| Straight Pass-Through Pricing and Level II | | | | can be as much as 2-3% higher causing |
| Processing Overview | | | | processing fees to be more than doubled. This |
| You may find this hard to believe, but you can | | | | eliminates a very significant portion of that |
| easily reduce your current processing rates | | | | transactions actual profit margin. |
| by.65% and more by working with a payment | | | | The obvious next question is how to properly |
| processing specialist who has an understanding of | | | | structure your merchant account to avoid these |
| proper Interchange qualification and Level 2 | | | | unneeded additional fees. The answer is very |
| processing. With all the normal stress and | | | | simple and lies in the following two processing |
| pressure that comes along with doing business in | | | | methods that all of the largest retail giants in the |
| our current economy, reviewing a monthly | | | | world take full advantage of. |
| merchant statement is one of the last things that | | | | - Interchange Pass-Through - A processing |
| most companies have time to do. As you are | | | | program that until recently was only provided to |
| reading this article, I would ask that you take just | | | | Fortune 500 companies. When set up on |
| a moment to grab one of your recent | | | | interchange pass through, your processor will pass |
| statements, so that you can reference to see if | | | | through every credit card and transaction type at |
| your company is currently receiving the rates you | | | | its associated interchange rate. Interchange is its |
| deserve. | | | | preset base cost by Visa, MC and Discover. A |
| Now when looking at your statement, it is not | | | | minimal flat processing fee is then added on top |
| uncommon to become frustrated or confused as | | | | across the board. |
| to how your overall processing fee was calculated | | | | - Level 2 Processing - Level II processing will |
| for that month. Some processors print more | | | | automatically save you between.35% to.65% on |
| detailed statements that may include charts or | | | | every corporate, business, purchasing and |
| graphs, while others send out a condensed less | | | | government cards that you accept. Many even |
| detailed version of only a single page. While a less | | | | within the payments industry are unaware |
| detailed statement is an issue in itself, for the | | | | commercial cards have the ability to qualify at a |
| purpose of this article I want you to focus on a | | | | preferred Commercial Data Rate 2. |
| few specific keywords. While it may vary as to | | | | Acceptance of credit cards has become a |
| where on your statement these can be found, | | | | requirement in today's business world in order to |
| the words themselves are universal and apply to | | | | ensure that you're not losing business due to lack |
| all payment processors. So please look over your | | | | of payment alternatives. The major hurdle that |
| statement very carefully and take note of any of | | | | merchants face is achieving the piece of mind of |
| the following downgrades or surcharges listed: | | | | knowing they are receiving the lowest possible |
| - Mid-Qualified "Mid-Qual" | | | | rates and fees. So with that mindset, I strongly |
| - Non-Qualified "Non-Qual" | | | | encourage you to take the time to review your |
| - NSQF | | | | current set up. Don't just take the word of your |
| - EIRF Standard | | | | current processor as gospel truth. Probably only |
| - Commercial Electronic | | | | 10% of people selling payment processing |
| - Corporate Data Rate 1 | | | | services have a true understanding of proper |
| - Keyed Transaction | | | | interchange rate qualification. It's a scary thought |
| These keywords refer to transaction downgrades | | | | but anyone today can sell payment processing |
| or additional surcharges added. What that | | | | services due to lack of regulation within our |
| effectively means is that a transaction is | | | | industry. |
| processed at a significantly higher rate than what | | | | Warehouse clubs, internet companies, wireless |
| it should have been. An example would be a Visa | | | | providers and POS companies are really |
| Business card that should be processed at the | | | | commoditizing the payment industry with no idea |
| Level 2 rate of only 2.10%. Now if your current | | | | how to setup a merchant account properly. This |
| merchant account is not setup properly to accept | | | | is why it is so very important to choose your |
| Level 2 processing, that same card will be | | | | merchant services provider carefully. |
| downgraded to Visa Commercial Standard which | | | | Remember, the payment industry would not exist |
| carries a much higher rate of 2.75%. That is a | | | | without businesses such as your own. You have |
| difference of.65%. | | | | the right to know what your paying and why. |
| Another example is when a merchant account is | | | | Hopefully this information can help you make a |
| setup on a "Tiered" or "Bill-Back" processing | | | | more informed decision as to your merchant |
| structure, which includes Mid-Qualified and | | | | services provider. |
| Non-Qualified categories. Many times these rates | | | | |