Let me explain Merchant Services/CC Processing for you.
CMSI is a third party processing company or Independant Sales Organization also known as an ISO. They are the middle man between the parent processing companies(i.e. First Data Corp) and the Merchant (in this case, Marijuana Dispensaries).
CMSI provides this service for a fee which is usually a combination of a percentage of the total sale and a flat rate transaction fee. Transaction fees can be as high as .35 and the percentage can be as high as 5% of the total sale. CMSI keeps the entire transaction fee for themselves; which equals a lot of dimes and quarters adding up everyday.
Now with that percentage it is broken down like this:
2% of the total sale goes to the card issuer (i.e. Visa, MC, AMEX)
The remaining amount of the percentage is split between the ISO and the parent processing company. So for instance if someone were to buy an ounce of Medical Marijuana for $400 and used their debit card for payment, then CMSI would receive roughly $10.25 for doing virtually nothing.
This is a VERY lucrative business, mainly because merchants have to accept Credit Cards/Debit Cards. And the contracts that are in place offer residual income. It continues for the life of the contract.
Just think if you received even just .10 per transaction and only 1% of the total sales of Walmart! That is HUGE MONEY for securing that contract. Now think about CMSI's contracts that they already have in place with the dispensaries, every swipe of the card is more and more money piling up with little to no overhead cost!
CMSI also makes money by selling and leasing CC machines. And the mark up on them is close to 100%.
If Prop 19 passes and CMSI can secure their place as the premiere MMJ Processor than they have a whole new world of opportunity opening up to them with "coffee shops" and "head shops" offering marijuana for personal consumption.
This is a huge market that has yet to be tapped into. I betting that means BIG $$$$ for CMSI.
All IMO, GLTY.
