We’re going to start this article with a story.
A man walks into a bar (no, this is not the beginning of a joke, but after you read the story you’ll probably think it is).
He sits down and the owner comes over.
It’s 3 PM on a Wednesday so it’s empty.
“Hey, random question: what do you do for payments processing”
The owner, now moving behind the bar, replies,
“Why do you ask?”
“Well, I’m in the merchant processing business.”
The owner racks a few glasses and says,
“It won’t matter.”
“What do you mean it won’t matter?” the guest asks quizzically
“I have such a low rate for payments you’ll never get close.”
“Try me,” says the guest.
The owner swivels around so he’s now facing the guest. Dead pan, he says, “I pay 1% to take cards.”
“You mean 1% above interchange?”
“No, 1%.”
The guest furrows his brow and runs his tongue across his lips to prepare his mouth for what he’s about to utter next.
“So you’re telling me that you pay less than Walmart, Amazon, and interchange?”
“Yep,” beams the owner, pushing out his chest with pride.
The guest gets up, pushes in his chair and heads for the door. When he’s three steps from the entrance he pauses, takes a slow look around, then pivots to face the owner once last time.
“If you don’t mind me asking, what’s your annual revenue?”
“$814,000,” says the owner.
The guest tips his hat, turns toward the door and walks through it.
You know what just happened?
We’ll tell you.
The poster child for the Dunning-Kruger effect.
The merchant was so clueless about what the hell payments processing even is that he thought – no, he actually believed – he was somehow getting one over on a system that counts the world’s largest retailers and financial institutions as players of the game.
That he was smarter than everyone else.
Big brain.
And you know what?
We bet he’s paying some of the highest payment rates we’d ever see.
The whole thing is comical, but we see it all the time, and the aforementioned story is not too far from what we actually observe on a weekly basis.
Look, we get it: everyone wants to look smart.
But do you fix your car yourself?
Invest your money solo?
Run your taxes on your own?
Specialization exist for a reason.
There’s no shame in admitting that one of earth’s most corrupt systems (i.e. payments processing) is made needlessly complicated to thieve money from merchants.
So stop telling everyone that you have amazing payment rates when you have no idea what-in-the-absolute-f*ck is going on.
Even if you did, how are you auditing to ensure your rates are “lower” than those paid by Amazon and Walmart?
Running the numbers on your monthly statements are you? Your franchisee statements too? Because surely you know that franchisees are the most likely to be abused in any corporate payments pricing agreement, right?
Handling all the chargebacks, downgrades, and associated fees with masterful dexterity?
No you’re not: you’re over there thinking you’re paying less than interchange to accept card payments.
Stop being prideful and start helping your organization.
It’s okay to admit you don’t know something and ask for help.
We’re here for you when you’re ready to actually fix your shit.
Wow. I think you REALLY NEED some transparency here. Your blog has become nothing more than an advertisement for Aben. I guess that’s your right, and one has to earn a living, but what happened to the “blogger of old” that looked at everything fairly? For the record, I work for Shift4.
Apologies Jerry, but it feels like you might be under the impression that we’re a payment processor. That’s not the case.
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