For toy store owner Buddy Wood, the one thing as familiar as Schwinn bicycles and Radio Flyer wagons is interchange. Wood has watched fees evolve in the four decades he has operated his family-owned store in Metairie, La.
During that time, processing charges have mutated from a simple flat fee to a jumble of rates. The fees are inconsistent, and his statements are labyrinthine and difficult to read, he says.
“I want them to tell me up front how much this sale is costing me, instead of this incredible investigation of how much each type of card costs,” Wood says. “If a debit card is going to cost me less, then I want to take that card.”
Fees may not be as simple as they used to be, but Wood’s frustration is emblematic of what other merchants say is missing from today’s complex processing environment: simplicity and transparency.
If they are going to stick with their current processors, merchants want independent sales organizations and agents to be up front with the fees they charge, and they want to understand the fee structure, merchants and industry sources say.
Knowing that the cost of retaining an established merchant is far less than acquiring a new one, retention boils down to educating clients and maintaining a two-way conversation with them, industry insiders say.
“I think the old tired saw is the one that’s going to serve you best, and that’s communication,” says Edward Slominski, a processing industry veteran and president of Anadyne Enterprises LLC, a management-consulting firm based in Gulfstream, Fla.
Merchants want to be kept in the loop with what is going on in the industry and how it might affect their bottom line. That means ISOs should communicate processing rules and regulations as they change, and they should hire knowledgeable agents who can get the message through to these merchants, says Rob Cason, president and CEO of Trust One Payment Services Inc., an ISO based in Villa Rica, Ga.
“(Merchants) are so confused with the rates and regulations. You have to be their consultant,” Cason says.
For Wood, the question is not who is providing his credit card processing but rather what his rates cost and how can he understand them better.
Wood brought on his current processor two and a half years ago after switching to a point-of-sale system that allows him to track merchandise. Previously, he had only a basic credit card terminal and had to run to his upstairs storeroom whenever he wanted to check inventory. His POS-system seller suggested switching companies.
“I didn’t have any strong loyalties to the other one,” he says.
But Wood does not have any loyalties to his current processor, either. He says he would consider switching if he found a processor that was more transparent about his fees and provided an immediate fee breakdown for each transaction.
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