MIC BankCard program saves dealers money in credit card processing fees
Agrowing number of dealers are slashing their credit card processing costs by participating in a program offered by the Motorcycle Industry Council through Boaz Payment Systems of Atlanta.
The 10-year-old MIC BankCard program offers all dealers a substantial discount on credit card processing fees on MasterCard/Visa transactions, among other services. For example, a participating dealer pays as little as 1.22 percent of each credit card purchase in processing fees under the program. By comparison, the typical lowest rate available through other credit card processors is 1.63 percent, says Matt Tanzy, president of Boaz.
That small percentage difference can mean big savings for a dealer, says Tanzy. Given an average of $50,000 in monthly credit card sales, for example, the savings for a dealer would be $205 per month, or $2,460 a year, he says. And that goes directly to the bottom line.
More than 3,500 U.S. dealers actively participated in the program last year, up 20 percent over 2005, according to Boaz. "We have the momentum going now," Tanzy says, adding that several hundred other dealers have signed up but have not yet cancelled their old processor.
One reason for the growth, says Tanzy, is the sharp increase in credit card use. According to Boaz figures, 36 percent of total dealership revenues are paid for by consumers with a credit card. That's up from 28 percent over the past two years.
Much of this increased credit card use is driven by aggressive promotions by credit card companies for their new reward program credit cards. "Both Visa and MasterCard have had huge pushes on signature rewards programs," says Tanzy. "Consumers figure that if they are going to make a big purchase, they may as well use their credit card and get the reward points.
"That's probably not happy news for dealers," he says, "because they have to pay money on those cards, but it's another big reason why they should participate in the BankCard program."
Processing volume under the program in 2006 totaled more than $1 billion, resulting in a savings of more than $2 million for participating dealers.
There is no cost to participate in the BankCard program. Dealers can keep their same equipment, and Boaz will simply dial into the machine and download the details for the new rates. "The entire process takes 15 minutes," says Tanzy.
New Services Added
As the dealer base grows, more services are provided. Last year, an agreement was put together with MasterCard to produce pre-paid cards that can be used anywhere that MasterCard is accepted.
The pre-paid cards allow OEMs and other manufacturers to load the cards for consumers and to reload them easily via the Internet. OEMs, for example, can use them to pay contingency fees as riders earn fees. "New technology that allows online loading of the cards has improved their value," says Tanzy. Previously, an OEM often had to reprogram processing equipment at individual dealers, making national gift card or pre-paid cards unattractive.
In addition to working with OEMs on the program, Tanzy also is talking with consumer groups such as the American Motorcyclist Association, which could offer the program to its members.
In a related program expanded last year, dealers now can purchase gift cards for about 80 cents per card, a sharp discount from the $1.25 charged by many other programs. "We've broken the $1 barrier for our dealers," says Tanzy. A fully customized dealer loyalty program was also launched in 2005.
Another important accomplishment for the program last year was its expansion into Canada, an effort that took close to 12 months to complete. The deal, put together with Chase Paymentech Solutions of Canada, makes the program available to nearly 2,000 dealers.
Participation by this large pool of dealers is expected to generate additional savings for U.S. dealers through volume discounts generated by the overall program, says Tanzy.
For more info, call (866) 992-2737 or send an e-mail to MIC@boazgroup.com. You can fax your current credit card processing statement to the MIC BankCard department at (678) 819-0153, and it will fax you a written analysis and savings guarantee within 1 hour.