Would You Like To Know

What You are Really Paying for Payment Processing?

Let’s Take a Look

Providers have a number of clever ways to hide fees from you. Take a look at this blog post to see two examples of how many providers hide their fees in the proposal. They often entice you with a really low rate and then make up for it in the fine print and confusing jargon. Their misleading practices aren’t limited to proposals, however. Their statements can be equally ambiguous and difficult to interpret. Let’s clear things up, shall we?

1. Discount Rates

If your provider presents you a nice and low “Qualified” rate, there is likely a balancing and much higher “Non-Qualified” or “Downgrade” rate. Ask what that is. Look for it on your statement. Higher rates could also be disguised as using a wide range of obscure descriptions.

This merchant was quoted 2.44%, but as you can see from their statement, they are paying 3.34% and 4.34% on 57% of their transactions.

Sometimes there are things you can do to help your transactions fall into the lower “Qualified” rate, such as collecting the cardholder’s billing zip code. However, it is not always preventable, as with business or international cards. It is estimated that between 10%-80% of a merchant’s transactions will be charged at the higher rates.

2. Authorization/Per Transaction Fees

Providers add fees to the discount rates under many different names. You were probably quoted a per transaction fee, but could also be charged hidden fees on top. Some examples: AVS fee, Wats fee, International/cross border fees, Foreign handling fee, Capture fee, Internet Auth fee, or Access fee.

This merchant was being charged several auth fees:

3. Surcharges

Providers have many different ways to add surcharges. Some examples: Batch Fee, Customer Service Fee, Internet Service Fee, Statement Fee, Maintenance Fee Monthly Fee, Monthly Access Fee, or Annual Fee.

One of the most misleading practices is called “Billback”. This basically means the provider adds arbitrary surcharges without a straightforward rate. These fees are extremely difficult understand. Billback can be on the current or following month’s statement and disguised as “BB”, “Differential”, or with more generic wording.

This merchant was racking up billback charges:

Of course you have to pay some fees when you accept credit cards. It’s crucial that you understand what those rates are, especially when you’re trying to compare providers. We’ve long been outspoken critics about hidden fees, teaser rates and obscuring charges on monthly reporting statements. We’re always upfront and transparent and clearly display charges on monthly statements. If you’d like us to dissect your current processing statements, we’ll be happy to show you what you are really paying so you can accurately compare.