What's in your "Bucket" ??

How do you truly know what you're paying?

If you've read this blog, or visited my website, you know that I am a strong proponent of total and full disclosure when it comes to merchant services. Unfortunately, in our industry, this stance is rarely taken by providers and reps in the field.

As you may already know, there are several different pricing methods in which you may be set up for accepting credit cards in your business. There is Three Tier, Four Tier and Cost-Plus pricing. Of these three, Cost-Plus is the most transparent to the merchant and can be, the least expensive. But, you have to have someone willing to educate you regarding how it works so that you can totally grasp the concept. If you, or anyone you know, owns a business that accepts credit and debit cards for payment, you owe it to yourself to get on over to my website for your education. I promise you will not be SOLICITED by me for your credit card processing business, however, all my contact information is there for you, if you desire my assistance.

When you are priced in a Three Tier format, (like the majority of merchants still are), you will have Qualified, Mid-Qualified and Non-Qualified rates. Qualified will be absolutely your best rate and will be for swiped transactions. But, here's where it gets tricky. For your Mid and Non-Qualified rates, each processor can add any surcharge they want on top of your Qualified Rates. And, they can throw whatever card or transaction types they want into whichever category they want, and....change it whenever they want.

For example, one processor may treat Rewards cards as Mid-Qualified with, let's say a .75% surcharge to the Qualified Rate. Other processors may treat those same Rewards cards as Non-Qualified with a 1.25%, or higher, surcharge. How does your current provider treat these types of transactions that are seen with ever increasing frequency these days? And furthermore, how much of a surcharge are you paying and is it fully disclosed on your statement? Do you know how to figure it out? You need to know the answers to these questions in order to minimize your total costs of accepting all kinds of cards.

In a Four Tier pricing format here is how the categories typically run:

Tier 1 for swiped debit cards

Tier 2 for swiped credit cards

Tier 3 for hand-keyed, maybe Rewards cards (or whatever the provider wants in there)

Tier 4 for corporate, world, Rewards cards (or whatever they want....YIKES!!!)

The bottom line is that you absolutely NEED TO KNOW what you're paying for what....don't you agree?

With the most recent Interchange adjustments (April 2008), it wasn't that there were many rate increases as much as there were more categories added. However, many merchant service providers utilized this as an opportunity to raise your rates. Others that I have seen, notified merchants (via a statement message that few merchants ever read) that several transaction types were going to be moved into higher costing tiers or "buckets". Check your March credit card processing statement to see what happened to your account.

As I've mentioned many times here, it's important to GET EDUCATED. My website is designed specifically to do that for your benefit. It is NOT A SOLICITATION for your credit card processing business, however, all my contact info is there if you desire my assistance.

Well, that's it for now. If you know others that own any kind of business that accepts credit cards for payment of goods and services, please send them to my website . In today's economy, we all need to do all that we can to improve our bottom line. Thanks for visiting!

Be Blessed and Be a Blessing