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The Payment Advisor

Ross Federgreen Comments

“The Payment Advisor” is a monthly Q&A column to which readers can submit questions about card transaction systems, electronic funds transfer, check acceptance and processing, wireless transactions, international funds transfer, and other payment issues. To participate, e-mail questions to Also watch for quarterly articles on related topics.

I am asked one payment question over and over again by inquirers to this column, so this month I will answer it in depth. The question is: “How do I know if I am getting a good rate with my payment processor?” The answer is multifaceted. In today’s financial environment, you must concern yourself with issues of security, compliance and risk as well as rate.

To determine if you will have an equitable relationship with your provider, get the following critical information in writing:

1. A detailed copy of the provider’s resume

2. References for the provider from people in your industry

3. A complete copy of the service contract

4. A complete list of definitions (terms vary among processors)

5. A clear indication of the length of the contract and all termination conditions and fees

6. A specific list of all rates

7. A specific list of all fees

8. A specific list of all equipment costs

9. An outline of who provides customer service

10. Copies of all documents related to payment-association compliance

Before choosing a payment processor, obtain at least three written bids to compare these important items. This will help you set a benchmark against which to measure.

Ross Federgreen is a co-founder of CSRSI, which provides an integrated approach to the analysis, design, implementation, deployment and management of electronic transaction services and systems. Since 1999, the company has helped more than 350 public and private institutions reduce the cost of acquiring money and minimize the liability exposure related to payment transactions and customer data. For more information, call 866.462.7774, ext. 1; e-mail; visit

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