As I sat in a pricing meeting the other day I realized that there is little to no consistency, clarity or transparency in the pricing methodologies used in our industry. Almost every ISO and acquirer does it somewhat differently. My team took me through the multiple merchant pricing options available on our settlement system and I ended up more perplexed then when the meeting began. Imagine the confusion in the merchant community. Every sales person offering a similar product with pricing that looks significantly different. A merchant statement that is cryptic using abbreviated words that one cannot find in any dictionary. How about the new salesperson who needs the ability to analyze numerous merchant statements? Or even more importantly, the new rep has to compare your billing to a merchant’s current supplier bills.
    It is a daunting task.
    Let’s look at what is out there:

• 3 Tier, 4 Tier, 6 Tier
• Qualified, Mid-Qualified, Non-Qualified
• Downgrades
• Bill Back, Bill Back w/ Surcharge
• Bundled, Un-Bundled
• Pass-thru; Pass-thru w/ Surcharge
• Net Billing; Gross Billing; Gross-Gross Billing
• Access Fee, Monthly Fee, Statement Fee
• Minimum Fee, Minimum Discount
• Annual Fee, Semi-Annual Fee,Compliance Fee

    Take all of the fees and billing ‘logics’ and then try and blend the costs and present it to a merchant. Talk about a confused business owner. On top of these methodologies we now have a laundry list of card types:
    Rewards Cards, Commercial Cards, Check Cards, Debit Cards, Large Ticket, Small Ticket, CPS, Merit ...Yuck! Soon we will have Discover interchange categories to deal with in addition to the new Visa and MasterCard interchange levels that they continue to throw at acquirers. Will the ISO and acquirer community work to make these interchange categories easier for merchants to handle? If past practices hold true the answer will be “no.”
    Now we can try and analyze each of these methodologies, but in honesty, most of them confuse me. It is better to just state that we have architected a system with terminology that is cryptic and ambiguous. I am not opposed to making money on merchant processing as I believe we all add value in the distribution channel; but haven’t we gone over board in our attempt to seek out incremental margin and hide our revenue streams from the business community? What ever happened to the KISS principal? When is enough, enough?

Greg Cohen is President of Moneris Solutions U.S., and manages all U.S. initiatives and operations for Moneris Solutions. Mr. Cohen can be contacted at 847-520-6559 or via email at greg.cohen@moneris.com.