Tag Archives: credit

Discover “On Us” Program

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Today The Official Merchant Services Blog  will focus on an exclusive deal offered to merchants by Host Merchant Services, a second year of the Discover “On Us” plan, formerly the Add Discover On Discover promotion. This plan comes at just the right time for merchants as holiday shopping will increase their traffic and sales. This offer from Discover, through Host Merchant Services is bold and exciting. It essentially gives qualifying merchants a year of being able to process Discover payments at no cost. Discover “On Us” gives the merchants no fees when their customers swipe a Discover card. And they have this benefit for an entire year.

The Details of the Plan

To qualify for the Discover “On Us” program from Host Merchant Services, you must have not processed any Discover cards in the past six months of doing business. Discover card processing includes Discover, Diners Club International, BCcard, China Union Pay, JCB and DinaCard. That’s it. That’s all you need to qualify. Once you qualify it’s a series of easy steps to get the program started:

  1. Enroll in the program anytime before December 31st, 2013.
  2. Confirm your enrollment with a required test transaction.
  3. Update signage at your retail store (or on your website if you are an e-commerce only merchant).
  4. Inform your employees and actively promote Discover to your customers to start reaping the savings.

 

Once you’ve been verified you will receive written notice from Discover. Within 10 business days of your acceptance you’ll receive a welcome letter with free Discover signage and tips for increasing your sales with Discover.

Benefits of the Plan

This plan is really good for merchants that haven’t been accepting Discover cards. Every Discover transaction you process for 12 full months will cost you nothing  –– no limits, no exceptions. Coming right at the end of the year, this plan is the type of holiday shopping incentive that is extremely lucrative for merchants.

Durbin Amendment Works For This Too

In fact, one of the features of the Durbin Amendment can help Discover get added hype and promotional assistance from this Discover “On Us” plan. As Host Merchant Services pointed out in their Durbin Amendment analysis earlier this year, one of the key pieces of the legislation focuses on competition within the payment processing industry: “[The Durbin Amendment] seeks to stop major credit and debit card networks from imposing penalties on small businesses, merchants and government agencies. The law applies to banks with over $10 billion in assets and restricts these large banks and credit card companies from using their dominant market power to force merchants to accept anti-competitive restrictions. To put it simply, large credit card companies are no longer able to punish merchants for offering discounts to customers for using another card network; or discounts for using cash, check, debit card or gift card and loyalty cards; or set a minimum or maximum transaction amount for payment by card.”

So what this means is Discover can usher in this program –– which offers no transaction fees for a year –– to attract merchants, and those merchants seeing how much more of a savings this can provide them over other options can freely promote Discover over the competition, with no fear of punishment or penalty. Durbin lets a merchant promote the better deal for their business.

For More Information

This landmark offer lasts until December 31, 2013. The Discover “On Us” Program will extend 12 months of free Discover processing to merchants who qualify, even if implemented on December 31st, 2013, the merchant would be able to utilize the program through December 31st, 2014. If you are interested in finding out more about it, feel free to Contact Host Merchant Services.

Interchange Settlement Given Preliminary OK

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On Friday, the Judge presiding over the controversial Interchange Settlement case in Brooklyn, N.Y. gave preliminary approval to the settlement of credit card interchange litigation announced July 13. The Official Merchant Services Blog recently explained why the controversial Interchange settlement was being considered for preliminary approval, despite the backlash from merchants and large corporations. We also began talking about the possibility of ‘The Big Cash Comeback’ when the settlement was first announced, and later we discussed the opposition to the settlement.

U.S. District Judge John Gleeson indicated in late October that his cursory review showed that the settlement probably met the legal requirements for preliminary approval. He scheduled a hearing for Nov. 9 to get input from lawyers for the merchant plaintiffs and network and bank defendants. The judge said final approval requires a higher standard, and lawyers don’t expect final sign-off anytime before 2013. Opponents argued that the plan didn’t even meet the lower threshold for a preliminary approval.

The National Retail Federation, the leading retail-industry trade group and an outspoken foe of the agreement, quickly issued a statement saying it would “explore all legal options.” But the Electronic Payments Coalition, a lobbying group of card networks and banks, said it viewed Gleeson’s ruling “as further indication that this historic settlement is a fair and balanced resolution to the epic swipe-fee battle.”

The NRF’s Mallory Duncan said in a statement  that “retailers, their customers and competition would suffer irreparable harm if this one-sided deal is allowed to move forward. We will consult with our attorneys and act as soon as possible to correct this injustice.” The NRF is not a plaintiff in this case, and made no mention of which legal remedies it would pursue.

MasterCard Inc. general counsel Noah Hanft said in a statement that the settlement “was reached with the assistance of the court and was supported by the merchant class representing millions of large and small retailers, and prominent trade groups across the country.” MasterCard also said it remains confident that “the court will grant final approval in the coming months.”

Visa Inc. said “this settlement is a fair and reasonable compromise for all parties. It is the result of two years of negotiation between retailers, their legal counsel, the networks, financial institutions and two highly regarded mediators under the supervision of the court.”

Merchants and some trade associations sued Visa, MasterCard, and about a dozen banks in 2005 alleging credit card interchange is unfair under federal antitrust laws. With a trial set for September 2012, the parties reached a settlement that calls for the defendants to pay more than $6 billion in damages and temporarily lower credit interchange to the tune of $1.2 billion. The networks also are to grant relief from some of their rules, including an easing of restrictions on surcharging, and let merchants negotiate in groups in the interchange-setting process. In return, the merchants are to agree not to sue the networks over interchange and rules in the future.

Opponents said the plan would protect what they view as anti-competitive interchange practices from further challenges by merchants, even from merchants that don’t yet exist. Opponents also questioned the value of the new surcharging freedoms, noting that 10 states prohibit the practice. This settlement attempts to force a one-size-fits-all solution onto a wildly diverse group of merchants, which may be extremely unsuccessful.

While we have discussed this settlement from different aspects previously, noting the advantages it would seem to give the Issuing Banks over merchants, the settlement seems to be proceeding along without any further adjustment or negotiation. Although it is not finalized yet, the dissenter’s cries seem to be going unheard, as they believe that the settlement protects the status quo more than anything, and will not change the way the networks set interchange. Host Merchant Services will keep you informed of all the latest news involving this legal battle between the merchants and the card-issuing giants.