Flip Your Payment Processing Cost into a Revenue Generator

The expense of credit cards can get frustrating and costly. What if there was a way to save and possibly make money off credit cards? In this podcast, David Serwitz at Commission Buddies shows us how. David’s fun loving and open personality shine in this interview.

Highlights

  • Why did you get into payments?
  • What do you do differently?
  • What are some nuances for dentists specifically?
  • How much money can dentists make doing this?
  • What does it take to get started?
  • So how can you do this, what is the “catch”?

Resources

About David Serwitz

David grew his first business to 43 locations and $25 Million+ in revenue.  One of his pain points along the way was the complexity, frustration, and cost of accepting payments.  David now works with companies to turn their payment processing from an expense, into a revenue generator…. And add a little fun along the way!

About Alex Nottingham JD MBA

Alex is the CEO and Founder of All-Star Dental Academy®. He is a former Tony Robbins top coach and consultant, having worked with companies upwards of $100 million. His passion is to help others create personal wealth and make a positive impact on the people around them. Alex received his Juris Doctor (JD) and Master of Business Administration (MBA) from Florida International University.

Episode Transcript

Transcript performed by A.I. Please excuse the typos.

10:01 – 33:16
Alex Nottingham JD MBA
Everyone, I’m Alex Nottingham, CEO of Also Dental Academy and welcome to Dental Allstars. Our topic is flip your payment processing costs into a revenue generator. Our guest is David Sherwood’s. David grew his first business of 43 locations and 25 million plus in revenue. One of his pain points along the way was the complexity, frustration and cost of accepting payments.

34:03 – 54:12
Alex Nottingham JD MBA
David now works with companies to turn their payment processing from an expense into a revenue generator and add a little fun along the way. In this interview that I had with David, he’s a lot of fun, a lot of energy. And what I like about David is it’s like what he shares, what you see is what you’re going to get.

54:28 – 01:21:09
Alex Nottingham JD MBA
Very honest, very straight. Kind of like you can get right into his head. He’s in his share. What’s in his head? No holding back. I really appreciate this. In this podcast, you’re going to learn about how these payment systems work different ways to save money on credit card fees or even make money on them. It’s very interesting, and I think it’s worth looking at because I know so many dentists complain, guys, those 3% credit card fees, they cost so much money.

01:21:09 – 01:47:09
Alex Nottingham JD MBA
How can I lower how can I optimize this? Because at $1,000,000 business, that’s $30,000 a year. That’s a car. And if your 2 million, 60,000, 3 million, almost $100,000 in credit card fees. So certainly worth looking at how to reduce that expense, make some money in the process. So I trust you’re going to enjoy this podcast and please welcome David Cole.

01:47:09 – 01:49:01
Mike Serwitz
Awesome, Alex, thanks for having me. It’s good to be here.

01:50:03 – 02:01:12
Alex Nottingham JD MBA
Very nice to have you. So why did you get into payments? Well, you talked a little bit about the frustration, but what was the journey to payments and what is your company do? Give me kind of a brief.

02:01:26 – 02:28:00
Mike Serwitz
Yes, for sure. Awesome. So I never planned on being in this business. I basically fell backwards into it. As you mentioned that my first company has nothing to do with payments except that we accept them. And basically, as we grew and grew, my frustration with our payment processing increased not only due to the costs, but also due to the lack of transparency and a lack of control.

02:28:10 – 02:49:18
Mike Serwitz
And so, you know, about five years ago, we decided to vertically integrate payments and like be our own processor, bring it in-house, as opposed to buying it from others. I had no intention of selling it to other people, but once we were up and running, I had other business owner friends that knew me and trusted me and said, Hey, Dave, if you do this to yourself, we know you and trust you.

02:49:26 – 03:12:27
Mike Serwitz
Can you please help us to understand it and set us up? So I said, sure. So I started doing it. And then pretty soon I had like friends of friends of other business owners calling us and saying, Hey, you know, our good friend vouches for you. You can help us set it up. And so all of a sudden we kind of had a second brand coming out of the woodwork on accident, which oftentimes is how a lot of things get going.

03:13:11 – 03:45:18
Mike Serwitz
And, you know, in the industry, because things generally work and service is generally low, very often the last thing haggle over is price, right? You know, I mean I mean, it really matters, but it’s a total commodity. Right? So we basically do things totally differently here at commission. But I said, look, if I’m going to get into this business, I recognize I have to compete on price, but we’re not going to negotiate on price because that’s what takes 90% of the time in dealing with this.

03:45:18 – 04:04:24
Mike Serwitz
And we basically said, look, here’s how it’s going to work. You send us your bill. Whatever you negotiated last time, we’re going to charge you the exact same. And that whatever money we make, you’re going to get half super simple. There’s no negotiation. There’s no up and back. There’s no pennies here and there. And it’s like, look, whatever we negotiated last time, we’ll take it sight unseen.

04:04:24 – 04:16:16
Mike Serwitz
And then we’re going to make you a buddy in commission. We are going to make you a 50% partner in your own account. So that was basically the basis of how we got going and how we’re able to cut out like 90% of the up and back that traditionally happens.

04:16:22 – 04:18:24
Alex Nottingham JD MBA
How did you come up with that, that model?

04:19:24 – 04:39:15
Mike Serwitz
You know, it’s funny. So I didn’t here’s how here’s actually how it went. And people don’t usually ask me that. So the way it went was a the sister of a woman who works in my office. Again, this was like I was just helping friends get get get this going. Right? A sister of a woman that worked in my office.

04:40:17 – 05:04:22
Mike Serwitz
I said, Well, hey, you know, send me your statement so I can, you know, also price you appropriately. Right. And she said, well, I don’t feel comfortable sending you my statement, like, you know, even though my sister knows you, I don’t really feel comfortable over, you know, she had all these reasons and it’s not. And I said, look, I’m not looking to find out how much you’re getting charged, so I can lower just a tiny bit.

05:04:25 – 05:23:10
Mike Serwitz
How about this site on scene? Whatever. You’re being charged, I’ll just charge this and give you that. I just spitball it there and, like, totally disarmed her, and she’s like, Oh, yeah, that sounds fair. That sounds good. I’m like, Cool. Yeah. And like, and so it was like totally on accent. I just spitball that there because I think she was worried.

05:23:24 – 05:42:24
Mike Serwitz
I mean, this happens in industry a lot. Like, if you are, they try to figure out just how much they need to save you in order to get you to switch. But they don’t want to save you more because that cuts into their profits. Right. And I think she was worried that I was attempting to do that, which I, I wasn’t I was just helping the sister of a friend of my office.

05:43:03 – 06:01:04
Mike Serwitz
And I said, look, okay, fine, I’m not going to like this. Whatever profit will split it. It’s simple. And it just disarmed her. And she sent it over and we got her going. And so I’m like, wow. Like, that went over, like, very well and easily. And some people seem to like it. So from there we thought about it and like built a whole brand around it.

06:01:04 – 06:23:03
Alex Nottingham JD MBA
That’s a really cool story and that’s interesting in life. Often it sees chance occurrences or offhanded things that end up being something really important in one’s business. What do you. So that seems very different than a lot of what other payment processors do. What else would you kind of, you know, describe your company as being different?

06:24:17 – 06:47:01

Mike Serwitz

Oh, well, you know, obviously, we like to think a lot of things. I think one of the biggest differences, especially for small businesses that we work with and we have like a real ongoing relationship, is that we’re not a payments company first or I’m not a payments provider first, like I’m a small business owner that grew my business to like medium size.

06:47:14 – 07:30:09
Mike Serwitz
Right? And I, I now happen to do payments also, but small business owners tend to enjoy working with us quite a bit because we’re like small business owners first that know how to do this. Right. And so I think a lot of people like working with us because we understand all the dynamics of their business, but many of the dynamics of their business that we share ourselves and the fact that we got into this to solve our own frustrations of the industry, that many of these our customers now also have had, I just think makes the bond better in the sense of it’s not a good industry, is the truth.

07:30:20 – 07:51:00
Mike Serwitz
It’s very, very complicated. So it’s very easy to be taken advantage of, whether maliciously or not on accident and it’s very difficult to get straight answers. And you ask three people, they’re going to give you three different answers on how it all works. It’s super complicated. And so I think one of the things that we really do differently is that we’re business owners.

07:51:00 – 08:02:25
Mike Serwitz
First, we just make this really simple. We’re not going to negotiate. We just take whatever you negotiate last time and now we’re partners. We’re partners. I mean, it’s really good.

08:03:00 – 08:04:07
Alex Nottingham JD MBA
I like people like it.

08:05:01 – 08:11:10
Mike Serwitz
And I think, yeah, just the fact that we’re small business owners ourselves now doing this makes things work. Now.

08:11:20 – 08:16:03
Alex Nottingham JD MBA
What are some of the nuances of dentistry specifically when it comes to payment processing?

08:17:10 – 08:48:27
Mike Serwitz
Well, as a particularly relates to the title of this, which is like flip your costs and your expense into a revenue generator. Let me touch on that and then answer your question in a roundabout way. And if you want to cut me off, you can basically one of the things that’s really sweeping the nation and many of your viewers certainly have seen in other industries is what people, the late person’s term is like cash discounting.

08:49:21 – 09:10:27
Mike Serwitz
It’s not really the best term, but essentially where your customer, the cardholder, pays the fee. And what that does is it allows the business to accept payments for no cost. So right now, all of your dentists are accepting their payments and it’s probably costing them thousands of dollars a month, tens of thousands of dollars a year. Bigger practices, maybe hundreds of thousands of dollars a year.

09:10:27 – 09:24:11
Mike Serwitz
Right. Well, many of you have probably seen where when you go to buy your sandwich or get your car washed or whatever at the front, it’s like, hey, if you want to use your card, it’s actually right. People are used to seeing that. And you started seeing that, Alex, in your area.

09:24:15 – 09:27:06
Alex Nottingham JD MBA
I have I have this annoying.

09:27:06 – 09:33:27
Mike Serwitz
It is annoying. Okay. However, have you stopped shopping at those establishments?

09:35:12 – 09:36:00
Alex Nottingham JD MBA
Sometimes.

09:36:10 – 10:03:13
Mike Serwitz
Okay. So here’s the deal. We can offer that now. And it’s incredibly it’s incredibly effective. We probably have 75 dentists and I’m just ballpark. You got to take a look. We just got a six location in California dental practice up and running on this. You asked me the nuances. So here’s what I’m getting at. If you go with this program with us, literally your fees drop to zero.

10:03:13 – 10:25:24
Mike Serwitz
Literally your fees drop to zero. Okay. And the commission that we pay you goes up quite a bit, because instead of being whatever amount of margin is on the account, typically there’s more margin. When we do this, because to you, 1% of your sales is meaningful as an expense to the cardholder. An extra 1% on their bill is not meaningful generally.

10:25:26 – 10:43:25
Mike Serwitz
Right. And so what happens is very often there’s like 3 to 4 times more commission on these type of accounts than on a traditional account. So that’s the whole premise of this talk is that literally we can cut your fees to literally 0.8 one half, I’m sorry.

10:44:14 – 10:48:11
Alex Nottingham JD MBA
Or make money in this sense because you’re charging the patient three or 4%.

10:48:11 – 11:09:06
Mike Serwitz
So what happens is literally your fees go to absolute zero. So you’re used to paying three grand a month in your credit card processing that goes to zero. And then our commission to you be substantial. So all of a sudden, what used to be an expense now literally is generating revenue for you. Okay. Now we can do that on our traditional program, which is like you still fee paying the fee and we will pay you.

11:09:19 – 11:27:26
Mike Serwitz
We now are subsidizing your expense like, you know, maybe it’s costing you three grand a month and maybe we’re paying you 500. But with this program, your fees literally drop to zero. Okay. So maybe all of a sudden sort of the costing, it’s you’re going to cost you zero instead of us paying you 500 a month, we’re paying you like 1500.

11:28:04 – 11:49:03
Mike Serwitz
Okay. So there are those options. Health care providers are a little slower to pick this up than other establishments, but it’s growing and we’re switching over dentists and other customers in droves now. And by the way, you can switch back. I mean, this is like we can turn it on and off the super easy, okay. Because people are people are nervous, understandably.

11:49:03 – 12:05:17

Mike Serwitz
Right. I think at that one dental practice, six locations they like piloted at one it was fine. They rolled it out to the other. Okay, now here’s what some of our dentists are doing. You asked me the nuances of dental. I’m talking about the nuances of dental on this program where your fees are zero and you make a lot of money and that’s okay.

12:06:24 – 12:31:29
Mike Serwitz
Cash discounting is like the layperson’s term for this program, right? If you’re having like a $15 burrito and drink, like you probably have cash to pay as an option. Right. But if you’re having like a $500 dental procedure, like not too many people are carrying around like $500 of cash. Right? So sometimes dentists are like, shoot, like, yeah, we’re giving them the option to pay with cash.

12:31:29 – 13:03:06
Mike Serwitz
But like, are we really giving them that option? Because how could they? Right. And so what we’ve done for a lot of dentists is we’ve turned on PIN debit. You can run a debit card with a PIN or without, right? You probably know that. Okay. If you put in the pin, the wholesale cost is lower. So what we’ve done for some of these dentists is we set it up where if the customer wants to pay with a credit card or a regular debit, or if they want to pay with a credit card, they’re paying the fee.

13:03:06 – 13:21:04
Mike Serwitz
But if they pay with a debit card and type in their pin, then the dentist absorbs the fee. And usually we set it at like a flat one and a half percent, which is a lot less than their nearly for sure than what they’re paying now. So it’s like it’s a flat one and a half percent fee to accept PIN debit.

13:21:12 – 13:39:09
Mike Serwitz
But what we have found that our customers that are doing this still like three quarters of their customers are paying with a credit card fee. Okay. So in the scenario I just describe for you, it’s allowing our dentist to do this in a way that they don’t feel they’re making. And they’re giving them the option to pay with cash.

13:39:09 – 14:01:03
Mike Serwitz
But who really is paying with cash? $500 in their wallet as they’re checking out? So they felt a lot of our dentist feel comfortable with this option. Do you pay the credit card? You pay the fee. If you pay with a debit card, we’ll pay the fee and then we can charge them a lot less. So in this case, we’re probably offsetting if 75% of their customers, which is a ballpark or pay with a credit card, there’s pay nothing on that.

14:01:14 – 14:21:23
Mike Serwitz
The remaining 25% that are paying on a debit card, they’re only paying one and a half percent as opposed to probably a lot more with credit cards. So all of a sudden, we’re probably offsetting, call it 85% of their fees. So maybe it’s not going to zero, but they’re paying like 15% of what they were paying before. And very often the commission that that we’re paying them exceeds that remaining 15%.

14:22:13 – 14:31:24
Mike Serwitz
Right. So I feel like I made it sound a little more complicated than it is. I don’t know if it makes sense to you. I as I’m listening myself, like, man, it’s simpler than I made it sound.

14:32:12 – 14:49:18
Alex Nottingham JD MBA
But you’re so entertaining, Dave. I love you know what I enjoy listen to you is like and that’s what makes you so sincere is like ear like we can see into your mind like here’s how you you’re so excited about a topic that you know, is kind of complex, but you have fun with it and you’re very straight about it.

14:49:21 – 15:13:18
Alex Nottingham JD MBA
That one of the cool things is you are going to have, Natalie, one of your representatives at the event, the All Star Practice Growth Summit May 19th and 20th in South Florida. And so what’s great is people can come to that. They can talk to your company, learn more. I had one of our members said that at the last live event that they love the content.

15:14:01 – 15:35:22
Alex Nottingham JD MBA
They made a ton of money from just the exhibitors learning from them and the savings they got by being exposed. Because what’s nice is you were a referral that came through us through one of our coaches. So you have been vetted and that’s what’s nice is we get to bring all the great exhibitors that have been sponsors that have been vetted to this event and you can meet, talk with them, learn.

15:35:22 – 15:55:05
Alex Nottingham JD MBA
And I love how I like what you said about the trust situation that you’re willing to provide that because I know a lot of dentists always feel nervous about new endeavors and it’s nice that your you are providing that. Yeah. If somebody is not able to come to the event and they’d like to learn more about you, how can they find out about you?

15:55:05 – 15:57:08
Alex Nottingham JD MBA
And I can put this information in the show notes as well.

15:57:21 – 16:10:26
Mike Serwitz
I’ll be nice. I will put a link. That is a way. I mean, first of all, I’ll put out a link for a website. They can call us, they can send us an email or whatever. But if they want to start the process and find out, like everybody’s question is, well, how much money am I going to make?

16:10:29 – 16:25:20
Mike Serwitz
How much money am I going to be great? Okay, so the way that they can do that is they can begin a little application process in which they can upload a statement. Okay? Like then we can quote you to the penny, how much money you’ve made. Okay? And I’ll give you a link for this. Alex, if I haven’t already.

16:26:07 – 16:28:16
Alex Nottingham JD MBA
Is the applied commission buddies dot com?

16:28:28 – 16:30:13
Mike Serwitz
Yeah. Yeah, absolutely. Okay.

16:30:20 – 16:31:16
Alex Nottingham JD MBA
I’ll put all that there.

16:32:02 – 16:55:13
Mike Serwitz
Yeah. And if you’re going to go with cash discounting, okay, there’s really like can call it dual pricing or non-cash adjustment, but everybody calls the cash discount if you want to go with that program. Like we don’t need a statement because we don’t need to match your rates because we’re not like we’re just going to charge you a flat one and a half percent for debit cards.

16:55:18 – 17:09:25
Mike Serwitz
Credit cards are going to cost you nothing because the fee is passed on to the cardholder. Okay. So in that case, you don’t even need to dig up a statement. We’re just let it roll. And whatever the profitability is on your account, you get half your total transparency into it, whatever. Okay. If you’re like, No, no, I don’t want to do that.

17:09:25 – 17:27:14
Mike Serwitz
I want you to match whatever deal I negotiated last time. Then we do need you to upload a statement because if we’re going to, in good faith match your whatever you negotiate. Last time we got to see the bill super complicated. Most business owners, they think they understand what they’re paying, but they know it’s super, super complicated. And so that’s the way to get going.

17:28:11 – 17:41:27
Mike Serwitz
And also maybe what we could do, Alex, too, if people want to talk first or whatever, maybe we could put Natalee’s like Talalay booking link as an option. Sure. That’s a good idea. I think where if they don’t want to put it in personal information yet and they just want to like talk like we can do that, too.

17:42:26 – 17:46:11
Alex Nottingham JD MBA
Yeah, I have our email here as well and we can certainly give a link to Kalani.

17:46:17 – 17:47:15
Mike Serwitz
I think, on the.

17:47:15 – 17:51:23
Alex Nottingham JD MBA
Show notes. Yes. And then over to me. Well, David, thanks so much for being on the show.

17:52:24 – 18:08:19
Mike Serwitz
And D-man is going to be our super pumped about what we’re doing. I mean, it’s a for the right person, it’s just a no brainer. It’s like I once made the mistake of saying somebody, Oh yeah, it’s like free money. And they’re like, Well, my dad told me there’s no such thing as free money and none of that.

18:08:19 – 18:22:08
Mike Serwitz
And I was like, okay, okay, okay. I wasn’t trying to like be cheeky, but like at the end of the day, working with us, like, everything stays the same and you just make money now. Yeah. I mean, so for the right people, it’s a no brainer.

18:23:11 – 18:35:26
Alex Nottingham JD MBA
For those that are watching or listening, please remember to subscribe on YouTube and follow us on Apple Podcasts and Spotify. And until next time, go out there and be an all star.

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