We've all seen the signs in local stores that say, "cash only", or $10, $15, or $20 minimums for credit card transactions. Or we've been told, "sorry, we don't accept Discover or American Express". Why would a business owner enforce these restrictions when studies have shown customers will spend up to 83% more when paying with a credit card? The only logical answer: they believe their merchant processing fees are eating away at their profits.
Recently, we've seen a rise in fixed pricing platforms. Business owners are frustrated with trying to read complex monthly statements from their merchant services providers, so they are willing to pay 2.5% - 2.9% + .10 cents - .30 cents per transaction for the convenience of simplicity and the comfort of knowing their fees will never be too high.
What if you could save another 1% and up to .25 cents off each transaction just by understanding a few simple things? Great! Right? That's more money in your pocket on every sale.
The complex part of a merchant statement is called Interchange. Interchange is the actual cost of processing the transaction. This is passed through your merchant processor from Visa, Mastercard, Discover, and American Express networks. Most corporate merchant accounts today are priced on a structure called Interchange plus. This basically means cost + profit. The plus is where your merchant services company makes their profit for processing the transaction.
No company wants to work for free, so there will always be a plus. As a business owner, you're simply trying to achieve the lowest plus possible. A benchmark for great pricing is interchange plus .09 basis points and .09 cent transaction fees. Anything below that is considered excellent. At interchange plus .09 basis points and .09 cent transactions fees, you can feel safe that you'll always pay less than a fixed pricing platform.
If you would like to see how much we can save you, give us a call at 720-222-3396 or fill our free quote inquiry form: https://www.corebusinesscapital.com/payment-processing.