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Be An Informed Merchant About Your Merchant Services Account
When it comes to knowing a subject I think Mark Twain said it best…
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
As I speak with Merchants each day about how to save money on their credit card processing, I am finding this quotation to be a perfect match for the vast majority of Merchant Services account executives out there. The unfortunate part is that it is needlessly costing merchants thousands of dollars annually.
In this first part we are going to speak about rates!
I hear terms everyday from the Merchants I consult with such as they discuss their merchant services accounts with me “Qualified rate” “Mid-Qualified rate” “Non-Qualified rate” ”check card or debit card rate” “Discount rate” ”Buy Rate” This is commonly referred to as “Tiered Pricing”
Here is the most important question a merchant should be asking a merchant services account executive. Which Visa, MasterCard and Discover interchange categories do you classify into your various tiered rates?
If he or she can’t answer this simple question, I wouldn’t continue, they obviously don’t know the business they are in.
If they are telling you the qualified rate is for “your basic everyday personal credit card” and that rate will most likely be in a range of 1.49% to 1.99% with a transaction fee of between .19 and .40 cents, then pin them down on the category. Here is why I ask this question, with Visa, MasterCard and Discover there is no category of qualified mid-qualified and non-qualified rates. The merchant services provider who prices in this manner can put in or leave out whatever interchange category they wish and you will have no way of knowing.
This next one is where they really charge the uninformed merchant hard, the so called Mid-Qualified rate. Why does it hit the merchant so hard? This is the majority of credit cards you will see.
“this is the rate for accepting Credit cards with points, frequent flyer miles, etc., or any type of rewards component” again Visa/MasterCard/Discover does not have a mid-qualified classification. Here an uninformed account executive will quote you an add on to the qualified rate of .85% to as high as 1.59% when you accept a “rewards card”. Notice I said add on, yes they add this rate on to the qualified rate. You could end up paying as much as 3.58% just to accept a frequent flyer card, plus don’t forget they also want to charge you an additional amount for a transaction fee of again anywher from .19 to .40 cents per transaction.
This applies to the so called Non-Qualified rate as well. The story here is…
“this rate is for accepting Business, Corporate, Government, International cards, cards numbers that are KEYED IN, or CNP (Card Not Present) and is also charged PER TRANSACTION when the Merchant has not batched within 24 hours.” Here again I have seen add on rates of 1.89% and higher. Not to sound like a broken record but there is not a V/MC/Disc non-qualified category. If you have this type of pricing then you could pay as much as 3.88% when you accept these types of transactions, plus let’s not forget the ever present transaction fee of .19 to .40 cents per transaction.
All of these “rates” talked about above are INFLATED rates above the actual interchange rate as published by Visa, MasterCard, and Discover.
To see what the actual interchange rates are you can Google “Interchange Rates” and you will find direct links to the Visa and Mastercard interchange rates pages.
With EnablePay Direct you as a merchant can process credit card transactions at the actual wholesale interchange rate. Why pay inflated rates and needless fees to accept credit cards at your business.
Contact me at rlynch@enablepay.com for a free no obligation account analysis.
Here we have only discussed rates, in our next article we will discuss the outrageous fees that “creep” their way onto your statement.
About the Author
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