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

Eariier 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.

I reported on the name change of Nova to Elavon back in 2009. Elavon is the merchant partner for Costco. The contact information is also in the article Where can I contact Nova Information Systems?

I’m surprised to hear from Elavon merchants that there is no phone number on their merchant statement. Maybe it’s just not easy to find?

I used to recommend the Costco solution for small retail businesses, where a customer walks into your store. I’m neutral on that now depending on how small the business. If you process over $100,000 annually, it might be worthwhile to look somewhere else.

related articles:

What do I need to open a retail merchant account?

Why do companies choose my merchant services solutions?

As previously posted, Nova is now Elavon. NOVA Information Systems Becomes Elavon

April 15, 2008

A Payment Processing Company for the Global Era

ATLANTA– April 15, 2008 – NOVA Information Systems (NOVA), a wholly-owned subsidiary of U.S. Bancorp (NYSE: USB), today unveiled a new global company name, Elavon. Elavon becomes the identity for NOVA and its affiliate merchant acquiring brands including First Horizon Merchant Services (FHMS) and euroConex. Elavon effectively unites the company’s acquiring solutions organization to address the expanding payment processing needs of its partners and clients. Backed by U.S. Bancorp’s strategic investments and operational efficiency, Elavon is positioned to capitalize on emerging market opportunities and build on the strength of its international processing platform and proven business model.

North American Nova - Costco and Elavon merchants requiring technical assistance or customer support may contact merchant services 24/7 365 days a year at 1-800-725-1243.

Beyond continued strong organic growth, Elavon has profited from the investments made by U.S. Bancorp, which have fuelled expansion. These strategic acquisitions include the Citibank Card Acceptance business in Europe, FHMS and most recently Southern DataComm —purchases that have placed Elavon into a leadership position in the payments industry and established it as a global gateway solutions provider. Elavon’s development of an international processing platform that consolidates multiple front-end authorization and back-end settlement systems onto a single network allows the company to quickly respond to evolving security requirements and technology advances.

“Uniting NOVA, euroConex, FHMS and our other brands under one company name positions Elavon to be recognized as the preeminent global leader in the payments industry,” said Stuart C. Harvey, Jr., chief executive officer, Elavon. “Our investment in developing an international processing platform delivers the scale necessary to quickly respond to client and market needs. We now have the opportunity to develop even deeper, broader relationships with our customers and partners that extend our reach into new markets worldwide.”

“U.S. Bancorp continues to demonstrate its commitment to the payments space by making wise investments in our growth,” said Pamela Joseph, vice chairman, Payment Services, U.S. Bancorp. “We believe in the strength of Elavon’s business model and the opportunities it fosters as we expand worldwide.”

In addition to global expansion opportunities, Elavon is also positioned to respond to the expanding needs of merchants in multiple segments including retail, hospitality, health care, education, and the public sector. End-to-end processing control and the delivery of strategic solutions including electronic check conversion, health care claims eligibility processing, and convenience fee processing are all important in helping businesses better manage costs.

“Global end-to-end control enables us to capitalize on emerging market opportunities that extend to our channel partners,” said Harvey. “Our successful business model allows our channel partners to focus on their core competencies while keeping their clients compliant, secure, efficient and financially poised for success in the global economy.”

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About Elavon

Elavon’s Global Acquiring Solutions organization is a part of U.S. Bancorp (NYSE: USB). Elavon provides end-to-end payment processing services to more than one million merchants in the United States, Europe, Canada and Puerto Rico. Solutions include credit and debit card processing, electronic check services, gift cards, dynamic currency conversion, multi-currency support, and cross-border acquiring. Elavon’s services are marketed through multiple alliance partner channels including financial institutions, trade associations and ISOs. Elavon has solutions to meet the needs of merchants in specialized markets including small business, retail, hospitality/T&E, health care, education and the public sector. Elavon represents the former brands of NOVA Information Systems and its affiliates FHMS and euroConex. For more information visit www.elavon.com.

North American merchants requiring technical assistance or customer support may contact merchant services 24/7 365 days a year at 1-800-725-1243. You may also fax inquiries to 865-577-0661. For additional contact information and answers to common questions, log onto www.merchantconnect.com.