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CompanyProfile

ISO/MLS contact:
Kipp Bockhop
Vice President, Sales Partners
312-444-0486
kipp@cardx.com
www.cardx.com

Profit enhancement through surcharge automation

hicago-based CardX LLC launched the same requirements, and be able to distinguish between credit
year a ban was lifted that prohibited U.S. and non-surcharge debit card transactions at checkout.
merchants from imposing a surcharge fee at
C checkout to cover card acceptance costs. As "If I come to your website to make a payment and I'm
the result of settlement of a merchant-led antitrust law- typing in a card number, how are you going to know
suit against the major card brands, surcharging became accurately, responsibly, very quickly if it's a credit card
legal in 40 states and has since risen to 44 with some and you can pass on the cost, or if it's a debit card and
restrictions. you must not pass on the cost," he said. "That's one of the
things our technology does."
"When I saw that regulatory change, I knew it was an
opportunity for someone to come in and be the first to ISO, advocacy focused
market with a turnkey solution," said Jonathan Razi, While merchants, government and education entities
CEO at CardX. He founded the company in 2013 while in represent prime markets for the service, business is
graduate school prepping for Harvard Law School. currently the fastest growing segment for CardX, Razi
noted. The company offers a revenue share program,
The first-time entrepreneur saw an opportunity to help processes through existing acquirer relationships or
businesses enjoy the same economic advantages granted CardX as a referral relationship, and charges a licensing
to government agencies and educational institutions in fee and flat rate for debit transactions.
the ability to charge a service or convenience fee for credit
card transactions. CardX serves these vertical market "We license it; they procure the merchant," Razi said.
segments nationwide. "We do deployment from our office, whether it's login
credentials for our portal, for our MO/TO account, or a
"We have merchants whose gross margin might be terminal. It comes from us. We have a full-time partner
something like 6 percent," Razi said. "When they accept a team; that's our distribution."
corporate credit card or rewards credit card, they might be
losing half of their profit margin right then and there for Beyond targeting new verticals, ISO partners can also
the credit card fee, so they view these fees as prohibitive. migrate existing merchants to the service. "After paying
They now have a way to pass on the cost." CardX's revenue share, they're going to net much more

Experts in compliance on current accounts and retain them forever, because the
merchant cost is going to be zero percent on credit," Razi
CardX's patent-pending technology automates surcharge said.
processes in compliance with state laws for handling in-
person payments through its turnkey terminal, which As a national surcharge advocate, CardX was the only
comes equipped with EMV Quick Chip technology and payment company in 2016 to file an amicus brief in the
the CardX app preinstalled, as well as MO/TO or online U.S. Supreme Court in the Expressions Hair Design vs.
payment acceptance via a virtual terminal. Schneiderman case challenging New York's no-surcharge
law. Today New York is among the states that allow
"I positioned the company at the intersection of technol- surcharging, as shown on the CardX website.
ogy and compliance," Razi said. "There are certain tech-
nology requirements, and those are all things that CardX Once all 50 states are aboard, Razi anticipates a tidal
does on behalf of our merchants. They choose us; they shift among merchants sidelined by the inability to
automatically comply." establish uniform pricing models nationwide, especially
larger merchants such as airlines. He pointed out that
For example, businesses must register with the card in Australia, where surcharging has been in effect since
brands, apply surcharges either at the brand or product 2003, 60 percent of large merchants and 42 percent of all
level, meet certain disclosure and surcharge fee cap merchants now surcharge.

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