Merchant Account Blog - Straight Pass Through » Business

Video: Merchant Accounts – What to Look For and Ask About, Part 2

Robb Lejuwaan — Fri, 29 Aug 2008 23:46:29 +0000

If you haven’t watched part one of of this two part series go here to watch the first video.

The theme of part two of this series is that there is much more than just price to pay attention to when shopping for a merchant account. Watch the video and take a look at my notes below to see what I am talking about.

In part one of this series I wrote mostly about rates and contract terms to watch out for when shopping for your merchant account. In this video I talk about characteristics you should look for in your relationship manager, you know the person you call when you need something regarding your merchant account. The one person who takes full responsibility for every aspect of your account. What, you did not know a merchant was supposed to have a person like that assigned to them? Wow, I hope you watched the video!

Here is are some characteristics to look for in your merchant account relationship manager:

1. Equipment Knowledge – of your software, terminals and gateways.

2. Interchange Knowledge -to ensure your transactions are qualifying or the lowest rates.

3. Proativeness – they go the extra mile ensure your merchant account installs and operates smoothly.

4. Reachability – each of my clients have my cell phone number and I ask them to always call me first if the have a question or an issue. I do not want them wasting their time on hold waiting to talk to some call center.

5. Communicator – Clearly communicates with all parties involved with your merchant account; even third parties like software and payment away companies.

6. Cool under pressure – when things go wrong with your merchant account is your relationship manager able to take the lead, communicate with you and fix the problem or do they run and hide from you?

7. Networked – Does this person have a business network they are willing to share with you for your benefit?

8. Value Creator – Does this person look for other ways to add value to your relationship, to your business.

Last, but not least, you should like them. Life is too short to not enjoy who you are working with just to save a few dollars.

Did I miss something in my list? If you think so, please leave a comment below.

Straight Pass Through as a Lifestyle?

Robb Lejuwaan — Sat, 12 Jul 2008 18:20:18 +0000

When I first thought up the name of this blog as "Straight Pass Through" (SPT) my focus was merchant accounts alone. It was all about exposing the truth behind interchange and how it affects a business’s bottom line.

However, in the year this blog as been up my understanding of that phrase has been expanding. SPT has become more of an overall business philosophy to me that can be defined in several words – transparency, openness, sharing, listening, and most importantly, serving. That last word really sums it all up, SPT is synonymous with the phrase, "how may I serve you" and really meaning it. This is just basic "golden rule" stuff, treating others as you wold want to be treated.

Would I want to receive pricing for my merchant account that is confusing and results in me paying more than I need to for your account? No way! So I only write up accounts with clear and simple pricing. Would I want someone to not share all their knowledge with me so they could make more money off me? No way! So I share everything I know can that can benefit my clients. You probably get the idea here, this is real simple stuff.

The philosophy is so easy and simple that I am almost shocked when I see the majority of sales people and businesses not operating this way. I know U.S. business culture is moving in this direction, but wow do we have a long way go. Yesterday I was talking to a industry colleague and he was complaining that honesty does not pay off, that potential clients always seem to go with the competitor that is acting deceptively. This type of thinking is probably one of the reason why SPT is not lived out more. People feel like they must compromise their own values and ethics to be able to survive.

You can probably guess I do not agree with this line of thinking at all! In fact I am completely contrary to that line of thinking. I believe the fact that most do not operate by the idea of SPT is a great thing. Why? Because it allows me to distinguish myself from the pack. Living the SPT business life style enables me stand out and feel good about what I am providing my clients.

Speaking of clients, SPT allows me to attract the type of clients I want to work with. Are you familiar with the saying, "like attracts like?" My experience has shown me this saying is mostly accurate, we tend to attract people into our lives that share the same interests and values. So if I am deceptive and greedy in my business practice, I will attract clients of the same ilk. Many of my clients end up becoming friends and I truly enjoy serving them because they tend to operate by SPT.

I am going to stop here, I do not like to write long blog posts because they do not get read! In closing I want to say two things. First, if you have not tried to live the SPT lifestyle, try it; but don’t jut dip your toe, jump in with great passion and strong action. I guarantee you will not regret it. Secondly, if you have any questions about this topic, contact me . I love to talk about this stuff and always enjoy meeting others who work this way.

The Three Price Points of a Merchant Account

Robb Lejuwaan — Sun, 08 Jun 2008 20:42:00 +0000

How challenging can managing a merchant account be? I review 5 – 10 merchant account statements each week and almost everyone one starts out looking like it is written in a foreign language! Some statements have fees from three separate months! Other statements are extremely vague and seem to be intentionally hiding information. So the answer is that managing a merchant account can be very challenging.

Three Simple Things

Below I have included three price points for you to focus on as you manage your merchant account.

#1 – The “Front Rate”

Also known as your “base rate,” or “advertised rate.” The key thing to understand here is this rate is only good for standard consumer cards that are swiped. You may have noticed every transaction where the credit card is not present or is a rewards or corporate or a world card do not come in at the base rate, right?

As a result, many of my clients, before they come to me, have a low base rate but their effective rate is much, much higher.

Bottom line: The front rate is used to draw you to sign up of for a merchant account. The lower your front rate is the higher your back end fees are.

#2 – The “Back End Fees” or “Surcharges”

This is where most of my clients have the greatest confusion and frustration. Visa and MasterCard have something called “Interchange.” This is a guide for surcharges to be added to your base rate for transactions that do not have a standard consumer card present.

The norm in our industry is to take these surcharges from Visa and MasterCard and add percentage points before they are passed on to you. For example, if you have a retail account and a customer calls in an order with a standard consumer card, Interchange says the surcharge should be .31%. However, what I typically see on a competitor’s statement is surcharges of .81% or .91% or even 1.21%! So the merchant account provider is making an additional .50% or .60% or even .90% on each of those transactions.

You may have noticed this type of fee on the last page of your monthly statement. The list of surcharges is typically confusing to the point of frustration and most of my clients previously just paid the fees because it would take too much time to figure them all out.

So what is the solution? How can you get rid of these hidden fees? The answer is something called “straight pass through.” What this term means is having the Interchange surcharges passed through to you at cost.

What? Is that even possible? You bet it is! That is our niche at Cocard Synergy.

Normally, straight pass through is only made available to large corporations such as Macy’s, Costco and
Wal-Mart. However, we give it to each of our clients.

Bottom line: You either have hidden fees or you don’t – make sure you have straight pass through and watch your fees decline immediately.

#3 – Qualification

If your machine is not programmed correctly or you have employees that skip terminal prompts you are definitely paying more than you should be on many of your transactions.

Here is a classic example; a customer with a standard consumer card comes in and buys some widgets from your company. When the terminal prompts your employee for transaction ID the employee skips to the next prompt with out entering any information. The result? An increase of .76% on your surcharge! Ouch! And that is at straight pass through; what if your surcharges are being padded?

So every statement should be reviewed to see if prompts are being skipped or if the software or terminals need to be reprogrammed. However, if you do not know Interchange well, you will not be able to do this.
Qualification guidelines are just too complex for the person who has better things to do than study the interchange book.

Bottom line: If your merchant account provider does not review your account for qualification problems at least quarterly move on to one that does.

Summary

If these three areas above are in order, then your overall “effective rate” will be as low as it can be.

The interesting thing is that 9 out of 10 people whose statements I review do not have straight pass through and have qualification issues but they love there front rate. When I call them back with an offer to lower there fees by 10% to 55%, sometimes while increasing their front rate, they are surprised. But that is typically how it goes.

Testimonial #2

Robb Lejuwaan — Wed, 21 May 2008 23:07:43 +0000

I received a very nice, unsolicited testimonial today. This is from my main point of contact at one of my favorite clients, Horizon Moving Systems in Tuscon, AZ. This is what Susanna Main e-mailed me after we fixed an issue with their virtual point of sale:

“Robb, this is why EVERYONE wants to work with you. Because you are so good at what you do and your customer service is excellent. Thank you for all that you do for Horizon and for all the help you give me. I appreciate every little bit of it!! Have a great rest of the week!!”

Testimonial #1

Robb Lejuwaan — Fri, 16 May 2008 15:08:15 +0000

I just asked for my first testimonial from a client of mine. After reading what she wrote I think I need to start asking for more of these! Allow me to show off a little:

"I have been in the business world for over 25 years. In that time I have had the pleasure (and pain) of dealing with many vendors, tech support people and service reps. Robb Lejuwaan, from US Merchant Services, has renewed my faith and set an exemplary standard for customer service. When he first called, quite frankly, I didn’t want to be bothered and was not only suspicious of yet another sales pitch but was busy and didn’t want to even consider taking the time to switch to a different company.

He never pressured me, was patient and very professional. After 6 months I decided he deserved at least the chance to explain his services. From then on it was quick and painless! He seamlessly did the set up, it didn’t cost me any time or money except for the 6 months of savings for not doing it sooner.

I would definitely recommend Robb Lejuwaan to any business.

- Maureen Lee / Maryhill Winery , Goldendale, Wa.

The End of Business as Usual

Robb Lejuwaan — Fri, 11 Apr 2008 22:31:58 +0000

In recent weeks I have come to learn about a business person who works in one of my key industries – wine. His name is Gary Vaynerchuck and he owns a retail wine business in New York and is the world famous host ofwinelibrarytv.com.

I was recently watching an interview of his where he spoke about his transformation from old school business thought to business, or web, 2.0 style thinking. Don’t have any idea what I am talking about? First watch the video below as Chuck passionately communicates his basic business philosophy and then go buy The Clue Train Manifesto and you will get a glimpse of where business is headed.

I must say this stuff excites me! Providing customer service that goes well beyond what is expected is fun and makes me feel good inside. What about you? Do you buy into to this stuff?

Interview: Marketing and PR Expert Don Simkovich

Robb Lejuwaan — Thu, 03 Apr 2008 17:19:42 +0000

When I first started writing this blog last year I connected with a fellow new business blogger, Don Simkovich. We lost contact with each other until I saw his blog recently on Technorati . So I contacted him to see if he would allow me to interview him in his areas of expertise, marketing and Public Relations. He was nice enough to say yes and below you will find the interview with some great information on how to grow your business:

Don, tell us about yourself, who are you and what experiences have you had that have led up to where you are at today?

I’ve come to believe that marketing is a “blue collar” profession. Sure, you plan. But over the years I’ve discovered a lot of activities succeed with sweat behind them.

I have a wide-ranging communication background from marketing small to medium-size businesses to building programs for non-profit organizations.

I’ve written across media including radio, newsletters, video and web.

My master’s degree in communication management gave me a framework for understanding how to promote to stakeholders within an organization as well as to target customers.

I also believe the first place to start is helping an organization understand its goals. When I created media for different entities nothing was more frustrating than thinking the business direction and process may change. Getting this clear is a foundation for following up with all forms of communication.

You have a blog; do you think they are necessity for a business to have?

A blog is helpful if it offers valuable information for the target customer or target audiences. A web site itself can have interactive components so a blog can be an effective add-on. A blog can be an extension of the business’ expertise and personality.

Do you have any tips for creating a successful business blog?

The same principles apply for all blogs: easy-to-follow design, compelling headlines and valuable content. A business needs to build “community” which may include giving a voice to select vendors, employee departments and customers.

If you start a blog, make a commitment to carry it out for a period of time like at least 9 months to 12 months. You can then compile select posts and create a report that can be downloaded from your corporate website.

What other forms of new media do you suggest a business utilize to promote their business?

Try print. Seriously, there are times when I want to get someone’s attention so I’ll snail-mail a letter to them or fax instead of use email.

I would start with asking: what does the business want to achieve? What is the problem it’s trying to solve or a need to address (that’s the heart of marketing)? Mini-web sites for product launches with interactive forums are one answer. Limited use of Flash to present a topic and package it on a usb drive is another angle. There are so many variations of media available. But before money is spent you have to ask yourself “what are you trying to achieve and who are you trying to reach? How will they best understand and respond to your message?” The answer is there’s more than one way. That’s why it’s important to pay attention to your “marketing mix.”

It seems like Public Relations is still the most misunderstood business communication discipline. Can you give a simple definition of what PR is and some baby steps for businesses to take to get started?

Public Relations can extend to your employees and vendors as well as your customers and the media. Small businesses can easily start their PR by responding to relevant news articles with letters to the editor. Participate in online forums that are of interest to your industry.

If a topic arises such as the price of gas, do you have the facts behind the issue that aren’t being reported by the media? If so, use print and online to get your message out. Sponsor a community event.

Marketing, and subsets like PR, is about testing and measuring results before finding what works. Try something consistently for a period of time as part of an overall strategy.

What projects are on the horizon for you? How can the readers of this blog get involved?

Right now, I’m conducting a direct mail and telemarketing campaign for a growing company that provides managed computer services to the insurance industry. I’ll be giving them an overall marketing strategy, too.

I’ll be meeting with a professional to see if I can help her package her expertise and boost her client base with a cost-effective marketing strategy.

I’d like to launch a regional marketing web site and blog filled with resources and real-life experiences. But I don’t want to do it by myself so if anyone wants to contribute it could be a great joint effort.

I think more companies can engage in partnerships and cross-promotional efforts. This is another form of PR.

If a business owner would like to contact you how would they get a hold of you?

My cell phone is 818-667-1789.

The office line to ask for me via the PR Store in Pasadena is 626-793-1411.

Email: simkovich@sbcglobal.net

Don’s Blog: Cash Flow Today

Great Lessons for Small to Mid-Sized Business Owners

Robb Lejuwaan — Wed, 26 Mar 2008 12:26:36 +0000

Source: WikipediaAmerican Express has begun advertising a new website they call “Open Forum – Networking, Ideas and Expertise for Business Owners.” Before I visited the site I thought it would be cheesy – I was wrong. They recently shot a bunch of videos at the recent Consumer Electronics Show in Las Vegas with leading business thinkers and practitioners. Here is a list of who was interviewed:

Seth Godin is the author of 9 books that have been bestsellers around the world and have been translated into more than 20 languages. Permission Marketing was a New York Times bestseller, Unleashing the Ideavirus is the most popular ebook ever published, and Purple Cow is the bestselling marketing book of the decade.

Sean Parker is the co-founder and Chairman of “Project Agape,” a new network that aims to enable large-scale political and social activism on the Internet. Sean is also a Managing Partner at The Founders Fund, an early stage venture capital firm based in San Francisco. Previously, Sean was the co-founder of the category defining Web ventures Napster, Plaxo, and Facebook.

Jimmy Wales is the Internet entrepreneur best known for founding Wikipedia.org, as well as other wiki-related organizations, including the charitable organization Wikimedia Foundation, and the for-profit company Wikia, Inc., which operates Wikia.com.

Susan Sobbott is President & General Manager of OPEN from American Express, the division dedicated exclusively to the success of small business owners and their companies. OPEN is the fastest-growing proprietary business unit within American Express, and the nation’s largest credit and charge card issuer for small business. Daughter of the owner of a small trucking business, Susan returned to her small business roots when she joined the OPEN team in 2003 and was named its President in 2004.

The topics they cover include Web 2.0, radical transparency, blogging, viral marketing, building a community out of your clients, social networking and a bunch more. Here is a sample video:

Click here to checkout the site.

An SPT Processing Statement is a Sales Tool? What?

John Robinson — Mon, 24 Mar 2008 22:10:05 +0000

by John Robinson

We know you’re successful business people. (I mean, you’re reading StraightPassThrough.biz, right?) And this means you probably have a pretty good idea who your customers are.

But what if you could use your processing statement to really market to specific customer groups? What if your statement was a powerful sales analysis tool?

Wow.

The statement, when you are receiving some form of SPT, is probably the most overlooked marketing and analysis tool. Imagine the following scenario:

Let’s say your average sale is $150. Now, for this example, you look at your statement and realize that a large percentage of your customers are using Rewards/Enhanced cards (the cards that give cash back or airline miles or whatever). On a whim, you divide the $ volume of Rewards/Enhanced transactions by their # volume.

Omigosh! That average ticket is only $75! That’s only half your total average ticket! From a marketing or positioning point of view, this would be a disaster. You see, most people who get Rewards and Enhanced card offers are usually good credit risks and more affluent than the average card holder. They should be spending more money, not less.

In this instance, you may create a campaign to push a few higher ticket items, or create some package deals to entice this audience to spend more with your company.

This is a simplistic example, but a powerful one. An SPT statement can also be used to make sure you are aiming your goods/services at the correct audience in the first place…or successfully doing so. You’d be surprised how many companies believe their credit card business is B2B when their statements claim it’s B2Consumer. And vice versa.

So pull out that statement and see who your customers are and if you’ve positioned yourself to best service them! And then keep looking to see how well you’re pulling it off. You might find this is the best marketing and sales analysis tool you’ve got.

Why are You in Business?

Robb Lejuwaan — Mon, 24 Mar 2008 18:24:09 +0000

Business, as a practice, is neutral. It can be used for profit, power, financial survival, personal expression and even making the world a better place. The truth is, the typical business is used for all of the above and more. What I am wondering out loud is why I am in business? What do I want to accomplish? How can I use my business to make the world a better place to live?

I am asking myself these questions because I just watched the winning video from Stanford’s Entrepreneurship Week innovation tournament. Check it out:

RubberBandTogether

Guy Kawasaki writes the following about this video, “The challenge for the tournament was to use an everyday object to create as much value as possible. The “RubberBandTogether” teams goal was to sell the ball and donate the proceeds to the Susan G. Komen Breast Cancer Foundation. Cost? $1/band or $3,056.”

If you would like to buy the ball go ahead an e-mail.

So what about you? Why are you in business? How could you make your business life more enjoyable? Even fulfilling? How could you use your business to make the world a better place? Please comment below.

Merchant Account Blog - Straight Pass Through » Business

Video: Merchant Accounts – What to Look For and Ask About, Part 2

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