Costco, Elavon, Nova and merchant rates

We frequently address questions from merchants currently using the Costco Wholesale Merchant Processing. Costco’s merchant partner is Evalon, formerly Nova Information Systems.

Earlier this year, some Costco member merchant rates were increased, though on the surface it looked like a decrease. It really depends on your business whether you’d be better off or not. In most cases, businesses will pay more.

COSTCO PUBLISHED MERCHANT RATES, April 2010.

Visa/MasterCard Qualified (Traditional Credit & Signature Debit) 1.48% plus $0.20 (reduced)
Visa/MasterCard Qualified Rewards 2.20% plus $0.20 (increased)
Visa/MasterCard Partially Qualified 2.96% plus $0.33
Commercial Non-Qualified 2.96% plus $0.33
MasterCard Non-Qualified 3.80% plus $0.33
Pin-Debit Transaction Fee $0.12

Previous blog readers know these numbers above are pretty meaningless for comparing merchant rates. What really matters is your effective rate. You get the qualified rate when the customer uses their check card and signs for it instead of entering the pin number. Debit card usage is definitely on the rise so the lower rate is a good thing. But how many of your transactions will qualify for the qualified rate vs the other rates? Reference this article for a more important number to use when comparing rate plans.
how to calculate credit card processing effective rate
In addition to the above fees, processors are passing along .30% or .40% international fees launched in 2009 by Visa and MasterCard, also called cross border service fees. These are fees for foreign issued cards. There’s no way out of this one. Everyone pays it. Since no one knows how many foreign cards you’ll be presented with, it’s usually an extra line item on your merchant statement. I’d be vary wary of any deal that did not separate out these fees.

Based on the April rate changes, I’m staying neutral on processing up to $100,000 annually via the Costco membership plan. Anything over that, I’d look at other options.