08 Jul [INFOGRAPHIC] The Difference Between Buy Rate and Revenue Share
The merchant services industry is notorious for vague contract language and hidden fees. How can your bank tell whether a prospective partner offers a competitive revenue share? To answer that question, we’ll need to delve into the hard costs associated with merchant accounts—buy rate. For a more in-depth look at this topic, read the corresponding blog post.
What is revenue share?
Revenue share is the portion of the profit generated by a merchant account within your portfolio that is received by your bank. In order to generate profit, each account will need to exceed the hard costs incurred by the processor. These costs are generally associated with the processor, the credit card associations, and interchange paid to issuing banks.
If a potential partner offers your bank 100% revenue share, it will sound like the perfect deal. But be sure to ask yourself what sustainable business would give up 100% of their profit? This is where it’s important to determine exactly what you’re receiving 100% of.
What is buy rate?
All processors have a cost—called “buy rate”—associated with opening and maintaining merchant accounts. If a processor has offered your bank a large percentage of profit, perhaps even all “profit,” for your revenue share, you can be sure that they’ve padded their buy rates to compensate.In an industry notorious for vague contract language and hidden fees, how can you find a trustworthy partner for your merchant services program?Click To Tweet
If your merchant services program is experiencing stilted growth and low retention, it might be time to switch processors. If you’re still not sure how to choose the right partner for your merchant services program, read 8 Things Banks Should Look for In a Merchant Services Partner, or reach out to us. BASYS would love to be a resource for your bank.
To learn more about the benefits of our partnership program, click here.
BASYS Processing as a business partner
If your processor isn’t delivering top-notch customer service and strategies to help grow your merchant services revenue, please call BASYS Processing at (800) 386-0711 or enter some basic information in the form below. Let’s talk about creating a true business partnership that will help you meet and exceed your goals.