Earlier this year, U.S. Senate lawmakers signed a bill that set limits on debit-card swipe-fees.  Set to go into effect October, 1st of 2011, the new bill will cap profits that banks like Visa, Master Card and Discover can earn on swipe-fees to 21 cents and .05% per swipe instead of the average 44 cents and .65% per swipe they were taking.  It was a victory for retailers spearheaded by big box stores and was a hit to the banks who were earning roughly $16 Billion in annual revenues from the fees.  That number is estimated to be cut in half, which should mean savings for all retailers, right?  It's the retailers that pay those swipe-fees every time a customer runs a debit-card so isn't this good news for everyone, not just the Wal-Mart's and Home Depot's of the world?  The simple answer… well, it all depends.

It all depends on what kind of program you use to process credit cards.  The big box stores of the world are so big that they use a great program that allows them to pay straight Interchange or Cost.  They are so large that Visa, Master Card, Discover, pretty much all of the major card associations, work with them directly.  They don't have to hire a credit card processor to represent them to the major card associations.  If you unlocked the doors and swept the stoop of your coffee shop on Main Street this morning, proud that the sign above your door does not say, "Starbucks," then you are aware that you do not have the privilege of processing your credit cards for interchange alone.  You pay interchange, just like every one else, even the big box stores, but you also pay a credit card processor on top of that to have the funds from your customers credit cards deposited into your account.  So how does this new bill effect your credit card processor?  Have limits been set on their ability to profit from swipe-fees?  The simple answer: No.  No, not at all.

In fact, your credit card processor can still charge you 50 cents for every transaction if they like, as long as they pay their cost of 12 cents to the banks, they can profit as much as they want to off of every single transaction.  So does that leave the businesses of Main Street out in the cold, unable to take advantage of this new legislation? The simple answer: No. Not at all.

All you need from your credit card processor is the right program. That program is found in Cost Plus Flat Fee Pricing.  If you find a credit card processor that offers Cost Plus Flat Fee Pricing without any per transaction fees or swipe fees in their agreement, then you too can pay just 21 cents per transaction, just like the big box stores.  Unfortunately, Cost Plus Flat Fee Pricing is still a new and innovative concept that most credit card processors have not caught on to yet, so finding one may be hard.  The good news, the blog you are reading right now is run by a company that does just that.

Contact us at www.ogflatfee.com, right now, to find out how you too can take advantage of this new bill and pay only the federal minimum of 21 cents for every transaction.