MasterCard Processing Integrity fee update

Effective November 1st 2011, the MasterCard Processing Integrity fee will increase by $0.01 to an amount of $0.055. Unless your merchant account is on a special type of bundled pricing, all merchants will see this on their November 2011 merchant statement, delivered in early December.

WHAT IS THE FEE FOR? This fee is applied to authorized transactions that are not followed by a matching MasterCard cleared (settled) transaction (or in the case of a canceled transaction, not properly reversed). The fee can be avoided by clearing (settling) your transactions. If an authorization is not needed, the authorization must be electronically reversed within 24 hours for face to face authorizations and reversed within 72 hours for Card absent authorizations.

WHO PAYS IT? All merchants pay the fee if triggered by the fee rule.

HOW WILL I KNOW IF I RECEIVE THE CHARGE? All merchants on “interchange pass through” or “interchange plus” pricing will see these charges listed as a separate line item, when the fee applies. If you are not on this type of pricing, then it’s up to the processor how your fees are bundled, though in most cases, I think merchants will see this fee regardless of the type of pricing.

HOW CAN I CANCEL OR REVERSE AN AUTHORIZATION AND AVOID THE FEE? This varies by many factors, including how you are processing.

  • Yahoo stores now have a Reverse Authorization button on the Order Details page.
  • Authorize.net has issued an API. Shopping cart engines are integrating the API, but it is not yet widespread.
  • Check with your processor or POS software provider.

Can you give me an example of when this fee would be applied? An ecommerce store receives an order for an item. The item is backordered and will be back in stock in 3 weeks. The merchant does not want to cancel the order and does nothing. The authorization will be automatically dropped because it exceeds the 7 calendar day maximum. The merchant will also incur the MasterCard Processing Integrity fee.

The fee does NOT apply to:

MCCs 3351-3441 (Car Rental Agencies)
MCCs 3501-3999 (Lodging-Hotels, Motels, Resorts)
MCC 4411 (Cruise Lines)
MCC 7011 (Lodging-Hotels, Motels, Resorts –not elsewhere classified)
MCC 7512 (Car Rental Agencies – not elsewhere classified)

NOTE: The penalty for failure to reverse authorization is $.055 but the merchant per transaction fee is likely even higher. Unfortunately merchants will be hit with two fees in order to reverse an authorization for the benefit of the customer. Here’s a better idea to improve consumer satisfaction. Why not require card issuing banks to fund  consumer accounts faster when merchants issue refunds?  The money comes out of the merchant account per the merchant termsn, usually upon settlement, but the consumer doesn’t see there money usually for 3-5 days, sometimes longer.


industry insider reviews merchants fees for non-profits

How can non-profits lower credit card processing costs for online donations? Video presentation specifically reviews these costs with real examples so controllers and CFO’s can benchmark their current costs vs actual lowest costs possible. Based on Visa and MasterCard Associations  2009 interchange rates and actual non-profit merchant statement reviews.

Lowering Credit Card Processing Rates for non-profits presentation

Non-profit credit card processing rates

Are there special credit card processing rates for non-profits?

Yes, there are special rates for non-profits. Specifically, there are special INTERCHANGE RATES. In order to qualify for them, you must be on a price plan that enables you to take advantage of them. We call this wholesale or interchange plus pricing. Typically we offer this for merchant accounts processing more than $1 M annually. Interchange plus is what large companies such as Home Depot or Barnes and Nobel pay. It always includes a % of the transaction, a per item fee, Visa/MasterCard dues and assessments, and a merchant discount. Over 95% of your costs are in the % of the transaction, so that is the area that must be controlled or MANAGED.

The most meaningful way to lower your costs is to hit levels of interchange with a lower rate. We can get your non-profit into a program where you’ll hit interchange rates lower than what most retail accounts pay, that is a lower % per transaction. Some of your transactions such as visa rewards cards will process at the same as for profit companies. However some transactions will process at a lower rate, usually at 20 basis points or .2% lower than the lowest rate for profit companies.

In my experience, most non-profits have not been offered these special interchange rates. You can save $2000-$10,000 per million dollars in donations just on this one item. National non-profits typically save 25-50% by implementing my recommendations and services. Which is easier? Finding a donor to give you $100,000 + every year, or calling me one time and saving that much on your expenses every year?

Here’s how you can check to see if you are getting the best rates for your non-profit.

First Look at your merchant statement. Go to the section, usually the last page or two, which shows INTERCHANGE COSTS. Do you have this section? If not, you are not on a price plan that lets you participate in the program.

Second. If you have the interchange cost section, you’ll see things like VISA RETAIL DEBIT, COMMERCIAL DATA RATE 2 ETC. Do you have one that says EMERGING MARKETS OR EMG MKT? If you do not see this category on any of your past statements, you are not participating in the program.

Both conditions are required whether you are accepting donations online or swiping cards for event registrations and auctions.
If you answered no to either question, and your non-profit is processing at least $1 million annually, please call and I will help you keep more donor dollars to use for your organization programs.

Would you like a PDF presentation with actual examples of what to look for on your merchant statement? Call the hotline 954-942-0483 and we will send it to you.