This post may be a little confusing to some of you. I want to explain it first. Since I started in this business I have always sold Interchange Plus Pricing. Overall, it is the best structure for the merchant. I still believe this, and I still sell Interchange Plus Pricing just about every time. That being said, because of the Durbin Amendment the minimum pricing requirements on tier pricing have gone way down.
Many of you understand the frustration of trying to help a merchant understand interchange plus pricing. I believe we can use these new tier rates as a selling tool. Here are the two ways I am planning to use these lower rates.
1. When a merchant asks, “What is your rate?” I am going to answer, ” ____%. I can even get that down to 0.__% for check cards if that is a major part of your business. Do you get a lot of people using their check cards in here?” Then start with a tier pricing pitch. If the prospect is a small merchant, I may just stick with this pitch. I can sell them on tiered pricing in order to get some extra profit while still saving them a huge amount of money. Or if I would rather go to interchange plus, I will switch back into the interchange plus pitch once the merchant’s interest is pricked by the ____% rate. I would say, “I tell you what I will do: As you can tell, our rates are much lower. In addition to offering these lower rates, I also make the same pricing structure available to my local clients which all the large retailers use. This is interchange plus pricing and is even more cost effective than the 1.09% rate…” Then I continue with the interchange plus pitch.
2. I think you should use these rates to do an on-the-spot analysis. There is no reason to bring figures back to your office for someone on tiered pricing at 1.79% qualified rate who does less than $10,000 per month. Why send these in to statement analysis and wait three days to get the sale? It is so easy! ~If the merchant is paying 1.79% qualified rate on $5,000 revenue, just take $5,000 x your %. ~Subtract that total from what the merchant paid, and you have the savings. ~Repeat this process on each line of the statement, and you are all set! Again, this doesn’t mean you have to price them on tier. You can always go back into interchange plus pricing. The most important thing is getting the merchant interested and showing some savings. The easiest way to do this for a customer on tiered pricing is to show your tier pricing rates.
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