I recently read a blog post from a merchant processor that was completely ridiculous.
SELLER #1 : In his abbreviated story, his sales rep quoted 1.68% for a ‘business rate’ which was a decrease of 20 basis points from the old vendor.
SELLER #2: The competitor quoted .40% and a per transaction fee. Nothing else.
SELLER #1 goes on to rant about how the customer was completely deceived. The customer was going to get something called “pass through interchange”. So if Interchange was 1.65%, .40% would be added and that total would be higher than their quote of 1.68%.
THE REAL STORY HERE
No one, and I mean NO ONE, would ever quote 1.68% across the board because they’d lose money.
The reality is the SELLER #1 has more than one rate. That’s probably the low end of a 3 tier price plan. Any card that had an interchange rate of 1.65% would probably fall into his ‘mid-qualified’ rate of around 2.2%.
ALL 3 TIER PLANS ROUND UP ON AVERAGE. That’s the only way to ensure you make a profit after paying Interchange expenses.
SELLER #2 however, lets his customer benefit from many different levels. Check card processing would be 1.53%- that’s a lot lower than 1.68%.
I could go on…but I’ll digress for a moment.
This same blogger also says that there is no reason to upgrade your old equipment when it is working perfectly fine. Obviously he does not require his customers to meet PCI DSS compliance standards.