Credit Card Processing Service: Pricing Basic principles and New Updates

On the subject of pricing your monetary institution's merchant services method, lots of aspects must be considered, including the dimensions in the merchant and their normal ticket, just to title several. This method may be perplexing in and of alone, and it results in being more difficult when you include in regulatory changes such as the Durbin Amendment and Visa's most up-to-date updates. Let's consider the effects of these changes on your credit card processing service. Visa: A lot more Fees & A lot more Confusion Once again, Visa is adding additional fees that do not fall under the typical interchange charges. This makes it more difficult for banks to price merchant accounts correctly. We encounter a lot of banks that have a strong preference for discount pricing. With less detailed line items on their statement that they need to analyze and understand, discount pricing is much simpler for merchants to understand. Visa: Update Overview You may have heard about these changes from your credit card payment services provider, but here is a brief overview in the fee changes that you will want to keep in mind. Transaction Integrity Fee (TIF): This is a $0.10 fee that is charged in addition to the interchange fee. This applies to both debit and prepaid transactions - those that do not qualify for Custom Payment Service (CPS). Basically, this fee depends on whether or not debit transactions qualify for a CPS method. If not, they will be subject to the new fee. In normal discount or tiered pricing, this fee will not result in surcharges from downgrades because it's not classified as interchange. Acquirer Processing Fee (APF): This fee was reduced from $0.0195 to $0.0155 per authorization for debit transaction, but stayed the same for credit card authorizations. Fixed Acquirer Network Fee (FANF): This is a new monthly charge, for merchants which depends on the merchant category code (MCC), the mix of card present and card not present volume, and the number of locations the business operates. The FANF can vary from month to month for each merchant depending on these aspects. Your customers expect your credit card payments service to run smoothly. They also expect to be treated fairly. That's why it's necessary that you stay on top of these changes and have a good understanding of what pricing option is best for your monetary institution's merchant services method. By thoroughly understanding your customers and their business, you can identify the perfect pricing plan. Remember to be flexible and work with your clients. With the new fees from Visa, you may be tempted to ignore discount pricing altogether - but adapting these new fees into your strategy doesn't must be difficult. If you have any questions, talk with your payment processor - they are there as a resource for you! What do you think in the new fees? Have they made an effects on your monetary institution's merchant services method? Leave us a comment about how you're trying to adapt. Jeff Zimmerman is Vice President of Product Management and Marketing at Clearent and has held management roles at Network Solutions and Intuit. Jeff brings 15 years of product management, finance and marketing experience to Clearent. Clearent is an experienced credit card processing service offering solutions including wireless options and next day funding. Learn extra about how we can aid your credit card payments service and let us know any questions you might have.