Hi, Does anyone know who offers the lowest internet discount rates for an internet merchant account (i.e. NPC, FDMS, ECHO, NOVA, etc...)? Or has anyone ever re-negotiated their internet discount rate with their processor/merchant bank? I currently have an account with FDMS, but I'm wondering if I can get a lower internet discount rate from another processor, or if I should try to re-negotiate my discount rate with FDMS; if that's possible to do. Thank you
You can often find a lower provider, and you can often renegotiate your current rate. A lot of it depends on your volume though. Also, keep in mind that Visa/MC interchange creates a fixed price floor, so nobody can go "that much lower" than anyone else. Unless you are being gouged or you have very high volume, it's unlikely that anyone else can save you a ton. If it sounds too good to be true, it definitely is.
Your best bet for getting good pricing (at least in most cases) is to go with "interchange plus" or "interchange pass through" pricing. The following are true no matter where you have your account: (a) everyone must pay interchange and (b) interchange doesn't vary by processor and (c) interchange represents most of your cost. Most processors collect discount from you, pay out the interchange on your behalf and pocket the difference. With "interchange plus" pricing, the interchange cost is passed through to you directly and you pay a fixed mark-up that is known ahead of time. It's a much more transparent way of pricing a merchant account. So how much can you save with interchange plus? I'll give one example. We recently signed up a merchant who used to process through Costco. They process about $900K annually. They'll save about $6,000 per year with interchange plus. Your mileage may vary based on processing volume, mark-up and so on.