First of all, it may look like there is not much to learn in today’s training. Today I want you to learn more about interchange plus pricing. As I have said many times, I have placed 90% of my merchants on this form of pricing. All now we do on interchange Below I have listed 4 reasons for this.
1. It is the most honest and transparent form of pricing. When a merchant receives the monthly statement he or she will be able to see charges for the cost of interchange, as well as charges in mark-up. With tiered pricing the cost of interchange and mark-up are bundled into different rates. Unless your merchants know the different interchange rates (which they don’t because there are well over 1,000,) they will not be able to see the separation of cost vs. mark-up.
2. It will offer the most savings for your merchants who are doing $10,000 or more in volume. (To have a profitable portfolio, merchants processing this volume and higher are where you want to focus the majority of your efforts.)
3. This form of pricing is the easiest way to determine the profitability of your merchant’s accounts. You simply take the amount of volume a merchant is processing and multiply that number by the percentage rate you are placing them on. For example: Merchant Processing Volume – $20,000 x 0.40% – rate given to merchant by agent = $80 in total profit. Considering the 50/50 split of profit between yourself and IPS, that means this account is worth $40.00 per month to you. There will be additional profit based on the transaction fee you charge, as well as a few other minor monthly fees you will learn later in training.
4. This is a very competitive form of pricing. Given that residual income means a great deal to us as agents, the more competitive you are with pricing and customer service, the less likely you are to lose merchant accounts. Keep in mind being competitive does not mean you want to always give your merchants the lowest possible rates. You want to have a margin to still make a profit for yourself.
Good luck in the field!
“Join our team; pass the test; we’re committed to the best.” – Marvin Shirey