Hybrid Program LFG Training
Summary
TLDRThe ViSiPay hybrid program is a surcharge solution that splits credit card processing costs between customers and merchants. Customers pay a 3% fee on credit card transactions, while merchants cover debit card fees at 1.5% plus 25 cents per transaction. The program is compliant and requires merchants to display signs and receipts detailing the fees. It's not available in Massachusetts and Connecticut. The hybrid approach saves merchants up to 40% compared to traditional interchange programs and is most effective for businesses with high credit card usage.
Takeaways
- 💡 The hybrid program by ViSiPay allows merchants to split the cost of credit card transactions between the customer and the merchant.
- 💳 A surcharge is a fee added to credit card transactions to cover the cost of processing payments, and it is applied only to credit card types.
- 🛒 The customer is responsible for a 3% surcharge on credit card transactions, while the merchant covers debit card transactions at a cost of 1.5% plus 25 cents per transaction.
- 🚫 Surcharging is not allowed on debit or prepaid cards; it is restricted to credit card transactions only.
- 🏪 Compliance requires merchants to display a sign at every point of entry and sale, as well as include the surcharge information on receipts.
- 💼 Merchants using a hybrid program can save 30-40% over traditional interchange fees, and customers cover the credit card processing fees.
- 🚫 The hybrid program is not eligible for use in Massachusetts and Connecticut due to state regulations.
- 💼 The program is beneficial for merchants who accept a significant amount of credit card transactions, as it can result in substantial savings.
- 📊 The hybrid program provides a clear breakdown of costs and savings on statements, showing how much customers have saved by covering the surcharge.
- ⏰ There is no waiting period for merchants to start passing on credit card fees once they enroll in a surcharge program.
Q & A
What is the main purpose of the ViSiPay hybrid program?
-The ViSiPay hybrid program is designed to split the cost of credit card transactions between the customer and the merchant, with the customer paying a surcharge on credit card transactions and the merchant covering the cost of debit card transactions.
How does the surcharge work in the hybrid program?
-In the hybrid program, a surcharge is applied only to credit card transactions, with customers responsible for a 3% fee to cover processing costs. The point of sale system automatically detects credit card payments and imposes the surcharge.
What are the merchant's responsibilities in the hybrid program?
-The merchant is responsible for covering the cost of debit card transactions at a rate of 1.5% plus 25 cents per transaction. They also need to ensure compliance by displaying required signage at all points of entry and sale, and including the surcharge information on receipts.
Why can't surcharges be applied to debit cards?
-Surcharges cannot be applied to debit cards due to legal restrictions. It is only legal to apply surcharges to credit card transactions in the U.S. and U.S. territories, as per a legal settlement.
Are there any states where the hybrid program is not eligible?
-Yes, the hybrid program is not eligible in Massachusetts and Connecticut due to state-specific regulations that prohibit surcharging on credit card transactions.
What is the monthly subscription cost associated with the hybrid program?
-The monthly subscription cost for the hybrid program is $25, which covers the use of the technology that enables the surcharge program.
How does the hybrid program benefit merchants?
-Merchants can save around 30 to 40 percent over traditional interchange style programs. Customers cover the credit card fees, which can be significant for merchants with high credit card transaction volumes, thus helping them save substantially.
What are the compliance requirements for merchants using the hybrid program?
-Merchants must display a sign at every point of entry and point of sale stating the surcharge fee and that there is no fee for cash or debit cards. The surcharge information must also be included on receipts.
What is the maximum surcharge that can be passed on to customers?
-The maximum surcharge that can be passed on to customers for credit card transactions is capped at three percent.
How does the hybrid program differ from a cash discount program?
-The hybrid program splits the fees between the customer and the merchant, whereas a cash discount program implements a discount for cash payments and includes a surcharge in the displayed pricing for all other payment methods.
What additional benefits does the hybrid program offer to merchants?
-The hybrid program offers no annual fees, no leasing required, and the ability to use terminals that support the program at no upfront cost, making it an attractive option for merchants looking to reduce costs associated with credit card transactions.
Outlines
💳 Introduction to ViSipay's Hybrid Surcharge Program
This paragraph introduces ViSipay's Hybrid Program, which is designed to split the cost of credit card transactions between the customer and the merchant. The program is called 'hybrid' because it involves surcharging customers for credit card transactions while debit card transactions are covered by the merchant. The training aims to educate on how the surcharge connects to the hybrid program, how to explain it to merchants, and how to ensure compliance and benefit from its use. A surcharge is defined as a fee imposed on customers during a credit card transaction to cover the cost of accepting the payment method. The POS system automatically detects credit card payments and applies the surcharge. The hybrid program works by charging customers a 3% fee on credit card transactions and merchants a 1.5% fee plus 25 cents per debit card transaction. The program is not available in Massachusetts and Connecticut due to local regulations. Compliance requires merchants to display signs and include surcharge information on receipts.
🔍 Deep Dive into the Hybrid Program's Mechanics and Compliance
This paragraph delves into the mechanics of the hybrid program, explaining how it works for both credit and debit card transactions. It outlines the different fees associated with various types of debit cards and how the program can save merchants around 30 to 40 percent over traditional interchange programs. The paragraph also addresses potential customer objections and how to mitigate them by offering alternatives like debit or cash payments. It emphasizes the importance of compliance, including the display of signs and the inclusion of surcharge information on receipts. The paragraph concludes with a discussion on the legality of surcharging, the disclosure requirements, and the limitations on surcharging in certain states. It also provides guidance on how long a merchant must wait before passing on credit card fees and the maximum surcharge percentage allowed.
Mindmap
Keywords
💡Surcharge
💡Hybrid Program
💡Point of Sale (POS)
💡Compliance
💡Merchant
💡Credit Card Fees
💡Debit Card Transactions
💡Subscription Cost
💡Massachusetts and Connecticut
💡Tiered Format
💡Cash Discount Program
Highlights
Visipay's hybrid program splits credit card costs between customers and merchants.
Surcharge is a fee imposed on customers during credit card transactions.
POS system automatically detects credit card payments and imposes surcharges.
Hybrid program charges customers a 3% fee for credit card transactions.
Merchants cover debit card transactions at a cost of 1.5% plus 25 cents per transaction.
Surcharge program is not eligible in Massachusetts and Connecticut.
Surcharge fees are capped at 3% for credit card transactions.
Merchants must display compliance signs at every point of entry and transaction.
Receipts must include a statement about the surcharge applied to credit card transactions.
Hybrid program can save merchants 30-40% over traditional interchange programs.
Customers can avoid surcharges by paying with debit or cash.
Merchants can offer a free cost analysis to see potential savings with the hybrid program.
Debit card transactions may be charged at different rates depending on card type.
Surcharge programs must follow legal disclosure and other requirements.
It is illegal to apply surcharges to debit or prepaid cards.
Merchants do not need to wait 30 days to pass on credit card fees.
Hybrid program benefits include cost savings and no annual fees.
Deja Vu Z8 terminals can be used with the hybrid program at no upfront cost.
Transcripts
welcome to visipay's hybrid program
training where we're going to talk about
busy pay's surcharge style program which
we call the hybrid program that splits
the cost of credit cards to the customer
and the merchants will be covering those
debit cards hence the name hybrid
program
let's get started by the end of the
training you guys should be able to
connect the dots on what a surcharge and
how it connects to the hybrid program
you guys should be able to explain that
hybrid program to your Merchants
simplify how Merchants can become
compliant to utilize this style of
program and then educate the merchants
on how to be beneficial and why to be
beneficial at their business
so first Let's help you guys understand
what is a surcharge so a surcharge is a
fee imposed upon the customer during a
credit card transaction that covers the
cost to accept the payment method the
POS the point of sale system or terminal
automatically detects when a customer is
paying with a credit card and imposes a
surcharge on that transaction type only
so again that surcharge is being applied
to credit card transaction types only
and that technology whether it's a POS
or a terminal will detect when a card is
being used and apply any sort of fee
that's built into that visipay's
surcharge program is the hybrid program
how does this work well the customer
would be responsible for a three percent
credit card fee on credit transactions
to cover processing fees the merchant
would then be responsible for the swipe
debit transactions at the cost of 1.5
percent and 25 cents per transaction
would be no credit card fee added
obviously because we cannot apply
surcharge to debit cards there'd be a 25
a month subscription cost and if you are
located in Massachusetts or Connecticut
this is not a program that would be
eligible in those two states we would
then utilize the same technology that we
have with our cash discount program that
isolates that Fiat that three percent we
would apply that fee uh the 30 cents in
this circumstance for 10.30 transaction
we apply that to a credit card fee uh
from the car brands and card issuers and
then the merchant would make their full
profit now with the debit card
transactions on average most Merchants
are going to be paying that 1.5 percent
plus 25 cents because that's going to
cover the majority of debit card
transactions however if there are any
sort of reward cards that come through
they will be charged a little bit more
2.5 percent plus 25 cents than any sort
of non-qualified key and or corporate
would be 3.5 percent plus 25 cents per
transaction this mimics somewhat of a
tiered format but is only applying to
those debit card transactions so your
Merchant again depending on what type of
card they accept that's a debit card may
fit under these three categories now
with any sort of surcharge style of
program there are some compliances that
are required for example a merchant
would be provided this sign over here
that states to cover the cost of credit
card acceptance we pass on a three
percent credit card fee this fee is not
more than the cost of accepting these
cards there is no fee for cash or debit
cards so a merchant would be required to
put that sign up at every point of entry
and at any point of sale any point of
transaction so for example if you have a
merchant that is accepting payment at a
table at a restaurant then every table
would have to have signage on it that
states this in information where they
choose to put it is up to them we always
work with them to figure that out and
then it would be required to be on every
receipt we do all of that we take care
of that obviously when we're building
that file and things like that but it
would state of course we impose a
surcharge of three percent plus zero
cents on total purchase transaction
amount on a credit card product which is
not more than our cost of acceptance and
then a merchant would or a customer
would sign off on that of course too so
like I said
for a merchant to be compliant and
properly using a surcharge so they avoid
fines and any sort of penalties they
must have the sign up at every point of
entry and every point of transaction and
then it must also be on their receipts
when we start looking at a hybrid
statement we're going to see that at the
bottom it's going to state things like
your surcharge saved you this amount of
money I will point out that if your
Merchant is utilizing a clover device
it's going to show that dollar amount
but if they do utilize a Deja Vu
terminal with busy pay that amount won't
show up on that cover page but they can
see that amount of savings in their
access one and just to break down what
that cover page is showing a would be
that total amount submitted
the total volume process B would be the
total fees charged including debit and
credit
and then C would be the amount that the
customers covered essentially when we
talk through selling the value of this
this is a great pivot from the cash
discount program because like we talked
about with the cash discount program if
you have learned a little bit about the
cash discount program we're implementing
that four percent into the price of the
product and the displayed pricing so if
you have a merchant that doesn't want to
go through all that labor or maybe they
don't want the customer to cover all of
the fees for any card payment then the
hybrid's a great pivot because it's
splitting those fees up between customer
and Merchant as well as it's going to be
tacked onto the point of transaction so
you don't have to change any displayed
pricing now you may get some objections
like upticks at the register you know uh
customers being a little bit more upset
things like that surcharging is viewed
to be kind of a negative you know
towards customers not a lot of customers
like that idea so you can get ahead of
those objections by that they can pay
with debit or cash and there's really
ways around these customers that they
can avoid those fees entirely and of
course a great way to just sort of
represent the how we can help them save
because it is important to note that the
hybrid is going to be most effective for
merchants that except a considerable
amount of credit cards offering up that
free cost analysis or that proposal is
going to show them hey this is how much
you've accepted in credit cards that's
how much you accepted in debit cards and
you can see how much you'd actually save
and how much you would have to pay per
month if you were to use a hybrid
program
now the benefits for this Merchant is
that they are going to save around 30 to
40 percent over traditional interchange
style programs their customers are going
to cover those credit card fees which
again if they accept a lot of credit
cards could be a hefty Dent
um and would really help them Save A Lot
there would be no annual fees no leasing
required and there are terminals that
they can be placed with that would allow
them to utilize the hybrid program it's
that Deja Vu
um Z8 that they would be placed with at
no upfront cost now let's go over
quickly the hybrid rules and legality
can a merchant add credit card fees to
card transactions as a result of a legal
settlement to resolve claims brought by
a group of U.S Merchants merchants in
the US and U.S territories may add a
surcharge to certain credit card
transactions and this started back on
the 2013 Merchants who chooses surcharge
must follow the disclosure and other
requirements agreed to so again they
just have to be compliant
am I required to disclose credit card
fees to my customers yes again we talked
about post sign at all point of entry
and point of sale as well as on the
receipts
an ISS a fee on both credit cards and
debit cards no it is illegal to apply a
surcharge to a debit card or any prepaid
cards it can only be applied to credit
cards how long do I need to wait before
I can pass on my credit card fees they
wouldn't be required to wait uh 30 days
prior to passing on the credit card fees
once a merchant decides essentially to
sign up with a surcharge program we will
actually notify on behalf of that
Merchant the card Brands and get them
set up they can still process payments
by the way within those 30 days but
we'll take care of any sort of
notification to the brands that a
surcharge is being applied at that
business is there a limit to how much I
can pass on to my customers yes that is
currently capped at three percent what
states can't I pass my credit card fees
in that would be Connecticut and
Massachusetts
all right so now you guys understand
what a surcharge program is how that
applies to our hybrid program you should
be able to explain the hybrid program
and what all the compliances are to
utilize it properly to avoid fines as
well as educate the merchant on how it
could be beneficial for them
if you guys have any additional
questions on what the hybrid program is
or how it works reach out to your sales
support team or you can obviously go
through the training again as always
keep an eye out for that next training
thanks everybody
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