Understanding your operating costs is a key component to successfully and effectively running your business. How much you pay for merchant services is important. Knowing how to lower your merchant processing costs is critical.
The credit card associations, Visa and MasterCard, set the base wholesale cost for every type of credit card transaction. This is known as Interchange and it costs the same for every business in Canada. Dues and Assessments are also set by the Card Associations. The credit card associations collect most of these fixed fees from your merchant services processor. In fact, almost 90% of your merchant services bill is made up of Interchange, Dues and Assessments.
At NPS, our job is to ensure that you are processing your card transactions in such a way that you paythe lowest fees possible per card transaction. There are several factors that determine how much youpay for merchant processing each time a customer purchases your products and services with their credit or debit card.
Card Present Transactions: Accepting cards at the point of purchase, having your clients swipe theirpreferred payment method or “tapping” it on your contactless reader is often the least expensive way to accept cards. The credit card associations know that the card, the client and the services rendered all happened at the same time. This is considered a qualified transaction. Qualified transactions cost less because the card data is verified when the credit or debit card is read.
Card Not Present Transaction: Most commonly, card not present (CNP) transactions are phone sales, hand entered or online purchases. The card associations charge a higher percentage for these transactions as they are considered to carry more risk. It’s possible that the person calling in to purchase isn’t authorized to use the card or your store personnel might key enter the data incorrectly, thus billing the wrong client. CNP transactions are billed as mid-qualified transactions, at a higher rate than qualified transaction.
Different rates for different cards: Did you know that debit cards cost less to accept than credit cards? Rewards cards have higher interchange rates and business credit cards cost even more. However, not all merchant processing companies pass along the lower costs to you and nearly always add additional surcharges to the most expensive card types.
Monthly Fees: Your merchant services provider probably charges you monthly fees too. These fees cover the cost of customer service, data security, paper and online statements and hosting your processing account with the card associations. Many processors add in unnecessary fees.
At NPS, our goal is to provide you with excellent service with the minimum number of additional surcharges and fees. We’ll provide a side by side cost comparison detailing all of the fixed fees, monthly fees and surcharges. Our team will present you with a fair, cost saving alternative. To get started with your no obligation cost comparison, call us today! – 1-866- 513-2063