Those of us of a certain age recall Rube Goldberg and his fascination with designing machines that were the opposite of efficiency. An engineer, inventor and political cartoonist who lived until 1970, Goldberg is the only person to be listed in the dictionary as an adjective, and he won a Pulitzer prize in part because his famed machines were "deviously complex and impractical.” His legacy continues with music videos (OK Go!) and a legion of recent Rube Goldberg designs highlighted by the website Cool Material. 

One classic Rube Goldberg design is of a mouse trap:

While the mousetrap seems absurdly impractical and amusing, there are hidden parts of our economy and everyday business systems that are no less complex.
 
One such area is credit card processing, an industry which employs Rube Goldberg-like machinery to the detriment of all of you that accept credit cards. While the issuance of credit cards to us as consumers is highly regulated (to protect us), the processing of credit cards to get you paid as a merchant is not.   

 
As shown in the chart below, as many as 3-8 different parties “touch” a credit card transaction from the time you swipe until the time the consumer pays the bill. Each party has their hand in the till and gets a piece of the transaction. It’s a lot of money, as you can imagine.

Who pays for this? You do. You pay in the form of rates and fees that are mired in complexity, including 600 rate categories, industry SIC codes (that are often incorrect), and errors in account set up when you first start accepting cards.  
 
To address this,  Merchant Advocate was formed by an executive who left the credit card processing industry to work on behalf of merchants.  Over the past 10 years, they have saved thousands of clients over $35 million in fees.   
 
While you may think you already have a “low rate” or got a good deal when you set up your account, empirical data suggest otherwise. 7 out of every 10 merchant accounts are over-paying in one form or another. 
 
While the landscape is quite complex, the process to rectify is simple and straightforward. With your permission, Merchant Advocate conducts a review of your recent processing statements and determines the likely savings. Their expertise in decoding terms like “EIRF” and “discount expense for credit” (which is not found in accounting textbooks) gives them the ability to speak the same language as your processor and bank and negotiate effectively on your behalf. 
 
There is no need to switch processors or change internal workflow. Merchant Advocate does the heavy lifting, reports back to you, and shares in the savings equally with your practice.   
 
SM2 recently agreed to help Merchant Advocate expand in the medical area. We started a pilot study with 3 practices and found annual savings of $37,000 and $12,000 in the first two; the third has good rates and will see savings once their account is optimized for all card types.

Once lower rates and/or fees are put in place, Merchant Advocate continues to monitor your statements over a 3-year period to prevent the processor from raising your rates or adding new fees (they are notorious for doing this). Each month you receive a report documenting the exact amount saved and any attempted changes to your account. 
 
Transparency is Merchant Advocate’s mission. And while that may not be a “Rube Goldberg,” it sure makes a lot of sense to turn part of an expense into operating income.
 
Next Step:  Click HERE and let us know you’d like to have your statements analyzed at no cost.   
 
We will send you more information about Merchant Advocate and their success in lowering rates and fees with your current processor and bank. The process typically takes 7-10 days and results show up on your next statement.