The Pellucid Perspective - November 2012 - (Page 7)
goLF courSe aDMiniStration
Debit or credit? Save either way
By Stuart Lindsay
Payment processing changes offer courses options for reducing processing fees
M
any if not most of today’s golf course cost reduction (1.59% + $0.20 transaction fee) and a relatively high debit fee strategies carry with them some degree of potential ($0.55). for weakening the overall customer experience. TakWe should also note that PIN pad usage is already very high ing advantage of recent changes in regulations and technology in Canada, where “debit” comprises over 70% of all electronic involving the fees that credit and bank card companies charge payment transactions. Some of this has to do with differences for processing customer credit transactions is not one of those. in regulations and that Visa/Mastercard has been more willing Payment processing is a significant expense item for most to cooperate north of the border; but recent developments in golf courses we evaluate, with most receiving 60% or more of the US may soon change that situation. We also understand their revenues from credit card transactions. We visit quite a that one major POS vendor (Fore! Reservations) is working few golf courses every year and I have yet to with Mercury Payment Systems to initiate see a golf course with a PIN pad that would the US. Payment processing PIN padiscapability into look at your payment enable them to save money on the processNow a good time ing of debit and check cards. There are some processing options, because other changes is a significant reasons for this – some of the fault lies with are coming that will affect your alternatives expense item for POS software vendors that have not made for accepting payments at your golf course. changes necessary to accommodate the recIn July, 2011, Visa and MasterCard had a most golf courses ognition of those cards as different from judge approve an antitrust settlement aimed we evaluate, with credit cards. Another reason is that payment at ending litigation started by a host of retailprocessors do not aggressively encourage most receiving 60% ers alleging restraint of trade, price fixing and the transition because it generally will lower other unfair businesses practices resulting or more of their their processing revenues. Both groups will from what they claim is a virtual monopoly probably accuse me of oversimplifying the revenues from credit enjoyed by the two largest credit card comissue, but the fact is that golf course operaThis slightly card transactions. panies. beingsettlement wasamodifiedjudge in tors are basically being deprived of an opbefore approved by second portunity to save money. Debit cards (such July, 2012. While this settlement is not finas Maestro, MAC and others) and bank isished – a number of retail trade associations sued check cards with affiliation to the Visa/ sent a letter to Congress on September 20, Mastercard system are the fastest growing segment of electronic 2012 complaining about some of the new terms proposed for payment and their use is aggressively promoted by low-margin merchant agreements going forward – it is anticipated that Visa grocery stores and an increasing number of small retailers. and MasterCard will begin rolling out new merchant contracts Of course, discount rates and transaction fees vary by pay- in 2013 ( James O’Toole, CNN Money, July 14, 2012). ment processor and merchant volume; but we did a little comIf you remember when gas stations used to have a “cash price” parison using three courses with different levels of volume and and “credit card price,” this is what basically caused the litigatransaction size, using a relatively low discount interchange rate tion; and, as part of the settlement, retailers will again be able to
PayMent ProceSSing anaLySiS number of transactions average transaction Size Processing cost – all credit 60% of all transactions Processing cost 80% Credit/20% Debit/Check Card courSe SavingS courSe #1 48,086 $39.12 $23,947 $22,331 $1,616 courSe #2 21,961 $66.19 $16,603 $14,732 $1,871 courSe #3 8,565 $103.26 $9,507 $8,171 $1,336
Copyright 2012 – Edgehill Golf Advisors
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Table of Contents for the Digital Edition of The Pellucid Perspective - November 2012
The Pellucid Perspective - November 2012
Table of Contents
Are you missing your calling?
A tale of two cities
Debit or credit? Save either way
Tucson municipal courses at risk
Economy, discounting pressure challenge Tucson market
October golf weather impact: Giving back some of our season gains
TopGolf proposal for takeover of El Segundo range operation encounters opposition
4 more years – wither goeth golf?
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