Fuel Oil News August 2019 | Page 21

BY MARCI GAGNON

With the warm weather upon us , most customers think fuel marketers have closed up shop for the summer . In reality , this is when the energy industry gets down to business . There is equipment to repair , software to upgrade and offices to organize . It ’ s also the time of year to closely review commercials , including credit card acceptance rates . card your company accepts . The least expensive rate for each card type is referred to as Target Interchange and is the best possible rate you can achieve . But there ’ s a catch . To achieve Target Interchange everything must be just right . You have to be set up properly , following all card brand rules , with necessary data ( by card type ) passing through--whether that be a simple CVV , or more complex data such as tax rate or customer ID . This might seem easy , but with 500 buckets , each requiring different bits of data , updated technology plays a major role .

Here are three tips to ensure the best rates on payment acceptance .

Make sure your company is set up correctly with each card brand . MasterCard and Discover classify fuel marketers as “ utility .” Visa classifies fuel marketers as “ emerging market .” This reduces the cost of accepting these card types at the card brand level and it also reduces what you pay . To qualify for these lower rates you have to be set up properly as a fuel marketer . Make sure that the company you ’ re working with can pass both codes ( Utility and Emerging ) so that you can achieve the best rates across all card brands . Many fuel marketers are surprised to find out that AMEX also offers a “ Services ” rate . While it is still a little more expensive than the other brands , it ’ s much cheaper than their standard rate .

Be sure you have access to updated payment technology . Each type of card that your business accepts has a price set by the card brands , also known as Interchange . Visa and MasterCard , combined , have roughly 30 Interchange categories that affect fuel marketers . And with the variance in card acceptance , business classification and platforms , Interchange cost can fall into over 500 buckets ( yup , pretty crazy ).

The card brands associate a cost bucket on each payment

Negotiate basis points . Focus on the processor ’ s proposal . Basis points , monthly fees and expenses make up the last 10 % of the statement . Since all processors have the same Interchange costs this should be the easiest thing to negotiate . Review the basis points ( the markup on the Interchange ). They should be a fair assessment based on the size of your business and risk associated . Review the proposal for fees such as “ club ,” “ portal ,” or “ security “ ( outside of PCI ). These could be hidden costs that add up quickly on a monthly basis . And review your gateway statement . Sometimes that is a separate bill . Savings at the gateway level could save you five or 10 cents per transaction .

This step might seem like the first thing to worry about , but it ’ s not . Remember , Interchange dwarfs processor expense . Once you ’ ve solved for Target Interchange , you have guaranteed that 90 % of fees are passing correctly . l FON

Marci Gagnon ( marci @ qualpay . com ) is vice president of strategic alliances for Qualpay , which provides processing solutions to fuel delivery and service businesses . Visit Qualpay at https :// www . qualpay . com / industry / utility-and-energy .

Editor ' s note : See a longer version of this column at www . fueloilnews . com .

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