Hybrid Program LFG Training

Summary

The 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

00:00

💳 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.

05:02

🔍 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.

Keywords

💡Surcharge

A surcharge is an additional fee imposed on customers during a credit card transaction to cover the costs associated with accepting that payment method. In the context of the video, the surcharge is a key component of the hybrid program, where it is specifically applied to credit card transactions to offset the processing fees. The script mentions that the POS system automatically detects credit card payments and imposes a surcharge, highlighting the automation and specificity of this process.

💡Hybrid Program

The hybrid program refers to a payment model where the costs of credit card transactions are split between the customer and the merchant. This program is central to the video's theme, as it details how the surcharge is applied only to credit card transactions, with the merchant covering the costs for debit card transactions. The script explains that this approach allows merchants to save on processing fees and provides a strategy for managing payment costs effectively.

💡Point of Sale (POS)

The Point of Sale (POS) system is the terminal or software used for processing transactions at the time of sale. It is integral to the hybrid program as it is responsible for detecting the type of card used and applying the appropriate surcharge. The script emphasizes the POS system's role in automating the surcharge process, ensuring that only credit card transactions incur additional fees.

💡Compliance

Compliance in the video refers to the adherence to legal and regulatory requirements when implementing a surcharge program. It is crucial for merchants to follow these rules to avoid penalties. The script outlines specific compliance measures, such as displaying signs and including surcharge information on receipts, to ensure that merchants are transparent with customers about the additional fees.

💡Merchant

A merchant, in this context, is a business that accepts payments from customers. The video is primarily aimed at educating merchants about the hybrid program and how it can benefit their business by reducing the costs associated with credit card transactions. The script discusses the responsibilities and benefits for merchants, such as the cost savings and the need for compliance with surcharge regulations.

💡Credit Card Fees

Credit card fees are the charges imposed by credit card companies for processing transactions. The video discusses how these fees can be significant for merchants, especially those with high credit card transaction volumes. The hybrid program is presented as a solution to help merchants manage these fees by passing a portion of the cost onto customers through surcharges.

💡Debit Card Transactions

Debit card transactions are electronic payments where funds are directly deducted from the customer's bank account. The script specifies that the hybrid program does not surcharge debit card transactions, with merchants bearing the cost at a rate of 1.5 percent plus a fixed amount per transaction. This distinction is important as it shows the program's approach to different payment methods.

💡Subscription Cost

The subscription cost mentioned in the video refers to the monthly fee that merchants pay to use the hybrid program. It is part of the overall cost structure that merchants consider when evaluating the financial benefits of the program. The script implies that this cost is a consideration for merchants but is offset by the potential savings from reduced surcharge fees.

💡Massachusetts and Connecticut

These two states are highlighted in the script as locations where the hybrid program is not eligible due to specific regulations. This mention is important as it underscores the importance of geographic compliance in surcharge programs. Merchants in these states would need to explore alternative methods for managing credit card processing fees.

💡Tiered Format

The tiered format refers to a pricing structure where different rates are applied based on certain criteria, such as the type of debit card used. In the video, this concept is used to explain how different debit card transactions may incur different fees, with the script providing specific percentages for various card types to illustrate this structure.

💡Cash Discount Program

The cash discount program is an alternative payment model mentioned in the video, where a discount is offered for cash payments to offset the costs of credit card processing. It is used as a comparison to the hybrid program, highlighting the differences in how fees are managed and displayed to customers. The script suggests that the hybrid program can be a pivot for merchants who prefer not to incorporate fees into displayed pricing.

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