Let's Break It Down.
Section(s): Highlighted in green represent the DISCOUNT RATE
Section(s): Highlighted in yellow represent INTERCHANGE
**Be cautious of blended pricing, intertwining interchange with the discount rate can be deceptive**
Section(s): Highlighted in yellow represent INTERCHANGE
**Be cautious of blended pricing, intertwining interchange with the discount rate can be deceptive**
- Discount Rates - are Negotiable, and the discount rate is a fee that attaches to the volume being processed. Meaning the more volume you process the more you owe. Pay close attention to these throughout the year as increases are a possibility.
- Interchange Rates - are NON-Negotiable, and is set by the issuing banks and card brands. This rate fluctuates twice a year in April, and October. It is the source of all consumer rewards programs. Depending on the cards you accept will dictate the interchange rates being charged to you, as the merchant, to help offset card holder rewards.
Section(s): Highlighted in green represent Transaction/Authorization Fees
- Transaction/Authorization Fees - are Negotiable, this rate corresponds to the amount of transactions being ran. These fees are determined through the negotiations of the processing company and the merchant.
Additional Negotiable Fee(s):
- Statement Fee - is nothing more than an up-charge. It is an unnecessary fee that can be removed or reduced.
- Batch/Settlement Fee - is a fee accessed for sending closed transactions to the acquiring bank to be processed. This fee can be removed simply by asking your processing company to remove it.
- Processing Minimum - In some unique situations, processors will install a processing minimum. This means if the merchant doesn't hit their minimum sale requirement, they must pay a penalty. Be cautious and aware.
- Early Termination Fee - is essentially a contract-buyout fee. This fee guarantees that the processing company is rendered some form of payment if the merchant leaves before the completion of a contract.
- Additionally, be cautious of a "liquidated damages" clause in the fine print of your contract. This may be assessed for cancelling/closing a merchant account after a contract is in place.
