Page 40 - GBC spring 2015

THE TRUTH ABOUT FEES
Many golf course operators I speak with believe that payment proces- sors are making the lion’s share of the fees that are paid by each merchant. In fact, the opposite is true. When one of your customers makes a credit or debit card pur- chase, payment processors enable money to be transferred to you, the merchant. You are charged a fee for this service, but only a small portion of that fee actually goes to your payment processor.
In fact, more than 75% of the fee you are charged for accepting credit card payments is determined by the type of credit card you ac- cept, such as basic, standard, gold, platinum or corporate. These rates, called the interchange, are set by the card networks such as Visa®, MasterCard®, and Discover®. The bank that issues the credit card to
the consumer is the organization that earns the majority of these revenues.
The interchange rates are the same no matter which payment processor you select. For example, the current interchange rate for a standard in-person consumer Visa transaction is 1.54%. If your pay- ment processor is charging you 1.60% for this transaction, they are only making 6 basis points. There are different interchange rates for each card type. Interchange also changes if the transaction is being made in-person, over the phone, or by email. Oddly, this is identified on your statement as a standard transaction if the card is not pres- ent; or electronic transaction when the card is present.
For several years, the NGCOA Canada has been recording the percentage of corporate and
premium card transactions made by its 500 members utilizing the Golfmax Payment Processing solution. In 2014, over 63% of the cards processed were corporate and premium cards. Understanding that the majority of transactions processed at your golf operation will be with corporate and premium cards, underscores the importance of looking at ALL of the processing rates offered by a payment processor, not just the initial “headline rate.”
In addition to the interchange rate charged on each transaction, there are additional fees associated with the use of all payment processing systems. When comparing payment processing proposals, it is essential to compare all of these fees: • Monthly account service packages • Assessments
• Network fees
• Debit transaction fees
• Monthly device rental/lease fees • Card brand fees (the headline fee
charged by VISA, MasterCard
and Discover on all transaction) • Security/PCI fees
RETURN ON INVESTMENT
While there are many options available for systems and services to process payments from your customers, not all of them are right for your business. To make sure you get the best return on your investment, consider these three areas:
1. Know your business and business needs
Although this sounds simple enough, sometimes important details can get overlooked. Some questions to ask yourself include, “What am I selling, to what audience, and what are the different ways I can be selling my goods and services within my golf course environment?”
Within the foreseeable future, your business may need an e-commerce solution, or the addition of long range wireless devices to process payments on the
ECHO Power Equipment (Canada)
Official Supplier of handheld equipment to NGCOA Canada.
40 Golf Business Canada