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Many prospective clients and existing Merchants call me wondering how all the pieces fit together at Cardservice International. Particularly frustrating is the variances of pricing which can result from talking with different Agencies.

CSI has a corporate office in Moor Park , California with better then 800 employees. By definition CSI Corporate is a “Transaction Service Provider”. This means that as a company they “acquire” businesses to help them accept credit cards for a consortium of banks. An “Acquirer” is in fact a licensed member bank. CSI for the most part makes money on?

The discount rate and transaction fees that you pay for the privilege of accepting credit and debit cards. A big part of this fee which you see on your Merchant Statement is paid by the Acquiring Bank to the Issuer of the card. This is called the Interchange Fee. See ?Term of the Month?.

The “Selling Arm” of CSI is a network of better then two hundred independently owned Agencies. If you call the corporate office and indicate you are interested in a product or service then you will be referred out to an Agency. A good parallel is Nationwide Insurance which has a big corporate office which services accounts. If you open up the yellow pages you can find a local Independent Agency under Nationwide Insurance which can help you with your insurance needs. CSI works much like this.



CSI independent agencies make money on set up fees, application fees, and the sale or lease of software and credit card terminals. CSI Corporate also pays a residual of your processing fees to it?s Agency offices on a monthly basis. Should you enter into a lease which you get through an Agency Office then basically you are financing the software or terminal purchase. The CSI Agency then sells your lease to the leasing company. The leasing company writes a check to the Agency.

Each CSI Agency has unlimited territorial rights and can do business anywhere in the US and even the world. Confusion sometimes comes into play because prospective customers will talk to different Agency Offices about set up fees, application fees, the hardware and software outright purchase price, the monthly lease payments if any, length of the lease term, etc. Individual CSI Agencies can charge anything they want for these type of investments and in fact this is a good part of how the Agency makes a profit. This can result in a prospective client contacting one Agency and hearing about “Free Application and Set up Fees” with a lease of $39.95 for 36 months while another Agency will offer a set up fee, application fee, and maybe an even higher lease.

Be careful about entering into an Agreement with an Acquirer based on price alone. One of the benefits of CSI is that the rates and fees are for the most part set by the Corporate Office. Many Acquirers will offer a ?great deal” on software or hardware only to make it up on rates and fees later. In my experience CSI does not use these type of “bait and switch” tactics. I get a call a week from a competitor Acquirer to leave CSI. Usually the selling point is that I can “increase the rate” and make more in residuals. No thanks.

Three things are important to know.

The new client actually enters into a Merchant Agreement with the corporate office of CSI who then services your account. CSI Corporate, not the Agency, for the most part sets the discount rate and transaction fees.

Each Agency has to make money somewhere. How the pricing is structured is up to the Agency. Some get paid more up front and some get more over time through residuals.

The service levels of different Agencies varies widely so make sure you are doing business with an Agency with the experience and competence to properly serve you.

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Editorial By Jack Kimball- Agency Owner