Community Financial Institutions and Overcoming “Chameleon-Based” Pricing

Dan Fisher

With over 35 years in the financial industry, Dan M. Fisher has proven himself as a leader in the financial industry holding roles as the former director of the Federal Reserve Bank of Minneapolis and former Chairman of the ABA Payment Committee.

The changing chameleon of charges and fees for community financial institutions. It turns out that things are just not what they appear to be.

How many ways can the product for community financial institutions be priced? Well, Paul Simon sung about the 50 ways … you fill in the blank.

There is no doubt that the more competitive the community financial institution technology market becomes, the more creative pricing models become, and the monster is a chameleon. Changing colors, shapes, and even how things are counted is the norm, and if you do not study these pricing artists, prepared to take out your check book, because what you thought you were paying for is not what your organization just purchased.

The changing chameleon of charges and fees. It turns out that things are just not what they appear to be.

The challenge is that it is not what you read, but also the questions you ask.

Did you know that pass-through fees can be pre-arranged charges between your primary vendor with a third-party that includes a revenue share with the primary vendor that you are unknowingly paying for?

In addition, when a vendor excuses a fee as a pass-through fee, implying that they do not have control over the fee, or at least not elaborating on the fee, there may be more to the story. We should also call your attention to “Pass Through Fees”. Some pass-through fees are negotiated between the brand and the processor. Furthermore, your processor may receive beneficial pricing or rebates that they do not pass on to your organization.

We are constantly amazed of what we discover when is pertains to vendor pricing policy, third party relationships, and transparency. Furthermore, there seems to be no end in sight to the many creative deviations that have replaced previously straight forward pricing methodology.

This is not to say that all vendors use this pricing methodology to generate revenue, but is should serve as a caveat from wombat. It should not be assumed that the proposal you receive includes all of the prices in the proposal. Fair deals are fully disclosed! Fully!

The Wombat!

Dan Fisher

With over 35 years in the financial industry, Dan M. Fisher has proven himself as a leader in the financial industry holding roles as the former director of the Federal Reserve Bank of Minneapolis and former Chairman of the ABA Payment Committee.