What does it cost to actually process these transactions, even on the crypto side.
At some point somebody's going to get the gimmick Visa MasterCard did it.
They're like, we give rewards to the consumer, the consumer will fight to
keep those things, and then we can put in whatever other fees we need
to at that point. And that's what's kind of occurred at this point,
like I'm not giving my two percent cash back either, and I'm like on
the other side of the fence advocating not to charge that much. So it's
a it's a really unique problem. All of the law right now is focused
on the Visa MasterCards of the world. That's not the problem. You are
listening to Carrie Letz's Financial Survival Network, where you get valuable information you just
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and welcome. You are listening to and watching the Financial Survival Network. I'm
your host, Carrie Lutz. Well, Jeremy Lasarus is with us. Now.
Look, if you take credit cards in your business, and you're taking
in more than fifty thousand a month, you have to hear what Jeremy has
to say. You're paying a ton in merchant fees, and Jeremy can save
you big bucks here. Jeremy, welcome to the show. Really appreciate you
coming on helping the FSN community. I know there's a bunch of you out
there that live on credit cards, literally on receiving credit card payments and debit
cards as well. Jeremy, how do you save people money on their merchant
fees? So I think it's really important to start with saying that in the
industry, when you talk about credit card processing, everybody need jerks. I'm
not switching. I don't want to switch my process, sir. I don't
want to go through underwriting and set up a new account. I don't want
to get into terminal. I don't want So it's important that I kind of
start this conversation at least by saying what I do has nothing to do with
changing credit card processing at all, because I'm immediately tied to the stigma of
that industry, which is really not good. I work with existing credit card
processing vendors and we use a machine learning tool to identify the profitability of that
processor, and we use that data to negotiate. So it's just data driven
negotiation. And okay, we can call it AI, but it's machine learning
where we're identifying the cost of those transactions. All those transactions are routed a
lot of the technical pieces of what the card cost is, and then we're
taking that data back to the processor and using it to negotiate the price down.
So it's a pure plain cost reduction exercise. Interesting. Interesting, what
kind of savings can you get? People? Leader? So I know that
this is a weird one to say, but every deal is like a stealthflake.
There is no two deals that are the same, and so revenue to
profitability or revenue to cost there is no such thing. I have a small
dental practice in Miami. They do one hundred and fifty thousand dollars a month.
We were able to save them six thousand dollars a month. On the
other side of it, we had a national hotel train that everybody would recognize.
They do millions of dollars a month. We're only able to save them
three hundred dollars a month. So there's no direct correlation between revenue and potential
savings. The one thing I challenge companies to do is to take a copy
of their credit card processing statement, take the total fees, divide it by
the total that they have in terms of revenue from their sales, and see
what the percentages and anything above let's say two percent, something that you should
take a look at. Okay, So it's interesting that that it so some
people are actually getting a good deal already and they just don't know it.
Huh. And you know, that's my favorite conversation have is, look,
your processor is honest. They're charging a reasonable fee for the volume that you're
doing. So I don't think you should make any changes or try to negotiate
at this point. But we'll look at it again next year. Because the
thing that we do know about processors, they change pricing at will and in
some cases with no notice, because that's what the contract says. Visa MasterCard
has three hundred different rates and fees, right you and I know, because
like we swipe a card, I want two percent cash back here, I
get like one point seven five percent cash here if I use it for fuel
purchase. Like, there's very complicated interchange that's what it's called. So they
have the credit card processing companies have to be able to change their price structure
at will, because Visa's like, hey, when we'rew out a new card,
or I'm going to change the interchange fee, so they have to be
able to change their pricing. The problem is that it became predatory years ago
when they realized no one's paying attention, so we can change the fee at
will, and it doesn't have to be in step with when VS. MasterCard
does it. So they'll add five basis points here and two cents there,
and five dollars a month here, and no one's paying attention because they'll look
at it and go, it's like three ish percent. That's the cost of
doing business, is what I hear way too much. And more recently the
companies came out with simple payments. It's just a flat two and a half
percent and thirty cents of transaction, which everybody loves because like I get a
statement, I can read it, I get it. The problem is like
a debit card only costs point two five percent, a very low rewards card
costs one point nine percent, So how much are you paying? Simple payments
doesn't make it cheaper, that's all. So we we try to take the
complexity and simplify it to find where the cost savings could be without making changes.
That's the number number one thing that we do, all right, So
I would think this would be sweeping the world now your system. Yeah,
So it's just a matter of getting introductions right. And also, as much
as I love being on podcasts and talking about it and getting it out to
the world, I also don't want it to get full attention. We're not
running ads, We're not trying to be big in front of all these banks
and processors, because the last thing they need to know is there's a company
like us that's out there trying to take their profits away. There's fifty billion
dollars a year above the profit margin line of of research study that we did
that we believe is falling on the shoulders of small to medium sized companies,
not the big boys. Those guys are all negotiating and constantly staying on top
of their vendors. They have sophisticated supply chain folks that are dealing with us
every year. I think that most of that burden falls on the companies that
can't afford it. They don't have supply chain people, they don't have you
know, somebody doing vendor and elysis every year. They don't have the sophistication
or education enough to understand the statement, so they're just they're just paying it.
So I'm trying to bring that to the masses. But we're trying to
also fly a little bit under the radar. I don't want the attention of
you know, the big banks and processors. It's saying, hey, there's
a company like this, let's not negotiate with anybody. So our hope is
to try to reach those people under the radar as much as we can.
Seems to me there's like anti trust issues here too. There is. I
mean they've signed real treaties with software companies to not change pricing, to fix
pricing, to stop free market choice, like all of the things that you
hear in these anti trust suits. They're doing at all, but they're just
not getting caught in it because they're talking it up to like, well,
we secure the payment and we bring a lot of value and all these other
pieces. But I see you know processors charging five and six percent. That's
a silent partnership. I mean, we're moving money here. This isn't as
sophisticated as they've made it out to be. Don't get me wrong. I
love what they do. I love that I can go in and thumbprint or
you know, scan my face and pay for something in a seamless way.
That's awesome. They've done a great job and it's secure and I don't have
to worry about my money and if somebody steals my identity, all that's taken
care of in a very seamless manner. Now that's great. But six percent
it just seems too much when there are companies that are paying some too.
So our goal is to help people get the transparency and see what they're paying
one and to give them some power. I mean the power should rest in
the small to medium sized company. Are they companies? So how do you
get paid? Do you get a percentage of what you save that we're performance
only so if we don't save you any money, we make nothing. So
it's a performance based pay. And the way that we work is we do
the analysis. We show people what we might be able to negotiate. We
can't guarantee we can get one hundred percent of it. If we get it,
we analyze it every single month and show them how much money we saved
them if we split the savings with them. We do it for a short
period of time so they have, you know, a period of time where
we make money. And then after that, if they want us to analyze,
we can charge for analysis. We can help them continue to monitor and
negotiate. It's totally up to the customer. I love that. I think
you could keep it ongoing because it's just the kind of I don't want to
call it theft, but it's a game. If I change a pricing two
basis points, you can't tell I mean attention to it. No, I
can totally get this. Unfortunately, I've never been in a business where we
relied on credit cards or unfortunately, on the one hand, you sell more
and you get you know, you get paid instantly, have no receivables hand
you're getting screwed. And this is a global problem because as more business has
have gone to electronic payment systems, basically the potential for mayhem here is increased
geometrically. It's what's even worse, we're hyper inflating the market now because what
what just happened recently? There's an article I posted this on our website as
well. But I think what you've seen more recently is merchants identifying the problem.
They're like, why are we paying four percent? I'm passing this on
my customer. So now you see, and i've if you've been in Miami
or other you know, vacation zones, you see this cash discounting thing.
It's like, what's this three percent charge? Is paid by credit card?
And so Visa MasterCard initially had a knee jerk. They're like, we don't
want our merchants to be able to do that. So they started fighting them
and they realized they're like, wait a second, on average, we're getting
two percent. Let's start charging direct. So now they're in endorsing to charge
your customer three percent. Hey, we'll even help you. We'll embed that
in your software and make it very easy for you to do that. So
I think that's even gotten worse where we're going to then hyper inflate the market
and start charging three four percent to the customer directly. It's like, this
is not this is not the direction we want to go. And you know
this is like making the argument for cryptocurrencies and cutting out the banks. They're
going to cut their own throats and the clearing houses, right, because all
Visa and Master Corridor are clearing houses. Right. Yeah, I'm not so
on the crypto side, I think that the bigger challenge will be when there's
no mining, what is the cost of transactions. That's a different discussion for
another call. I love that stuff. I could talk about that all day
too, but I think in general, like because I've looked at I've looked
at it objectively and said, what does it cost to actually process these transactions?
Even on the crypto side, at some point somebody's going to get the
gimmick the some massacred did it. They're like, well, give rewards to
the consumer. The consumer fight to keep those things, and then we can,
you know, put in whatever other fees we need to at that point.
And that's what's kind of occurred at this point, Like I'm not giving
my two percent cash back either, and I'm like on the other side of
the fence advocating not to charge that much. So it's a it's a really
unique problem. All of the law right now is focused on the Visa Master
cards of the world. That's not the problem like paying two percent for cash
back rewards isn't the problem. It's what they charge above that. And that's
not Visa master Cards problem. That's the credit card processors problem. And so
yeah, these clearing house are making and you can see them. They're gobbling
up all of the other ones and making these incredibly large companies. So it's
it's dangerous. Sold. Where do I sign up, Jeremy, I'm sold
the business. I just get the wires and ah's I don't do credit cards
because I don't want to pay three or four percent. So it's they're coming
after you next. And by the way, so you take AH. Yeah,
you know, AH costs nothing if you look at the actual national laws
and how how those transactions move, there's no cost of these things. Now
they're like super secure and there's no like there's really no risk. So phosphor
risk and compliance and other things are huge hurdle. And I understand that cost,
So not trying to discount that. Visa master Cards shouldn't charge some of
these fees. But they're now going after AH and I more recently, what
it used to be ten cents of transaction or twenty cents flat rate, now
they're starting in charge a percentage and you're going to start seeing that number move
up really quick. So I've now seen that Stripe and others have gone down
the path to charge you know, a percent per transaction for ACCH. That's
not that used to not be the case. So I see what's happening now
because people are understanding how to do this cheaper? Can you negotiate with like
Quicken into it? No, QuickBooks not happening. This non negotiable. They
have a flat rate system for a reason. If you have significant volume,
it's worth the shot. But you're going to have to be doing you know,
one hundred two hundred thousand dollars a month in transactions to have any kind
of clout, to have any leg to stand out with them. I've done
successful negotiations with quick Books directly. But it's also when you look at it
in terms of business, it's not really a commercial grade processing company, right,
Okay, we're a small, small to medium business sized company. All
right, it's really exciting. I think a lot of you out there can
profit by this. Jarmey, what's the website? How do we connect with
you? Super easy payment Brokers dot com, Aiman Brokers dot com link in
the show notes. Make sure you go take a look at the show notes
at Financial Survival Network dot com. While you're there, at sign up for
your free newsletter JARME. Very exciting service and we wish you the best.
Thanks Man, great to meet you, Thanks for listening to Carrie Letz's Financial
Survival Network, your solution to today's trying times. For the latest, go
to Financial Survivalnetwork dot com. Financial Survival Network now more than ever,