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Podcast

Why Companies Are Passing on Credit Card Processing Fees

Learn about the reasons companies are passing on credit card processing fees to consumers.

Episode 210: Have you noticed that more companies are passing on credit card processing fees? Why is that happening and what can be done to lower or eliminate that expense? 

My guest today is Peter Brickman the President of National Credit Card Processing Group.  

Peter is a returning guest, he joined me live last year. You can listen to the recording of HDPR Live #54 by visiting the show notes.  

Peter Brickman the President of National Credit Card Processing Group.  In this episode, learn about the reasons companies are passing on credit card processing fees to consumers.

Guest Website: NCCPgroup.com

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Transcript of Episode:

Jamie Irvine:

You’re listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And this is the show where you get expert advice about heavy-duty parts that keeps trucks and trailers on the road longer while lowering cost-per-mile.

Jamie Irvine:

It’s no surprise to anyone costs are going up all over the place. And we are experiencing inflation. Like we haven’t seen since I was a young child, that’s a long time ago for those of you who are wondering. And one of the things that we’ve seen is of course, companies and people are all trying to figure out how they’re going to mitigate these increased costs. And one thing we see is credit card fees. We see a lot of companies now passing on fees to their customers. So my guest today is Peter Brickman. He’s the President of National Credit Card Processing Group. He is a returning guest. We had him on one of our live broadcast last year. It was HDPR Live # 54. Links will be in the show notes if you’d like to go back and listen to that one. Peter, welcome to The Heavy-Duty Parts Report. Glad to have you back. And I’m looking forward to talking to you today about some strategies to help both consumers and people who are selling parts with their credit card fees. So welcome to the show.

Peter Brickman:

Thanks Jamie. Thanks for having me back.

Jamie Irvine:

So I think we should just start off by kind of establishing what’s going on here. And I guess my first question is, are more companies passing on credit card fees? And if so, why are they doing that?

Peter Brickman:

It’s a great question. It’s a very hot new industry trend. I think everybody out there starting to see when you go into your local bagel store, your deli, your dry cleaners, now, even your truck parts distributor, or your car mechanic or your truck mechanic, you’re starting to see these businesses pass on the fees to their customers. It’s no secret, everybody pays with a credit card these days, right? Well, with that comes companies are, it’s now costing them more money to do business. It’s now legal in all states except Massachusetts and Connecticut to pass on the credit card fees as a cash discount. It’s everybody’s paying with a credit card and you know what companies are starting to see their receivables rise via credit card. So how do you combat that? To be honest, the government has done a great job for small businesses in allowing this to happen. And it’s a significant impact on folks bottom line.

Jamie Irvine:

Right and I mean, when you think about it from a consumer point of view, you think this is a bad thing from a business point of view, it’s a positive thing. And let me ask you something is all of the inflationary pressure that everyone is experiencing consumer and business alike, is that part of what’s accelerating this trend to adopt that? I guess, let me rephrase that. Is it that the people who are selling parts said, look, we could handle this cost in the past, but everything is so much more expensive today. We’ve gotta pass this on to our customers because our margins have shrunk is that’s what’s going on? Or is there, is there other factors that play,

Peter Brickman:

You know what, Jamie, you kind of hit it on the head and it’s becoming more expensive to operate your business everywhere. Now, if you look at your balance sheet, where does it cost the most money? Well, credit card fees are up. If you look over year over year, everyone’s seeing an increase in their credit card fees. Well, two things you need to do. One pay attention to them, two now it’s legal for you to pass them on. So instead of raising your prices on parts, which is gonna be a bigger impact on your customers, they’re passing on a credit card fee and you have a choice. If you don’t wanna pay with a credit card anymore, you could pay with check or cash. And then the program worked right. Every business, you’re trying to find ways to operate a little more lean. Well when credit card receivables rise costs are going up, passing on credit card fees is a great option. Does it work for everybody? But it’s starting to become a really, really positive trend. And while it’s legal and the government’s saying you could do it, it’s a significant impact. It really is.

Jamie Irvine:

And, and you think about like the typical heavy-duty parts distributor, they often deliver parts. So they incur fuel costs. Fuel has gone sky high. And fuel surcharges are becoming a thing you think about, you talked about raising prices on parts that there’s been no way around that. I’m hearing some distributors say that they’re getting multiple price files from suppliers, literally prices changing on a week by week basis based on availability. Right? So, you know, as soon as that container’s empty and the next container shows up, it comes at a much higher cost. So then all the prices have to go up. So there’s a lot of pressure on the business. And so I see why this is an appealing trend from the consumer’s point of view. They must just feel though, like they’re paying, you know, you think of an owner operator, right?

Jamie Irvine:

He’s got fuel costs or she’s got fuel costs. She’s got repair and parts costs, and now she or he also has these credit card fees being passed on. So really the consumer is the one that ends up paying, but by and large that makes society pay because then everybody puts their prices up. So I don’t know that there’s a way out of it, but we all have to be responsible I guess, with our own finances. So, you know, from the, from the consumer’s point of view, is there anything they can do to try to help mitigate costs with their credit cards?

Peter Brickman:

You know, it’s, it’s interesting that you say that not really, um, consumers, you know, we all go out there and everybody shops for deals. We all have our relationships with our repair guy and our parts guy. You know, people are paying with a credit card for a reason. Jamie, the card brands have made it extremely advantageous for not only me and you as a consumer to pay our bills with a credit card, but businesses paying their bills with a credit card. To mail checks is very expensive, paper, ink, the person that processes the checks. That’s what AP automation is about. We’re not gonna get into that now, but if you get rid of mailing checks and you pay now with a credit card that you get a rebate back on, you just got rid of a cost and gained a revenue stream back on your spend, people pay with a credit card for a reason. It’s not gonna change. How many times have been like, I flew to Italy with my family for free. Well all anywhere you’ve used that card, you could thank the business because they pay for it. It’s over basis points, but billions and billions and billions of dollars are spent basis points. That’s how people fly to Italy for free. So it’s give and take a little, but you gotta really focus on the small business and the operating cost.

Jamie Irvine:

Yeah. And also for the consumers, I mean, there’s the security aspect of using your credit card too. So that plays a part into it. And there’s a price to be paid for that. We’re gonna take a quick break. We’ll be right back. Don’t have a heavy-duty part number and need to look up a part? Go to parts.diesellaptops.com or download the app on Apple or Android to create your free account. Looking for high-quality fuel injection for heavy-duty applications? Having one supplier for fuel injection allows you to better serve customers by providing them with a complete line, which increases your sales and profitability. Learn more at ambacinternational.com/aftermarket. We’re back from our break. And before the break, we were talking about the trends right now with businesses using this legal means of passing on credit card fees to their customers.

Jamie Irvine:

It’s something that’s helping them mitigate some of the costs of running their business so that they can stay open and provide us with parts and repair services that we need to keep trucks and trailers rolling. Peter, when it comes to some of the new products or services available to companies like parts companies and repair shops, like what’s new, beyond just this ability to pass on credit card fees. What else has been going on in the industry? What kind of new products are available that’s helping small business be more successful, because they’ve got an awful lot of challenges to overcome right now.

Peter Brickman:

They do. And it’s a good question. Payments is tricky, right? Everybody figures out, everybody wants to get paid. And how do you get paid in the most cost-effective manner? Well, since the COVID era, there’s been a lot of different ways to get paid. For a lot of times we had touchless. Nobody wanted to go into a store and so there’s some new technology coming out, which is paid by text. There’s a lot of new technology coming out with ACH. So it’s really all about how do we get paid, paid cost-effectively.

But a lot of times now, if like we’re trying to coordinate with our customers, you know, we’re a payment processing company, but not just payments, right? We want to be more of a technology company. How could I help the heavy-duty truck parts folks in the truck repair industry get paid, perhaps get a review on Google, the marketing aspect of it, right? People need reviews. A lot of people go online these days to search a company name before they go visit the business.

Well, we feel that if we roll out these types of products that help customers get paid more cost-effectively, paid by text, leave a review on Google for us. Or could you write a review for us if you had a great, you know, listen, people always, they go online when they have a bad experience.

Jamie Irvine:

Yeah, that’s right. They have a good experience. They might only tell one or two people. They have a bad experience they’ll tell 10 or 20.

Peter Brickman:

How about when you have a good experience? Don’t you want people to know, Hey, this particular truck parts company was awesome. So a lot of new products have to deal with kind of getting paid, protecting the brand, growing your business in your certain niche, but pay by text is something that my company’s gonna be rolling out really shortly. And I think heavy-duty truck parts, truck repair is gonna really embrace that. It’s gonna be pretty awesome.

Jamie Irvine:

So why did you focus on the heavy-duty truck parts truck repair industry as a real focal point for your company? How did that come about?

Peter Brickman:

Good question. Thanks Jamie. So when I got back into business after selling my first company and I met someone on Long Island called Long Island Truck Parts now Fleet Pride, but a friend of mine Bobby Naples, I went out and met Don Ramondo from HD Truck Pride, great guy. We hit it off. And we were talking about HDA Truck Pride and you know, who they use for a credit card process.

HDA Truck Pride’s always focused on the member. How do you help the member? How do we help our members operate more cost effectively? What programs do we have? Well, I wanted to say, Hey guys, I think I could add some value here and talk to all your members.

Well met Don one night and they brought me out as a partner. And I just found that heavy-duty truck parts, truck repair, it was such a great industry. And so vital to our nation’s infrastructure. Literally like people talk all the time. How do we keep trucks on the road? It’s such an awesome industry. And I have found that so many truck parts companies, they were so clueless on what they were paying. It’s like I’m with my local bank and I ask them what’s interchange plus I don’t know.

Well, if you don’t know what that is, you are not educated by your processor. You’re throwing away money. And I just, for some reason, I just hit it off with these truck parts owners. You know what? Sales is funny. I have a passion, but I also love educating. If you show a CFO where he’s throwing out money, it resonates where we’re gonna make money no matter what, but the biggest, the most important part of this is the business and your customer and heavy-duty truck parts. You know what? It was a good old-fashioned American business, clean, not a lot of chargebacks, high volume, low risk.

And we’ve just done very well in the business. And we really love the niche that we’re in because I saw a lot of people that didn’t know enough. So I wanted to make a difference. It wasn’t, to me, it’s, I’m gonna make money no matter what, when I process your credit cards, but I like the relationships better.

Jamie Irvine:

Yeah. And it’s so great when you can, on the one hand have business success, on the other hand, really meaningfully impact your customers and make their world a lot better.

Peter Brickman:

New friends too.

Jamie Irvine:

Yeah. And the relationship side of the trucking industry is a big part of the driver. Absolutely salt of the earth people. So for someone who’s evaluating their credit card processing company and they’re gonna look at your company, what makes you really stand out as different from, let’s say a local bank or another credit card processing company, besides just your love for the trucking industry

Peter Brickman:

I mean, it’s really, so we have like a hashtag line at our company. ‘We are different’ and I kind of built the brand that way. I didn’t wanna be that up and down main street processing company, that’s out there and there’s a different sales rep every six months. We are truly, we built the brand on relationships and partnerships, HDA Truck Pride, Vipar.

They’ve trusted me to go to their members and stockholders and ensure their paying the most competitive processing rates out there. So I have a lot of responsibility not to just go out and grow my business, help transparency, honesty, teach people, Hey, this is what you’re paying today. You didn’t know. Oh, I didn’t know I was paying for that. You know how many times I hear that? Jamie, that’s not a good thing to hear when you’re taking credit cards.

Peter Brickman:

I didn’t know I was paying for that. So we try to really focus on transparency and honesty, right? I don’t need you to come to me. And then you’re gonna leave me to save a hundred dollars a year. We’re not meant to be, but I know I’m gonna save you the most amount of money. You’re gonna learn something from me. And you’re always gonna trust me because it’s funny.

Our industry gets a bad rap, people say, I have no idea what I the industry’s bizarre to me, you know, after you talk to me or some of my guys, you’re gonna learn about what the costs are. And you’re gonna know that your rates never get raised. Any new industry trends. We’re gonna be contacting you. We just go the extra mile, our customer service, we pride ourselves on no 800 numbers. You have a call, an 800 number and speak to somebody. They have no idea who you are.

We have a personal touch here. Everybody gets their own relationship manager. That’s done really well. I can’t tell you how many, like HD Truck Pride members love Erica from my office. Right? Because they know that they could call her. They don’t have to call an 800 number, press one for press two for, it’s Erica on her direct line. So we like that personal touch. It’s very unusual in the payments business.

Jamie Irvine:

You’ve been listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. We’ve been speaking with Peter Brickman, the President of National Credit Card Processing Group. To learn more about their company and the services that they offer and how they can help you, visit NCCP group.com. Links are in the show notes. Peter, thanks so much for coming back on The Heavy-Duty Parts Report and talking to us today. I appreciate it.

Peter Brickman:

Thanks Jamie. And you’re doing a great job of your show.

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