Inspire Commerce Inc. had Spindle Inc. at hello. Well, almost.

After serving on a panel discussion together at Bank Innovation 2012 in March, execs at the companies formed a business partnership this week that makes Spindle’s RhinoPay, a payment service platform, available for white-label through Inspire Commerce for end merchants to rebrand to their customers.

InspirePay, Inspire Commerce’s flagship application, is a payments aggregator that lets merchants offer a variety of payment options online through a branded interface. With the new partnership, RhinoPay will serve as its credit card, check and ACH payment processor.

After a few pre-event conference calls, negotiations were on the table the night before their panel took place, Mark Fischer, Inspire Commerce’s co-founder and chief executive tells Bank Innovation.

“Spindle is going to allow us on a basic level to offer instant processing accounts to merchants inside and outside of our InspirePay platform under the .pay™ brand,” says Fischer. “Merchants will be able to directly accept credit card payments via the simple online setup process. RhinoPay is the underpinnings, the processing platform. As our relationship expands, we will grow together into multiple markets including online, mobile, and P2P payment processing.”

We’re fairly confident Inspire and Spindle will attend Bank Innovation in 2013, no?

Strategic Relationship Gives Merchants and Consumers Greater Options for E-commerce and Mobile Commerce

BOULDER, Colo., May 07, 2012 (BUSINESS WIRE) — Inspire Commerce, a Boulder-based credit card processing company, and makers of InspirePay, today announced that it will license its .pay(TM) brand of services to the payment systems provider Spindle, Inc. (SPDL.OB).

“This agreement, to license the use of the .pay(TM) brand (dot pay(TM)) and related technologies is a landmark in the evolution of online payments,” said Mark Fischer, Inspire Commerce co-founder and CEO. “Spindle, Inc. brings an entire new tool set to the InspirePay environment, and beyond. Merchants will be able to receive instant approval for new payment processing accounts. As we work together, .pay(TM) will be extended into third party environments including web and mobile.”

Headquartered in Scottsdale, AZ, Spindle Inc. is a leading provider of alternative and mobile commerce payment platforms for merchants and consumers. The company’s RhinoPay(R) product is a highly-secure payment solution that facilitates person-to-person, person-to-business, business-to-person, and business-to-business payments.

Through this new partnership, merchants will be able to white label instant approval functionality on the InspirePay platform and within the person-to-person money movement space.

The .pay(TM) brand was used in commerce for the first time in June of 2011. The company’s website and trained customer service associates assist with financial transactions including merchant services, echeck solutions, digital wallets and payment services. They even setup web sites for merchants via the InspirePay platform. Inspire Commerce’s fully customizable platform allows businesses of all sizes to private label their pay experiences and shopping carts for their customers.

“InspirePay’s easy-to-use, customizable and secure protocol to make and receive payments offers an exciting and complementary route to market for Spindle’s RhinoPay payment solution,” said Bill Clark, president of Spindle Inc. “By integrating Spindle technology with the .pay(TM) brand of services, we can deliver a robust solution that can facilitate e-commerce and m-commerce transactions for both merchants and consumers.”

About Inspire Commerce

Based in Boulder, Inspire Commerce is the first universal payment platform that consolidates all online commercial transaction options into a single, streamlined, secure and customizable payment hub. It’s flagship application, InspirePay, provides businesses and consumers with an easy-to-use, flexible and secure protocol to make and receive payments without the complexity of expensive, disconnected, closed systems. For more information visit, www.inspirepay.com .

About Spindle, Inc.

Spindle is an innovator of mobile payment solutions for the banking industry, retail sector and consumer-facing companies. A pioneer in “Frictionless Finance,” the company is actively developing new and improved ways for companies and end consumers to fluidly transact and exchange funds, regardless of platform. The Company is dedicated to delivery of secure payment services crossing traditional boundaries by offering cutting-edge solutions that enable buyers, sellers and individuals to transact face-to-face or virtually using mobile or internet devices, this includes RhinoPay(R), a frictionless way to pay. The company also owns and has developed an extensive intellectual property portfolio, including patents pending, covering networks, mobile payments and security. For more information, visit www.spindleHQ.com .

SOURCE: Inspire Commerce

The amount of the FANF depends on the merchant category code (MCC), the mix of card present and card not present volume, and the number of locations the business operates. The FANF can vary from month to month for each merchant depending on these factors.

For many merchants who process all of their transactions in a card present environment, the amount of the FANF is based on the number of locations owned by the business, as shown in Table 1b below. (Please note that if merchants have any card not present volume for debit and credit card processing, they will incur additional FANF fees, which we will explain later.)

However, certain types of merchants are considered “High Volume MCCs” by Visa and have a different set of rates shown in Table 1a below. High Volume MCCs include Airlines (3000-3299, 4511), Auto Rental (3300-3499, 7512), Lodging (3500-3999, 7011), Warehouse Stores and Wholesale Clubs (5200, 5300), Discount Stores (5310), Department Stores (5311), Supermarkets (5411), Car/Truck Dealers (5511), Auto Tire Stores (5532), Petroleum (5541, 5542), Family Clothing Stores (5651), Furniture Stores (5712), Electronic Stores (5732), Drugstores (5912), Theatres (7832) and others.

Now comes the really tricky part, card not present volume. The FANF fee for card not present volume is calculated separately in Table 2, in addition to the fee from Table 1a or 1b. The FANF fee for card not present volume is based on monthly volume, as shown in Table 2 below. This table is also used to determine the FANF for fast food restaurants (MCC 5814) and merchant aggregators.

As a reminder, the FANF is calculated per merchant taxpayer and includes all merchant accounts owned by that taxpayer. A taxpayer is defined as a legal business entity with its own federal taxpayer identification number (TIN). This can make it even more confusing, so hopefully the following examples will help you understand it.

Example #1 – Retail business with 1 merchant account with 100% card present volume

FANF is determined using Table 1b, Tier 1 = $2.00/month.

Example #2 – ecommerce business

FANF is determined using Table 2, Tier 6 = $15.00/month.

Example #3 – Restaurant with 1 location with 80% card present volume

The FANF is determined in two steps. The card present volume is determined using Table 1b, Tier 1 ($2.00). The card not present volume is based on Table 2, Tier 4 ($7.00). So, the total FANF for this account would be $9.00 per month.

Example #4 – Retail business with multiple locations and channels

The card present part of the business is based on Table 1b, Tier 2 (2 locations), so each location is assessed $2.00/month. The card not present part combines the volume from Location B and the e-commerce website. The total of $7,500 in card not present volume results in Table 2, Tier 5, or $9.00 per month.

According to a recent survey by technology, outsourcing and consulting company Infosys, consumers appreciate the convenience and ease of using their mobile devices to carry out banking activities. Of the 1,000 active smartphone users in the U.S. who took part in the study, 94 percent said they found mobile banking easy and 77 percent reported that it was convenient. Additionally, 83 percent said they felt comfortable and secure while banking on their devices, and nearly 80 percent appreciated the fact that, with mobile banking, they have access to their accounts 24 hours a day, seven days a week.

Speed, viewing issues mitigate satisfaction

More than one-quarter (26 percent) cited viewing features – such as small fonts and similar interface issues – as barriers to use, while less than half (48 percent) said they were pleased with speed of service and 46 percent were happy with ease of log in. That said, nearly 60 percent said their view of mobile banking services had improved over the past year.

“Our research shows that mobile banking users like ease and convenience but at the same time demand and expect seamless service,” said Ashok Vemuri, head of the Americas at Infosys. “There is phenomenal opportunity for banks to listen to feedback from early adopters and set the pace around customer experience in the digital world.”

Mobile banking via tablet

According to the recent 2012 Tablet & Banking Report from Javelin Strategy & Research, tablet adoption is expected to rise 40 percent by 2016, with tablet users’ mobile banking rates increasing twice as fast as those of non-tablet users.

“With tablet use among U.S. consumers on the rise and the underlying tablet operating platform market evolving, financial services executives need to better prioritize their app development efforts,” according to Javelin. The company noted that consumers use tablets differently to PCs and smartphones, and banks should customize their mobile application offerings with this in mind.

“(Banks) should first optimize their mobile sites for tablets because most tablet owners access their bank accounts using browsers,” noted Mary Monahan, executive vice president and research director of mobile at Javelin, in a statement.

This means that regulated debit transactions will still receive the regulated interchange rate (0.05% + $0.22), but they will be subject to the TIF if they fail to qualify for a CPS program. For example, a transaction that qualifies for Standard Debit – Exempt or Regulated – will be assessed an extra $0.10 for the TIF.

Merchants can follow best practices for processing credit cards to maximize their chances of qualifying for CPS, which can help them qualify for better interchange rates and avoid the Transaction Integrity Fee. Here are some common reasons for incurring the TIF and how to avoid it:

• One wallet or multiple wallet platforms? What level of integration can we expect or is necessary?
• What’s out there now? What’s on the way? Where does NFC fit in?
• Loyalty, points, rewards and virtual currencies
• The future of cashless payments

For more information: http://bankinnovation.info/

2. Reduce the occurrence of fraudulent transactions
Merchants doing business online are exposed to significantly higher fraud risk and costly chargebacks. In fact, it is estimated that fraud losses are more than 16 times higher for card-not-present transactions than for conventional transactions. Because it is much more difficult to validate a shopper’s true identity in an online transaction, fraudsters frequently take advantage of eCommerce merchants to monetize credit card data that has been illegally obtained. Merchants often employ pro-active order screening to prevent fraud, but utilizing only one or two points of logic (e.g., rejecting orders simply based on dollar threshold or address verification results) will rarely identify fraud attempts accurately, causing overabundant review efforts and potential “false positives.”

3. Decrease interchange fees
Corporations are increasingly taking advantage of online channels for procurement purposes, and the use of purchase cards and corporate credit cards is expanding rapidly as a result. eCommerce retailers can benefit from the lower interchange fees associated with business-to-business (B2B) card transactions—however, to qualify for reduced interchange rates for these transactions, they must capture and transmit additional data (known as Level III data) such as line items, product codes, item descriptions, unit price, unit quantities, and ship-to postal data.

4. Use data more intelligently
One important advantage that online businesses have over traditional brick-and-mortar stores is an enhanced ability to collect and analyze detailed customer information about everything from cart abandonment to promotional effectiveness to average ticket size by demographic. With such large volumes of purchase data running through eCommerce sites every day, the challenge is how to cost-effectively access and analyze the data to extract useful insights. Real-time access to data analytics, as well as detailed reporting, benchmarking tools and chargeback tools, is essential
to maximizing success online.

5. Stop managing multiple eCommerce vendors
There is a great deal of complexity that comes with operating a profitable online retail business, especially one that spans across international borders or also includes a brick-and-mortar operation. The payment acceptance function alone can comprise managing payment processors, eCommerce gateways, alternative payment services, fraud solutions providers, global acquirers, and data security experts.
In order to gain operational efficiencies and reduce the resources required to manage so many suppliers, it may be beneficial to consider consolidating certain payment-related services and processes with a single vendor. Doing so can have many advantages, including simplified access to technical support services, unified reporting, easier integration of ancillary functionalities, optimized interchange costs, volume discounts, and a single point of contact and user interface.

Inspire Commerce can handle your credit card processing and payment gateway services.  Get in touch with and find out how we can support your business.

See below for an explanation of interchange, or click the links below for more details on particular topics.

• Visa Transaction Integrity Fee (TIF)
• Visa Fixed Acquirer Network Fee (FANF)
• Visa Interchange Rates
• MasterCard Interchange Rates

What is Interchange?

When a customer (cardholder) makes a purchase with a credit card, such as a $100 pair of shoes at a shoe store, the bank that issued the credit card (the issuing bank) funds $100 to the shoe store before they collect that money from the customer.

Interchange refers to fees paid by the merchant’s bank to the issuing bank for this service. Interchange covers the cost to convert a charge on an accountholder’s card to a cash deposit at the merchant’s bank account, including billing services, credit risk, fraud risk, and float.

Interchange accounts for the vast majority of merchants’ costs for accepting card-based payments, regardless of how the merchant is priced.

Why is Interchange Important?

Interchange is important because it helps drive growth of the payment system. Interchange fees earned by card issuing banks provide financial motivation for them to promote and issue more cards to more cardholders. Interchange also helps cover the risk associated with doing so. Adding more cardholders to the system increases the benefits to merchants of accepting credit and debit cards.

Interchange also helps expand the market of accepting merchants by tailoring interchange programs to certain types of businesses. For example, smaller ticket transactions receive a lower transaction fee so that it is not too costly for merchants to accept card-based payments. The card associations attempt to maintain a delicate balance with interchange. If interchange is too high, merchants will not accept cards; if interchange is too low, then issuing banks will not issue cards.

What Determines Interchange for a Transaction?

Interchange is determined for each transaction based on the industry of the merchant, the type of card, the way the card is accepted, the transaction size, and other factors. Here are some common examples of factors that drive interchange costs:

Manually entered and e-commerce transactions have higher interchange costs because without the swipe data, there is a greater risk that the transaction may be fraudulent. (Address verification mitigates this risk.)
Rewards cards have higher interchange costs to fund the reward programs to the cardholders.

Debit cards have lower interchange than credit cards because of the lower credit risk.

Merchants with small ticket sizes can qualify for interchange rates that have lower transaction fees to reduce their costs.

Commercial cards have higher interchange rates to fund corporate and purchasing card programs that include rewards, spending controls and detailed reporting.

How can Merchants Lower Interchange Costs?

Merchants can follow best practices for card acceptance to obtain the lowest possible interchange rates for their business. For example:

Swipe the card whenever the card is present.
When it is necessary to manually enter a transaction because the terminal is having trouble reading the card, verify the cardholder’s address using the Address Verification Service.
Settle (batch out) your terminal or point-of-sale software every day to avoid downgrades and higher interchange rates.
Make sure you obtain a valid authorization for every transaction.
Restaurants should properly enter tip adjustments before the batch is settled.
Hotels should enter the check-in/check-out dates and folio numbers.
Enter the invoice number when prompted.
Enter the tax amount when prompted.
What Other Fees do Associations Charge?

In addition to interchange, which goes directly to the card issuing banks, the card associations assess other fees for the use of their networks and systems. It can be difficult to keep up with the list of these fees because the card associations have introduced several fees in recent years. Association fees include:

Assessments
Network fees
Foreign card fees (for cards issued outside of the U.S.)
MasterCard Network Access and Brand Usage Fee (NABU)
Visa Acquirer Processing Fee (APF)
Visa Fixed Acquirer Network Fee (FANF)
Visa Transaction Integrity Fee (TIF)
Visa Authorization Misuse Fee
Visa Zero Floor Limit Fee
How Often Do Interchange Rates Change?

The card associations regularly update their interchange programs to promote more card issuance and acceptance. They add new interchange programs and change rates and fees to do so. It is most common for the associations to implement changes in April and October each year, but changes may also occur at other times.