The War on Businesses and High Credit Card Processing Fees

By Sean P Jones

For years, merchants and retailers have been waging a war in the Payment Processing industry over "interchange fees" -- the hidden costs of processing credit and debit card transactions. Interchange is the amount of each sale that goes back to the card issuing bank and attributes to about 65% of a merchants actual fees

Although interchange is a significant part of this equation, I am here to show you that almost half of your credit card processing fees/downgrades can be attributed to working with a sales rep or company that many not be properly trained or have a true understanding of how your business operates.

It's a scary thought, but there is no regulation in our industry; anyone can sell payment processing with no formal training. Sam's Club and Costco are now offering payment processing services. I can't tell you the number of merchants whom we have worked with that are using one of these programs. They were quoted one rate, but because they key in transactions, process commercial, business, purchasing and government cards, they ended up paying 3.50% or more.

Visa and MasterCard have special programs for business that process commercial, business, purchasing and government cards, but because most processors/sales associates lack the training and expertise related the acceptance of these types of transactions, merchants are set up improperly and have an abundance of unwarranted and unnecessary fees and downgrades.

You may see some of these on your statement: MID QUALIFIED, NON QUALIFIED, EIRF, STANDARD, COMMERCIAL ELECTRONIC AND CORPORATE DATA RATE 1.

These fees can easily be eliminated or reduced by working with a payment processing specialist who is familiar with not only interchange but requirements needed for transactions to process as efficiently as possible.