Many prospective
clients and existing Merchants call me wondering how all the pieces fit
together at Cardservice International. Particularly frustrating is the
variances of pricing which can result from talking with different
Agencies.
CSI has a
corporate office in Moor Park , California with better then 800
employees. By definition CSI Corporate is a "Transaction Service
Provider". This means that as a company they "acquire" businesses to
help them accept credit cards for a consortium of banks. An "Acquirer"
is in fact a licensed member bank. CSI for the most part makes money on?
The discount rate
and transaction fees that you pay for the privilege of accepting credit
and debit cards. A big part of this fee which you see on your Merchant
Statement is paid by the Acquiring Bank to the Issuer of the card. This
is called the Interchange Fee. See ?Term of the Month?.
The "Selling Arm"
of CSI is a network of better then two hundred independently owned
Agencies. If you call the corporate office and indicate you are
interested in a product or service then you will be referred out to an
Agency. A good parallel is Nationwide Insurance which has a big
corporate office which services accounts. If you open up the yellow
pages you can find a local Independent Agency under Nationwide Insurance
which can help you with your insurance needs. CSI works much like this.
CSI independent
agencies make money on set up fees, application fees, and the sale or
lease of software and credit card terminals. CSI Corporate also pays a
residual of your processing fees to it?s Agency offices on a monthly
basis. Should you enter into a lease which you get through an Agency
Office then basically you are financing the software or terminal
purchase. The CSI Agency then sells your lease to the leasing company.
The leasing company writes a check to the Agency.
Each CSI Agency
has unlimited territorial rights and can do business anywhere in the US
and even the world. Confusion sometimes comes into play because
prospective customers will talk to different Agency Offices about set up
fees, application fees, the hardware and software outright purchase
price, the monthly lease payments if any, length of the lease term, etc.
Individual CSI Agencies can charge anything they want for these type of
investments and in fact this is a good part of how the Agency makes a
profit. This can result in a prospective client contacting one Agency
and hearing about "Free Application and Set up Fees" with a lease of
$39.95 for 36 months while another Agency will offer a set up fee,
application fee, and maybe an even higher lease.
Be careful about
entering into an Agreement with an Acquirer based on price alone. One of
the benefits of CSI is that the rates and fees are for the most part set
by the Corporate Office. Many Acquirers will offer a ?great deal" on
software or hardware only to make it up on rates and fees later. In my
experience CSI does not use these type of "bait and switch" tactics. I
get a call a week from a competitor Acquirer to leave CSI. Usually the
selling point is that I can "increase the rate" and make more in
residuals. No thanks.
Three things
are important to know.
The new client
actually enters into a Merchant Agreement with the corporate office of
CSI who then services your account. CSI Corporate, not the Agency, for
the most part sets the discount rate and transaction fees.
Each Agency has
to make money somewhere. How the pricing is structured is up to the
Agency. Some get paid more up front and some get more over time through
residuals.
The service
levels of different Agencies varies widely so make sure you are doing
business with an Agency with the experience and competence to properly
serve you.
CLICK HERE for more information
Home - Internet
merchant
account - Online
merchant
accounts -
Accept payment online
- Online business
merchant accounts -
Internet
payment services options -
Build a ecommerce web site -
Web
hosting ecommerce merchant accounts -
Ecommerce web host -
Electronic commerce shopping cart
-
Online shopping Carts -
Terms