about your pricing would be going down from two cents to one point eight cents for transaction no it doesn't always go that way oftentimes you'll see that in the agreement or in the contract the processor will say after 12 months of the new pricing then you get that lower rate or after 12 months of the new volumes the higher volumes then you get the lower rate and that's you want to make sure that that's you don't want that you want to be able to start and become getting the benefit of that lower pricing as soon as you want increase your rates or increase your volumes other fees non standard reporting chargebacks equipment rentals things like that and timing something else to consider the payment timing do you get your funds in two days or three do you pay fees at month end or ten days after that will make a difference in your cash flow some processors may take fees out on a daily basis others might take them out say five days after month end you know obviously the one five days after month and that gives you that the float on the on the fees and then others you may see that again you might get in some cases typical you know your incumbent may giving you get it your funds on let's get you your funds on two business days and someone else made for whatever reason be able to do it on one business day maybe it's your cash management bank or something so that's something else to consider as well okay I'm gonna have to go through these next slides a little quicker here we'll just have a few minutes left on the questionnaire vendor qualified you may ask him are you able to process to our exact specs required for your um our communication software and they may may give you an answer says we expect to be by q3 of 2018 okay that means no they can't they might be able to but they cannot so just be aware of that next one on the settlement issue daily cutoff timing again like my other example earlier was important depends on where you are low I'm so and so keep that in mind especially if you're in the West Coast reporting ask for reporting samples they may charge extra if they need to develop specific reporting for you probably they will not need to but be aware of that conversion no question this might be the overlooked the most overlooked part of the RFP you want to find out as much about conversion now and during the presentations that you can service quality again you want to know what issues there might be if the systems go down a big plus also is if they'll review your interchange for down grades to save you money going forward maybe you can get them to do that once a year whoever signs up with you security again security and conversion by far the two most important areas if you can't convert you've got real problems and people lose their heads on that and security of course you don't want to be there either disaster recovery this important is important known for fair prepare for but they pretty much all should have pretty good answers for them ok something else on the vendor profile for references just ask how many they know right or how many they have that has similar demographics to you you know your industry your size your similar hardware software use things I clap they won't give you those names now and that's fine but just tell them to be prepared because if they've become in the safe top three candidates or so of it you don't want to know what they what they can do for you meaning what they have done for others other areas for consideration again this is where you want to ask them by your concerns potential changes that type of thing ok so these are the kinds of areas of questions that you have and now we're on polling question for the last one okay how often does your process or meet with you discuss issues pricing saving money security processing exceptions etc now once per year every two three years we've never had that conversation or you just don't know okay every two to three years that wins out and never had a conversation not so much um I get you think back to it when EMV was being implemented was your processor did they have your back or did they not so you know things like that just kind of keep in mind okay you've prepared the RFP sitting out to some good processors got their questions now you're ready to get their proposals in two areas you want to compare and I need to go through these kind of quickly him pricing and qualitative factors on the pricing remember you head in there you're building an Excel spreadsheet that is going to give you say 2017 pricing for it'll give you you're giving yourself and showing yourself pricing detail and volume detail that adds up to the total amount you'll have paid your processor in 2017 then in 2018 the next column over you'll have 2018 volumes and the 2017 pricing meaning oK you've done nothing for 2018 for 2019 again I'd say okay that would be the first year of a new contract that's where you want to say okay 2019 volumes and again stick with your 2017-18 pricing assuming you know you don't make any changes and then the next column over would be your incumbent with 2019 volumes but their new pricing if they're able in the RFP if they can respond with better pricing okay and then the next columns over would be again 2019 volumes but with the individual pricing detail from each of the incumbents and then you'll total that down to come up with a total pricing for a year one and for everybody but the incumbent you want to make sure to include your year one external conversion costs you know communication lines setup fee hardware on-site assistance whatever that might be and if you can quantify any internal conversion cost go ahead and do that as well but then also adjust again for adding subtracting for timing differences for both receipts and payments of fees like I'd mentioned before okay same thing here again you've got your benchmark number which is going to be your 2019 volumes and your 2018 pricing that's your benchmark volume and you want both your incumbent and the candidates to beat that so you'll be comparing that then you'll have that total and then for years 2 & 3 you'll increase the pricing again by the percent volume changes you stated in the RFP remember you said 2020 will be 3 percent higher and 20 21 1% higher etc etc but then and then you'll wanted but make sure you eliminate your one conversion cost because you won't be paying those in your 2 and 3 and then you want to discount those future costs whether it's three or five year order of the contract discount those back to and obtain a net present value and then that way you can say okay who's the cheapest who's the best the cheapest I'm sorry the cheapest may not be the best but you'll know pricing wise where they stand and later on you'll want to confirm those with the processors the ones that are the finalists you want to confirm the pricing make sure that you nor they made any mistakes on them because I've seen that happen and then the other areas for consideration you can see these here again I lined out receipt and payment timing because you can quantify that so that should be in the other section here again you're comparing your current processors abilities to the other candidates and this is more subjective it'll require some back and forth on answers and again in the pricing you wanted to see who is the best who had the lowest price or second lowest etc and on this it's more related to finding out what processor or processors cannot provide the services you need you know due to system incompatibility is or reporting conversion etc okay and then from here you're going to go ahead and narrow it down to your best two or three and next okay summary I'm going to go through those real quickly okay so here we go in summary again main thing don't leave everybody anybody out at your company that's involved with credit card processing they've all got a mistake in this again show the detailed volume history processing information in a detail and you're going to compare both the quantifiable and the non-quantifiable and then just ask for a few a few presentations and then also when you want to confirm the pricing that they've put that they've proposed with them and then when looking at their contract make sure you review that pricing and other issues as well okay questions look at something real quick here okay do you find that using a third-party company specializes in chargebacks tend to work as well as levering the chargeback specialist in question generally the third-party company it kind of depends on what they might charge you but you know that your processors charge back specialists probably there's no additional charge to that and they can give you some general ideas as to what you might where you're Amit you may be able to save money the third-party company will probably want to come in and get more detail and may end up charging a fee for that so I'd probably if I was to start I'd probably look at the my incumbent my processors charge back specialist and talk to them first and see what the issues were and then after that go back to the and if they're still if I if they can't help correct them and obviously you're gonna find out pretty quickly whether or not you can correct them or not but if they can't if you've not been able to correct them based on what you've said or you know changes you've made based on what they've done then I'd probably go to the third party you know another one what are the three most important areas to focus on in the RFP questionnaire number one conversion because if you can't convert properly which i've seen that happen you know you can't switch processors and you know there's a lot of questions that have to be answered into the bosses then after that security and security is only getting more important all the times we all know and then obviously pricing is probably number three what are the best ways to ensure security over transactions be EMV and PCI compliance make sure your processor it can help you there make sure your card readers have not been tampered with minimize the customer data that's stored on your servers and then also use tokenization encryption and have a managed firewall I would do that and let's see what else do we have here could we provide our current pricing to the processor candidates I do not because I don't want to publicize canta canta confidential client information when you do issue an RFP for other products and services you know ask yourself do you give out pricing but but if outside the RFP again maybe if a processor wants to see what you're paying again that's kind of a a call internally but again remember that that pricing you're paying is confidential information between you and your current vendor so kind of keep that in mind one more question what's the one or two areas maybe where you cut corners to save a little bit of time first minimize the number of candidates you send the RFP to you know instead of a dozen plus obviously four or five five or six something like that and because that reduces the time and answering their questions and in analyzing proposals because you've got fewer of each also you know sheet here review the pricing first because if someone's proposal is far too high then you probably don't have to go a whole lot further with them and I don't have any other questions right now Tim okay Dennis yeah thank you this is Luke and I just want to thank you Dennis for taking the time to share with everyone about what they need to look for when they conduct you know go through the process of requesting an RFP and so as a reminder to everyone if you would have any more questions or you know just to click on the question tab like hitting a GoToWebinar toolbar and then type in your question and if that question goes answered our presenters will follow up via email so if you have any last-minute questions you want to answer just go to that tool bar and submit those and then Dennis will follow up with you via email at his convenience thanks everyone again for attending today's webinar and have a great day thank you