Just received a paper titled â€œStatement Analysisâ€ from a HPS rep that decided to stop in. The monthly volume and # of transactions are similar to what I have, however Iâ€™m not sure what the rest of these figures mean.
Volume: $12k mo.
Number of Trans: 500 per mo.
Average Ticket: $24.00
Current Effective Rate: 4.17%
HPS Rate with Trans Fee: 2.45%
HPS Rate Service: .13%
HPS Basis Points: .45%
HPS Effective Rate: 3.02%
I assume the â€œcurrent effective rateâ€ is what I am supposedly paying?
i’m not sure… beacuse i dont know where they came up with the 4.17% As they have never seen one of my statments nor know who i process through.
I actually tried figuring out my total % about a month ago but i’m not sure how acurate it was, i think it was about 3.2%
Does anyone have a diagram on how to figure out the actual overall % we are paying?
I dropped that crappy con company (huge security hole, I suspect intentional) nearly 18 mos ago and haven’t looked back. No more chargebacks, no more outrageous rates. Much better companies around who can notch you at less than 3%.
As for the analysis, its just that, a piece of paper.
Don’t even talk to a company about processing unless they are willing to quote you on a cost plus basis. Until you do this, you will never be comparing apples to apples. They quote you rates based upon swiped cards but then you get their bill and the actual price is not even close cause most of the pizza transactions are keyed. From what I have gathered from this board, interchange cost plus 6 cents is the lowest you’ll find and paying interchange plus 12 cents is still reasonable. My rate of cost plus 8 cents seems to consistently cost me 3.1 to 3.2 percent of my credit card revenue. Your mileage will vary with ticket average, the mix of debit card and credit card types, the mix of swiped and keyed transactions ect.
gotcha, i’d like to get a good quote so that i can go to my current processor and tell them to match these new figures… but it’s difficult to do that if I can’t tell what the f is going on with these “quotes” that HPS came up with.
Heartland is a reputable, low cost provider. We have been with them for some time. We have had exactly one chargeback in several years and it was a result of our employee double charging the customer by mistake. We pay interchange plus 6 cents. The statements are clear and easy to understand. Payment hits our bank account on time. Fees are exactly what they told us they would be. I don’t know what Pizza2007’s problem with them was, but they not a “con company” they are a publicly traded major player with a great reputation. Yes, they had a security breach a couple of years ago. To call it deliberate is absurd.
How much you pay with any processor will depend on three major variables: 1. Total transaction volume, 2, Average transaction size and 3. Card present or not.
If you do a lot of delivery and process the card numbers over the phone by keying them in the card is “not present”. That is the case with any processor. Fees also vary as posted above between different cards, debit and credit etc. Am-ex is also very expensive so we do not accept them. People that have them have a visa card too 99 times out of a 100.
We end up paying 2.7% to 2.8% total cost on our card business in our restaurant. Those numbers have not varied with Heartland… ever. We also use them in our retail store.
and just as important if not more so 4) your ability to shop around and spot a good deal and/or negotiate a better one!
I regularly review my contracts on a regular basis and move as and when required to get a better one. I have got better rates on my credit card by comparing and getting my provider to better their rates, and virtually every other service in the last 2 or three years.
I am always concerned about a processing provider that doesn’t give all the detail used to analyze a statement. A business owner should know exactly how they came up with the numbers they have provided, without that detail you have no idea what you are getting charged. Cost plus is the only way to go and you should be able to see a side by side comparison with your current processor so you can see where your savings( or increases) will be. I will be happy to supply you with a true analysis, even if you are only going to use it as leverage with your current processor. Word to the wise: You may be able to get them to agree to match my rates, but you need to be monitoring your statements every month, but especially in May and November, that is when they will most likely sneak in higher rates.