New MIC BankCard Program: More Savings, Better Service

Publish Date: 
Feb 3, 2010
By Arlo Redwine

As with Tsys, a small percentage of the revenue generated by the First Data program is given to the MIC, which earmarks the funds for land-use lobbying.

So just how much will dealers save? Tanzy says dealers will see a 29 percent to 32 percent decline in their annual costs, depending on the “rate bucket” for which they qualify. So 30 percent on average.

Tanzy says recent dealer enrollees are saving about $4,800 annually with First Data compared to the costs of their previous provider. So the average Tsys dealer is saving only $3,360, a $1,440 difference.

First Data’s discount rate for card-present “qualified” transactions (i.e., most of those taking place in-store) is actually not much different than that of Tsys. Both average about 1.23 percent. The savings come about for “mid” and “nonqualified” transactions. Examples include Internet and mail-order transactions as well as those involving rewards cards and corporate business cards. Tanzy says that in the powersports industry, the split between mid or nonqualifed transactions and qualified is 48/52.

Dealers also save on their debit card fees. “In the olden days when a dealer took a debit card,” Tanzy says, “he just paid a quarter for the transaction and no discount fee. Now over half the banks in America [including Tsys] are charging a 1 percent fee on top of the quarter. We’re not doing that with First Data. We’re running debits for still the same quarter.”

The $1,440 yearly difference between Tsys and First Data may not sound like much to some dealers. But there are other ways that First Data could save them not only money, but time.

For example, a Tsys dealer may already be using TeleCheck, a company owned by First Data, for his or her check services. “TeleCheck works with Tsys,” Tanzy says, “but it definitely doesn’t have all the bells and whistles you get with being on their own network.”

 

That same dealer may offer gift cards through yet another company (most BankCard dealers use Valutec Card Solutions). “So you have three different companies involved,” Tanzy says. “If you have an issue and you call us, we have to figure out whether it’s a network issue or a TeleCheck issue because all this software is lobbed into one machine. If the TeleCheck data gets corrupted, it could mess up your gift cards. We do a lot of troubleshooting.”

But now BankCard dealers can receive all their services — card processing, check services, gift cards and electronic payroll — from First Data. It’s all in-house. “So in literally one phone call, we can troubleshoot and see exactly where the issue is and solve it,” Tanzy says.

First Data is providing all dealers its 24/7 platinum-level help desk service. Whereas Tsys dealers may be transferred once or twice while using Tsys' first-level help desk, First Data dealers speak immediately to a third-level representative. (Continued)