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Education

the fee, and they realize quickly they just eliminated perspective has truly been valuable. The residual potential
hundreds to thousands of dollars in monthly business is most definitely an attention getter to us veterans in the
expense. business.

It is especially powerful if you're a local sales agent We have been resistant as a company to pursue this
and you can reference other local businesses that program, especially after the Visa pronouncement last
have adopted cash advance, so the customer can feel year. In fact, what we've been most worried about is the
comfortable knowing other merchants in their area repercussion the merchant might get in non-compliance
are also doing it. fines or potential termination from accepting cards
altogether.
Q: Without giving us your trade secrets, can you
share what the revenue opportunity has been on a We've been going the surcharge route within the states
cash discount merchant account versus the traditional where it is permissible, but we are also seeing an ever-
merchant account? increasing willingness from merchants to pass along their

A: We are seeing between 1.20 percent to 2.50 percent processing fees to the customer. We're also working with a
in profit margin on the residuals. In comparison, you processing partner to bring a new program to market this
might see an average of 0.60 percent to 0.80 percent on summer, designed to observe card brand rules, but also
traditional accounts. In effect, it's anywhere from two- deliver a more immediate option for merchants to pass
to-four times the profit of a traditional account. fees to the cardholder.
What's more exciting, is the fact that once merchants With all the positive feedback Hawkins' team has received,
are using the cash discount program, they are no we are determined to take this product into the field,
longer paying the processing fees on their accounts. because it is so beneficial to both MLSS and merchants.
Therefore, they are far less likely to move to a different
processor, ultimately yielding a much lower attrition Dee Karawadra is president and CEO of Impact PaySystem, and Emily
rate. Karawadra is the company's chief financial officer. Since 2001, Impact
Q: What percentage of your cash discount merchants PaySystem has been a leading provider of payment processing technolo-
ask to be converted back to a traditional program? gies and services to merchants throughout the United States. Through
alliances with payments industry leaders such as Chase Paymentech,
A: A very small percentage – approximately 10 percent First Data, Buypass, Sage and more, Impact PaySystem offers tailored
– switch back to traditional processing. solutions to meet the unique needs of each merchant. Dee and Emily will
welcome your questions and comments at dee@impactpays.com and
Q: In a nutshell, what do you feel the pros and cons of emily@impactpays.com, respectively.
the cash discount program are?
A: Adopting the cash discount product
can truly be a win-win-win for the
merchant, sales agent, and processor. Also find us on FaceBook,
The merchant literally eliminates
thousands of dollars in expense LinkedIn & Twitter for the
almost instantly, which increases the most up-to-date stories,
merchant's sales margins. This can
be a vital game changer for the small can’t miss events and newest
ticket merchant. Also, the sales partner
makes a much better residual, and the industry announcements.
program yields a much lower attrition
rate, which is just as good for the
processor as it is for the agent.

The only con is the perceived concern
by merchants they'll lose business
through the program. However, in our
experience, this isn't a huge threat, and
the actual benefit to the merchant is far
more valuable. https://www.facebook.com/TheGreenSheetInc
A new direction https://www.linkedin.com/company/the-green-sheet
https://twitter.com/The_Green_Sheet
Thank you, Hawkins. The first-hand look
into this program from the MLS/agent

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