Credit Card & Payment Processing

Credit Card And Payment Processing Is Complex.

Banks don't make lowering your payment processing costs easy.  They do their best to keep it a mystery.  Depending on the type, risk  and how the transaction is processed, there are over 250 different rates and fees you could get charged.   Considering these fees can take 3-5% of your in store, phone and online sales revenue right off the top, management of these fees are critical to improving the bottom line.  "EBPP", Electronic Bill Payment and Presentment is another area which can generate huge costs, extend DSO and create additional risk.  Managing how your company handles PCI risk is becoming increasingly more important as well.  We can help.

Banks charge your company a number of transaction fees including interchange and gateway rates.  These rates can be negotiated.  In addition to what is negotiable, the card companies assign different percentages based on a number of factors including:

  • The type of transaction, (internet, phone, In store etc...)
  • Payment method (debit, electronic check, credit, ACH etc...)
  • Other risk factors decided by the banks.

There are over 250 different transaction costs assigned based on a combination of the above factors.   To simplify, the transaction are put into several risk and costs buckets.

(example types and rates).

  • Gold (In store purchase, secure terminal, drivers license validation, etc...  2.5%)
  • Silver (Some missing information, or validation but still lower risk  3.5%)
  • Bronze (Internet transaction, no cv number collected, poor authentication 4.25%)
  • Hi Risk (missing large amounts of information, non secure transaction, high risk 5%)

In addition to maximizing your negotiated rates, it is possible to put more of your transactions in the lower risk and cost categories based simply on minor changes in process.   Due to the large difference in transaction costs, the impact could mean a 25-40% decrease in transaction expense, put back on the top.

There is a rapidly growing risk to your business; card number theft.  With the increasingly sophisticated computer hackers trying to steal your card data, maintaining airtight security of your customers credit card information is imperative.  Why does this matter?  Due to the cost of losses and creating new card numbers for their clients, Visa, MasterCard and others can charge your company as much as $1,000 -$3,000 per card number stolen.  This means your liability could be as much as $3,000,000.00 per 1,000 card numbers stolen from your systems. In the credit card industry, there are different levels of PCI compliance.  PCI compliance is simply the standards the industry has established for how secure your customers card data is.  What level of certification your company is can affect your potential liability.  In order to be certified, an outside consulting company, specializing in PCI, has to audit your systems, servers, processes and security.  Due to the size of the risk, best practices dictate that these audits are performed at least once a quarter.  The cost of the infrastructure, maintenance, and audits can easily exceed $75 - $100,000 per year.  Even then, you are still liable to the credit card companies.

Electronic Bill Payment and Presentment, EBPP, can also eat away at your profits.   According to Aberdeen:

  • The cost of generating an invoice costs approximately $10.00
  • The cost of customer service call to discuss an existing invoice can cost an average of $26.00
  • The cost of resending or faxing an invoice to a customer can cost an average of $7.00

How your company manages these processes have have a dramatic impact on your total cost.

Optelcon's industry insiders and subject matter experts will work with your team to minimize these top line transaction costs.  As part of our service Optelcon will:

  • Audit your invoices and contacts to insure billing accuracy.
  • Analyze your EBPP (Electronic Bill Presentment and Payment) processes and recommend ways to improve your companies DSO.
  • Apply our proven Rapid RFPtm process,, benchmark your costs against market and help negotiate better rates.
  • Review your processes and recommend any changes, which will result in a cost savings.
  • Review your current PCI liability and recommend ways to minimize these risks.

Optelcon's deep subject matter expertise combined with our market rate database will provide rapid results.

Optelcon's primary goal and compensation is linked directly to reducing your costs while maintaining or improving quality.

Contact Optelcon today and start improving your bottom line tomorrow.