When you are getting ready to launch your business and are in the process of putting all your systems in line you will want to know as much as you can about credit card processing fees and guidelines. Currently, almost everyone whips out that card and swipes it to pay for their gods (or types that number in furiously in the case of online shopping). That means you will inevitably have to deal with setting up a merchant account or a third-party processing account. You may have an option there, but you will not have a choice when it comes to the most popular credit cards that you will want to accept. Each of these has their own individual systems and fees. Take Visa, for instance, they have been charging an acquirer fee for the past few years. What is that? Well in this article we will look at what it is and what it means for you and your business. So, let’s start with that first question…
What is the Visa Acquirer Processing Fee?
First, let’s talk about just what an acquirer is. This is a bank or institution that enters into a contract with a merchant to process their debit and credit card transactions. Basically, this company or bank creates a merchant account for the given merchant which allows them to take payments via credit cards from specific cards within the association. A line of credit is set up and this is how the institution permits the merchant to complete those transactions. The fee we are discussing is an additional charge on top of interchange fees and other additional fees that the acquire deems needed.
Now the Visa acquirer processing fee is a US-based authorization process that only pertains to cards issued within the U.S. borders. This fee was added to the mix once Visa went public and in response to potential action b the government. This fee is a non-negotiable fee that will be added to each transaction on any card that bears the VISA logo. This fee can be changed at the whims of the VISA institution but is currently sitting are $.0195 for credit and .0155 for debit.
Where and When Does it Show Up?
The when part is kind of a two-answer deal. The first is actual when. This fee is charged per transaction instigated by the merchant and the customer. This transaction does not even have to be settled to be charged. The second part of this question is when you will see it. That is easy it will appear on your statement from VISA. So, you will be able to monitor it monthly and then react accordingly.
This fee is placed on every transaction whether it bears or not and will appear somewhere on your statement from VISA. You can monitor this and use the metric to estimate you on the fees and then calculate that into your budget and business strategy to help fight the effects of the cost.
Now you know you cannot escape the fee but is there a way that you can account or reduce the cost to your business?
How to Reduce Your Costs
Though this fee is non-negotiable to balance the scales and make sure you can reduce the impact of this cost on your bottom line there are a few things we can suggest. The first thing to consider is if you are paying a markup that is competitive. This is the one part of credit card processing fees that can be somewhat flexible. So, make sure you pay as close to cost as possible. This means that you must shop around for the best and lowest processor markup. There are many tools available online that can help you figure this out. By doing this you will be able to take a little control over the fees and help your bottom line.
The other ways you can help reduce the overall cost has nothing to do with the actual credit card process. You can utilize and average and include it in the equation when you are pricing out your products or services. By allotting for the fee in the end price you will be almost negating this fee in some ways.
Final Thoughts
So, as you see be aware of all the fees that you as a merchant may accrue is vitally important to be able to accurately budget and plan your strategies. Though there is absolutely nothing you can do to get around this fee as it is a non-negotiable, you can work to estimate the overall; costs and make your life just a bit easier. BY taking every cost including these fees into consideration you will be using a business that is proactive and not reactive.