Having visibility into credit card fess is an important part of maintaining bottom line profit. Most times the rate you will have to pay to process a credit card transaction is combination of the basic cost and the markup cost which is called the merchant discount.

Consider the merchant discount as the retail price of credit card processing, the basic costs as raw material expenses and the markup as production costs.

Base costs should account for most of the expenditure (around 75% – 80%) followed by the increase (around 20% – 25%). That said,

Basic credit card processing fee

Basic credit card processing fees consist of exchanges and valuations, and are the same for all processors. There are no credit card processor company that can give a rate lower than the basic cost. An example is First Data which is the biggest credit card processor, but they pay the same interchange and assessments fees as a small local bank.

InterExchange

The Interexchange represents the largest part of the credit card processing fee and is paid to the card issuing banks. Believe it or not, your processor and card brands (Visa, MasterCard and Discover) do not see any revenue from the exchange.

All Stakeholders from credit card Company’s like Visa, MasterCard and Discover do meet to decide how much they want to pay when you accept their credit cards.

Banks consider things like the method of processing (swiped, keyed, e-commerce), the type of card (rewards, business, consumer), your type of business (merchant category code) and a host of other variables. Interchange fees.

Interchange fees are measured net of refunds and debit, and most are comprised of a percentage and transaction fees. For example the current visa interchange fee that is charge for a swiped consumer credit card is 1.51% plus $ 0.10.

It is important to note that even if interchange rates do not vary between processors, it is possible to optimize interchange fees to reduce costs. See our information on interchange fees for more details on trade optimization.

Rates

Visa, MasterCard and Discover earn money by charging assessments on every transaction involving one of their credit cards. Like the exchange, the ratings are exactly the same for all credit card processors and no processor can give you a lower rate or better agreement on the ratings.

Most times assessments, may be billed differently were you have a group pricing model. And this is mainly because your processor has more control over manipulating prices based on a bundling system.

Rate for each brand of card are listed below along with details on when they apply. Rates are periodically changed by card brands, and this list is updated as changes are announced.

Visa

Debit Assessment: Also Called Visa US Acquirer Service Charge – Debit This rating applies to all Visa debit transactions.

0.13%

Credit Rates: Which is also Called US Visa Acquirer Service Charge – This credit rates applies to all Visa credit transactions.

0.13%

Purchaser Processing Fee (APF):- Debit Also referred to as Visa Processing Fees – Variable Debit This charge applies to all non-PIN Visa debit authorizations acquired in the United States.

$ 0.0155

Master Card

Volume of the acquirer’s brand

This estimate applies to Master card transactions less than or equal to $ 1,000.

0.13%

Purchaser Brand Volume : Credit Transactions Over $ 1,000

This valuation applies to Master card credit sales transactions greater than $ 1,000.

0.14%

Discover

Evaluation Valuation applies to the gross volume of Discover card transactions. Note: In April 2016, the valuation of Discover went from 0.11% to 0.13%. Note: In April 2015, the valuation of Discover went from 0.105% to 0.11%.

0.13%

Data Usage Charges: Data Usage Charges apply to all US-based authorization transactions.

$ 0.0195

International Processing Fees: International Service Fees apply to transactions acquired in the United States and paid for with a card issued outside the United States.

55%

The above credit card summary will get you started on getting to know credit cards rates.

For more information on how to reduce your credit card fees, contact us at Answers@enterprisefundingsolutionstx.com

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Every time you accept your customers’ payments, there is a cost. These costs are more obvious when it comes to paper payments. Traditional checks and bills require shipping, equipment and other equipment – expenses ranging from $ 4 to $ 20 per check posted.

Yet even when you scan your payment solutions, there are always hidden costs – and most merchants are blind to these expenses. They are so happy to receive money, which they do not think about what they are spending when they manually:

• Enter transactions from one platform to another
• Reconcile their bank account
• Search out errors and double entries
• Update their accounting software, CRM or ERP

However, with integrated payments, it is possible to automate these steps so that payment processing, accounting, and CRM all work together seamlessly.

What are the advantages of this approach?

Here are just five of the most important benefits that you will enjoy if you use integrated payments within your company.

Save money

The most important benefit is savings. You do not have to spend so many hours monitoring, tracking, and reporting transactions in your payment environment. Everything happens automatically – without having to intervene directly.

Higher accuracy

The built-in payments allow you to completely remove the human error from the equation:

• No more redundant entries.

• More calculation errors.

• No more lost bills.

This benefit reinforces the first. Fewer errors mean fewer losses (ie greater savings).

Better forecast

When your payment system is not integrated, processing, accounting and marketing are all separated into separate silos. What’s more, it takes a lot of energy to know where your money is going.

Yet, when you integrate these separate sections, you gain greater visibility on your finances.

Simplified tax preparation

With built-in payments, there is less need to chase old bills or store faded receipts in shoe boxes:

• All reports are centralized.

• All accounting becomes automatic.

Come tax time, you have a handy record of every dollar that went in and out of your business. Some built-in payment solutions even allow you to export this information directly into your preferred tax preparation software.

Best customer service

In addition to the convenience of increased security, an integrated payment solution supports your staff’s ability to assist your customers and helps you increase the level of customer satisfaction with their shopping experience. An integrated CRM solution is a detailed customer database for your business. It can track past customer sales, capture prospects and contacts, maintain customer interactions, and improve your marketing for more focused engagement and targeted promotions. Similar to accounting and ERP software, CRM automatically updates customer data and metrics for quick and easy reporting.

While monitoring the status of your customers’ purchases and behaviors, payment integration can also help you keep a close watch on your company’s inventory, sales, and deliveries. Allowing you to learn about stock, in-transit or on-order items can satisfy your customers – and your potential customers – with excellent service and, ultimately, foster the kind of customer service that will create more business for your business.

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