Merchant Service Advisor

The Myth of “Wholesale” Credit Card Processing Rates

June 2010

We’re continually amazed by what our competitors will say that stretches the truth so excessively that it’s comical to us. Our clients report to us that sales reps from other companies have tried to convince them that they offer “wholesale” rates. So what is a wholesale rate? In the retail industry this would mean buying a product directly from the manufacturer or distributor instead of the retailer, thereby eliminating the retailer’s mark-up. So what would this wholesale concept look like for a financial service? The general concept to cut out the middleman sounds good, but for financial services it simply doesn’t translate as you’re buying a service not a product. In addition here’s no shipping and handling charges to process a credit card or move money from one account to another. For a service, there simply aren’t multiple hands that the service passes through before it gets to you.

For example, if you go to a bank’s headquarters location you get the exact same pricing that you get at the local branch, don’t you?

So what if you could get a “wholesale” rate for credit card processing? It would probably mean that you contracted directly with Visa/MasterCard for your processing. But that’s simply not possible, as they don’t work directly with businesses. Ok, so now you want to go direct to a processor for Visa/MasterCard… great. That defines most credit card processing organizations in the US. So does that mean that almost all credit card processors are wholesalers? We figure yes, so when you contract with a merchant credit card processing service, you are almost always getting what can be called wholesale rates. While it is possible to work with a sales rep from a processor who has their own sales reps, and so on who are all adding their mark-up to your fees; but that’s the exception not the rule.

Bottom line… what’s important to you are the actual rates that you pay, not the supply chain that provides the processing to you. Anyone can claim wholesale rates for financial services, but compare your actual rates to make sure that you’re getting a great deal. Leap Payments will gladly analyze your current statement to make sure that you’re paying as little as possible. We won’t pitch you that our rates are wholesale, our credit card processing solutions are simply better and our service is second to none.

Make the jump to a Leap Payments, no gimmicks, no sales pitches, just honestly better credit card payment processing.