Credit Card Processing

Credit Card Processing: How it Works

Ben Dwyer
by Ben Dwyer

Knowing the lay of the land will help you to isolate areas of possible savings. Once you’re done reading this article, check out our more detailed breakdown of where credit card processing fees come from. For now, let’s dive in to how credit card processing works. Key Players Cardholder Merchant (Business) Acquiring Bank (Merchant’s Bank)…

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It isn’t necessary to have intimate knowledge of the inner-workings of the bankcard system in order to find the best credit card processor. But, it’s a good idea to have a general understanding of how credit card processing works because fees are incurred at various stages of the system.

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Credit Card Processing

Issuing Banks: Where does your money go?

Ben Dwyer
by Ben Dwyer

It’s not really as simple as that, though. In actuality, a variety of entities are working behind the scenes, and it’s the card-issuing bank that ends up taking the largest piece of the pie. The more you know about what affects your business, the better armed you are to improve your position in the market…

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If your business charges credit cards, you pay fees. This seems straightforward enough on its surface — you might assume it’s as uncomplicated as Visa or MasterCard taking a cut of your sales.

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Credit Card Processing

Tiered Pricing VS. Interchange Plus

Ben Dwyer
by Ben Dwyer

Understanding how credit card processing fees are determined and how different merchant account pricing models work can save your business hundreds of dollars a month in transaction costs. One of the first questions you’ll ask is “Which should I go with, tiered pricing or interchange plus?” Tiered pricing is never in your best interest, but don’t…

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Tiered pricing or interchange plus? How do you know what’s best for your business?

pricing models

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Credit Card Processing

Credit Card Processing Fees & Rates

Ben Dwyer
by Ben Dwyer

In this article I’ll explain the different aspects that contribute to credit card processing fees to give you a solid understanding of who’s charging what and which areas of cost you can control. Components of Cost Base Fees Interchange Assessments Visa MasterCard Discover American Express Markups Pricing Model Interchange Plus / Pass Through Tiered /…

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Credit card processing fees seem complicated. But take away the sales jargon and it makes more sense.

Credit Card Processing Fees

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Credit Card Processing

Interchange Plus Pricing

Ben Dwyer
by Ben Dwyer

What is interchange plus pricing? Interchange plus basis points Is interchange plus basis X points competitive? How does it work? What are the benefits of interchange plus? Is interchange plus the best pricing model? Where can I get it? What is interchange plus? Interchange plus is the term used to describe a merchant account pricing…

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Interchange plus pricing is a credit card processing pricing structure that separates the components of processing costs allowing for transparent reporting and interchange optimization often leading to lower costs when compared with other forms of pricing such as tiered or bundled.

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Credit Card Processing

Interchange Rates and Fees

Ben Dwyer
by Ben Dwyer

Historically, interchange has been imposed upon businesses to reimburse issuing banks for lost interest resulting from a cardholder’s grace period for repaying their debt. This is why Visa still refers to interchange fees as “interchange reimbursement fees.” Today, Visa states that “the primary role of interchange is to create an equitable balance of incentives between a…

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In credit card processing, interchange is the money transferred from the acquiring bank to the issuing bank for each bankcard transaction. Interchange fees account for the majority of credit card processing costs and are established by the card brands (Visa, MasterCard, Discover) of open-loop processing systems.

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Credit Card Processing

Effective Rate for Credit Card Processing Fees

Ben Dwyer
by Ben Dwyer

For businesses searching for a new merchant account without actual processing data, the effective rate should be interpreted as a general indicator of cost-effectiveness — not as a precise measurement. However, it is still extremely important in determining the best processing solution. Varying interchange fees make predicting the exact total cost of a merchant account quote…

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For businesses that already accept credit cards and have actual processing data, the effective rate can be interpreted as an exact measure of the competitiveness of the current processing solution.

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Credit Card Processing

Credit Card Processing Consultants

Ben Dwyer
by Ben Dwyer

Add to that the fact that you can get the benefits of a consultant through CardFellow without the hefty price tag, and a credit card processing consultant won’t seem like such a great option. Types of Consultants Unaffiliated Credit Card Processing Consultant Affiliated Credit Card Processing Consultant CardFellow: The Best of Both Worlds Types of Consultants…

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Credit card processing consultants offer to negotiate with your credit card processor to lower your costs. But is it the best way to save your business money?

credit card processing consultant

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