Credit Card Processing Pricing Models

By Amy Fisher

Merchant account pricing can be categorized as pass-through, bundled or a mix of both. Pass-through pricing is the most transparent, flexible and least expensive form of pricing. Bundled and mixed pricing models, although currently more prominent in the marketplace, are opaque and result in inconsistent and often greater processing costs.

Pass-through pricing is commonly referred to as interchange plus for the way in which base processing charges of interchange, dues and assessments are billed and reported separately from markups.

Separation of processing costs is the primary component of interchange plus pricing that opens the door for a host of other benefits that ultimately lead to greater transparency and lower costs. Primary benefits include transparent reporting, the receipt of interchange credits and cost reductions (such as the proposed Durbin Amendment), and a consistent card markup independent of interchange qualification.

Interchange plus processing statements provide a complete picture of charges including interchange-level detail. This detailed reporting makes it relatively easy to reconcile costs and optimize interchange expenses.

The majority of credit card processing costs are the result of interchange fees. The detail provided on an interchange plus processing statement makes it possible to analyze and optimize interchange costs.

Interchange plus pricing allows acquiring banks to pass interchange credits and reductions along to their merchants. This is something that is not possible with bundled pricing and results in hidden costs.

The separation of base costs and markups on an interchange plus merchant account results in a consistent markup regardless of interchange qualification. This consistent markup eliminates surcharges, lowers costs and makes comparing merchant account quotes much easier than with bundled pricing.

The transparent, consistent markup of interchange plus pricing makes comparing merchant account quotes relatively straight-forward. Unlike with bundled pricing, there are no surcharges based on a provider's generalized pricing tiers.

Bundled pricing is named for the way in which interchange, base processing costs and markups are combined and passed to the merchant in an oversimplified format. Bundled pricing is often referred to as "bucket" or "tiered" pricing because fees are generalized into tiers or buckets called qualified, mid-qualified and non-qualified.

Major pitfalls of tiered merchant account pricing include inconsistent buckets, hidden costs, inconsistent markups and difficult reconciliation, all of which contribute to greater overall processing expense.

The tiered pricing model makes it possible for merchant service providers to dictate which rate tier or bucket an interchange category qualifies. A provider's ability to influence how interchange is routed results in something called inconsistent buckets, because not only would you need to know a provider's rates in order to compare quotes; you also need to know how they qualify interchange to determine the markup for each category.

The bundling of costs on tiered pricing prohibits interchange credits and fee reductions from being passed to merchants, resulting in what can amount to significant hidden expenses.

The card markup on the tiered pricing model varies per interchange category making reconciliation difficult and contributing to greater processing expense.

Reconciling processing costs by referencing a tiered merchant account statement is difficult at best and impossible at worst. Interchange detail is typically not disclosed on a tiered merchant account statement leaving the merchant to guess how interchange categories are qualified. In this case, an educated guess is as close as a merchant can come to reconciling actual processing costs.

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Credit Card Processing Solutions For Restaurants

By Amber Love

If you are a restaurant owner, whether you own a large national chain, a small independent caf or anything in between you need to accept credit cards if you want to maximize your sales and profits. Setting up a merchant account and accepting credit cards is a pretty simple process and once everything is in place you can watch your profits soar. Here is a look at what you need to know if you are a restaurant owner.

How Restaurants Benefit Form Credit Card Processing

There are numerous ways that restaurants can benefit from credit card processing including:

An increase in sales. Customers are likely to order more when they have the option to pay with plastic.

An increase in customers. You could be turning potential customers away when you do not accept credit cards. More and more people today are not carrying cash and if they don't have cash with them they will have to go elsewhere.

An easier and faster checkout process. When you accept cards you are able to check your customers out faster and easier.

Eliminates bounced checks. When you accept credit and debit cards you really eliminate the need to accept checks as a form of payment from your customers and as a result you do not need to worry about bounced checks.

Choosing A Credit Card Processing Merchant Account

If you are ready to accept cards for your restaurant business you will need to select a credit card processing company and open a merchant account. You will want to take your time and carefully choose a company that is going to meet all of your credit card processing needs. Here is a check list to help guide you in the selection process.

Make sure you choose an account that is compatible to the restaurant industry. For example you will need to select a merchant account that is capable of adding on tips.

Take the time to price compare. You will want to carefully compare prices. Many companies will charge start up fees, monthly fees, a fee per transaction and more. Additionally many accounts come with monthly minimums and early termination fees. Make sure you know all the fees you will be charged.

Choose a company that meets or exceeds the industry standard for fraud protection.

Find out what the processing time is. In other words how long will it take from the time you swipe a customer's card until you actually receive your cut of the funds.

Find out what type of processing equipment is compatible with your account and if you plan to lease equipment find out the cost.

Make sure the company you choose is reputable. You can read reviews on line and check with other restaurant owners.

Finally, if you sell gift cards for your business you will want to make sure that the processing program will be compatible to accept them.

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Want to find out more about credit card processing for restaurants, then visit our site on how to choose the best merchant services for your needs.

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Credit Card Processing For eCommerce And Online Payments

By Sandy Hurley

Setting up an online business is a meticulous process. Thriving in this type of entrepreneurship may require an e-commerce credit card processing company as business owners can become overwhelmed by the numerous merchant account choices, the cost and overhead, the requirements and processes, and their needs.

Before you can accept online payment, you should first apply for a merchant account. It is used for collecting debit or credit payments that are eventually sent to you. Once a payment arrives, the fund goes straight to your business account. Depending on the agreement, the provider may deposit the money on a daily or monthly basis. They also hold a part of the fund to cover for any possible charge backs, but this amount is returned after a period of time.

An e-commerce processor implements an encryption to protect customer's information from hackers and thieves. When the bank information is sent via web form, the payment processor ensures that the information has been encrypted accurately. This means that you also need a gateway system provider for payment processing. The third party provider works on building and maintaining the system, but they will require a fee. Some business accounts can also function as a gateway, but their rates are higher than any other service.

Your provider is set up to allow your customers to input their information when they view your products or services online. Another option involves putting the card information via web form in a separate online environment. Your account processor gives instructions for this procedure once you settle for them. Make certain, however, that the form used by the customers when they enter their card information implements the SSL (Secured Socket Layer) system to ensure optimum security, so it is important to consult with the provider first-hand.

Some situations might not require online payments, but rather an offline processing. For mobile equipment, you can select the ability to accept online payments. Under other instances, you will need both online and offline card processing in order to accept online payments. This is why it is important that before settling for a merchant account provider, carefully consider whether your business will need an offline payment option in the future.

Discuss your needs with the processing company you wish to settle with, and do not be alarmed over their requirements. An expert provider will guide you throughout the procedure of securing an account to accept online payments even if you are a beginner. The best among them will help you apply and secure your business account no matter if you are new to a web page's security concerns or not.

Choosing your e-commerce processor should be based on your business requirements. Once chosen, customize your settings to ensure a smooth business operation before signing up. Read and understand the terms and conditions prior to spending a dime for your account.

An ecommerce credit card processing company allows you to accept online payments, thus adhering to the intricacies of your business.

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Want to find out more about eCommerce credit card processing, then visit our site on how to choose the best online credit card processing for your needs.

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