Merchant account Charges Explanation: Do you really know how much does each credit card deal cost?

Let us firstly consider the 2 components of the debit/credit card transaction:

Every time a seller processes a debit or credit card transaction, he is rated with a % of total transaction and an inquiry-charge. Inquiry charge is nothing but a flat-amount which ranges typically between twenty cents and thirty-five cents. Whereas, percentage charge is known typically as “credit card rate” which signifies the transaction and card type used.

Typically the Credit card charges are broken into 2 categories. They are:

1.) Card Present: Here, the card is swiped physically through the credit-card terminal. Thereby, lowest charges are applied to the card present transactions.

2.) ‘Card Not Present’: Signifies any transaction type where card can’t be swiped. This transaction type is also called as “MOTO”, that is, ‘Mail order/Telephone orders’. The transactions where credit-card can’t be swiped physically through the terminal including phone transactions, internet transactions, and the credit-card numbers which are entered into the terminal, all fall under this category.

So, let us now go through the different types of credit card rates:

The charge for credit-card transaction-type is mainly determined by the type of card utilized, way it is being processed, and the duration taken for the seller to process the batch transactions. It is indeed essential you consider ‘card not present’ or ‘card present’ transaction during the selection of plan time, since the charges for ‘card not present’ are significantly high in TYPE-1 compared to TYPE-4 plan.

So let’s see what this Type-1 and Type-4 plan is?

Type-1 (Retail): This account type is designed only for the card-present transactions.

Type-1 (Qualified): Most of the swappable credit cards fall under this category which charges typically low rate. The customers swipe their card and these transactions are batched within 24 hours. 

Type-1 (Mid-Qual): This charge is applicable to key-entered and reward card transactions. This rate is also applicable to transactions which are batched within 24 to 48 hours.

Type-1 (Non-Qualified): All government and corporate cards are charged this regardless of the batch-processing time. Transactions that are batched after forty-eight hours are charged with this rate too. Thereby, this is the highest-rate that is charged.

Type-4 (MOTO): This charge is applicable for the card-not-present transactions.

Type-4 (Non-Qualified): All the reward, government and corporate cards are charged with this rate not considering their batch-processing time. This rate applies for transactions that are batched after twenty-four hours which could otherwise be considered as Qualified if they would have been batched soon.      

Let us now proceed to consider the rates of debit card:

Debit card classification is similar to the credit card, but rate and type for debit-card transactions are typically low compared to credit-card rate.

Few of the money-saving tips are as listed here:

Ensure that your credit-card-processor is providing you separate low rates for the debit card transactions.

Thereby, make sure for what you make payments for. Know the rates of each transaction after every purchase to make your shopping less costly.