Fitli is upgrading payment processing
Change. Some love it. Some hate it. But, it is inevitable. It can be challenging but it’s also what enables new and better opportunities. Fitli is a startup in a dynamic environment so we must continue to change and grow to meet your needs and stay competitive. We also try to balance that with the quality and the frequency of the changes we make. Smaller and incremental change is always easier to control. Sometimes, however, a big leap is called for. This is one of those times. The time has come to upgrade our payment processing capabilities.
We are aiming to make this change seamless for you and your clients. We are working very hard to minimize any impact on you during these changes. There will be some, but we think you will agree that the benefits massively outweigh the effort involved.
What is in it for you?
So, let’s get to the heart of it and tell you what are some of the improvements you can expect to see when we launch. This is just a short explanation of the change. In future posts, we will cover each change in much more detail.
Automation of Refunds
We are automating the refund process. Regardless of the payment source, refunds will be processed immediately once you submit them. No more manual processing on the back end. There will be much higher chances of getting a void vs refund for same-day requests. Also, and this is a biggy, funds will be debited directly from your bank account. No more manual charges to your credit card for refunds. And eventually, we will introduce the ability for clients to ‘request a refund’ which you simply approve (or reject).
Introduction of ACH Payments
Some of you have been requesting this for a while now. We are adding ACH processing capability. This has a slower settlement time, but the main benefit is that ACH Payments will be cheaper (~ 33% cheaper) than credit card payments.
Supporting Point-of-Sale devices
Until now, we have not offered any hardware and most of you don’t need it. But some do and let’s be honest, it will be nice to have even if rarely used. You will have to purchase the devices, but think how cool it will be to take payments in the park, at the beach, on the trailhead, and anywhere else you can imagine.
Launching a New Wallet
To be fair, this is more for your clients than you, but that is indirectly good for you, right? We will be launching a newly designed wallet that will allow your clients to easily manage their payment methods in ways they can’t do today. To start, they will have the ability to easily change the default and update expired cards. We will be adding many other cool features here over time… such as prioritization of payment sources, multi-card payments, etc.
Switching to Gross Settlement
This change is required in order to enable some of the things above. It’s not necessarily a good or bad thing; just different. Once we cut over to the new payment processor, you will start receiving ‘Gross Settlement’ which means 100% of your sale will be deposited into your bank account. Today, you receive the sale less processing fees.
Don’t get too excited, the fees are not going away. They are just getting deferred. There will now be a statement (see below) at the end of each month. At that point, the processing and any other relevant fees will be charged and debited against your bank account on file. The upside is you have your money longer and it’s easier to reconcile a sale and deposit. The downside is you need to make sure your bank account has funds to cover your fees at the end of the month.
Additional Notifications & Payment Handling
We will be adding additional notifications for actions such as expiring cards and upcoming recurring charges. There will also be some new rules and handling of failed recurring charges. Combined with some potential new wallet features, we may be able to try multiple payment sources. Then if the charge continues to fail for too long, the recurring package will be canceled and we will stop attempting to charge the client’s payment source(s).
Improving the Payment Vetting and Activation Process
This will be more relevant to new customers and help reduce the risk of introducing fraud into our system. We are planning to integrate with a 3rd party platform to help perform due diligence, collect required documentation, and instantly verify applications for payment processing. This will allow us to activate payments in nearly real-time in the future.
Adding Monthly Statements
As mentioned above, the change from “Net Settlement” where fees are taken from deposits to “Gross Settlement” will necessitate the need for a statement. The statement will include details of your transactions along with associated fees for the given period. Unlike most other payment processors, our goal is to make sure this statement is transparent and simple to understand.
This will be more relevant to some of you than others. You know who you are. 🙂 Chargebacks (aka Disputes) are just terrible to deal with. Period. They are an unfortunate reality if you want to take any form of digital payment such as Credit Cards, Debit Cards, or ACH. The main change here is that YOU will now have direct control over how you respond to these and will not have to work through our support team.
Additionally, funds related to chargebacks will be debited directly from your bank account rather than Fitli’s account. That means we won’t have to charge your credit or debit card for the chargeback. On the downside, the chargeback fee with the new processor is slightly higher ($25 vs. $20 currently).
So, in short, more control for you but with control comes responsibility. We won’t be harping on you constantly to provide us with info to fight the chargeback. That is all up to you. Better? I suppose that depends on your perspective.
With the new system, we expect to have more and better data which will enable us to provide more and better data to you. We intend to provide you with easier batch settlement reporting, along with some details on charges, declines, disputes, etc
What do you need to do?
By now, we hope you’re already convinced this will be an amazing change. As much as we’d like to complete the process and just flip a switch, it’s not going to be quite so simple. Changing processors means changing legal relationships and contracts. As mentioned above, there are also some differences in the process. Here are the things that will require your engagement.
Complete the Enrollment Process
This is nothing too complicated. Our new processor requires a few additional bits of information for enrollment. Once we kick off the enrollment, you will notice a pop-up across the page requesting you to complete the enrollment process. This will allow us to capture the additional data, afford you an opportunity to view the enrollment application, and ultimately submit the form. This whole process will most likely take less than 5 minutes to complete.
We will be launching the enrollment within the next 2-3 weeks. So don’t mind us popping into your inbox more often than usual.
Have a website (If you don’t already)
Our new processor requires you to have a website for your business to get approved for payments. If you don’t have a website, you may enter your social page such as Facebook. Another option is to use your Fitli portal page. We will make it very easy to select the last option if needed. And if you want help building a website… reach out. We can help with that.
Complete an Annual PCI Survey
Previously, we never troubled you with a PCI survey. We completed it ourselves as the master merchant. However, our new processor requires all our sub-merchants (that’s you) to complete your own annual PCI survey. I’m told this is a 10-minute exercise so nothing too major. This process is still in the works. We will, of course, share more once it’s nailed down. By the way, PCI stands for ‘payment card industry’ and is related to the security of cardholder data.
This is a fairly major set of changes. So, we are being very measured in our approach and will take the appropriate time to ensure all goes well.
The first major step will be to open up the Enrollment process. This will get you set up to process payments with our new processor. We will likely kick this off in the next 2-3 weeks during the month of April. The Enrollment period will last for at least a couple of months and likely longer.
While you are enrolling, we will continue to work on updating all the features discussed above. Some changes that are not dependent on the payment processing may roll out sooner, even during Enrollment. However, the big change will involve a full migration of data. We will be securely exporting/importing all active cardholder data from the old system to the new system. This will happen as close to the final cutover as possible.
Then, finally, once all the basic components for payment processing in the new system are built and tested, we will, after ample warning, flip the switch. Aside from some new functionality, it should almost seem as if nothing changed for you.
Do I really have to switch?
This change impacts every business that is or will process payments through Fitli. So, if you do now or want to do that, then Yes, you will have to switch and complete the onboarding process. The old processor, Braintree, will be discontinued once we complete the cutover.
Will any of these changes impact my pricing?
There are a few minor tweaks, but nothing really very material.
- Your subscription pricing is not impacted by this change.
- The standard payment processing rate for cards (credit or debit) of all types will remain exactly the same (2.9% + $0.30).
That represents 99% of all fees. There are some infrequent payment processing-related fees that may be impacted slightly. If they do, I expect the amount will be immaterial. For example…
- If you ever receive a chargeback (aka dispute), the fee from the processor is $20 today. The new chargeback fee is $25.
- Today, you pay 2.9% + $0.30 for a partial refund in addition to losing the original processing fee. Going forward, there will be no additional fee for a partial refund.
- There is a new monthly statement fee which we will be absorbing.
- There may be a small PCI Non-Compliance Fee if you do not complete the self-assessment annually (to encourage compliance). That is still TBD, but we will likely pass that one on but do everything possible (short of completing it for you) to ensure you don’t ever experience that.
Lastly, there are new capabilities that don’t exist today that involve pricing as follows:
- We will be implementing ACH Payments capability. This will be priced significantly lower than card processing at 1.9% + $0.30.
- We are enabling the use of physical terminals. These will need to be purchased through us in conjunction with our processor. The prices will vary but only involve a one-time fee.
What happens to all my customer data?
This will be seamless. All of the card data for your customers will be securely migrated to the new processor. In fact, we never touch the data. The processors have a secure process to do this so that nobody’s data is exposed. So, to be honest, you won’t notice a difference. As far as all your other data stored on the Fitli servers, nothing changes there.