Understanding Discount rates and additional charges on merchant statements has become more difficult as the rules and procedures continue to change.
Discount rates are computed based on several factors:
Interchange: This is was the processor pays the bank that issued the card that is used in the merchant's establishment.
Assessments: This is what the processor pays to Visa/MasterCard.
Processing Costs: This is the cost to authorize, settle, support, and provide merchant accounting and reporting for the merchant's transactions.
Profit: The amount of money the processor wants to make on a monthly or per transaction basis.
Non-Qualified transactions: Transactions that are not card present, swiped through a device, authorized and settled within 24 hours are considered Non-Qualified. These transactions have a higher Interchange rate then Qualified Transactions.
Surcharges: Some processors up charge Non-Qualified transactions, for example the difference between a Qualified (Visa-CPS Retail, MasterCard-Merit3) and a Card Not Present transaction of Visa is 0.42% and $0.05 per transaction. If your differential between CPS Retail and Card Not Present or Key Entered is more than 0.42% and $0.05 per item you are being surcharged. The differential is different for each card type and qualification level.
Some other reasons transactions may be downgraded: You receive a call center message, the transaction is not settled within 24-48 hours, the card is a Commercial or Corporate card or you receive a voice authorization.
Select Transaction Services can provide you with a detailed analysis of you transactions and provide you with recommendations to help you reduce your processing costs.
Fax us a complete merchant statement to 800-393-7162 or call us at 800-781-3334 for more information.
