Processing Rates Increasing Because....

Over the past week or so, I've had merchants contacting me saying that their processor has given them various reasons for raising their credit card processing rates. Sometimes rate increases are necessary and warranted. In your business, when your costs increase, don't you also consider raising the price of your goods and services to help offset, at least a little, the increased costs you have incurred? It's no difference in the merchant services industry but when I hear what some of the merchants have been told, my blood starts to boil because they are simply flat out lies.

One processor told their merchants that they were going to have to increase some of their Non-Qualified or Fourth Tier rates, by .30% and $.10 due to "interchange increases". Well, if there was actually increases to that magnitude, I could certainly see the justification. However, the problem is, that in April, Visa/MC had very minimal (and I do mean minimal) increases only on a very few card or transaction types. So, the processors "justification" in passing on this type of increase is ridiculous. It's simply a profit generator for them.

Another processor has told their merchant (a retailer) that increases were coming on many of their transactions because they weren't breaking out the transaction and separating the cost of goods/services and sales tax. So, consequently, they were going to have to charge them more. How ridiculous! I'm sure you're aware that when you run a transaction thru your POS system, it simply asks for a total and not separate amounts for the product and the sales tax. What a crock!

It's precisely these types of things that happen that further encourages me to always recomment Cost Plus pricing to merchants. It is by far the most transparent form of pricing and simply, the processor can't manipulate rates or "hide" fees on you. If you're not currently priced this way...it's time to get on it.