Do understand your merchant statement? Do you actually know what you’re paying? Have you ever had a credit card processor analyze and explain your statement to you?
If you are a business with an average ticket sale above $20.00, you may want to consider going with Interchange-plus. Usually, sophisticated, high-volume companies will choose this interchange-plus pricing and the transfer does not normally cost anything.
Many businesses neglect to understand and review their merchant statements. There are several ways to reduce your credit card costs. If a processor/ bank quotes only one rate, they are not telling you everything. There are two different types of credit card processing: Bundled- pricing and interchange-plus pricing. The most common type of pricing in the industry is bundled-pricing: both types of pricing have several rates involved. Knowing the basics is the key to saving you money.
If you feel you do not have time or patience to learn the basics, find a processor willing to provide you with a free-consultation, including rate-comparison and statement-breakdown, to give you the basic knowledge to understand and save you money.
Every processor charges a fee for processing whether on interchange-plus or bundled-pricing. The cost to the processor is the interchange-rates set by Visa and Mastercard. The processor’s profit is any percentage points charged above their cost. The processor will charge a fee either in percentage of dollars processed and/or a transaction fee for each transaction. Interchange-pricing discloses the processor’s fee; bundled-pricing does not, therefore; interchange-plus is recommended.
Choosing a Processor
If you think you may do better with interchange-plus pricing, there are companies who will offer this pricing. Find a reputable company who will analyze and explain your current merchant statement to you. Find a company who will give you references and provides outstanding customer service. Larger processors usually have large call centers set up for customer service needs, where medium size can be more personable. You processor does not have to be the bank, since all processors must be registered with major bank. Find a merchant service provider’s who is willing to provide you with a free rate-comparison and statement-breakdown. A review of your merchant statement by a processor can give you the basic knowledge to understand to save you money. Processors will request a current merchant statement so they can provide an accurate analysis or consultation.
About the Author:Sherene Costanzo is the Vice president of GlobeEx Corporation, a consulting firm for businesses and an independent agent for credit card processors and merchant services providers. She has a BA degree in Business Finance. You may contact her for more information at 1-866-502-8472 or by e-mail at sherene.costanzo@yahoo.com . For a free evaluation of your credit card processing statement, simply e-mail her or fax it to her at 954-252-2247.
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