National Payment Card Association first introduced its alternative payment solution in June 2006. Often referred to as, "decoupled debit" and a "disruptive technology" for its intrusion into the fees charged to merchants by [image-nocss] credit card companies, National Payment Card Association's offering has proven to be a viable alternative to high credit-card fees in the petroleum industry and other business sectors, according to the company.
"Even when the economy was healthier, merchants were being squeezed by high transaction costs, so in our current state the need for a lower cost, more manageable solution becomes ever greater," said Joe Randazza, president of National Payment Card Association. "Our programs capitalize on the lower-cost ACH settlement platform, which can create a significant savings for the merchant and a self funded loyalty program that provides an incentive for consumers. It's truly a win/win for both."
The National Payment Card Association payment system processes transactions through the Federal Reserve Automated Clearing House (ACH) resulting in lower merchant fees and a self-funded loyalty program that provides immediate savings to consumers. Specifically, the program benefits retailers by helping them shift the costs normally associated with the interchange fees credit card companies normally charge on each transaction to the National Payment Card Association lower cost, fixed transaction fee. The merchant can then use some of the savings between the two to change customers' payment behavior by passing some of that savings along to them.
The transaction is debited from the customer's account and is processed through the Federal ACH System that handles billions of transactions per quarter. The merchant settlement is the next business day. The system is cheaper, costing only a fraction of what most retailers normally pay in merchant service fees, because the funds come directly from the consumer's bank account, removing the middlemen in the credit card and debit card networks altogether.
Credit-card fees remain one of the biggest expenses for retailers making it harder and harder to conduct business and attract customers. Merchants employing the program said that the National Payment Card Association solution provides a way for them to build closer relationships with customers by helping both parties save money.
National Payment Card Association's charge to merchants is a flat-fee per transaction on a loyalty card, a third-party card or driver's license. The fees normally represent more than a 60% savings compared to current standard processing fees.
Rockford, Ill.-based Road Ranger is a leading Midwest retail petroleum c-store chain that operates company locations in Illinois, Iowa, Kentucky, Indiana, Missouri, Wisconsin and Ohio. Martin Eagle, Denton, Texas,has 32 Quick Track Food Marts in Texas. Marion, Iowa-based Guppy's On the Go operates eight locations in the Cedar Rapids, Iowa, area. Certified Oil is headquartered in Columbus, Ohio, and operates approximately 65 locations in Ohio, Kentucky and West Virginia.
Coconut Creek, Fla.-based National Payment Card Association's primary product is a retailer-branded debit card that does not use the Visa/MasterCard rails that provide consumers access to funds in their checking accounts so they can pay for goods or services. The ACH Decoupled Debit Card is not a credit or debit card that is linked through the national banking networks, but rather utilizes a user ID for consumer authentication and is processed through the National Payment Card Association network. A Decoupled Debit Card can be a loyalty card, a membership card or driver's license. National Payment Card Association is a member of the EFT Network, which is a part of the Electronic Check Council of NACHA. NACHA is the rule-making body for all electronic funds transfers made through the ACH.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.