When PeC got wind that these two had a new venture to launch we set up the three-way call and requested maybe four inquiries and stood back. "Tell me about your new job," elicited a 3 minute and forty second reaction from Waldron that boiled down to, merchants that are successful and who procedure $20,000 or more a month in credit card transactions deserve a rest from the transaction and processing fees they pay their merchant account provider.
See our products:
- Magento 2 pos system
- bigcommerce pos software
- woocommerce pos system
- shopify pos system
- msi inventory management
Waldron: depending on the fact that mainstream ecommerce is eight to ten years old today, and depending on the way these merchants are registered over time and then could get up and running in ecommerce with everything working, they take the attitude of"it works do not let me touch anything and I would like to concentrate on growing the business." But now, due to the way the (credit card processing) industry charges these merchants in a three-tier pricing arrangement and how a whole lot of these merchants have grown up, they deserve a solution structured round the sort of business that they're rather than being dumped into a bucket that applies to the ecommerce section as a whole.
So, two older business partners, who aren't really all that old, decided to launch a new concept in credit card processing and online merchant account solutions. However, after selling e-onlinedata into PowerPay a year or so ago, Sloane went west and split his time between Tucson and the old mining town of Bisbee, where he paints (artwork, not homes ). John remained in Ohio. If nothing else, but the pair knew how to convey via modern technology. By cell and landline telephone and email both wrote a business plan. In a fit of realistic branding, they called the new venture, only, EstablishedMerchantsOnly.com (EMO). PowerPay, the purchaser of e-onlinedata, signed-on for a partner.
Waldron: We believed, rather than getting into the industry and trying to serve everyone, let's get in the marketplace and serve the folks who we know are already doing good ecommerce and would definitely find plenty of value from the solution we're offering. The solution involves placing them on an interchange-plus pricing program for their credit card processing. We would show them the interchange cost and then mark it up specific basis points based upon the relationship we develop together.
Given the age of the ecommerce industry, Waldron and Bouchever (boo-sha-vay) see middle-sized and expanding ecommerce merchants as grossly overlooked and underserved. Lots of the merchants now reaching maturity in the industry were startups and beginners five to eight decades back. For that matter, so was the ecommerce sector as a whole, and bankers took a dim view of the industry where people began and ran companies with desktop computers, no inventory and little or no financial reputation--they never much liked"card not present" transactions. Sure you could find a merchant account with a bank, but if the transaction went through you paid two and three times what the brick and mortar merchants were paying. But what the hell, it was the only game in town.
Not anymore.
While there were many upstart novices in ecommerce, you will find, according to Bouchever and Waldron, tens of thousands of successful online merchants who've done all of the proper things and become big credit card sale chips. They've proven themselves as legitimate businesspeople able to scores billions of dollars in new card business for the banks. However, the banks have been slow to recognize the trend. Not Bouchever and Waldron.
Waldron: now is the time to start taking a look at the other areas of the business at which the merchant can maximize the return on the earnings they've generated. We see a good deal of merchants who focus on growing the company and kind of ignore the base. Now it's time to say to yourself, my earnings are always at $20,000, $50,000 or $100,000 per month, how do I maximize the yield on those sales? We believe they deserve better treatment and a processing cost that's commensurate with their demonstrated capability to deliver large blocks of transactions on a constant basis.
See more :
https://www.connectpos.com/why-you-need-a-business-partnership/
https://www.connectpos.com/will-virtual-workplace-change-the-ways-we-go-to-work-post-covid/
https://www.connectpos.com/case-study-departure-thailand/
https://www.connectpos.com/top-4-thailand-payment-gateways/
https://www.connectpos.com/what-is-inventory-shrinkage-and-how-to-prevent-it/
https://www.connectpos.com/brands-adopting-headless-technology/
https://www.connectpos.com/top-cloud-computing-for-business-in-2021/
https://www.connectpos.com/what-is-visual-merchandising/
https://www.connectpos.com/top-5-visual-merchandising-elements/
At issue here, are the card processing thing's markup on credit card transaction interchange fees. Interchange fees, paid by merchant-acquiring banks to cardholder-issuing banks, are set up to pay the cost to convert a fee on a cardholder's card into a cash deposit in the merchant's business checking account, such as cost factors like billing services, fraud and credit risk and profit. The merchant acquiring bank is at liberty to indicate the interchange fees up to whatever point the market will bear. It's been a really lucrative revenue stream for merchant banks.
There are approximately 200 different interchange pricing amounts for credit card processing. Fundamentally processors force merchants' transactions into three"buckets," as Waldron describes them: qualified, mid-qualified and non-qualified. The bucket into which the transaction falls is dependent on the merchant's score, location of the card, the issuer, the sort of card (business, reward, etc) and a number of other factors. While most merchants will tell you that they cover, state, 2.20 percentage for processing, which might not be, and most often isn't, the case. A rewards based US Consumer card, as an instance, will cost a lot more than a normal US consumer card.
It is hard walking around with one foot in a bucket all the time. The EstablishedMerchantsOnly.com program has no buckets, no mass class lumping. Waldron and Bouchever's plan is to demonstrate the merchant what the interchange rate is for the transaction, mark it up a particular fraction and call it a done deal.
Bouchever: To give you an example, plenty of companies accept cards from different businesses. A normal non-qualified rate would be between 3.5 and 5.5 percent. However the actual interchange cost on a US company commercial card is 2.25 percent. So for the merchant to cover between 3.5 and 5.5 percent is terrific for the chips and not terribly fair or valid for the merchant. So what we are looking at with our firm is a Visa business card at 2.55 percent out the door.
When EstablishedMerchantsOnly.com starts in September there will be a half dozen or so merchants on-board. They've been well screened and be producing the minimal of $20K a month in transactions. Bouchever and Waldron are gambling on the being even more successful.
Bouchever: What we've done is reduced our profit margins substantially from the expectation that we're going to bring some very high quality merchants. In fact we'll have many merchants with us when we start that are of a completely different demographic than what we had at the old firm.
To be certain, EstablishedMerchantsOnly.com is not for everybody. It is (as the name suggests ) available to folks who've shown themselves credit worthy and always produce enough volume for the chip to justify the investment by EMO to get them up and running in the EMO system.
What Bouchever and Waldron have done is construct a model based on one annoying little fact of life in their former ventures.
Bouchever: Over time some of the highest quality merchants that we did bring on board could proceed after a year or two since they felt they deserved a much better program but we just didn't have it to provide at the moment. We would lose some of our better merchants since they would go to their bank or a different chip and need the pricing. We couldn't meet the demand as we were only a juggernaut, signing a million new merchants a month. We stated at the time, if we ever do so again let us concentrate on the larger more quality merchants.
And that's what they've done. The new company officially launches in September 2008. The site is up and accessible to the public today. A visit there'll demonstrate the rate structure, right up front and in writing. However...
Waldron: Merchants can accept the prices we publish on the website or, if they believe they deserve a better arrangement, they can request a custom platform. They can fax or email us of the existing transaction statements and we'll spend some time assessing their company. We are going to ask them a few questions about their organization and then we'll include a very detailed customized proposal.
The proposal will reveal the merchant what they're paying now and what they would pay under the interchange-plus program proposed by EMO. The EstablishedMerchantsOnly.com system doesn't require the merchant to modify anything but the merchant account number. The current gateway, shopping cart, and site remain as they always have been. The normal one to three month window necessary to receive a merchant account up and functioning was shortened.
Waldron: it is a ten-minute phone call; we will walk the merchant through everything and find the new account running. The merchant has no down time and no lost business time in switching to our system.
The new company is based in Columbus, Ohio. John Waldron will continue to live and work there, while Sloane Bouchever will operate from Arizona.
--
Waldron and Bouchever are the founders of e-onlinedata, which under their direction grew to one of the largest ecommerce merchant account providers in the nation, and Authorize.Net's largest reseller. Using a referral system they constructed of over 4,000 value added resellers encompassing web hosts, web developers and charging systems suppliers, e-onlinedata signed over 30,000 Internet merchants between 2002 and 2007. These lively eCommerce entrepreneurs also founded MerchantFocus.com and GatewayOnly.com, which continue to be very successful suppliers of the Authorize.Net payment gateway. Additionally, they have AuctionCheckout.com, a provider of merchant checkout services to eBay and Overstock.com auction sellers.
Comments
Post a Comment