A growing amount of business is being done with Commercial, Business & Government Cards,
many of which qualify at the wrong interchange Rates and are driving up your costs.
Much of this has nothing to do with the rate your processor charges.
Implement these best practices to control your cost for accepting B2B & B2G transactions.
Cost for Accepting B2B & B2G Cards Correctly
- Under 1.86%
- .40%-1.58% for Large Ticket Transactions
Include Level-3 Payment Detail: – To encourage merchant participation
and support of this program, Visa and MasterCard created special
interchange rates that reduce transaction cost by 30%-40% allowing merchants
reclaim a large percentage of profit margins.
Do not use credit card terminals: Credit card terminals are not
capable of supporting the additional requirements for level 3. Using a
terminal results in 30%-40% higher interchange rates before your
processor adds their fee.
Use a Level-3 Processing capable virtual terminal,
preferably a web based solution to prevent customers sensitive credit
card data from being stored on your local PC’s.
Enter a zip code for keyed transactions: Chances are you’ve paid more
than you should for your keyed or interchange transactions by
triggering an interchange reclassification for skipping the zip code
field. Standard, EIRF and Non-Qualified listed on your statement are
indications of these culprits.
FYI, when your set up properly a zip code “match” is not required but
does have to be entered.
Auto Settle/Batch: Make sure you batch or settle your transactions
daily. Visa and MasterCard require transactions be settled within
24 hours if you swipe transactions and 48 hours if you key or process via
the internet. Transactions not settled within this time frame will
cause everything in this batch to downgrade.
Pre Authorization: If you perform pre-authorization’s make sure the
settled amount equals the pre authorization otherwise it will result
in reclassifying the transaction to downgrade. Pre authorizations
also need to be settled in 24 hours for swiped and 48 hours for keyed
& internet transactions.
Cost Plus Pricing: Insist on cost plus pricing, otherwise you will not receive all the available incentive rates.
This pricing method will process your credit card transactions at their respective
interchange rate, with only a small fee added on top. Interchange is
the base rate for each type of credit card issued by Visa, MasterCard
Interchange is the same regardless of the processor you choose, so comparing one processor to another will be
easy since the only thing that will change is the processors markup and monthly fees.
Work with an experienced Level-3 Payment Consultant:
Setting up a merchant account to accept commercial and government
cards is much different than a standard retail account.
Knowing what determines your rates and
the fees that impacting your bottom line cost, help you make more
informed decisions when choosing a processing partner.
Have questions about your business? We’d love to hear from you
Revolution Payments is a is a full-service payment provider of electronic transaction processing services for
(B2B) business-to-business and (B2G) business-to-government
merchants with over 20 years’ experience.