HOW IT WORKS:
TRADITIONAL CREDIT CARD PROCESSING
A Transparent Guide for Merchants
As a trusted provider of credit card processing services, our goal is to help merchants like you understand the complexities of credit card processing fees. We believe in transparency and educating our clients, empowering them to make informed decisions for their businesses.
CREDIT CARD PROCESSING RATES
Credit card processing fees for merchants typically range from 1.3% to 3.5% per transaction.
These fees exist to cover the operational costs involved in facilitating credit card payments, such as maintaining secure payment networks, fraud prevention, and customer support.
IN DETERMINING YOUR RATE PER TRANSACTION
• Payment network (e.g., Visa, Mastercard, Discover, or American Express)
• Type of credit card (e.g., rewards cards, corporate cards, etc.)
• Merchant Category Code (MCC) assigned to your business
CATEGORY CODES (MCC)
The easiest way to understand Merchant Category Codes (MCC) is to think of them as a classification system that assigns a four-digit code to a business based on the type of products or services it provides. Payment networks, like Visa, Mastercard, Discover, and American Express, use these codes to categorize merchants for various purposes, including:
By understanding these factors, you can better anticipate the fees associated with each transaction and optimize your payment processing solutions accordingly.
Our commitment to transparency and education sets us apart, as we work alongside you to navigate the world of credit card processing.
Our aim is to help you find the best solutions for your business needs, so you can focus on providing exceptional service to your customers and growing your business.
1. To help card issuers determine the eligibility of a transaction for rewards or cashback programs.
2. To simplify tax reporting for businesses and consumers.
3. To apply different processing fees depending on the merchant's industry.
Each business is assigned an MCC that corresponds to its primary line of business, making it easier for payment networks, card issuers, and other financial institutions to track, analyze, and manage transactions.
To find your business's MCC, you can either ask your credit card processor, check your merchant statement, or search for your industry using an MCC lookup tool available online.
Different credit card types can impact merchant processing rates due to factors such as the card network, reward programs, and risk associated with the card. Here's a breakdown of how various card types can affect processing rates:
UNDERSTANDING THE IMPACT
OF CREDIT CARD TYPES ON MERCHANT PROCESSING RATES
The card network (e.g., Visa, Mastercard, Discover, or American Express) plays a role in determining the processing fees. Each network has its own fee structure, which can vary depending on the card type.
CARD-PRESENT VS. CARD-NOT-PRESENT
CCard-present transactions, where the physical card is swiped, dipped, or tapped, usually have lower processing fees compared to card-not-present transactions (e.g., online or over the phone). This is because the risk of fraud is generally higher in card-not-present transactions, leading to increased processing fees for merchants.
There are various types of credit cards, such as standard, rewards, corporate, and premium cards. Reward cards typically have higher processing fees because issuers need to cover the cost of providing rewards to cardholders. Corporate and premium cards, often used by business clients, can also have higher fees due to the additional benefits provided to cardholders, such as travel insurance and cashback offers.
Some cards are considered riskier than others. For example, cards issued to customers with lower credit scores or cards associated with high-risk industries can lead to higher processing fees for merchants.
Interchange fees are set by the card networks and are paid to the card-issuing bank for each transaction. These fees can vary depending on the card type, transaction size, and the merchant's industry. Some cards, like rewards or premium cards, may have higher interchange fees, which in turn affects the overall processing rate for merchants.
There are various types of credit cards designed to cater to different consumer needs and preferences. Each type of credit card has its unique features, benefits, and requirements. The card
Some of the most common card types include:
STANDARD CREDIT CARDS
These are basic credit cards with no special features or rewards. They often have a fixed credit limit, and cardholders can use them for everyday purchases.
The year 1950 marked a significant milestone in the history of payment processing, with the invention of the first modern-day credit card - the Diners Club card. It was created by businessman Frank McNamara, who, while dining out in New York, realized he had forgotten his wallet. Together with his business partner Ralph Schneider, they introduced the Diners Club card as a solution for those who wished to pay without carrying cash. This innovative concept revolutionized the payment industry, and it laid the foundation for the modern-day credit card.