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10 Facts You Probably Didn't Know About Credit Card Processing

Posted by sandy Waggett on Sat, Jan 31 2015 @ 12:08 PM

If your business accepts credit cards, you may think you already know everything that you need to know. But here are 10 facts that you may not be aware of. Being armed with this information can save your business money and improve your bottom line.

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  1. You can now require a $10 minimum purchase for credit card use. Visa and MasterCard used to prohibit this, but the Durbin Amendment now allows it. This is NOT true for debit cards, however.

  2. Credit card processing fees are tax deductible and it's typically a sizable deduction for businesses that accept cards. As tax season approaches, don't forget to take this deduction!

  3. Using your local bank does not save you money on credit card processing. Most local banks outsource credit card processing services to third party sales teams who work for larger processors. By using your local bank you are likely paying more than if you went direct to the processor since it's adding another layer to the pot.

  4. There is only one part of your credit card processing cost that is negotiable and that is the processor's markup over interchange and assessments. Interchange and assessment are the same for all credit card processors. This is why Novera's fixed flat fee merchant account pricing structure is so attractive to businesses. It saves them money and there are no surprises.

  5. You can now pass credit card processing fees through to customers. This change occured in 2013. Whether you SHOULD, however, is another topic altogether.

  6. Make sure you don't find yourself on the "TMF". The terminated merchant file is essentially the credit card processing blacklist. A credit card processor can add you to the TMF if they suspect you of misusing your merchant account for fraudulent purposes. If your business or name is on this list, it can cause you to have to pay higher rates or make it difficult for you to get a merchant account in the future.

  7. Credit card processors monitor your chargeback ratio closely. Pay attention to the number of chargebacks you receive ... if your percentage of chargebacks to total transactions is too high, your merchant account can be cancelled or unsettled funds withheld.

  8. Not using AVS (address verification service) can cost you money. Visa, MasterCard and Discover require the customer's billing address be entered for all card-not-present transactions. If you don't provide it, it will result in a downgraded transaction (resulting in higher fees).

  9. Business owners foot the bill for cardholder reward programs. The banks pass the cost of their cardholder reward programs to businesses through higher interchange fees on reward-based cards.

  10. Tiered merchant account pricing costs you more. You know you have a tiered pricing structure when your processor quotes three different rates: qualified, mid-qualified, and non-qualified. They suck you in with a super low "qualified" rate ... but what they fail to tell you is that most of your transactions will actually fall into the non-qualified higher rate. Novera Payment Solutions' fixed flat fee merchant program takes the mystery out tiered pricing by offering a single flat rate to save you money.

Get some straight talk and learn why a merchant account including our “flat fee advantage” can be one of the best business decisions you’ll ever make. We are happy to offer a FREE savings analysis to show you how Novera Payment Solutions can save you significant money on your credit card processing fees.

Request a No-Obligation Quote!

Tags: accept credit cards, flat fee merchant account, payment processing, merchant account, credit card processing, flat fee credit card processing, online credit card payments