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5 Ways to Lower Interchange Rates - Business Card Acceptance Models

If you’re on Interchange Plus pricing, you might want to think about implementing some of the following techniques to lower the actual Interchange costs in an effort to lower your bottom line. Not all are practical for all businesses or card-acceptance models, but hopefully we can help you reduce costs – more so than we’re already able to with finding you a new, lower cost merchant service provider.


1 – Swipe cards

The more card-present business you do, the lower your interchange costs will be. Not necessarily for everyone, but, increasingly, Card-Not-Present business types are moving the point of sale TO the customer in an increasing effort to reduce costs. Wireless terminals and mobile payment solutions allow in home sales to be swiped, instead of taking an invoice and remitting payment later “in the office”. Also important: Make sure your provider has you set up properly. Unfortunately, a lot of providers giving you IC+ pricing don’t really make sure your account is established correctly - it doesn’t affect THEIR costs, as they are, by definition, passed through. If you NEVER swipe cards, make sure your processing account is set up to reflect that.

2 – Use the Correct SIC or MCC Code

While we’re talking proper account maintenance, make sure your provider has the correct SIC or MCC code on your account.

There are industry-specific criteria for many interchange categories, often lower than a regular retail charge. Did you know, for example, that hotels and car rental places have specific categories to allow for lower rates? A hotel front desk set up as a regular retail outlet, on IC+ would cost you a lot more than if you were set up properly.

3 – Send AVS Data

If you can’t/don’t swipe cards, make sure to send as MUCH data as possible with the transaction.

Consider using an Address Verification Service as is provided with – the more information, the more secure the transaction and the lower the costs. You can also get a physical terminal that accommodates AVS, too! The cost of doing a quick address check when you’re keying card info in is usually pennies plus 30 seconds of employee time – the savings can be staggering.

4 – Batch out every day

Transactions that have a batch date later than that of the authorization are, in most cases, processed at a higher cost than normal. Many merchants with a low volume of daily transactions will batch out manually, often whenever they remember. Consider updating your point of sale to auto-batch every day.

5 – Get your Durbin debit savings (while you can)

Branded payment cards (Visa, Mastercard and Discover), where there’s no line of credit to the cardholder on the transaction, are often processed at a regulated (i.e., capped) rate of 0.05% and 22c. Unless your average transaction dollar amount is very low, this is a very good thing for merchants. Payment association rules stipulate that you, as a merchant, cannot insist on one payment type over another, but when your customers select “DEBIT” instead of “CREDIT” at the point-of-sale, you’re probably lowering your costs.

Are you concerned about your interchange costs with your current contract? Contact a Sekure representative today and we’ll help you save money so you can focus on your business. 

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