Vantiv issues rebuttal to Capitol Forum, rejects report's conclusions
In a regulatory filing, Vantiv issued a response to an article written by a "subscription-based organization," believed to be Capitol Forum, that claims Vantiv deceives merchants by marking up interchange fees. "Vantiv rejects the conclusions and methodology asserted in the article. Vantiv does not mark up interchange fees; the company properly discloses the calculation of its fees to merchants, and generally charges merchants less than the industry," the company stated. In its further explanation, Vantiv stated in part: "Vantiv's average effective rate for small and medium sized business clients is lower than the U.S. payments industry average...Because different processors charge different fees with different names and present them in different formats on a merchant's billing statement, it is widely recognized that calculating a merchant's effective rate is the only way to get a true apples-to-apples comparison of client pricing from one merchant acquirer to another. Calculated as the total of all charges and fees billed to a client divided by the client's total sales volume in the billing period, the effective rate captures the client's all-in cost of transaction processing. Effective rate includes all processor fees, all network fees and all third-party assessments...As a result of our competitive pricing, Vantiv's merchant attrition rates are below industry average, based on industry data published by The Strawhecker Group for 2016. Given the ease with which merchants can change payment processors, were Vantiv to be out of step with the industry as claimed in the article, we would likely experience high client attrition rates. In addition, contract termination fees are standard practice in the payment processing industry, as well as many others, and competitors are often willing to reimburse potential clients for termination fees if they agree to switch...We clearly delineate base processing fees from our risk-based per transaction costs and surcharges by separating them into separate sections within our client billing statements, including delineating Vantiv's risk-based per transaction amounts in a "Surcharges Section" within client statements."