SitePoint Sponsor

User Tag List

Results 1 to 8 of 8
  1. #1
    SitePoint Member
    Join Date
    Apr 2006
    Posts
    4
    Mentioned
    0 Post(s)
    Tagged
    0 Thread(s)

    What are typical mark-ups for an ISO

    Hi
    I was wondering if anyone had any idea of the typical mark-ups that an ISO or MSP would put on top of the buy rate offered by the card company. I am particularly interested in what people put on top of Amex as they already have the highest rate in the market.

    Thanks
    John

  2. #2
    He's No Good To Me Dead silver trophybronze trophy stymiee's Avatar
    Join Date
    Feb 2003
    Location
    Slave I
    Posts
    23,426
    Mentioned
    2 Post(s)
    Tagged
    1 Thread(s)
    Nothing. You can't mark up Ameriacn Express. You can, however, charge a flat fee everytime one is processed through their account (assuming they don't use split dial). This fee is usually around 15-20 cents.

    FYI, you can't mark up Discover Card either. Both are separate from Visa and MasterCard which is what MSP/ISOs resell. They each have their own rate structures and all you can do it quote them. You can't change them or mark them up.

    As for Visa and MasterCard, well, it all depends on the MSP/ISOs buy rates. They get different ones depending on their contract with the sponsoring bank.

    Instead of worrying about what your markup should be, you should try to figure out what competitive rates to offer would be. Markup is meaningless if you can't compete with your rates. The market you are targetting will determine that. On ebay internet merchant account rates are under 2%. However, most sales agents and MSP/ISOs are offering about 2.3-2.5% on their websites and in their advertising elsewhere. On ebay it's lower because it is more competitive.

  3. #3
    SitePoint Member
    Join Date
    Apr 2006
    Posts
    4
    Mentioned
    0 Post(s)
    Tagged
    0 Thread(s)

    one more question?

    Thanks for the information. Do you know if that is how Amex works in the non-internet space as well? Do they ever share their fee with anyone or is it always just a click fee?

    I would think the click fee would put them at a pretty big disadvantage with retailers doing large amounts per transaction.

  4. #4
    He's No Good To Me Dead silver trophybronze trophy stymiee's Avatar
    Join Date
    Feb 2003
    Location
    Slave I
    Posts
    23,426
    Mentioned
    2 Post(s)
    Tagged
    1 Thread(s)
    Quote Originally Posted by jthomps22
    Thanks for the information. Do you know if that is how Amex works in the non-internet space as well? Do they ever share their fee with anyone or is it always just a click fee?

    I would think the click fee would put them at a pretty big disadvantage with retailers doing large amounts per transaction.
    Amex works the same everywhere: retail, restaurant, moto, internet. They never share their fees. The only way to captialize on an Amex transaction is to markup the fee for their transaction passing through the Visa/MasterCard account. The way to really profit from Amex as an MSP/ISO is if your sponsoring bank pays you for each account established.

    The click fee never turns anyone off. It's their high percentage rate that does. The higher your ticket price the more it hurts. Lower ticket merchant actually like American Express because they don't charge a per item fee.

  5. #5
    SitePoint Member
    Join Date
    Apr 2006
    Posts
    4
    Mentioned
    0 Post(s)
    Tagged
    0 Thread(s)
    So if someone convinces a retailer to accept Amex do they collect a fee? I have seen fees on the Web in the $50-200 range for something like this. What can you get for Amex? Since Amex is both the card issuer and the bank do they pay the fee?

    I know in the non-internet world they use non-Amex employed "broker" types to get to the smaller merchants. How do these brokers make money?

  6. #6
    He's No Good To Me Dead silver trophybronze trophy stymiee's Avatar
    Join Date
    Feb 2003
    Location
    Slave I
    Posts
    23,426
    Mentioned
    2 Post(s)
    Tagged
    1 Thread(s)
    You can only collect a fee for establishing an Amex account if your sponsoring bank pays you a referal fee or if you bill the merchant directly for an American Express setup fee (which I've never heard of anyone doing). Just make sure if you do the latter the merchant doesn't fins out Amex doesn't have a setup fee as they will be pretty sore with you for charging them one.

    I don't know anything about those brokers as I've never heard of them. I'm not sure what they do but Amex has set guidelines and set rates so they're working with the same tools as everyone else.

  7. #7
    SitePoint Member
    Join Date
    Apr 2006
    Posts
    4
    Mentioned
    0 Post(s)
    Tagged
    0 Thread(s)

    Last question

    what are typical referral fees? what if i thought i could get a 1,000 new accounts for one of these guys over the next 3 months?

  8. #8
    He's No Good To Me Dead silver trophybronze trophy stymiee's Avatar
    Join Date
    Feb 2003
    Location
    Slave I
    Posts
    23,426
    Mentioned
    2 Post(s)
    Tagged
    1 Thread(s)
    Quote Originally Posted by jthomps22
    what are typical referral fees?
    This may vary but would porbably be in the range of $50 per new Amex account.

    Quote Originally Posted by jthomps22
    what if i thought i could get a 1,000 new accounts for one of these guys over the next 3 months?
    They wouldn't believe you until you did it and then kept it up over an extended period of time (about a year). Then you'd have some room to move. But if that volume is real you wouldn't be considered with Amex. You'd be trying to drop your rates on Visa and MasterCard because that's where the real money is.


Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •