Credit Card Fees
Having the flexibility to offer your customers payment via credit cards can help increase your sales volume. In today’s economy many people are using their credit cards as a method of payment. Due to strict budgets and necessary monthly household expenses, people just don’t have cash laying around like they used to. As an alternative method of payment, many consumers like the flexibility of being able to charge something on their credit card if they are looking to make a purchase.
If you are a merchant and see that you are struggling to help find new sales, you need to offer credit cards as a method of payment. However finding a company who will give you great customer service and rates can be a daunting task. There are many companies out there that offer the best rates, but when you get your statement you find that these rates do not include interchange and assessment fees the salesperson didn’t tell you.
If you can, try and find a company that offers a 3 tiered rate system. In case you didn’t know all credit cards come with different rates. The 3 tier system consists of “Qualified Rates”, “Mid-Qualified Rates”, and “Non-Qualified Rates.” So what the heck does all this mean? Below you will find an explanation in most simple terms. Keep in mind that all rates are based on percentages.
Qualified: These are regular consumer credit cards used and processed in a manner defined by your merchant services agreement. In almost all cases, this is the lowest rate offered by your merchant services company.
Mid-Qualified: Any credit card that may not be accepted as qualified. This is typical when you as the business owner key the information on your terminal (over the phone ordering), instead of swiping the card in the store. Rewards cards that are used to make purchases also fall into this category.
Non-Qualified: Any government, foreign or corporate cards used in the purchase process will be considered non-qualified and will be charged the highest rate as per your agreement with your processor. This also occurs when keying in information on your terminal without address verification. Non-Qualified rates are the highest rates charges by your credit card processor.
Other fees to be aware of when selecting a merchant services company are batch, authorization, monthly minimum, customer service, statement, early termination and chargeback fees. It seems like an overwhelming process to get started, but if you find the right company they can steer you in the right direction.
Controling Credit Card Processing Costs - (A letter from the BBB)