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Credit Card Processing Fees Increasing This April?
Do They Need To?

March 22nd, 2011

April is almost here—the time when merchants often see the cost of processing credit cards increase. Are you aware of what changes are in store for your business this April? Do you know if your processor needs to raise their rates to remain profitable, or are they using April to simply increase their bottom-line?

Anyone who has accepted credit cards for more than one year knows the card brands (Visa, MasterCard, Discover, and American Express) consistently evaluate the fees merchant service providers pay to process transactions (interchange). Price changes typically take effect twice each year, April and October.  Did you know that it is not uncommon for interchange to DECREASE?

When the card brands conduct their review, they decide to either increase or decrease interchange, and sometimes even add new categories to make accepting credit cards more attractive for certain markets or to accommodate new types of cards.

This April, the card brands are increasing certain fees and adding several new categories. For example, MasterCard increased the cost of most transactions over $1000 by 0.01% and they increased the cost of many World Card transactions by .04%. Visa introduced new categories for chip-based cards and had no notable changes otherwise. This is just a high-level overview of a very complex system.   (You can see the actual cost of processing transactions at www.visa.com and www.mastercard.com – Search: Interchange)

So savvy merchants are asking themselves:

·    How many of these types of obscure transactions do I process?
·    Will new pricing affect all of my transactions or just these lonely few?  And ultimately…
·    Does my processor need to increase my fees this April?

The answer for our clients is no. The changes this April are so minimal that there is very little, if any, justification to pass along an increase to merchants.

This is one more example of what sets Payex apart from other credit card processors. It is our policy to only increase client’s fees if and when it is absolutely necessary. Still, many other merchant service companies will take this opportunity to raise rates regardless of how deeply the adjustments actually impact their bottom-line.

So remember to always look at your March, April, September, and October statements to learn how much your processor is increasing your fees. Then, tune into What Every Merchant Should Know to learn if an increase in your fees is justified!

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