What's
Your Rate?
Short
Answer -- Interchange + 50 Basis Points + 5 Cents
When
I started in the merchant account business over 20 years ago
and a prospective merchant asked “What’s your rate?”
it was easy to simply quote 1.69 % + 20 cents, take out my pen,
and start writing up the paperwork. Wow has that changed. Over
the past two decades MasterCard and Visa, in their infinite
wisdom, has developed a daunting list of interchange rules based
upon your type of business, what type of card is presented by
the consumer, the amount of the sale, what type of data you
enter into your terminal or software, and if you swipe or manually
key in the sale. In the 1980’s I could count on one hand
the number of different interchange categories while today the
list is over 100 pages long. Up until recently interchange was
a trade secret guarded like the recipe for Coke but now it is
publicly posted on Visa and MasterCard’s corporate websites.
It
is important to know that every merchant account provider is
bound by the exact same interchange schedule. It is the markup
from this schedule that determines what you will ultimately
pay. There is no such thing as wholesale rates, not even for
the largest retailers. So when today a sales rep quotes you
a tiered rate such as 1.69 % you really have to ask for the
rest of the picture as very few of your transactions will qualify
for that rate. As you can see from the chart below interchange
cost for almost every category is higher including all rewards
cards, business type cards and keyed cards. Therefore only swiped
debit/check cards and small ticket (Under $15) sales in a limited
number of business types have an actual cost lower than 1.69
%. In this example one could expect that most sales would be
downgraded to a mid-qualified or non-qualified rate which usually
adds 1 to 2 % to the qualified rate.
OK,
so why do we have rates on our site similar to the 1.69 % example.
The reason is because it has been so embedded in merchant’s
minds over the years to just say “What’s your rate?”
that it would be foolish for us to not at least offer this popular
option. However, the educated merchant (which we want you to
be), including most every large merchant knows that the least
expensive option is Interchange Plus pricing. That is why Credit
Card Processing Services offers all of our merchants either
tiered pricing or the following low cost interchange plus pricing
schedule.
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| CATEGORY |
INTERCHANGE |
ADD
30 BP + 10 Cents |
YOUR
RATE |
| Visa
Check Cards |
|
| CPS
Hotel - Debit Cards |
1.46
% + $0.15 |
Add
30 BP + 10 Cents |
1.76
% + $0.25 |
| Visa
Credit Cards |
|
| CPS
Hotel - Credit Cards |
1.68
% + $0.10 |
Add
30 BP + 10 Cents |
1.98
% + $0.20 |
| CPS
Rewards 2 T&E |
2.00
% + $0.10 |
Add
30 BP + 10 Cents |
2.30
% + $0.20 |
| Signature
Card Electronic |
2.40
% + $0.10 |
Add
30 BP + 10 Cents |
2.70
% + $0.20 |
| Visa
Commercial Cards |
|
| Business
Card Electronic |
2.50
% + $0.10 |
Add
30 BP + 10 Cents |
2.80
% + $0.20 |
| Corporate
Card Electronic |
2.30
% + $0.10 |
Add
30 BP + 10 Cents |
2.60
% + $0.20 |
| |
|
| MasterCard
Offline Debit Cards |
|
| Merit
3 - Debit Cards |
1.15
% + $0.15 |
Add
30 BP + 10 Cents |
1.45
% + $0.25 |
| MasterCard
Credit Cards |
|
|
| Merit
3 - Credit Cards |
1.68
% + $0.10 |
Add
30 BP + 10 Cents |
1.98
% + $0.20 |
| MasterCard
World & Elite Cards |
|
| World
Card T&E |
2.40
% + $0.10 |
Add
30 BP + 10 Cents |
2.70
% + $0.20 |
| World
Elite Card T&E |
2.85
% + $0.10 |
Add
30 BP + 10 Cents |
3.15
% + $0.20 |
| MasterCard
Corporate & Business |
|
|
| Face-to-Face
Corporate Cards |
2.15
% + $0.10 |
Add
30 BP + 10 Cents |
2.45
% + $0.20 |
| Face-to-Face
Business Cards |
2.42
% + $0.10 |
Add
30 BP + 10 Cents |
2.72
% + $0.20 |
| World
& World Elite Business T&E |
2.60
% + $0.00 |
Add
30 BP + 10 Cents |
2.90
% + $0.10 |
| Diners
Club Electronic |
2.10
% + $0.00 |
Add
30 BP + 10 Cents |
2.40
% + $0.10 |
| |
|
|
|
| Discover |
|
|
|
| Hotel
- Debit Cards |
1.45
% + $0.10 |
Add
30 BP + 10 Cents |
1.75
% + $0.20 |
| Hotel
- Credit Cards |
1.81
% + $0.10 |
Add
30 BP + 10 Cents |
2.11
% + $0.20 |
| Hotel
- Premium Cards |
2.40
% + $0.10 |
Add
30 BP + 10 Cents |
2.70
% + $0.20 |
| |
|
|
|
| |
|
| Interchange
Rates already include Dues and Assessments which we have
rounded off to 10 BP |
| Interchange
Plus Pricing available for all lodging properties processing
at least $10,000 per month in volume |
| Visa
Dues and Assessments are .0925% |
|
| MasterCard
Dues and Assessments are .0950% |
|
| Discover
Dues and Assessments are .0950% |
|
| |
|
| Interchange
Table Current as of April 2013 |
|
