Learn the truth about hidden fees

Credit Card Merchant BLACKLIST

Christopher Swift Founder, CEO Noble Pay LLC

Copyright 2012, All Rights Reserved

From the desk of Dear Business Owner: If youre reading this right now, youre either a new business looking for your first merchant account or youre an existing one looking for better rates or better service. Did you know that in the merchant service industry there are methods that are regularly used to increase your merchant account fees? Most of these are applied without you ever noticing. When theyre noticed theyre seldom understood or questioned. In the Blacklist, we are ripping the cover off these tactics and exposing their harmful effects on average business owners. As you read this report you will find yourself increasingly empowered to take control over a segment of your business that will make up one of your largest single income sources. If statistics and predictions are correct, your merchant account will increasingly make up a larger and larger portion of your overall income. As the world grows smaller and as paper and coin monies are used less, your merchant account will be more and more valuable to you. You therefore owe it to yourself and your business to be well informed. We want to help you get control of your merchant fees. In fact, our entire business model is built upon the premise that we have a vested interest in your success. You can reach me anytime with questions at chris@noblepay.com. Yours for Transparency,

Christopher Swift Founder, CEO Noble Pay LLC

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Table of Contents
I. Deceptive Practices II. Hidden Fees III. Smoke and Mirror Tactics IV. Bait and Trap Schemes V. Actual Bank Rates ... 5

... 08 ... 10 ... 12 ... 14

VI. True Cost to Process $1000 with 17 Processors ... 16 VII. The Truth About VIII. How To Protect Yourself Now ... 19 ...

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I. Deceptive Practices
A)Beware of buying things you dont really need
Have you even been sold something you didnt need? We all have, more often than we like to say. Well, one of the ways your merchant company ramps up your fees is by adding services to your contract that you may not need. There are so many of these that we advise you to literally question EVERYTHING you dont understand (and most of the ones you do). For example, small business owners are often sold a check recovery service that is only valuable if you experience over a certain amount of bad checks per year. Many stores receive a few bad checks due to the nature of their business, so for them, this service may be a true value. For most merchant services companies, however, this upsell is not necessary. Merchant companies will do what they can to can make an extra buck by getting you to think you need an add-on service that you may in fact not require. So be aware and always ask questions. Our point is that no one merchant account fits everyone. Thats why we like to talk to the customer first and to find out their specific business requirements. This way we can develop a CUSTOM PLAN that meets their needs. You ideally want: 1.) An honest merchant service company who desires to build your business on honesty and trust. 2.) A custom agreement that fits your exact needs as the business owner.

B)If You Cant Catch Us

Dont expect anyone-and I mean anyone-to admit to or even discuss this tactic to rip you off. Believe us when we say that it happens.

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Here it is in a nutshell: Some of the large merchant companies have a client list in the hundreds of thousands. Lets just say they want to build up capital to expand their operations in some way. Instead of going to the bank to secure a long-term loan for a few million dollars, they come up with another option. They can up your rate at any time so long as they give you a 15 day notice. Read that statement again. Any merchant company has the right to increase their rates if they give the proper notice. They can also add a new fee to your account if they can justify it as a legitimate expense. Think of how much money could be raised if a surprise fee of $25 was added to the accounts of 400,000 customers at one time! If you think this is a farfetched idea then think for a moment how many times you have called a company about a charge that you did not understand that appeared on your statement for no apparent reason. Now think of the number of times you call about things like this AND THEY GET TAKEN OFF AND YOU RECEIVE A REFUND? If anyone calls the merchant company on this they can just say Im sorry, we will take that off. But how many customers do you think actually take the time to call?

C) Trust & Respect Goes A Long Way:

If you cant trust your merchant service company you should find one that you can trust. We work hard to earn your respect and trust. We wouldnt be writing a revealing report like this one if we did not intend to be transparent and honest with all our customers.

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We dont want to depend on rip offs to build new buildings or to expand our business. We know on our company will grow bigger and better than others because we dont engage in trickery or deceit. To us, trust means never having to say Im sorry I ripped you off, it wont happen again (wink). Trust is never engaging in this kind of behavior in the first place.

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II. Hidden Fees

Is your current processor charging you a Merchant Club Fee, a Compliance Fee or a Membership Fee for free paper? All of these types of fees are illegitimate fees and if youre being charged for them youre paying TOO much! These fees are not required by Visa or the other major bank card companies. Although there are some monthly fees that are justifiable, you should realize at the outset that most of these fees are negotiable and are charged at the whims and wants of the merchant service company and are often not required. Remember to ALWAYS ASK what a fee represents and to inquire if they are imposed from above or if they are negotiable. You may be pleasantly surprised at the answer. At NoblePay we do not pad our fees or add other unnecessary expenses just to earn a few extra dollars. Again, dont misunderstand. We love getting extra money. We love a raise, a bonus, a cash increase of any kind, just like the next guy. However, its because we love this extra cash that we do not engage in these tactics. You see, if we can help you to be more successful youre going to spend more of your success dollars on growing your company. When your company grows our bank account grows right alongside you. We would much rather get our raise as a result of you getting yours FIRST. When merchant companies turn this principle into an everyday reality everyone wins. Many of our competitors honestly believe they can make more money, more quickly, if they rip others off and take shortcuts to success. Thats

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why many of them go out of business so rapidly. For some reason this kind of dysfunctional thinking is rampant in the card service industry. Thats why you need to do some serious research before you sign a one to four year contract with a merchant processor. Once you sign that contract you are legally bound to their terms. Take this necessary business step seriously and you will save thousands of dollars every year.

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III. Smoke and Mirror Tactics

1.) Avoid Non-Qualified Transactions
Most processers know that a business owner will pay more money for every transaction if they cannot verify the address from each customer. Address verification is just one of the many Risk Factors that go into the credit card rate and fee system, all of which is passed on to the average consumer. When you think about it, it really does make sense. Some people do misuse their credit cards and rack up huge sales with no intention of paying back what they owe. Therefore, the banks want to verify as much as they can about the one using the card. If they can get this information they are willing to reduce their fees in exchange for reduced risk. But if your merchant service company wants to use this little known fact to hide the extra expenses it can mean another source of revenue for them. Youd be surprised how many actually do this.

2.) Make Sure Address Verification is Built Into Your Processing System
Unfortunately, unless you request that your processor program your system to include AVS (address verification stamp) it may never happen. At NoblePay we automatically program AVS into every processing system. In fact we look for this and other ways to help you save money so you can have every advantage to succeed.

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This may sound like a small item when you consider the total scope of your business income. However, we learned long ago that all these small things add up quickly. So take our advice and avoid all Non-Qualified transactions in the future and save your hard earned money for that much needed vacation.

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IV. Bait and Trap Schemes

1.) Theres No Such Thing As A Free Merchant Account
Most processes lure you in by offering to give you something free. This tactic is as old as the earth and probably existed during the cave man days, even before Geico. In fact, I think we are using this strategy very effectively with our promise to give merchants a free credit card reader for their smart phone (not bad, huh?). So obviously, were not against this principle. What we are against, however, is the giving of things like free paper and free print ribbons and other such items when you know you are paying for these by increasing your fees for other items or services. You may rightly ask us how we are able to give away our free card reader. Dont we have to pay for these somehow and therefore arent we engaging in the same practice we are condemning? Great question and the answer is NO! Heres why Yes, of course we have to pay for the card reader and we do that by giving you a very value based fee structure. The gateway carrier charges you a one-time activation fee so we recognize the cost of entry wouldnt be attractive if you had to pay an activation and equipment fee. What this means is that over the first year we use your fees to pay for these and other expenses. We only begin to make money after we prove our service to you and as

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you continue to use our service over time. Honestly it is a bit risky for us as we dont lock you into a contract and we dont charge you rates that push 3% like many of our competitors. We believe that if we dont try to gouge you with unfair costs your business will succeed and we will develop a win/win relationship. We dont have to get rich quick. Instead we want to grow our wealth more slowly and with a greater degree of certainty.

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V. Actual Bank Rates

Most of us know the difference between a credit card and a debit card. Most of us think our credit card processing system should know that also. However, many people do not realize that unless you ask for a dedicated rate tier for signature debit cards or a pin pad youre leaving money on the table. You would think this one should be against the law! The fact is, business owners are often so busy that they do not read either instructions or directions, thus leaving themselves vulnerable to the very tactics that depend on ignorance to work. The merchant company does not have to tell this to the business owner, and if the owner never asks this little scam can add up to lots of money over time. You might ask how these rip offs can go one when millions of people use credit cards. The answer is simple. Most new business owners know little about the ins and outs of running a business. Thats why such a high percentage of them fail annually. We want to see these numbers change. If more people approached business with the same philosophy we aspire to we would see more success. At the heart of our values is the commitment to put all our cards on the table. We not only give honest answers to all the questions our business owners bring to us, we go out of our way to INSTRUCT and to MENTOR each owner so that they are better prepared for the realities of the business world. This includes things like how to get the most out of debit cards.

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Thats the motive behind this report. We know that we could use some of the tactics to add a few more dollars to our pockets. In fact, Im 100% positive we lose accounts every day because we dont. However, there is something more important in life than just money. We get a great deal of satisfaction from helping others succeed.

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VI. True Cost to Process $1000 with 17 Processors

The list below is what we project it would cost with 17 of our biggest competitors price plans. This model assumes 10 transactions x $100 per transaction

1.)

PayPal No Monthly Fee Plan

3% + $0.30/transaction = $33 per month

2.) PayPal Virtual Terminal plan - $30 per month

3% + $0.30/transaction = $33 plus monthly fee

3.) Square
No Monthly Fee Plan 2.75- 3.5% = $27.50 = $35 per month

4.) Intuit Go Payment

No Monthly Fee Plan 2.7-3.7% = $27 - $37 per month

5.)

Intuit Go Payment Monthly Fee Plan - $12.95 per month

1.75- 2.7% = $17.50 - $27 plus monthly fee

6.) Google Checkout

2.9% + $0.30/transaction = $32 per month

7.)

Sams Club
$10-$25 per month 1.75-3.75% + $0.20/transaction = $19.95 - $39.95 plus monthly fee

8.) Costco Club

$10-$25 per month 1.75-3.75% + $0.20/transaction = $19.95 - $39.95 plus monthly fee

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9.) Flagship Merchant Services

Average monthly fee is $16.95 per month Average rate is 1.75 - 3.25% + $0.27/transaction $17.95 to $32.50 plus monthly fee ($20 monthly minimum if applicable)

10.) Merchant Warehouse

Average monthly fee is $16.95 per month Average rate is 1.75 - 3.25% + $0.26/transaction $19.95 to $34.50 plus monthly fee ($25 monthly minimum)

11.) Leaders Merchant Services

Average monthly fee is $13 per month Average rate is 1.75 - 3.25% + $0.26/transaction $19.95 to $34.50 plus monthly fee ($25 monthly minimum)

12.) Chase Paymentech

Average monthly fee is $17.50 per month Average rate is 1.79 - 3.5% + $0.25/transaction $20.50 to $37.50 plus monthly fee ($25 monthly minimum)

13.) National Bankcard

Average monthly fee is $16.95 per month Average rate is 1.75 - 3.25% + $0.26/transaction $20.10 to $35.10 plus monthly fee

14.) The Transaction Group

Average monthly fee is $25 per month Average rate is 1.79 - 3.5% + $0.25/transaction $20.45 to $37.50 plus monthly fee

15.) Merchant Accounts Express

Average monthly fee is $25 per month Average rate is 1.79 - 3.5% + $0.25/transaction

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$45.90 to $63 per month ($25 monthly minimum)

16.) Electronic Transfer Inc.,

Average monthly fee is $25 per month Average rate is 1.79 - 3.5% + $0.35/transaction $21.40 to $38.50 monthly fee ($20 monthly minimum)

17.) Merchant One

Average monthly fee is $17.95 per month Average rate is 1.75 - 3.5% + $0.25/transaction $20 to $37.50 plus monthly fee ($20 monthly minimum)

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VII. The Truth About

1. Low Rate Plans
What is your discount rate? This is the number one question that business owners ask when looking for a new merchant service company. Often, if a company can answer with the lowest number they get the sale. What the business owner does not realize is that hidden behind that fantastic rate, the one you are now bragging about to your friends, is an unknown tactic thats about to bite you in the wallet over and over again. I know, I know, you are about to say, If they promise you a rate in writing they have to stand by that rate, or its against the law. And you are right. However, the way they legally do this is to wait for banks to move first and then they are no longer bound. For example, did you know that Visa, MasterCard and all the others execute a rate increase between one and three times a year? When this happens your merchant service company uses this unfortunate occasion to pad their own bank accounts. Not only do they pass this mandatory increase on to you, they conveniently add a little increase for themselves, and this is all perfectly legal. For Example: Lets say your rate is 1.95% when you start. Then, sometime shortly after this Visa applies a Global Rate Increase of.03%. Your rate would automatically go up to 1.98%. But the majority of merchant card companies use this as an opportunity to simultaneously add an increase of their own.

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Lets just say they add the same .03%. Now your rate, which started at 1.95%, has shot up to 2.01%. That may not sound like a lot, but over a years time it can quickly add up to hundreds or even thousands of dollars depending on the size of the merchant account. Here is a fact that ought to help you understand how these merchant card companies can get away with this systematic rip off. Whenever we are asked to give a business owner a quote for new service we always ask them to give us their past three or four months of merchant history to evaluate. We obviously cannot do this with a brand new business, but with an existing one this helps us to give a comparable quote that is based on their processing history. We are frequently shocked to find many merchants who have never opened their processing account statements. One of the reasons why they dont open their statements is because they trust that the merchant service company is going to honor their word and not increase their rates and fees! When we ask about this another reason we frequently hear is that they are too busy and all they care about is the money that goes into their bank. They focus on the bank and not that little bandit that lurks just outside the bank, the one thats quietly pulling hundreds even thousands... and thats a big mistake, one we hope you will not make yourself. At NoblePay we dont play the rate game at all. Instead we offer something that is much more valuable to every business owner. We guarantee that once we set your rate we will not increase that rate BEYOND that of Visa, Master Card or the others. We call this the pass through guarantee.

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Instead of padding our rates we open the gates and we refuse to be led only by greed. Dont misunderstand us here. We are not saying that money is not important to us. Not at all. In fact, we believe that our philosophy of business is so appreciated by other business owners that we make more money than many of our competitors. The reason for this can be found in a very simple principle: Give and it will be given back to you, in greater measure. Instead of seeking a business relationship that lasts only up to the moment you discover our rip off techniques, we are seeking a LIFETIME CUSTOMER. Very few people leave our company. They cant afford to. We honestly do not know of a single merchant service company that has a TOTAL package that can beat our rates. Thats why we call ourselves NoblePay. If we can make an honest profit and keep you as a customer for life we will, in the end, make more money through volume than we would by having fewer customers who we are gouging and ripping off

2. Chargebacks
Whether youre accepting payment for your goods and services via cash, check, or credit card, there is always a chance that things may not go smoothly. This isnt your businesss fault or the fault of your credit card processor. This is usually due to a third party problem such as shipping or with the customer himself/herself. In short, a chargeback is the request by a customer or client to have the funds they spent at your business given back to them; in other words, a refund on a credit card payment

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through your bad credit merchant account. The main problem with chargebacks is that customers do not usually approach your business and request a refund. Instead, they call up their credit card company that provides the service for them. Despite whether the chargeback is warranted, the credit card company has an obligated duty to look into the issue being brought up by the card holder, including: Claims that your business did not provide the service(s) or good(s) that were agreed upon. Claims that you charged for service(s) or good(s) that were not requested, even if you have no business relationship with the card holder. Claims that the service(s) or good(s) provided were not what was expected, and a refund is being requested. Chargebacks are just toxic to your business and to the processor. The more chargebacks you have the more youre at risk of losing the ability to accept credit card payments. I cant stress this enough Do All that you can to work with your processor to keep your chargeback ration below (.5%) of your total card sales. NoblePay takes chargebacks very seriously and weve installed some very sophisticated monitoring systems to help protect you. Technically the banks are granting you and your business a line of credit for collecting payments. They base their decision on your personal and business credit history. The banks expect you to provide a product or service as advertised and if they see a pattern of angry or hostile customers they reserve the right to cancel the processing relationship. At the end of the day the banks are all about minimizing risk so they will not put themselves in a position to have to cover the expense

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unscrupulous merchants. The best thing you can do to avoid chargebacks is to clearly set consumer expectations. Youll want to have your terms & conditions as well as you refund and return policy listed on your website. As long as youve protected yourself with these items and made every attempt to work with unhappy clients youll be given the benefit of the doubt. So what is the best away to avoid being in the situation of a credit card chargeback? Here are a few tips to keep in mind: Double check all cards to make sure that they are owned by the appropriate person. Under rare exception, never accept a credit card that someone just has written down or memorized and would like to have punched in instead of swiped. If you have any suspicion, be sure to look at and verify the signatures on the credit card and on the receipt. When accepting phone or mail order payments, be sure observe extra caution when dealing with customers who may sound a little suspicious. Always get receipts signed and request a signed proof of delivery for shipped items. Keep everything on record and accounted for, and you will have a better time disputing any claims a customer may make with regards to chargebacks.

3. Merchant Lockdowns
Did you know that if your merchant equipment is not working properly that it usually means the merchant processor makes more money off of you? No, I bet you did not know this one either.

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For example if a terminal doesnt have enough memory to hold the right programs your hand keyed transactions will cost you more because you have to remember that this industry is all built on RISK, and the more risk to the processor the more you as the merchant pays. Also, if the swiper is broken it means that all of your transactions have to be hand keyed in and your fees double because of the risk to the processor is greater. This is one of the MAIN reasons that many merchant companies only give away USED and REFURBISHED terminals. It is a well-known fact that these will break down sooner than new equipment. The main way that NoblePay solves this problem is to avoid much of it altogether by selling BRAND NEW TERMINALS. We do resell refurbished units BUT only with updated software so you dont get penalized. Dont worry; were not looking to sell you something you dont need. If you already own a terminal we will do everything in our power to try to make it work for you by re-programing it with the last PCI DSS Compliant software update.

4. Charge Limits
Most business owners want their business to grow. However, many merchant companies write their contracts with the expectation that the company in question will NOT GROW. We often see contracts that put the limit for the largest single purchase so low that when the company does begin to grow and to process larger transactions, the bank will often hold your money or penalize you for your OVER LIMIT transaction. Like all rip offs, this problem could have easily been avoided by writing the merchant contract correctly in the first place.

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The contract should be written with success in mind. There is absolutely no reason a merchant company would write a purchase limit so low unless it intentionally expects to capitalize on it later. Yet this is what we see all the time. How sad for the business owner to wake up one day only to see that his success has cost him dearly and in some cases may even shut him down. If the merchant bank kept $10,000 of your profits for over 40 days what would this do to your business? For some, its enough to shut them down. Now you do need to recognize that if your credit is bad OR if you have poor financial data you shouldnt be approved for a higher volume account. This may sound cruel but Id rather be honest with you than set you up for failure. We have banks that will take on riskier accounts but if we dont feel comfortable well tell you OR well set the expectation prior to bringing you on board. In my humble opinion; its the right way to do business.

5. PCI Compliance
In 2010 there was an enormous push in the industry to make sure that all merchants were PCI DSS Compliant and now that its 2012 it will soon be the norm and a part of the cost of doing business IF you wish to take credit cards. Operating without being PCI DSS compliant exposes you & your business to potential fines and loss of the ability to accept credit cards.

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The card brands (Visa, MasterCard, Discover & AMEX are trying to make sure that merchants who handle consumer credit card data are doing so in a secure and responsible manner. With that said theyre requiring that merchants who touch card data have their systems scanned on a regular basis to make sure there are no areas of vulnerability where your customers card data could be compromised. After completing the initial PCI DSS compliance requirements your company is secure, BUT only for that moment. Cyber criminals are always changing their techniques, trying to find weak spots to steal information so It doesnt guarantee you wont be breached in the future (meaning from Viruses, Spy-ware, Mal-ware and other methods used to steal credit card data). Every processor should be assisting their merchants through this process - Some will charge for this service, others might do it for free by giving you access to an online portal to fill it out yourself. Once upon a time I believe that PCI Compliance was a money grab for the industry as it wasnt mandated but now that the card brands are tired of losing money they are making it a requirement. Youll find some companies out there who ignore PCI Compliance and use it as a sales tool to win sales. Nobody wants to pay another fee, I get that, But do you want to be liable for the financial repercussions should a case of identity theft originate from youre handing a credit card? NoblePay requires our merchants to become complaint within 60 days after the account is approved. We do offer a program that will assist with becoming compliant at a rate of $9.95 per month or it can be paid at a discount for $99 annually. Youre not required to enroll in our program BUT you do need to become compliant by using another PCI DSS Compliance provider.

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6. Equipment Leases
Whats really scary is that theres a whole bunch of companies out there giving away free terminals or leasing equipment-think about it, why do you think they do this? Most do this for retention purposes because they know if feel like you got something special youre more likely to not notice many of the items we discussed to this point. Most free terminals have software locks so you cant take it to another processor. Others purposely disable cost savings items such as being able to enter a zip code or cvv code so that your cost per sales is higher. Many sales reps make their living from leasing or placing terminals. Those who lease make hundreds and hundreds of dollars. In fact Ive seen countless merchants pay 4 to 5 times what the device was worth! Most terminal leases range from $20 to $40 per month for 36 to 48 months. Thats $720 to $1920 annually! Guess what? You can buy a brand new terminal from NoblePay for $199 to $295! Sales reps who give away free terminals get upfront commissions from the processor they represent and ultimately surrender their interest in your account. Not the best way to build a long term relationship as they wont technically be in your corner when you need them - no is it? Both of these tactics are just slick ways to lock you into a contract. Remember you get what you pay for & If it looks too good to be true it probably is If you need equipment buy it. Most processors dont make a lot of money off of equipment so the cost to purchase is very reasonable. IMPORTANT dont buy terminals off of eBay as most of them are still the property of the processor they were loaned from. Chances are these devices will have software locks and you wont be to use it.

7. Contract Terms
Wisdom tells us that we should always read our contract, but the fact is we often do not.

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Do you have a mortgage? Did you ever buy a car or finance your education? Be honest, did you really read all the terms and conditions of the agreement? Im not going to lie to you, Ive done all of the above and I never read all of the items in the paperwork. Many merchant account contracts are like time bombs as they hold plenty of hidden terms and conditions that can be costly. Merchant Service companies know that most customers looking for service are mesmerized by THE RATE they often sign the contract once they think they have secured a good one. What they fail to see in the fine print is that after 6 months those great rates go up automatically (something they forgot to read). Next to slipping in a rate increase when Visa gives a global increase, this is one of the most popular rip offs on the market today. If you want your customers to trust you there needs to be trust where it counts most, in the fine print. If you ever find techniques like the time bomb being used against you, you should immediately commit yourself to changing service providers as soon as your contract allows. If they will treat you like a fool in the fine print they will do it any other time they can also. At NoblePay we welcome you to read EVERYTHING in our contracts. They wont find anything we have not discussed; especially things like hidden rate increases that are tucked away in the smallest fonts available. This is not good business and its a pure rip off. Heck, well even dissect and analyze our competitors contract for you too if youd like!

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