Help Articles & FAQ

Rates Vary By Industry Type

RETAIL

face to face vendors

MOTO

mail order or telephone order

ECOMMERCE

all internet based transactions

RESTAURANT

Including quick purchase, small ticket

SUPER MARKET

grocery stores with over 20% perishable

FUEL

gas, propane, incl. pay at pump

HOTEL

motel, lodging with deposit reservations

AUTO RENTAL

advanced deposit 
on reservations

EMERGING MARKETS

education, charity, government, utilities

HELP!
Most business owners, CFOs, controllers are afraid to ask their processor to explain fees at the risk of sounding stupid.
Processors exploit this fear!

I Can’t Read My Statement!

(Hint: maybe they don’t want you to!)

Statements are not getting easier to understand, in fact, to the contrary. This highlights a desperate need for tighter industry regulation.

Processors & Banks could easily make statements EASY to comprehend by being transparent: showing fees & rates along with corresponding transactions.

Instead, the fees are DELIBERATELY obscured and convoluted so that you — the busy Merchant — won’t see what is going on with your money.

What is going on with your money? You’re being nickel and dimed to death on fees, like every other business. Some industries are hit worse than others due to inherent risk (statistics of fraud), but often still, fees are exaggerated.

There are some great processors out there that are very honest and up front, with full disclosure. However, the majority pull all kinds of stunts to gouge the merchant every penny possible.

Coded Billing

One of the worst culprits is coded billing. RBS (Retriever) is notorious for this. They blatantly use an obscure, 4 (or more) character code to represent each credit card type so that you have to look up each one on a legend, as if you were literally translating a foreign language. This is intentionally to confuse merchants and make it almost impossible to figure out whether cards are marked up.

Flat Rate Billing

Although this is obviously plenty simple, it is simply a rip off. Processors costs are variable according to almost 100 card types, so there is no way to charge a single rate for all transactions, and yet some do. This would be like a restaurant charging a smorgasbord buffet price for all menu items, even if you just want a coke!

Processors don’t set rates to lose money obviously. So, unless your statement shows the exact card your customer paid with, your processor is marking up each credit card type. We call this “double-dipping” in the industry.

Tier Billing

If your statement lists Qualified, MidQual or NonQual fees, you have Tiered billing and should refer to our “Tier Billing” article, coming up in the Tricks of the Trade section. Also see our glossary for an explanation of Tiers.

Obscure Abbreviations

Do you know what “VSP STD” means? Or “MWCE”? Of course not. Wouldn’t it be just as easy for your processor to print on your statement: “Visa Signature Preferred-Standard” or “MasterCard World Commercial Elite Card” ?

Of course it would. But then you could look up the card type on Interchange to see if your processor is inflating the card rates.

There are about 38 types of Visa cards, 44 MasterCards, a dozen Discover cards, and a few Amex, each with individual rates derived from risk statistics. Each industry has its own pricing also. So a warehouse would be charged differently than a retail store receiving exactly the same credit card.

These individual rates are collectively called Interchange and can be found on the websites of the respective Association. Also see our glossary here.

These are your first line of defense:

Visa Interchange

http://usa.visa.com/merchants/operations/interchange_rates.html

MasterCard Interchange

http://www.mastercard.com/us/merchant/support/interchange_rates.html

Discover Interchange

Discover does not list card rates, call them at 888-DISCOVER or contact us.

American Express

Amex keeps much to itself and does all their own processing. Therefore, they set their own rates according to each of their merchants. To understand and negotiate for better rates and service, contact them directly at 800-528-5200

If you’ve found some nasty, convoluted tactics on your statement, let us demystify yours! 
(just blackout your merchant ID number). We’ll do a line by line analysis to reveal what is what. We’ve seen some of the worst processing statements. We will also quote you what you would save had you been processing with Merchant Services Group LLC