It's no secret to business owners that credit card fees can be extremely confusing.
At Novera Payment Solutions, our goal is to remove the mystery and provide a service that is clear and easy to understand.
The first thing to know about pricing is that MasterCard, Visa and Discover in conjunction with the banks that issue the credit and debit cards to the consumer actually set the underlying transactional cost of credit card processing (known as “Interchange”). They then pass along this transactional cost to the processor, who in-turn adds a profit before providing the retail rate and service to the merchant. The cost or “Interchange” is now public knowledge and posted on MC/Visa/Discover’s respective websites.
Tiered Pricing for Credit Card Processing
Currently tiered and/or a form of cost plus pricing is the methodology most processors still prefer to use in order to preserve the highest profit margins on merchant accounts. Understanding tiered and other forms of pricing is the key component to determine if your paying more than you should for your merchant account.
Tiered pricing utilizes the 160 +/- individual transactional costs (known as “Interchange”) with each transactional cost comprised of:
- Unique percent of the sale
- Transaction fee
Both are dependent on the type of card used, (i.e. debit, credit, rewards, business etc..) and, how the purchase was made (in person, over the phone etc...). These transactional costs (which are the same for all merchants large and small) are categorized into either three or four tiers with each tier housing approx. 40 of the 160 transactional costs (“Interchange”).
Why Understanding Fees is Important
Understanding the challenge with Tiered pricing is the next step in understanding merchant pricing. Twice a year MasterCard/Visa/Discover reviews and adjusts some of the 160 +/- transactional costs and passes this change along to the processor, who in-turn, usually seizes that as an opportunity to raise the tiered retail rates to the merchant and create additional profit made on each of its “tiers” (the difference between the underlying transactional cost and tiered retail rate) thus raising the entire expense for the merchant, even if the underlying transactional cost is never actually applied against the merchant for a transaction.
Ultimately this is what causes the merchants fee to creep upwards over time.
It’s not simple, it’s not transparent and it’s not fair pricing.
Novera Payment Solutions Approach
Novera Payment Solutions has developed a unique pricing format that passes along all the direct transactional costs:
- Interchange
- The processor costs
- A small “FLAT FIXED FEE” per month depending upon the monthly merchant volume (usually between $19.95 per month up to $99.95 per month). This amount is essentially the gross margin on the account.
Since everyone knows we are in business to make a profit, we are not hesitant to let our merchant clients know what a reasonable profit margin will be.
In addition, this pricing format delivers:
- Substantial savings based upon volume
- Transparency in pricing
- Detailed reporting on statement
- Best “cost plus format” available
- Flat fixed fee never changes
Your Savings Can Increase Over Time
The savings can actually increase over time because unlike the “tiered” and / or other forms of cost plus pricing structures, which raises the overall rate of the tiers or markup when MasterCard/Visa/Discover change rates, our program only raises the one line item effected, this is the only true transparent way of offering merchant processing.
Next Day Funding or Weekend Funding for Gross Deposits
In addition, Novera Payment Solutions offers our merchants in most cases the option of either “Next Day” or “Weekend Funding”, and always with “Gross Deposits”. Unlike many processors who deduct their rates/fee’s daily from your deposits, fees for our services are not collected until the month AFTER the month you have been processing. This means your get your money faster and it’s easier to reconcile with your bank statements.
Novera Payment Solutions is a Great Solution for Your Business Credit Card Processing
The Novera Payments' solution not only offers an integrated credit card processing solution, it also offers a unique transparent pricing model unparalleled in the merchant services industry.
