Do You Have Risk Fees On Your Credit Card Processing Statement?

Do you have “Risk Fees” on your credit card  processing statement? No? Well, that’s good! You are lucky (make sure you keep reading if you do), but have you gotten an audit to ensure you don’t have one of the other hidden fees? Did you verify your statement to ensure that your credit card processing interchange fees are not being inflated? Due to the lack of regulation, credit card processors can inflate fees, makeup fees, etc. Over 95% of all merchants are getting overbilled. The worst part is that merchants give credit card processors 100% full access to their business bank account and never validate the fees they take out. They think merchant processing is regulated.

Below is what Senator Dick Durbin said on the Senate Floor on September 27, 2011:

Watch the video

The government knows that credit card processors are taking advantage of merchants, but they refuse to intervene. There have been many class action lawsuits where credit card processors have settled. Yet, most merchants still give them full unchecked access to their business bank accounts. We find that the average merchant is getting overbilled by 40% or more. Think about that – for every $10,000 credit card processors are taking out of your bank account, it should only be closer to $6,000.

Back to one of many ways processors over-bill merchants is a thing they call “RISK FEES.”

I could go into a lot of detail on this, but much of it would be lost on most readers due to the abundance of industry jargon. People who work for a credit card processor are like politicians in training. Ask them why something was taken out of your bank account, and they will talk and talk and talk until you are sorry you asked and probably forgot what you asked.

So here is the short answer – we have only seen one credit card processor and a few ISO’s (Independent Sales Organizations) who resell credit card processing charge a “RISK FEE.” So the question is if this is a legitimate fee, why isn’t every credit card processor and ISO charging a “RISK FEE”?

We have seen “RISK FEES” as high as almost 1% – that’s almost 100 basis points. To put this into perspective, a merchant should be paying a credit card processor a “Discount Rate” of only 5 basis points (.05% or .005) or less. But if you factor in a 1% RISK FEE, your true “Discount Rate is now 105 basis points or 1.05%

Again, “RISK FEES” are just one way a credit card processor can overbill a merchant. I wish credit card processors spent their money on how to make credit card processing safer and cut down fraud, but it seems like they spend all their time on how to come up with new and creative ways to hide and inflate fees.

Whether you have “RISK FEES” or not, you should take advantage of getting a free audit to see if you are getting overbilled and if your statement is full of hidden, inflated, and made-up fees.

I know when someone says FREE, you automatically say what’s the catch?

The catch is like when the big box grocers give you the free cookie in hopes you will want to buy the whole bag once you see how good it is. We hope after you see for free what we can do, that you will want to use our paid services. But to be clear, there is no credit card or anything to try us out. Like the free cookie, if you don’t like it, you are free to keep walking.

But also, to be transparent, over 99% of our clients stay with us. Even our very first client from over 14 years ago still loves us today as much as they did 14 years ago.

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