Credit card processing requires an enormous communication infrastructure and it is impossible to offer the service for free. To keep costs down and charge those that use the service more than those that don’t, the processing fees are billed at a percentage rate on total volume and a transaction fee as well. The lion’s share of the fees goes to Visa, MasterCard and the issuing bank.
Processing companies assume most of the risks on each transaction, so the riskier the transaction usually means the higher the cost will be for the Merchant to process said transaction. Each time a credit card transaction is processed, the credit issuer pays out the cash and then bills the consumer who can pay quickly or default on a credit card balance. The retailer then gets paid without assuming any risk, or very little risk.
Because businesses assume no risk on the transaction, except in case of a charge back where the Merchant could be out the product and payment for the product they are asked to pay a merchant fee that is consistent with the level of risk, costs and losses incurred by the processor. In order to maintain accreditation credit issuers must maintain high standards to meet federal guidelines.
Businesses benefit by supporting credit card payments options, although they do also take a small hit in terms of the merchant fees, this cost is part of doing business and has become a vital service in today’s consumer driven economy.
Retailers have several ways to offset the cost of credit processing. Only accepting a qualified credit card is one step that merchants can take to keep their rate low. Another option is to only process cards that swipe, and refuse to offer manual entry. The merchant rate can be figured based on several factors for each transaction. Ensuring that you are familiar with the way that fees are charged can help you get the best merchant rate on each transaction. Sekure Payment Experts specialize in analyzing merchant statements and lowering merchant fees. If you have a complaint regarding your current provider’s fees or would simply like a free review then allow our Payment Experts to analyze your statement.
Contact a Corporate Sales representative today
Phone: (866) 437-3189
Fax or email your most recent statement to: