Art Lieberman
Art Lieberman is president of MCPS for Campgrounds, a credit card processor sponsored by Woodforest Bank NA. Lieberman has been in the credit card industry for nearly 16 years and has been conducting seminars on credit cards in many state and regional association conventions. He provided this guest roundtable for the June issue of Woodall’s Campground Management. He can be contacted at rvcreditcards@yahoo.com or by calling (877) 858-9010.
My company, MCPS for Campgrounds, has been processing credit cards for campgrounds since 2006. It amazes me how far technology has advanced in the methodology and equipment relative to credit and debit card transactions. Also, because the process itself gives us unusual access to data and statistics about the finances of several hundred campgrounds, we are an unparalleled source of financial information about the industry. We have constantly informed our customers, potential customers and readers of various publications of these advancements and of the ever-changing rules and regulations of the credit card industry. Truthfully, there are some campground owners who find these facts interesting and helpful but, by in large, owners of campgrounds are much more interested in the current local and state rules governing their campgrounds, what the weather is or how their customers are treated – and who can blame them? We are talking about the hospitality industry!
As a pure businessperson, facts about the credit card industry should be interesting to owners, since credit/debit card processing presently averages 72% of all income of campgrounds. It is true that many owners are moving toward utilizing reservation programs through computers and it is true that many have figured out that buying cabins, park models, yurts or rental units will attract the households that don’t own RVs, but beyond that, there is little interest in the advances made in the technology of credit card processing nor the applicable laws which impact them as merchants. Most of the articles I write deal with these developments or in legalities in the industry. While these might be important to some people, it would appear that campground owners consider them boring – especially when I try to explain why and when they occurred. It dawned on me that simply stating what a campground owner can now do with the new technology, and also explaining any new regulations, would help them in their business.
So here, in brief are some basic credit card facts that campground owners should know that might be useful:
Rates: Essentially there are two rate structures that the processor gives to merchants. One is called tiered rates where the costs are determined by the method of the transaction They are swiped rates, non-swiped rates, rates for rewards cards and rates on debit cards. These rates are generally fixed rates such as 1.69% on swiped credit cards and up to 3.49% on non-swiped cards such as reservations taken over the phone. Swiped debit cards are always cheaper than swiped credit cards. The other rate structure is Interchange Plus that is based upon the actual rates offered to acquiring banks to which they add a small percentage as their profits on the transactions. Interchange Plus rates tend to be lower than tiered rates and are based upon card types rather than the method of actually doing the transaction.
Processing Equipment: There are now several ways to process credit cards. The standard method is still utilizing a point of sale credit card terminal, which is hooked up to a phone line. Eighty percent of all campgrounds still use these machines manufactured by half a dozen companies such as Verifone, Hypercom (now Equinox), Linkpoint, Talento, Nurit (purchased several years ago by Verifone), Dejavoo and Ingenico. For most campground owners, even those that are technologically impaired, these machine brands are familiar.
But in the past few years, many owners have switched their processing to computers, either utilizing a website, a stand-alone program or a gateway into other software such as a reservation company. There are several such companies that service the campground industry (some almost exclusively) and some that have a broader customer base. The campground owners are familiar with many of the names of these companies such as: Leisure Interactive (also called Hercules), RMS (one of the largest in the world), Campground Manager, Campground Master, Campground Automation, Red Rover, Digital Rez and several others.
Most recently, some campground owners have decided to go wireless with their transactions using terminals that require neither a phone line nor electricity. Although convenient, transactions get a bit more costly utilizing these terminals – however there are places where they are necessary because of the lack of a phone or electrical connection.
Finally, the processing industry has introduced swipers that hook up to either I-phones or Android phones and a program which is accessible through the Internet.
Many processors such as my company are prepared to allow campground owners to utilize whatever type of equipment they desire to process credit or debit cards.
Security: Because the theft of people’s identities has become the No. 1 crime in America, encompassing over 68% of ALL crime, the processing card industry took action in 2006 to help prevent these crimes when they originate through the theft of credit card data. The industry created the PCI-DSS – the Processing Card Industry Data Security Standards – which are a set of rules and regulations that govern ALL businesses that accept credit or debit cards. The PCI require that every business complete a “Questionnaire and Attestation of Compliance” on a yearly basis and answer questions concerning the security of their transactions and the record keeping of the transaction data. Processors now charge merchants either a yearly or monthly fee for PCI Compliance. In the event a merchant’s data is stolen, the industry levies fines on both the merchant and the processor, which can range from $50,000 to millions of dollars depending on the severity of the data breach.
Litigation: In 2006, many major retailers sued Visa and MasterCard alleging collusion between the credit card companies in setting credit card rates. The retailers stated that the two companies had violated the Sherman Anti-Trust Act and the case proceeded for nearly seven years in the U.S. District Court of the Eastern District of New York (Brooklyn). Late last year a settlement was reached with some of the plaintiffs. Visa and MasterCard agreed to pay $3 billion in fines, lower the interchange cost 0.10% and permit merchants to surcharge their customers for the transaction fees. The latter, however, entailed some details that campground owners should be aware of. A sign must be posted in the campground notifying campers that they would be surcharged a specific percentage not to exceed the actual costs to the campground owner. The actual receipt must also denote that charge and the surcharge MAY NOT be applied to debit card transactions only to credit cards. In discussions with campground owners we have not heard of ANY campground surcharging their campers.
Several major retailers, such as Wal-Mart and Target, opted out of the settlement. Their reasoning was that the fines represented only a few weeks profit for the card companies and that the lowering of Interchange Rates had no time associated with it so that rates could be raised even within a year and finally, that surcharging customers would cause an overall inflationary price increase on all goods sold in their stores.
So in summary, how much of the above data is familiar to campground owners? It’s hard to say, but we have discovered that they are amazed when these details are explained to them. We conducted a brief seminar at the Northeast Campground Association’s conference in Sturbridge, Mass., and were later thanked by dozens of owners who attended the seminar. They informed us the information we gave them was a revelation – which surprised us. We have been informing the industry about these details in articles, which we publish, in free on-demand webinars we gladly give (even to individual campground owners) and to every prospective customer when we call them.
Perhaps we shouldn’t be surprised when we realize what it takes to successfully run a campground and make campers comfortable. There’s so much to do, so much to know and so many personalities that must be soothed. It’s a tough business. It’s also the most enjoyable associations I have ever made.
