NACS to Launch Card Processing Program
ALEXANDRIA, Va. -- The National Association of Convenience Stores (NACS), in partnership with Denver-based First Data Corp. and its PayPoint Electronic Payment Systems subsidiary, announced a new program designed to reduce card-processing fees for convenience store and petroleum marketers. The program will is being launched at the 2003 NACS Show, October 11-14 in Chicago.
Retailers participating in the new program should receive reduced fees because of processing efficiencies and the aggregation of their transactions with NACS members and others in the industry. Participating retailers will continue to incur current interchange rates established by the card associations. NACS estimates that an average retailer could benefit from a cost savings up to 5 to 10 percent on card processing per store annually, depending on the number of transactions conducted at a particular location.
The initiative is the result of a six-month Request For Proposal (RFP) process by NACS to solicit new initiatives from interested card processing companies to address retailers' increasing costs of handling card payments. The due diligence done on behalf of the convenience store industry by NACS resulted in the selection of First Data and its PayPoint subsidiary based on the savings and service level rankings it received in the RFP evaluation process.
Credit and debit card transactions accounted for 28.2 percent of the convenience store industry's $290.6 billion in sales in 2002, according to NACS' 2003 State of the Industry report. Fees incurred in accepting these payments account for 4.8 percent of gross profits, making credit card fees the sixth-largest expense at the store level. Driven by historic 7 percent year-over-year increases in card usage, card fees are projected to exceed store utility costs within the next decade and approximate the cost of store rent by 2020.
All convenience store retailers may participate in the program, and NACS members are eligible to receive a discounted rate for the program. The target market for this program is small to mid-size chains without major brand affiliations and fewer than 200 stores.
"With the cost of doing business skyrocketing every day, I am delighted that NACS and First Data have worked to bring tangible savings to our members and the industry," said NACS Chairman Hank Armour, president and CEO of Olympia, Wash.-based West Star Corp. "We look forward to implementing this program and helping retailers improve their operating efficiencies."
Retailers participating in the new program should receive reduced fees because of processing efficiencies and the aggregation of their transactions with NACS members and others in the industry. Participating retailers will continue to incur current interchange rates established by the card associations. NACS estimates that an average retailer could benefit from a cost savings up to 5 to 10 percent on card processing per store annually, depending on the number of transactions conducted at a particular location.
The initiative is the result of a six-month Request For Proposal (RFP) process by NACS to solicit new initiatives from interested card processing companies to address retailers' increasing costs of handling card payments. The due diligence done on behalf of the convenience store industry by NACS resulted in the selection of First Data and its PayPoint subsidiary based on the savings and service level rankings it received in the RFP evaluation process.
Credit and debit card transactions accounted for 28.2 percent of the convenience store industry's $290.6 billion in sales in 2002, according to NACS' 2003 State of the Industry report. Fees incurred in accepting these payments account for 4.8 percent of gross profits, making credit card fees the sixth-largest expense at the store level. Driven by historic 7 percent year-over-year increases in card usage, card fees are projected to exceed store utility costs within the next decade and approximate the cost of store rent by 2020.
All convenience store retailers may participate in the program, and NACS members are eligible to receive a discounted rate for the program. The target market for this program is small to mid-size chains without major brand affiliations and fewer than 200 stores.
"With the cost of doing business skyrocketing every day, I am delighted that NACS and First Data have worked to bring tangible savings to our members and the industry," said NACS Chairman Hank Armour, president and CEO of Olympia, Wash.-based West Star Corp. "We look forward to implementing this program and helping retailers improve their operating efficiencies."