“Rates” Posts

Interchange Pricing vs. Flat

Interchange Pricing vs. Flat

For starters, there are more rate plans for your business to consider than just Flat and Interchange pricing. That said, comparing too many options at once can be overwhelming; therefore, we’re going to focus on only two plans to simplify things a bit. If you’re just starting to accept credit card payments, a Flat rate plan might be the best to start with. If your business is more mature, Interchange plus will likely be more advantageous. Let’s dive into an explanation of each option. Flat Rate Pricing Payment Facilitators offer their customers Flat rate pricing, so if…

What Is Credit Card Interchange?

What Is Credit Card Interchange?

Credit card Interchange is the wholesale cost to process a credit card transaction and is typically comprised of a percentage of the transaction plus a fixed dollar amount (e.g., 0.5% + $0.10). The cost directly relates to the level of risk or reward associated with the transaction. For example, a business rewards card will have a higher Interchange cost than a debit card. Interchange is set by the card brands (Visa, MasterCard, Discover and American Express) and is subject to changes biannually when Interchange guides are updated and released. It’s important to have a basic understanding of…

What Is MOTO Credit Card Processing?

What Is MOTO Credit Card Processing?

MOTO stands for Mail Order/Telephone Order and is a credit card processing pricing setup on a Tiered plan. MOTO credit card processing is best suited for businesses that primarily accept card-not-present transactions: Examples include e-commerce and delivery-based businesses. In contrast, Retail pricing is appropriate when the majority of transactions occur in-person. It’s important to establish the correct setup, which depends on the type of business you run. Failing to do so could result in higher rates, incorrect risk assessments and lost savings opportunities. How Tiered Pricing Works With Tiered pricing, transactions are bundled into one of three buckets:…

How to Calculate Your Credit Card Processing Effective Rate

How to Calculate Your Credit Card Processing Effective Rate

When a business is considering taking credit card payments, there are several questions that should be answered before they select a partner, including the following: “What are the terms of the contract?” “What equipment am I receiving?” “What level of support will I get?” “What are the risks involved?” However, there’s another question that most businesses tend to fixate on: “What is the cost?” The answer to this particular question can get quite convoluted. When you say “cost,” are you referring to the cost on your current Interchange-plus pricing plan of a downgraded over-the-phone transaction on an American Express…

What Does Credit Card Processing Cost?

What Does Credit Card Processing Cost?

There are a number of payment providers that enable you to accept credit cards. Whether you interact with them directly or not, there are a handful of fees you have to pay for the privilege of accepting plastic. Some fees, like Interchange, cover the wholesale cost of accepting a given transaction. Others are charged monthly, quarterly or annually. We’ll detail how Interchange works and various fees that can factor into your credit card processing costs. There is no right answer here, so it’s best to understand which fees come directly from the card brands versus which are dictated…