What are Credit Card Surcharges

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Credit card surcharges involve the addition of a small fee added to a transaction. They’re added to cover the cost of processing a credit card transaction. This is why businesses often have a minimum purchase amount if you intend to pay with a credit card. Credit card surcharges are often unfair to the consumer, and surcharge models are always unfair to businesses.

Surcharge Structures Overwhelm and Confuse

Credit card surcharges are often modeled to unfairly qualify some businesses with high processing rates and fees. This means they either have to absorb these fees or punish their customers with higher costs – which can lose customers. There are hidden fees, tiered pricing systems, and other elements that can make it confusing to understand just what your business is signing up for.

Many of these cost elements have a legitimate foundation, a reason for existing. As they become overwhelming, many are in there simply to make businesses throw their hands in the air and figure this is the best surcharge situation they’re going to be able to get.

Many Businesses Need an Alternative

You can choose a more modern alternative. Credit card surcharges subscribe to a model of end-point sales that hasn’t really caught up with today’s market of online sellers, referral services, small-cost marketplaces, or even the business-to-business economy as it’s evolved. Because of this, surcharges and fees can grow to high-risk territory for businesses that just aren’t high-risk.

If your business sells a low volume, you shouldn’t be punished so that you make even less from it. If you rely on high-cost sales, you shouldn’t have a chunk of that taken out. Neither should you have to pass costs on to customers that risks them going elsewhere. The old surcharge model has not adapted quickly enough to the way the world works today. It’s fallen behind for too many who are working too hard.

Interchange Plus Pricing

Interchange plus pricing is a more reliable and predictable model for many who fall into these categories, or who just don’t find credit card surcharging fair. You know your fees up front. There are no hidden fees or added rates. There’s no three-tier structure for punishing hard-working businesses. It’s simple, easy to implement and engage with, and it’s client-oriented.

You have options beyond simply signing up with the least damaging processor. It’s worth it to investigate what else is out there. Contact Y2Payments today at 888-693-1850 for a free no risk statement review & audit!

What are Interchange Fees?

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If you are a business that accepts credit card payments, there are fees you could be overlooking, and they may be costing you more than you think. They’re called interchange fees, and if you don’t understand exactly how much you’re paying each month to processors for these fees, you may not know where all of your profits are going.

A Definition
Interchange fees are essentially what a credit card sale is costing you. Any time you process a credit card sale with a customer, you’re paying a fee to do so. Take a moment to consider who is involved in a credit card sale.

First, there’s the merchant service provider – that’s your bank or financial institution. The financial institution that issues the card is the second party involved. That’s the company who actually issued the customer a card.

The last party involved is the credit card company behind the card itself like American Express or Visa. They set the interchange rate itself. For every card issued, a pre-set rate is also issued for merchant service providers to pay the bank that issues the card. That rate determines those fees that are costing you so much money.

Cards with points, airline miles, rewards, and so on have higher interchange rates. Debit cards tend to have lower interchange rates. The way you process a card also affects those rates. Swiped sales tend to have lower rates associated with them than online sales do. The important point to remember, though, is that the interchange rates set by the card company apply to every single merchant, even the smaller ones.

Lowering Your Rates
So, how can you keep those costly interchange fees in check? Work with us. With more than thirty years of payment processing experience, Y2Payments can help you save some of that money from your current statements and have it go directly to your bottom line! Contact us today to learn more.