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Education

StreetSmarts SM

Steve Feldshuh

“Talk To Steve”

New merchant fees – who

plays dirty, who plays fair?

By Steven Feldshuh why they would like to put through increases. Think of
Merchants' Choice Payment Solutions East the costs of developing new programs that may or may
not prove to be good investments. We, as a sales office,
ecently, GS Online's MLS Forum was lit up always want more. Whether, it is more products, better
with discussions about processors and gate- cost structures or freebies, we want it.
ways pushing through fees that were not part
R of the schedule of expenses in agents' con- But putting through well-thought-out increases, based on
tracts. It seems to be a hot button that should be opened a value proposition such as increasing a Payment Card
up and discussed. Industry security standards compliance fee while also
increasing compliance services or increasing the cost of
No one really wants to push additional fees onto online access, but giving a program providing analytics,
merchants. The one thing we all know is merchants do to me, are fair increases. So that brings us to what the
not like receiving letters announcing cost increases. I discussions in the MLS Forum are about. You can be the
feel extremely fortunate in that my processor doesn't put judge of whether certain increases are fair or not.
through any increase unless it is agreed upon beforehand Watch out for questionable moves
in the office ‒ with a revenue share. The people at our
processor understand the integrity of their contract with One forum member mentioned that a well-known, large
us. processor put through a new $299 EMV annual fee. That
Take care, add value is almost $25 a month, which seems to be excessive and
has gotten a lot of negative feedback. I can assure you if
The question is, though, how should processors deal my office ever had that fee put through, I would see an
with the continued increased costs they face. As a small uprising from our sales agents. One hundred percent of
business owner located in New York City, my costs of them would be against such an attrition-causing cost. I
doing business continue to increase. Even with efficiencies, would guess that we would receive countless complaints
the human cost of wages, health insurance, rent and so from merchants, and those that didn't call would say,
forth continue to increase every year. My landlord isn't enough is enough and just leave.
concerned about my situation, nor is the business health
insurance provider. Another comment on the forum was from a sales office that
received a 6-basis-point increase on a gateway expense.
Obviously, to keep great employees, one must continue As far as I know, none of the gateways I have ever worked
to take care of them. Add to that the costs processors with have had a discount charge. They typically have a
have with boarding, risk, tech support, customer service, monthly fee, and sometimes an additional transaction fee.
compliance, legal and losses from risk, one can understand
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