An eBay for Card Processing Seeks to Cut Costs for Merchants

Merchants searching for card-acceptance services may want to make short work of the process and work with Transparent Financial Services LLC’s TransFS site. The company has eight processors making “binding” bids to merchants who utilize their site, which was launched late last year and went commercial this spring.

TransFS has mechanisms in place to insure potential customers view comparable bids. Processors are required to submit interchange-plus pricing and they must waive cancelation fees. With interchange-plus pricing, bids are presented with a clearly stated mark-up over the fixed fees and percentage-based prices laid out in the interchange tables published by the card networks. “If you’re not the kind of processor that wants to do that, you really shouldn’t be on our marketplace,” says TransFS chief executive, Sean Harper. Processors pay a set fee to TransFS after a deal is closed and merchants are able to utilize the service for no fee.

Last year TransFS conducted a merchant survey prior to launching its site, and found significant dissatisfaction in regard to both services and pricing from acquirers. And Harper says things aren’t getting any better this year, with some acquirers tacking on new fees to monthly statements, including charges to cover compliance costs of compliance and pass-through fees related to MasterCard and Visa fee hikes for network access

TransFS has plans to introduce a new feature that will allow merchants to search by select criteria for a processor. The new feature will also allow for commenting and user supplied information that will make it easier to choose a processor. Already the company has several hundred processors in its database and hopes to be the Yelp of credit card processing.

TransFS’s online marketplace isn’t the perfect solution for all businesses though. They are more suited to smaller merchants. The forced interchange-plus pricing may help merchants avoid bundled pricing that doesn’t tally with what they would actually pay. Of course processors that are truly open about all fees may end up losing in this type of environment. And the deals generated by TransFS’s auctions are only intended to supplement the business processors are picking up elsewhere.