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Author: Olivia Benson

Credit Card Processing Fees: How Much Does It Really Cost?

Posted on by Olivia Benson

The average credit card processing fee for most businesses is between 1.5% and 3.5% of the total transaction. However, these fees can vary depending on the payment types the business accepts and the pricing model the business uses.

Key Takeaways

1.      Credit card processing fees may include interchange fees, network assessment fees, and your payment processor’s markup.

2.      Different pricing models (interchange-plus, tiered, blended) offer varying levels of transparency and cost-efficiency.

3.      Negotiate and explore alternatives: Don’t be afraid to negotiate with us, your processor for better rates. Consider offering ACH bank transfers as a lower-fee payment option for customers.

Understanding the Breakdown: What Goes into Credit Card Processing Fees?

Processing fees are more complex than they seem. Here’s an overview of the key players involved:

1. Interchange Fees: Major credit card networks such as Visa, Mastercard, etc. control the interchange rates. These fees are paid between the issuing bank (that provides the credit card) and the acquiring bank (yours, that receives the payment). Interchange fees are the biggest chunk of your processing costs, varying based on card type (rewards cards and business cards may cost more to process), transaction size, and even your industry [1]. Unfortunately, businesses have little control over interchange fees.

2. Assessment Fees: Think of these as credit card network taxes (Visa, Mastercard, etc.) levied on each transaction. While a smaller percentage than interchange fees, they can add up [2]. Just like interchange fees, these are non-negotiable.

3. Merchant Account Fees: On top of network fees, your payment processor will also charge their own fees to cover their services. Here’s a breakdown of some common ones:

a. Per-transaction fees: A flat fee assessed for each swipe, dip, or tap.

b. Monthly statement fees: A recurring charge for account maintenance and access to monthly statements.

c. PCI Non-Compliance Penalties: PCI compliance helps safeguard customer information. Failing to comply can result in hefty fines. [6] Learn more

d. Chargeback fees: Fees assessed when a customer disputes a transaction and their bank reverses the charges. These can be expensive, so it’s important to have a good fraud prevention system in place.

e. Early termination fees: A penalty for closing your merchant account before the contract ends.

While some fees are unavoidable, your choice of processor will have the greatest impact on the price you pay for accepting credit cards. Different processors offer varying pricing structures and fee rates.

Breakdown by major credit card networks (average interchange and assessment fees):

The actual fees you pay will depend on your specific business and the type of cards you accept.

We can help!

The Many Different Payment Processor Pricing Models

Payment processors offer various pricing models, each with its pros and cons:

1. Interchange-Plus Pricing: This transparent model shows you each fee component (interchange, assessment, processor markup). The advantage? You can negotiate lower per-transaction fees with your processor [4].

2. Tiered Pricing: This bundles fees into pre-determined categories (qualified, mid-qualified, non-qualified) based on factors like card type and acceptance method. While simpler, it can be difficult to predict total processing costs [3].

3. Blended Pricing (or Flat Rate pricing): This combines interchange fees, assessment fees, and processor markup into one simple percentage. It’s easy to understand, but often less transparent and can be more expensive for businesses with high transaction volume [5].

4. Membership-Based Pricing: Here, you pay a monthly subscription fee that covers a certain number of transactions. This can be cost-effective for businesses with predictable transaction volume, but exceeding the included transactions can result in additional fees.

In-person vs. Online Transaction Fees

Generally, online and manually keyed transactions have higher fees compared to in-person transactions. This is because online transactions carry a higher risk of fraud.

Here’s a comparison of in-person vs. online fees for major networks:

The actual fee difference between in-person and online transactions can vary depending on your processor.

Remember, every business is unique. The ideal pricing model depends on your industry, average transaction size, and transaction volume. What works for one business might not be the best fit for yours.

At EPAYMENT, We Tailor Solutions for Your Success

We understand that a one-size-fits-all approach doesn’t work for payment processing. We offer tailored merchant processing solutions to meet the unique needs of your business. Our expert team will analyze your business model and recommend the pricing model that ensures clarity, reliability, and cost-effectiveness in every transaction.

Finding the Right Credit Card Processing Company: Strategies for Savvy Businesses

Knowledge is power, especially when it comes to fees. Here’s how to be a credit card processing pro:

1.      Negotiate with your Payment Processor: You have value! Highlight your business’s strengths (high transaction volume, low chargeback rate) and negotiate lower per-transaction fees or monthly fees.

2.      Choose the Right Pricing Model: If your business processes many rewards cards, interchange-plus might be better for transparency in negotiation. For predictable transaction volume, tiered pricing could work.

3.      Consider Alternative Payment Methods: Explore offering options like ACH bank transfers (lower fees) alongside credit cards to give customers flexibility and potentially lower your overall processing costs.

The type of business you run, your sales volume and average transaction amount all affect costs. While other processors may seem transparent, hidden fees can eat into your profits. At EPAYMENT, we offer custom solutions designed for your business, giving you clear and reliable costs for every transaction.

Let EPAYMENT Help You Find the Perfect Fit and Slash Your Processing Costs!

Contact us today for a free consultation!

Sources

  1. National Retail Federation  https://nrf.com/
  2. Electronic Transactions Association  https://www.electran.org/
  3. Federal Trade Commission  https://www.ftc.gov/
  4.  U.S. Bank Account Services  https://usa.visa.com/
  5. Small Business Administration  https://www.sba.gov/
  6. PCI Security Standards Council  https://www.pcisecuritystandards.org/merchants/

Automated Clearing House (ACH) – What is it and how does it work?

Posted on by Olivia Benson

When it comes to getting paid, businesses have lots of options! Credit cards, mobile wallets, peer-to-peer payments, you name it. But it’s not just about having choices, business owners need to consider what’s most cost-effective and customer friendly. That’s why we love ACH (Automated Clearing House) transactions. It stands out as essential for customer transactions, payroll, and more.

What is the Automated Clearing House (ACH)?

You might not know it, but you may have used ACH payments in the past. The ACH is an electronic system for transferring funds directly between banks and credit unions in the United States. It processes billions of transactions each year, silently powering things like:

  • Direct deposit payroll
  • Recurring bill payments (subscriptions)
  • Large business-to-supplier transactions
  • Tax payments

Key Takeaways

  1. ACH payments are a cost-effective and secure alternative to traditional checks and credit cards. They are ideal for recurring payments and offer faster processing times than checks.
  2. There are two main types of ACH transfers: debits (you pay someone) and credits (someone pays you). Both are generally completed within 1-3 business days.
  3. Businesses can benefit from accepting ACH payments by reducing processing costs, improving customer convenience, and offering a wider range of payment options.

How Does an ACH Transfer Work?

ACH transfers work by moving funds from one bank account to another through the ACH network. There are two main types of ACH transfers:

  • ACH Debit: This is when you authorize a business to take money directly from your checking or savings account, often used for bill payments or recurring charges.
  • ACH Credit: This is when money is electronically deposited into your account, such as with direct deposit for payroll or government benefits.

Here’s a breakdown:

  1. Initiating the Transfer: The transfer is initiated by either the sender (you) or the receiver (the business you are paying).
  2. Network Involvement: The sender’s bank submits the transfer request to the ACH network.
  3. Batching and Settlement: The ACH network batches transfers throughout the day and settles them four times daily.
  4. Funds Movement: The receiver’s bank receives the transfer notification and deposits the funds into the recipient’s account.

ACH vs. Other Payment Methods

 Benefits of ACH Payments

  • Cost-effective: Lower transaction fees compared to credit cards and wire transfers.
  • Convenient: Ideal for recurring payments and eliminates the need for checks.
  • Secure: Reduces the risk of lost or stolen checks and credit card fraud.
  • Faster than checks: Funds transfer electronically in 1-3 business days.

ACH payments are a secure, convenient, and cost-efficient way to transfer funds electronically. Businesses can benefit by offering ACH as a payment option, enhancing customer convenience and potentially reducing processing costs.

Ready to Get Started Accepting ACH Payments?

 Our expert team can help:

  • Evaluate your business needs. Is ACH the right payment strategy for your business?
  • Choose as your payment provider. At EPAYENT we offer a one-stop solution for various payment methods, including ACH, with transparent pricing. We have solutions that integrates with your existing system(s).
  • Set up ACH processing. We can guide you through the setup and integration process, allowing you to focus on what you do best: running your business.

We are here to help:

Sources

1.      National Automated Clearing House Association (NACHA) https://www.nacha.org/

2.      Federal Reserve Payments Study https://www.federalreserve.gov/paymentsystems/fr-payments-study.htm

3.      The Electronic Payments Association https://www.epa.gov/financial/makepayment

Understanding PCI Compliance: A Guide for Merchants

Posted on by Olivia Benson

As a merchant, you’re likely no stranger to the world of credit card transactions. But do you know what it takes to ensure your business is protected from fraudulent activity? PCI compliance is not just a suggestion, it’s a requirement for any business that accepts credit card data. 

What is PCI Compliance?

PCI Compliance refers to the act of adhering to the Payment Card Industry Data Security Standard (PCI DSS), which is a set of rules and regulations designed to protect both your business and customers’ secure data from fraudulent activity. In essence, it’s a system to verify that you’re meeting pre-set security standards to ensure safe credit card transactions.

Do I Have to be Compliant?

With the increasing threat of credit card fraud, the major card brands have made PCI compliance mandatory for all merchants who handle credit card information. This means that you, as a merchant, are required to meet the PCI security standards to ensure the safety of your customers’ sensitive data.

How Can My Business Become Compliant?

First, you have to determine how your organization takes cards and what mechanisms are involved to find your correct Compliance process. Basically, how your organization stores, processes, or transmits payment card data indicates how you can become PCI compliant.

Complete an annual Self-Assessment Questionnaire (SAQ.) With the Self-Assessment Questionnaire, you’ll have the opportunity to review your business’s security protocols and make necessary adjustments to prevent data breaches. This process typically takes around 10 minutes to complete, and our live representatives are available to assist you if needed.

Note, failing to meet PCI compliance requirements can result in fines, audits, and damage to your brand reputation. Stay protected and compliant to ensure the security of your customers’ sensitive information.

Conclusion

Understanding PCI compliance is crucial for merchants like you who accept credit card data. By grasping the importance of PCI compliance and following the guidelines outlined, you can ensure your business is protected from fraudulent activity and avoid costly fines and fees. Be mindful of, becoming compliant and staying compliant is a straightforward process, and with the right guidance, you can safeguard your business and customers’ sensitive data.

We are here to help

Sources

  1. PCI Security Standards Council: https://www.pcisecuritystandards.org/
  2. Visa: https://usa.visa.com/support/small-business/security-compliance.html
  3. Mastercard: https://www.mastercard.us/en-us/business/overview/safety-and-security/security-recommendations/site-data-protection-PCI/merchants-need-to-know.html

Breaches & Fines: The Cost of PCI Compliance Neglect

Posted on by Olivia Benson

As a merchant, safeguarding your customers’ payment information is crucial. Neglecting PCI compliance can lead to severe repercussions, affecting not only your financial stability but also your reputation in the industry. Understanding the potential PCI non-compliance consequences, such as hefty fines and increased vulnerability to cyberattacks, is essential for mitigating risks and ensuring compliance with industry standards. It’s imperative to prioritize PCI compliance to avoid the damaging effects on both your business’s bottom line and its standing in the eyes of consumers and partners alike.

Key Takeaways

  1. Financial Penalties: Non-compliance can result in fines ranging from $5,000 to $100,000 per month.
  2. Increased Fraud Risk: Vulnerability to cyberattacks can expose customer data to fraud.
  3. Payment Processing Restrictions: Non-compliance may lead to restrictions or revocation of card processing capabilities.
  4. Legal Consequences: Potential lawsuits and legal actions from customers and card companies.
  5. Revenue and Reputation Loss: Data breaches and negative publicity can damage trust and sales.
  6. Brand Reputation Impact: Loss of customer trust and confidence can affect long-term business viability.

Here are the critical consequences you need to know.

Potential Financial Penalties for PCI Non-Compliance

Merchants face substantial financial penalties for PCI non-compliance, with small businesses typically fined $5,000 to $10,000 monthly, and large enterprises facing $50,000 to $100,000 fines. Such penalties can affect your bottom line.

The risk of fraud and data breaches increases significantly without PCI compliance. Cybercriminals target businesses with weak security, accessing sensitive customer data for exploitation on the dark web. These breaches not only compromise financial information but also undermine customer trust and brand reputation.

Impact of PCI Non-Compliance on Brand Reputation and Revenue

Non-compliance can lead to credit card processing restrictions imposed by payment processors and card companies. These restrictions limit transaction capabilities, impacting revenue streams and operational efficiency. Moreover, legal implications such as lawsuits and fines further strain resources and tarnish a business’s standing.

The financial fallout extends beyond fines to include revenue loss and diminished brand reputation. Customers wary of security breaches may take their business elsewhere, affecting long-term profitability and investor confidence.

Conclusion

The consequences of PCI non-compliance are severe and multifaceted, posing risks to both financial stability and reputation. By prioritizing PCI standards, merchants protect customer data, avoid hefty penalties, and maintain trust in a competitive marketplace. Compliance is not just a regulatory requirement but a safeguard for business continuity and growth.

Protect your business, comply with PCI.

We can help!

Sources

1.    PCI Security Standards Council: https://www.pcisecuritystandards.org/

2.    Nord Layer: https://nordlayer.com/learn/pci-dss/pci-fines/

3.    Network Assured: https://networkassured.com/compliance/pci-level-1-compliance/

What is the PCI DSS Self-Assessment Questionnaire? Get the Help You Need

Posted on by Olivia Benson

Many organizations undergo self-assessment processes to evaluate their performance and identify areas for improvement. A key element in this process is often the Self-Assessment Questionnaire (SAQ). However, completing these questionnaires can sometimes be complex and time-consuming. This article explores how partnering with us can streamline your SAQ completion and ensure a smooth and successful process.

Why Partner for SAQ Assistance?

Self-assessment questionnaires can be intricate, with technical language and specific requirements. Partnering with a company with extensive experience in this area offers several advantages:

  1. Expertise and Navigation: A knowledgeable partner can guide you through the questionnaire, ensuring you understand each question and provide the most accurate information.
  2. Efficiency and Time-Saving: Their familiarity with the SAQ process can significantly reduce the time required for completion, freeing your team to focus on core business activities.
  3. Accuracy and Confidence: Partnering with an expert minimizes the risk of errors or omissions, leading to a more accurate and confident submission.

What to Look for in an SAQ Partner

When selecting a partner for your SAQ needs, consider the following factors:

  1. Industry Experience: Choose a partner with a proven track record of success in your specific industry. Our knowledge of relevant regulations and best practices can be invaluable.
  2. User-Friendly Approach: We prioritize customer engagement and clear communication. They should be able to explain complex concepts in a way that is easy to understand.
  3. Adaptability and Customization: Look for a partner who can tailor their approach to your organization’s unique needs and requirements.

Embrace a Streamlined and Successful Assessment

By partnering with EPAYMENT, your organization can navigate the SAQ completion process with greater ease and confidence, so you can focus on running your business.

We are here to help:

Maintaining Payment Security

Posted on by Olivia Benson

Due to the risk of cyberattacks and data breaches, ensuring the security of payment card information (PCI) is a critical aspect of safeguarding sensitive cardholder data. Take note that the specific PCI DSS requirements will vary depending on the size and nature of an organization’s involvement with cardholder data. The PCI Security Standards Council (PCI SSC) defines different merchant levels based on transaction volume, with stricter requirements for higher levels.

Understanding PCI Requirements

The PCI DSS encompasses several key components:

  1. PCI Data Security Standards: The Payment Card Industry Data Security Standard (PCI DSS) is a set of comprehensive guidelines designed to safeguard sensitive cardholder data. Developed by the PCI Security Standards Council, an industry collaboration, PCI DSS outlines the operational and technical requirements for organizations involved in payment transactions. This includes merchants, financial institutions, payment processors, and software developers.
  2. PCI PIN Transaction Security Requirements (PTS): The PCI PTS focus specifically on the security of devices used for PIN protection and payment processing activities. These requirements govern the design, manufacturing, and distribution of such devices, ensuring they meet stringent security benchmarks. Merchants are encouraged to utilize only devices that have been rigorously tested and approved by the PCI Council.
  3. Validated Payment Software: Validated Payment Software signifies that the software has undergone a comprehensive assessment by a qualified professional. This evaluation confirms the software’s adherence to the PCI Secure Software Standard, ensuring it adequately protects the integrity and confidentiality of payment data. Utilizing validated payment software adds an extra layer of security to your payment processing environment.
  4. Point-to-Point Encryption (P2PE): Point-to-Point Encryption (P2PE) offers a robust security solution by encrypting cardholder data at the point of capture, rendering it unreadable to unauthorized parties even in the event of a breach. This significantly reduces the value of stolen data and streamlines compliance for merchants. P2PE solutions validated by the PCI Council further enhance security and simplify the compliance process.

Taking Action: Quick Steps to Secure Your Business

While PCI DSS may seem complex, achieving compliance boils down to implementing essential security practices. Here are some actionable steps you can take to safeguard your business:

  1. Invest in secure hardware: Always use PCI PTS-approved PIN entry devices at your POS terminals.
  2. Utilize validated payment software: Ensure your POS system and any payment processing software you employ are PCI-validated.
  3. Minimize data storage: Avoid storing sensitive cardholder data like full credit card numbers on your systems.
  4. Build a secure network: Implement a firewall on your network and individual devices to shield them from unauthorized access.
  5. Secure your wireless network: Always password-protect your Wi-Fi network and enable encryption.
  6. Embrace strong passwords: Enforce the use of strong, unique passwords for all accounts with access to payment systems. Regularly change default passwords on hardware and software.
  7. Maintain vigilance: Regularly inspect your POS terminals and computers for suspicious software or tampering.
  8. Educate your employees: Train your staff on secure payment practices and data protection protocols.

Partnering with EPAYMENT for Secure Payment Processing

At EPAYMENT, we are committed to providing secure and reliable payment processing solutions for merchants of all sizes. Our services are designed to simplify PCI DSS compliance and ensure the highest level of data security. We offer:

  1. PCI-compliant payment processing solutions
  2. Integration with validated payment software
  3. Support for point-to-point encryption technologies.

Maintaining payment security is an ongoing process. By following PCI DSS guidelines, implementing the best practices outlined above, and partnering with EPAYMENT, you can create a secure environment for your customers and protect your business from financial risks. Remember, data security is a shared responsibility. Let’s work together to build a safer and more trustworthy payment ecosystem.

We are here to help:

Sources