Visa, Mastercard, American Express, and Discover, postponed new interchange rates and fees originally scheduled to take effect in April, 2020 until at least July 17, 2020 due to Covid-19 Coronavirus. The announcements provide some relief to battered and closed businesses. Every Spring most networks tweak their fees.
American Express will delay the changes to their assessment fee and their Inbound Fee (International) until October 2020. TSYS will delay the PULSE annual fee increase ($4.00 increase to current $12.00 fee) until July 2020. The NYCE annual fee will be billed at the new rate of $16.00 in August to all applicable merchants.
Other card network fees were relatively minor. It’s noteworthy that many continue to be penalties related to authorization compliance, for example, fees for not performing authorization reversals.
If your company has a business to business component and more than five hundred thousand in credit card processing revenues, this article is for you. If you answer yes to any question, you’ll almost certainly increase EBITDA with very little effort by switching to CenPOS. Changing your merchant services provider is not required.
- Do you have a desktop terminal?
- Do you use authorize.net, Paypros, or Paypal for your payment gateway or virtual terminal?
- Do you have mixed swipe and card not present transactions on the same merchant account?
- Do you preauthorize cards and charge when ready to ship- sometimes weeks later?
- Do you ever preauthorize card for one amount, but capture or settle a different amount (change order)?
- Is MasterCard Data Rate I or II on your merchant statement, but not Data Rate III?
The list is what I call ‘easy pickings’ for big financial impact, and I don’t even need to see your merchant statement. CenPOS fees will nearly always be more than offset by merchant fee savings. That’s not necessarily a big enough reason to make a change, but isn’t it compelling enough to call 954-942-0483 now and learn more about how our platform can help your company?
A telemarketer called from “Express Processing Payments”, with the pitch, “Have you heard about new regulated rates that Visa and Mastercard introduced for small businesses only?” And further, “…reduce your rates 20-50%.” Let’s dispel this claim right now. There’s no such thing.
The only ‘recent’ government regulation regarding rates, are those from the Durbin Amendment, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In August 2011, I reported on the proliferation of robo calls that followed the federal legislation for debit card transactions:
Under the final rule, the maximum permissible interchange fee that an issuer may receive for an electronic debit transaction will be the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. This provision regarding debit card interchange fees is effective on October 1, 2011.
What does this mean to merchants?
- The maximum the issuer (if they meet regulated size) can receive is .05% plus $.21 plus $.01 if qualified.
- What merchants pay are determined by the salesperson selling them.
- Visa debit interchange rate for CPS Retail was 0.80% + $0.25 per transaction prior to the new legislation. If a small business received a 50% reduction in debit fees, the average small business processor still increases their profits significantly.