We can appreciate why many merchants have questions and difficulty understanding the fees and the pricing programs for credit card processing.
Some Processors are still using the outdated Tiered Pricing model.
There used to be only a few Interchange Categories so Tiered Pricing made it easy for business owners to understand and the two to four tiers covered the differences in Visa and MasterCard, swiped or keyed Credit Cards. Then along came the Debit Card and Rewards Card. There has since been a major proliferation of Card Types such as World Card, Corporate Cards, Signature Cards and different rates for different types of businesses. In October 2011 there was a major reduction from Visa and MasterCard through the Durbin Amendment for transactions using the Debit/Check Card.
Rather than lump the many Interchange Categories together into two or three different rates, we break out each one so that you are always paying the lowest price for every transaction. This is Passthrough of Interchange.
The fairest and very best pricing program is Interchange PassThrough. This program ensures that you will always be paying the lowest rate possible for each transaction type, even when there are increases or decreases in the pricing of Interchange Categories which occurs twice a year. On the PassThrough Pricing Program, the four components of the fees that are charged consist of:
Paid to the Card Issuing Bank.
There are over 500 categories related to:
- the different card types (Debit, Credit, Rewards, Corporate, World, etc.)
- whether the card is used at a retail store, restaurant, supermarket, hotel or elsewhere
- whether the card is swiped or key entered
These fees are set by the card brands (Visa, MasterCard, Discover, and American Express). Interchange Rates are the same for all credit card processors and no processor can give you a lower rate or a better deal.
Card Brand Fees
Paid to Visa, MasterCard, Discover, and American Express.
Like Interchange, Card Brand Fees are the same for all credit card processors and no processor can give you a lower rate or a better deal.
Account Management Fees
Paid to the Processor.
For the authorization, processing, and settling of each batch, as well as for reporting, fraud control, technical support and customer service.
Paid to the Processor.
For Payment Card Industry (PCI) Compliance and Non-Compliance, EuroPay MasterCard Visa (EMV) “Chip Card” Compliance, 1099 Reporting, as well as other security updates.