The industry has seen an unprecedented series of announcements that have impacted the financial aspects of being an IAD:
- Interchange is a race to ZERO these days. The banks continue to decrease their interchange payments. Network deductions, defined as administrative fees, fraud fees, monthly maintenance, have increased.
- ADA compliance and the upcoming EMV liability shift require site visits for installing expensive equipment upgrades.
- Regulatory changes have resulted in more due diligence and financial reporting.
- The major credit card networks have more than doubled the cost of annual renewal.
- Continuing fraud has made insurance companies and banks more nervous about sponsorship. This anxiety is reflected in the cost of coverage and access to vault cash.
- Maturity of the retail ATM business has forced portfolio owners to bear these increased costs and risk without the benefit of meaningful interchange or even surcharge revenue in many cases.
- Competition has made negotiating with merchants for placement and a portion of surcharge revenue more and more difficult.
What options do you have to re-establish control over your pricing:
- Charge a monthly administrative fee to the merchant for charge-back disputes and other operating costs
- Collect a down payment towards the actual dispute charges, to be replenished when balance gets to a pre-determined minimum
- Negotiate incremental surcharge of $0.10-0.25 per transaction that covers your expenses since you can no longer rely on interchange to cover your daily operating expenses.