Magazine Article | December 16, 2008

Reduce Payment Processing Fees

Source: Innovative Retail Technologies

By streamlining its payment processing network, this quick service restaurant has reduced transaction fees across all its franchises.

Integrated Solutions For Retailers, January 2009

When Steven Lee became director of information groups and technology at Booster Juice, he was given a daunting task — remedy the fruit and smoothie bar chain's payment processing dilemma. When Lee came on board, Booster Juice had 153 franchise locations throughout Canada. Each location operated antiquated POS systems. To make matters worse, some franchises sought unreliable third-party companies for payment processing on their own. Sixty-five percent of the franchises were hit with excessive fees on credit, debit, and gift card transactions. In one instance, the transaction fees started at 1% but skyrocketed to 15% once the brief three-month 'honeymoon period' ended. Lee took action by overhauling and streamlining each franchise's POS and payment processing systems.

In May 2007, Lee studied each franchise's POS system. He found the franchises operated Panasonic CRS 3000 cash registers, which are no longer manufactured. This made procuring parts costly and time-consuming. "Before I could fix the payment processing issue, I had to remedy the POS problem," says Lee. "I conducted a two-week-long case study to determine if our current POS system could meet our needs. I constructed a lab in my office to determine how the register handled cash, debit, credit, and gift card transactions. I found that Booster Juice needed a new integrated POS system." Lee chose the Halo POS, a Web-based POS solution for restaurants, from Vivonet to solve the POS problem.

Form POS And Payment Processing Partnerships
With the POS system issue solved, Lee focused on streamlining payment processing. Booster Juice's U.S. franchises use Mercury Payment Systems' processing platform, MercuryPay, to process debit, credit, and gift card payments. Lee wanted the Canadian franchises to also integrate MercuryPay with their new POS solution. Unfortunately, Mercury Payment Systems did not work with Canadian businesses at the time. Also, the vendor distributes its product solely through its POS resellers, and Vivonet was not a POS reseller. "It was important for us to have Vivonet partner with Mercury Payment Systems," says Lee. "If Mercury Payment Systems did not agree to the partnership, our payment processing platform would continue to drain our revenue. All it took was a conversation with Mercury Payment's executives about the partnership, and they agreed to work with our Canadian locations and partner with Vivonet."

Quell Employees' Concerns With Money Savings
Lee was the project manager and facilitated the integration proceedings between Vivonet and Mercury Payment Systems. He set goals for the two companies and made sure they were in constant communication. He managed their progress with weekly reports that highlighted goals, milestones, and deficiencies. Lee admits some franchisees were skittish about the change. "At first, the franchisees viewed the change as sudden and difficult to implement," says Lee. "They were concerned about having to switch from their former credit and debit provider," says Lee. "They quickly changed their minds once they realized it would save money in processing fees."

Upon the agreement, Mercury Payment Systems had to establish a partnership with CIBC (Canadian Imperial Bank of Commerce) to process Booster Juice's credit and debit transactions. CIBC then had to set up an automatic clearing house (ACH) electronic funds transfer system to process gift cards. Once Mercury Payment Systems got authorization from CIBC, the vendor had to perform PCI (payment card industry) certification. Lee had to be aware of this process' progress to keep the franchisees up to speed.  Booster Juice began using MercuryPay for its Canadian locations in September 2007. The system manages every debit, credit, and gift card transaction by keeping an electronic ledger of each sale's total amount.

Today, every Booster Juice franchise is required to use MercuryPay as its payment processing network. When a new location opens, an IT executive simply writes or emails Mercury Payment Systems for installation information. The vendor sends the IT executive sign-up letters, which ask for the store's bank account number. It also handles integration with the POS. Each franchise can check its reports online by logging onto and typing in its merchant ID. The franchisees can call the vendor directly if any issues occur. The vendor fixes issues remotely.

MercuryPay has enabled Booster Juice franchises to save money on payment processing fees. Also, the company's gift card program has been streamlined, as Mercury Payment Systems processes all of the gift card transactions. 

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