Prairie POS Connection Inc. is an Elavon Payments Partner
& Registered MSP/ISO of the Canadian branch of the U.S. Bank National Association & Elavon
An Elavon Payments Partner
ALL PROCESSORS PAY THE SAME BASE RATE
HOWEVER, ALL RATES ARE NOT CREATED EQUAL
Many processors lure businesses with promises of low processing rates, when in reality only a small percentage of sales actually qualify at that rate. Additionally, the rate quoted is typically only one component of the overall rate, and once you add up the 'target’ base rate, assessment/card branding, interchange differential, and non-qualified/processing fees, your true rate is much higher.
Your discount rate includes interchange, assessment, and a processing fee, BUT how the processor chooses to pass that cost onto the to you varies from processor to processor. So it's important to understand exactly how your fees are calculated so you can make an informed decision to ensure you are receiving the best solution for your business.
INTERCHANGE is the system where transactions are submitted for payment from the processor to the card issuer. Interchange represents roughly 90% of your total discount fees, and are paid directly to the card issuer (IE: ATB, BMO, CIBC, RBC, TD, etc.) Every transaction is assigned an Interchange category based on card type (credit, debit, rewards, purchasing, etc.) industry type (retail, e-commerce, mail order/telephone order, etc.) and qualification elements (PIN verified/swiped card, key entered, etc.). The card associations establish the qualification rules, and manage the interchange of each transaction. A complete breakdown of current interchange rates can be found on www.visa.ca and www.mastercard.ca and search for 'interchange'.
Card Associations quote the lowest rate for a transaction, assuming that a number of requirements are met. If one or more of these requirements are not met, the transaction is categorized at a more expensive interchange level, and a higher fee is assessed.
The interchange rate you pay can be affected by factors you can control, as well as those outside of your control. You can't control the type of card presented or whether the cardholder earns miles or rewards for using the card, but you can minimize the controllable factors by following these two simple rules.
Whenever possible authorize a transaction electronically. Presented with the identical consumer card, you will pay an additional 0.20% (or more) if you manually enter the card information vs. authorizing it electronically. Why? The risk is much higher
Settle your transactions as soon as possible. Transactions that are older than 48 hours will automatically become downgraded, and a higher interchange fee will be accessed. A good rule of thumb is to batch out every 24 hours. Your bank may charge you a few extra cents per month for the additional deposits, but you will be saving considerably more than that with your processing fees.
ASSESSMENT OR CARD BRANDING fees are paid directly to the card brands (Visa, MC, Discover, etc.), and represent roughly 5% of your total fees. Assessment fees cover the cost of maintaining Interchange, regulating card processing and dispute arbitration. Some processors pass assessment thru to the merchant at cost, while others "mark-up" assessment to increase their profit.
PROCESSING fees are paid directly to the credit card processor, and represent roughly 5% of your overall fees. Processing fees cover the cost of fraud risk management, risk assessment, on-going network, security maintenance, use of payment processing networks, and back office administration.
Integrity Pricing - Complete Rate Transparency