The largest portion of fees paid by businesses for processing credit cards it “Interchange” paid to card issuing banks (I know big surprise the banks). Each of the large networks Visa and MasterCard have 4 basic categories of credit cards:
- Prepaid, Classic, Gold & Platinum current rate 1.42%
- Infinite current rate 1.61%
- Infinite Privilege current rate 2.08%
- Business, Corporate, Commercial current rate 1.90%
- Business Infinite Privilege current rate 2.10%
- Prepaid, Core current rate 1.44%
- World current rate 1.77%
- World Elite current rate 2.06%
- Business, Corporate, Commercial current rate 2.00%
Pretty simple right? I wish, this is where it starts to get complicated, these rate vary depending upon how you accept a payment/type of transaction and who you are. Some rate factors based on the type of transaction are:
- Card not present (CNP or “Standard”) which included any transaction where the credit card is not swiped or the chip used, rates for these transactions are higher. Rates for these transactions are 1.52%, 1,71%, 2.45%, 2.00% & 2.10% for Visa and 1.55%, 1.89%, 2.49% & 2.00% for MasterCard (more than basic rates)
- Recurring payments are payments setup to be done automatically every month for instance monthly membership fees. Rates for these transactions are discounted, 1.37%, 1.56%, 1.95%, 1.85% & 2.00% for Visa and 1.36%, 1.48%, 1.90% & 2.00% for MasterCard
- Secure Code enabled/MasterPass are online MasterCard transactions are less than other card not present transactions at 1.55%, 1.89%, 2.49% & 2.00%.
- International, rates are both higher and lower depending upon the card. Current rates are, 1.10%, 1.80%, 1.97 & 2.00% for Visa and 1.10%, 1,85% & 1.85% for MasterCard. It should be noted that if your transactions are deposited in non-Canadian funds network fees are considerably higher.
- Charity/Emerging Segments for registered charities and other specific categories of businesses. Current rates are .98%, 1.17%, 1.95%, 1.80%, 2.00% for Visa and 1.00%, 1.25%, 1.50% & 2.00% for Mastercard.
Some rate factors based upon who you are include the following lower rates:
- Merchant Volume Tier 1 volume over $3 billion for MasterCard and $2 billion for Visa plus specific fault percentages. Current rates are 1.37%, 1.56%, 1.95% & 1.80%
- Merchant Volume Tier 2 volume over $1 billion for MasterCard & $850 million for Visa
- Merchant Volume Tier 3 volume over $400 million for MasterCard, Visa does not have a Tier 3 rate. Current fees are 1.38%, 1.53%, 1.90% & 2.00%
- Supermarket/Grocery for businesses doing more than 50% of their business in food. Current rates are 1.23%. 1.42%, 1.95%, 1.85% & 2.00% for Visa and 1.22%, 1.34%, 1.60% & 2.00% for MasterCard
- Independent Business/Everyday Needs for businesses that fall into specific categories (Visa & MasterCard have specific lists. Current rates are 1.36%, 1.54%, 1.95%, 1.90% & 2.10% for Visa and 1.38%, 1.53%, 1.90% & 2.00% for MasterCard
- Pertroleum/Gas for gas stations. Current rates are 1.18%, 1.37%, 1.95%, 1.80% & 2.00% for Visa and 1.17%, 1.30%, 1,60% & 2.00%
- There are also special (lower) rates for the Public Sector and Utilities
If you read all of this your head is probably hurting but you understand why it is so difficult to understand processing rates, statements and contracts.