The payment gateway can have a substantial impact on the cost of accepting credit cards, efficiencies and cash flow, but too often they’re considered a commodity, little more than a transactional solution. PCI DSS* Compliance and tokens replacing senstive credit card or ACH payment data are pretty standard inquiries today. The three items below address questions that are often overlooked.
- Will the gateway support Level 3 Data for credit card processing and how does it work? Level 3 is paramount for any business to business company due to the high volume of corporate and purchasing cards. Interchange fees are non-negotiable, but by providing additional data, merchants can qualify for lower interchange rates, typically saving .70% on MasterCard for example. Functionality is also critical.
- How will the gateway manage expiring credit cards? For example, does the system push out reminders and enable customers to self update, or does the merchant manage the updates or pay for a 3rd party service?
- How will the gateway help manage interchange fees? Interchange is the largest component in the cost of accepting credit cards, typically over 95% of the overall fees. Each card presented has at least three rates associated with it. The margin of variance between a properly presented transaction that meets the qualified interchange rate and one which hits the non-qualified rate, can be in the 1% range. With hundreds of different rates, rules, complexities, combined with internal staff turnover, it’s impossible to manage interchange fees without a technology solution.
About Christine Speedy, blog author. Christine has been helping merchants select the right gateway since the beginning of ecommerce in the mid 1990’s, including the Miami Dolphins first ecommerce site. Today, Christine offers gateway solutions for many applications beyond ecommerce, including electronic bill presentment & payment, retail POS, and online payments, with light and full ERP integrations.
* Payment Card Industry Data Security Standards