Merchant Rate Review
Are you grappling with concerns about your merchant rate cost to process credit cards? See quick checklist below.
- Does your processor work with you to understand your monthly credit card processing statement?
- Do you receive 30 days notice of any credit card processing fee changes related to credit or debit transactions?
- Are you afraid to switch credit card processors because of a high fee cancellation penalty?
These concerns are about to be addressed by the draft Canadian Code of Conduct for the credit and debit market accepted as policy in the March 2010 Federal budget. Download pdf
Your next steps? Speak with a payment professional to get the straight facts on how to save your business money.
Merchant Alert! Are you receiving these calls?
First reported by the CFIB on their website as a Fraud Alert.
Many merchants have contacted CFIB to complain of high-pressure tactics being used by companies offering credit and debit card processing. Here are examples of the telephone scripts they have used:
- "Hi, we are a company working for the banks to see that you receive your 30% discount on your credit card fees…."
- "Hi, we are working on behalf of the banks/CFIB/Chase Paymentech/VISA/MasterCard to lower your merchant services costs. If you send us your credit card statement right away, we will have our team of analysts find you savings."
There are many variations on this theme, but typically they promise to reduce your POS and other transaction rates considerably. CFIB recommends when taking calls in the future... ensure that you are speaking with a registered Association member that is authorized to represent Visa® and MasterCard® services to merchants.
CardSolve International is a registered ISO for First Data Canada Merchant Solutions authorized to provide merchant services such as a merchant rate review.
The Real Rate Merchant Review
Your quoted merchant rate only applies to the Base rate!
Pull out your credit card statement and divide the total credit card sales by your total processing costs. If you were originally quoted 1.69%, does the number still come out to 1.69%? This is the heart of the matter. In the spring of 2008, Visa and MasterCard introduced new interchange categories for different cards. Each type of card now has its own interchange cost. Quite likely, a merchant with a credit card processing rate of 1.69% to accept credit cards only receives that rate on 25 to 40% of his total credit card sales. There are now more than 22 categories of interchange rates in Canada. Trying to understand the complexities in payment processing is a full time job.
See an example below: (Merchant real rate is actually 2.13% not 1.69%)
| Existing Processor Visa Rate | 1.69% |
| Existing Processor MasterCard Rate | 1.69% |
| Monthly Visa Credit Card Sales | $10,000.00 |
| Monthly Visa Transactions | 200 |
| Monthly MasterCard Credit Card Sales | $5,000.00 |
| Monthly MC Transactions | 100 |
| Total Monthly Credit Card Sales | $15,000.00 |
| Annual Credit Card Sales | $180,000.00 |
| Total Monthly Merchant Rate Processing Fees | $400.00 |
| Less Interac Debit Fee | $50.00 |
| Less Amex Fee | $30.00 |
| Equals Total Credit Card Processing Fees | $320.00 |
| Average Ticket Size | $50.00 |
| Actual Processor Rate for Visa And MC | 2.13% |
Next Step. The terms below are commonly listed on the monthly merchant credit card processing statement. Are they on yours? Do you understand what they are costing you and why?
BUS NATL CAN CROSS BORDER FEE CAN HS ELEC CAN HS STD CDN COMM ELEC CHIP CDN COMM STD CDN INF ELEC. CHIP CDN INF STD CDN INF STD CHIP CHP BUS NAT CHP CONS NAT CHP EBUS NAT CHP EINF NAT CHP EPUR NAT CORP NATL ELE COR NAT ELE INF NAT ELE PUR NAT FGN COMM NAT FGN CORP INT FGN CORP PUR FOREIGN STAN INT SIGNATUR MC – CARD BRAND MC - CARD BRAND FOREIGN MC - CONSUMER ELECTRONIC MC - CONSUMER FOREIGN STANDARD KEYED MC - CONSUMER PREMIUM ELECTRONIC SWIPED MC - CORPORATE ELECTRONIC MC - CORPORATE FOREIGN STANDARD MC ASMTS MC CAN COMM MC CAN STD Mid Q NAT SETL INF NAT SETTLED Near Q PURCH NATL VISA – CARD BRAND VISA - CONSUMER ELECTRONIC SWIPED VISA - CONSUMER PREMIUM ELECTRONIC SWIPED VISA - CONSUMER PREMIUM STANDARD KEYED VISA - CORPORATE ELECTRONIC SWIPED VISA - CONSUMER STANDARD KEYED VISA - CORPORATE STANDARD KEYED Visa ASMTS
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Find out more about the Merchant Rate Review and put some cash back in your wallet.
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Call 1.877.982.4274 or use our form: Apply Now
