Well, it’s that time of the year again in which some credit card processing providers will announce that there is an increase in Visa/MasterCard rates and these rates must be passed on to you. Have you received such a notice in your February, March or April merchant statement announcing this increase for May or June? If you did, then read on and if you didn’t, make sure that you fully check your May or June merchant statement to see if there has been one.
There actually was an increase announcement by the association of MasterCard which with this announcement there was also a decrease! What is important with this announcement is that for restaurant owners, it really is a very small increase with just a few types of transactions. First, and most importantly, is the Merit III Base which is the consumer credit card swiped through your system. This increase is just .001 point above the previous buy rates that credit card processors must pay. Also with a .001 point increase is the World MasterCard Restaurant. For corporate business cards, there have been two increases with both being .0010 points. These are the Corporate Data Rate II cards and the Corporate Face-to-Face cards. Although there have been a few other increases with card types, they really do not apply to restaurant owners.
With this announcement, there have been two decreases and both of these are for the Visa and MasterCard Small Ticket transactions. These have been deducted by .005 points. For restaurant owners, this is for transactions that are for $15.00 and under for consumer debit cards that are swiped through the terminal to receive this special rate.
By the above rate differences, the most important increase is the MasterCard Merit III rate of .001 point and the two corporate cards at .0010 points. As you can see, Visa had no increase. In fact, they have only announced a decrease!
So again, I highly recommend taking a look at your previous statements to see if you have been increased with fees. Commonly around this time of the year when I analyze business owner statements I see these fee increase announcements and then the increase is more than the actual increase of the Visa/MasterCard associations. Recently I have seen .3 point, .5 point and as high as .12 point increases across the board. This should not be so. One way to substantiate this across the board increase by processors and to make additional profits is to state on their thirty day increase notice that, “Because of the announcement of Visa/MasterCard associations that there is a change in costs and with the cost of conducting business, as of May 1st there will be an increase in your discount fees of such and such”.
Notice in the announcement that there is the wording of “the cost of conducting business”. I am not a lawyer but because of this wording, they can increase their rates as high as they like for it is now the combination of the Association buy rate increase and whatever they want to tack on.
Now with the decrease in the Small Ticket debit card rates, you cannot take advantage of these transactions if you are not on an Interchange Plus program which I have so much talked about in my other articles and in my book, Merchant Processing 101. But, your processor will for they will qualify those transactions of $15 and under for this reduced rate and enjoy the additional profits that are not passed on to you.
In closing, I will say to always read the fine print on your merchant statements to make sure that you are not getting increases in your merchant program that you fill should not be there. Is this why they call it “fine print”?
Robert Becker is the author of Merchant Processing 101, the book that the banks and processors don’t want you, the merchant, to read! Mr. Becker has analyzed thousands of restaurant merchant programs from single establishments to national concerns and found that 88% of the time either the business is not set up correctly or are paying unneeded fees in their program. With Mr. Becker being a national credit card processing provider, these eliminations and corrections can save the restaurant owner thousands on their bottom line with protection from unfair increases. Would you like a complete no cost analysis of your present merchant program? You can email Mr. Becker at; firstname.lastname@example.org or contact Mr. Becker directly at 1-866-226-5551. To learn more about Mr. Becker and his book, just go to www.merchantprocessing101.com
Author: Robert Becker