As a refresher, we covered all of the considerations you, as a merchant, need to think about when processing payments. The world of merchant services and PCI compliance is broad and entails many different things that go beyond simple payment processing. We covered most of those in part I, and today, we’re going to provide a more concrete sense of what to expect in terms of cost.
Remember, you want to make sure you’re comparing apples to apples when evaluating vendors. So, without further ado, let’s dive into everything you need to know about merchant services & PCI compliance costs.
Real Costs of Merchant Services & PCI Compliance: A Rundown
When comparing processing costs, be sure to consider all of the features and assistance your organization will need and use. Oftentimes, these benefits are not included in standard processing agreements from vendors. Questions to ask when evaluating vendors include:
- Are P2PE devices included? Some vendors may include a set number of P2PE devices with your processing, while others may charge a flat monthly fee per device.
- Quick math: If you need 100 devices and the vendor charges $25/month/device, your annual fee could be $30,000.
- Are P2PE transactions (encryption) included? Some vendors charge an additional $.10/Transaction for P2PE encryption on top of processing fees.
- Quick math: If you see an average of 600,000 transactions per year and a quarter of them are processed through P2PE devices, you will incur an additional cost of $15,000 per year.
- Does it include PCI SAQ Portal & Vulnerability Scanning? Colleges and universities pay, on average, $85 per year per MID for this.
- Quick math: If an institution has 60 MIDs, it would incur costs of $5,100 per year on top of processing costs.
- Does the processing agreement include interchange optimization? Your current processor includes Automated Interchange Optimization to reduce your interchange rates.
- Quick math: Small amounts add up fast. If your institution processes $20M annually and interchange optimization can save you just 0.05%, you’re looking at $10,000 in annual savings.
- Will I need to secure external ecommerce solutions for payment pages? Some vendors include these with processing, while others charge additional fees. Don’t forget the cost of the additional staff required to manage an external ecommerce system.
- Quick math: Ecommerce hosted payment pages run ~$30,000 per year. The salary of an ecommerce manager is ~$50,000, for a total of $80,000 total per year.
- Do you automate reconciliation? If not included in your processing agreement, you’ll need to handle this in-house, which typically takes about one hour per MID each week.
- Quick math: In our hypothetical case, that’s 60 MIDs x 1 hour per week x $40 per hour for staff to complete, totaling $124,900 per year.
- How can you help reduce PCI scope? This is a big one. PCI is a handful, so the more you can reduce scope, the better. Segmenting networks for PCI compliance alone, for example, runs about $130,000 per year (thankfully, our hypothetical vendor offers P2PE solutions, which eliminate the PCI requirement to segment networks. Phew!)
When all is said and done, a lot may actually be included in the full package. Before you let sticker shock win out, be sure to evaluate how (and if) pricing factors in:
- Devices
- Encryption
- Interchange optimization
- Ecommerce solutions
- PCI DSS requirements and scope reduction
You will need to account for these critical items one way or another.
Schools Need Advisors With Deep Experience
The bottom line is that many colleges and universities don’t even know to ask these questions. And why should they? They are busy fulfilling their core missions to their students, staff, and alums. Working with consultants can help schools get a handle on the “big picture,” including all of the costs that go into streamlining payments and PCI compliance. The consultancy can get in the weeds on device and processing details so schools can focus on growing and improving the university.
In an ideal state, schools don’t have to manage their systems themselves or hire expensive specialized staff to do so. Just like they hire accountants to manage financial reports and taxes rather than trying to figure it out themselves, schools can rely on consultants like Arrow Payments to ensure that the complexities and requirements of payments and PCI are addressed and met with ease and without surprises.
Arrow Payments specializes in working with complex, decentralized institutions to help them streamline payments and PCI compliance with the right software, processes, and strategies. Contact us today for a free consultation.
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