Canada's Credit Card Evolution Through Interchange+

CANADA'S CREDIT CARD PAYMENT EVOLUTION THROUGH INTERCHANGE+ CREDIT CARD V00 30 05AW FOR YEARS, CREDIT CARDS HAVE SERVED AS THE BACKBONE OF COMMERCE. While some continue to argue for their replacement with mobile phones, biometric fingerprint readers or at the most extreme, RFID chips embedded in our bodies, credit cards aren't going away just yet. Paired with the latest mobile technology and pricing services, banking with credit cards is now easier than ever for both businesses and consumers. MOBILE COMMERCE 2011 $240 BILLION A recent study by Juniper Research determined the value of total mobile payments worldwide will have reached over half a trillion dollars by 2015. 2015 $670 BILLION CANADA, often considered a 0-2.5 MILLION "test-market" for U.S. Growth of Canadians targeted products, continues to be a part of the rapid adoption of mobile payment services. with banking apps on their smartphone in just over 14 months. 2,500,000. BANKING APPS BANKING APPS 2010 2011 Canadians using 38% a banking app. WITH CONSTANT TECHNOLOGICAL ADVANCEMENTS, businesses looking to accept credit card payments are exposed to various solutions such as a physical terminal or a mobile application. Now, thanks to Payfirma, there is a way to make accepting payments much simpler on the part of the merchant. Canadian iPhone users 54% with banking apps. When it comes to using banking apps, iPhone users prove themselves to be the real early adopters. INTERCHANGE + PRICING Already a cornerstone in US and foreign markets, Interchange Plus Pricing comes to Cananda through Payfirma, giving merchants the most in-ter-change plus /in-ter-cheynj pluhs/ n 1. New type of merchant pricing program that completely eliminates all non-qualified fees and surcharges associated with premium and high-spend credit cards. transparent and cost-effective pricing model geared to maximize profit on each transaction. INTERCHANGE Cost for processing credit card transactions paid to card issuers PLUS Markup from acquirer to cover risk associated with credit card purchase HOW IT WORKS In 2010, Canada's Ministry of Finance introduced the Code of Conduct, which requires all processors to clearly state their effective rates per card type lending greater transparency to all credit card transactions. CURRENTLY, WHEN A MERCHANT ACCEPTS CREDIT CARDS... The interchange system also affixes a cost based on the type of card and method processed. The cards go through an interchange system that tacks on costs based on: TYPE OF CARD Consumer, Premium, Business, etc. INTERCHANGE FEES O DUES O CONSUMER PREMIUM BUSINESS ASSESSMENTS O METHOD PROCESSED Swiped, chip inserted or manually entered MasterCard Paid to Card Associations These fees and surcharges contribute to convoluted billing structures that can lead to frustration on the part of businesses. Paid to Card Issuer VISA INTERCHANGE+ PRICING FROM PAYFIRMA ELIMINATES ALL NON-QUALIFIED FEES AND SURCHARGES ASSOCIATED WITH PREMIUM AND HIGH-SPEND CREDIT CARDS BY: • Passing along hard costs paid to VISA and MasterCard. • Adding a small markup (the +) to those costs to cover the risk associated with each transaction. USING A S10,000 IN CREDIT CARD SALES AS AN EXAMPLE, COMPARE THE SAME TRANSACTION WITH INTERCHANGE DIFFERENTIAL (WHAT YOU'RE MOST LIKELY PAYING CURRENTLY) vS. PAYFIRMA'S INTERCHANGE + PRICING: INTERCHANGE DIFFERENTIAL INTERCHANGE + Qualifying Interchange Target Rate 1.74% Qualifying Interchange 1.74% 1.54% - "PLUS" 0.30% + Interchange Differential 0.20% = Total Cost to Merchant 2.04%o- Non-Qualifying Surcharge 0.30% Cost on $10,000 Volume $204 o Interchange Differential 0.20% + Subtotal 0.50% = USING INTERCHANGE+ CONTRIBUTES A 12% Merchant Discount Rate 1.80% SAVINGS OVER INTERCHANGE DIFFERENTIAL. Non-Qualifying Surcharge 0.30% + For the majority of businesses, switching to Payfirma's Interchange + pricing model results in significant savings. Other benefits include: • Low processing costs normally reserved for large billion-dollar merchants. Interchange Differential 0.20% + Total Cost to Merchant 2.30% Cost on $10,000 Volume $230 • No more surcharges based on card type (biggest benefit to SMB market) • Easy to read monthly statements with clear and concise rates • Complete transparency in order to understand and manage costs properly • Profit maximization on each swipe Payfirma is Canada's true all-inclusive payment processor, providing its partners with innovative and best-in-class financial technology. Visit PAYFIRMA.COM for more information on interchange pricing and other payment solutions. CREDIT CARDS ARE HERE TO STAY. WITH INTERCHANGE+PRICING FROM PAYFIRMA, ACCEPTING THE MOST COMMON FORM OF PAYMENT DOESN'T HAVE TO BE A HASSLE. Payfirma. Sources: The Business Journals, Canadian Bankers Association, Canadian Wireless Telecommunications Association, Juniper Research, PayPal Canada, Solutions Research Group 000 |Ш