A rolling reserve allows a credit card processor to withhold a pre-specified percentage of your gross sales. The processor deposits the held funds into a non-interest bearing account for a pre-determined period of time that is specified in your merchant processing agreement.
You won’t find the best credit card processing unless you define what “best” means for your business, and then learn the fundamentals of processing before setting out in search of a processor.
From a business’s point of view, credit card processing is a straightforward system — swipe, sign, and the customer leaves with their purchase. However, making a customer’s experience so hassle-free requires a complex array of companies working behind the scenes to ensure that credit card payments are processed securely and efficiently.
Originally created in 2004 to streamline 1099 reporting, merchant category codes are now used for a number of different purposes. Of particular importance to businesses is a merchant category code’s impact on interchange fees charged by issuing banks.
A monthly minimum fee is one of the more confusing credit card processing fees because it’s not really a fee at all. A monthly minimum is more accurately described as a benchmark that may result in a fee, rather than as a fee by itself.
The term basis point is thrown around a lot in the credit card processing industry, but many sales people fail to realize that most people aren’t quite sure exactly what a basis point is, or what it means in terms of credit card processing fees.
Some credit card processing fees are negotiable, and some aren’t. If you’re looking to lower credit card processing fee, put the spreadsheet aside for a moment and read this article before you call another processor to ask the fateful question, “What’s your rate?”
Businesses that are considering switching credit card processors wonder, “Can I use my credit card machine with another processor?”
