How much is the merchant credit card discount in the USA?
Posted on October 30th, 2009 by admin
When I took accounting, we learned that credit card companies don’t reimburse merchants for the entire purchase price. Instead, they short the merchant a small cut that they keep for processing the transaction. In my classes, we used 2% for all cards.
But that was many years ago and in academia. In the real world right now, what is the merchant discount for the various credit cards (Visa, Master Card, AMEX, Discover)?
Thanks!
It all depends on your business, the type of transactions you do. Rates can vary, or you can be on a variable rate plan which charges you interchange rates (Interchange rates are decided by Visa Mastercard Association). To get a merchant account, give these guys a call – www.iso4chase.com.
Now as far as AMEX is concerned, they set their own rates as AMEX is not part of the VISA / MC association. Discover used to do that as well, but now merchant processors such as First Data, Chase Paymentech and others can setup Discover accounts for you and keep the charges on that one statement only. Discover has their own interchange charts.
There are different type of pricing plans out there. You can be on a fixed rate, a three / two tiered structure where you get a qualified rate and a non-qualified rate (cards such as corporate cards, rewards card etc do not qualify for qualified rate), you can be on a bill-back structure where you would pay a fixed rate and then the lowest non-qualifying interchange rate or you can be on a Interchange + sort of pricing where you would pay the Interchange rate in addition to a small percentage on top on each transaction. Talk to the people you want a merchant account from to discuss your needs.
Hope this helps.
October 30th, 2009 at 11:12 am
It all depends on your business, the type of transactions you do. Rates can vary, or you can be on a variable rate plan which charges you interchange rates (Interchange rates are decided by Visa Mastercard Association). To get a merchant account, give these guys a call – http://www.iso4chase.com.
Now as far as AMEX is concerned, they set their own rates as AMEX is not part of the VISA / MC association. Discover used to do that as well, but now merchant processors such as First Data, Chase Paymentech and others can setup Discover accounts for you and keep the charges on that one statement only. Discover has their own interchange charts.
There are different type of pricing plans out there. You can be on a fixed rate, a three / two tiered structure where you get a qualified rate and a non-qualified rate (cards such as corporate cards, rewards card etc do not qualify for qualified rate), you can be on a bill-back structure where you would pay a fixed rate and then the lowest non-qualifying interchange rate or you can be on a Interchange + sort of pricing where you would pay the Interchange rate in addition to a small percentage on top on each transaction. Talk to the people you want a merchant account from to discuss your needs.
Hope this helps.
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