In credit card processing like life, there are things that you have control over and things that you don't. Many credit card processors start their conversation with merchants by offering a rate. But as you will see shortly, offering a rate without specific knowledge of a merchant's business is a meaningless gesture.
Visa and Master Card set the Interchange Rates
As a merchant you have no influence over how Visa and Master Card set Interchange rates. Click on the links below to see Visa's and MasterCard's interchange rates
Customers decide which card to present for payment
The Customer chooses which card to present for payment. The card presented may be a branded rewards card, a corporate card, foreign card, purchase card a debit card or gift card. Each of these different card types carries its own processing rate. You have little or no influence over which card the customer chooses to present for payment.
Merchant presents transactions for processing
As a merchant, this is the only step in the process that you have control over. The price that you are ultimately charged for a transaction is influenced by how your account is setup and how you present each transaction for payment to your processor. If your business is primarily B2C and a customer presents a corporate card for payment that transaction will be downgraded to a higher rate. Conversely, if you are a B2B business and your customer presents a consumer card for payment, your transaction will be downgraded.
It is important to make sure that your account setup reflects the majority of cards that you are presented.
In addition to your account setup, if you present transactions for payment that are missing information or the information you present is incorrect, those transaction will be downgraded. A common example of this is a debit transaction that is presented without a pin number. In this case, you will be charged a transaction fee plus a percentage of the transaction instead of just a small fixed transaction fee.
Costly downgrades that result from improper account setup or missing or invalid transaction data are avoidable.
Conclusion
Anyone can offer you a "rate". But without a detailed understanding of your business, the type of cards that you are predominantly presented and how those transactions are presented, a "rate" is meaningless. You should be wary of any payment processor that quotes you rates without reviewing your processing statements. Its is impossible to estimate transaction cost without taking the time to complete a statement analysis. At MuniCommerce, we never quote a rate without first analyzing your processing statements. We guarantee our estimates in writing. If you are tired of 1800GoodLuck, call the financial professionals at MuniCommerce. You'll be glad you did.
