The only way to lower your credit card processing costs is to control HOW you are processing. That means processing at the OPTIMUM INTERCHANGE RATE for the type of transaction. There are over 100 ‘rates’ and the trick is to get process at the lowest allowable for the type of transaction. We call this ‘managing how you are qualifying for interchange’.
That’s where our expertise comes in. Common information is below. How we help you is revealed with a mutual exchange of information.
All bankcard transaction rates – regardless of who processes the transaction – include a cost for “Interchange.” Interchange rates represent the fees that the VISA and MasterCard Associations charge a Merchant to get the funds into his bank (Merchant Bank) and to get the billing information to the Cardholder’s Bank (Issuing Bank). Interchange rates are comprised of a % of the total transaction plus a per item fee.
Why do some charge a per item fee and others don’t? It’s all in how it is packaged for marketing. The interchange fees must be paid but how processors repackage the fees to present to customers is endless.
Interchange rates vary by:
– type of merchant or industry (retail, restaurant, hotel, mail order)
– type of bank card the consumer uses. Rewards cards, debit cards and corporate cards all have different rates.
How can I lower my credit card processing costs?
– the key is to make sure you have transactions in “qualified” buckets. The “qualified rate” is the cheapest category of Interchange; the merchant physically swipes the bankcard through the terminal and receives authorization for the transaction. The transaction can be authorized only once and the authorized transaction amount must match the “settled” (deposit) transaction amount. In addition, for a transaction to be charged the “qualified rate” the merchant must settle the transaction (electronically transmit the transaction for payment by the issuing bank) within 24 hours.
What about chargebacks? A chargeback is a transaction disputed by the cardholder or card issuer. There are many reasons for chargebacks, but the most common are returned merchandise, terminated services, disputes, errors, or fraud. Merchants must be able to provide proof that the disputed transaction is valid and in accordance with Visa/MasterCard regulations or risk having their account debited for the disputed amount. NOT ALL PROCESSORS GIVE YOU BACK THE INTERCHANGE CREDITS YOU ARE ENTITLED TO when a chargeback is resolved in your favor.