Credit Card Processing Tiered Pricing Is Bad

After doing a lot of researching I have come to learn that Tiered pricing is a word in the credit card processing industry that is very vague. They tell you that you will be charged 1.67% for debit cards. But what they aren’t telling you is that you will be paying 2.08% to 4.99% For every other card. “So what if people don’t use their debit card?” Well then the processor will being charging me, the merchant, more money because someone else is getting the rewards on that card.

Then I heard of Large Corporate Pricing. What is Large Corporate Pricing? A very simply method of credit card processing which makes your pricing easy to understand. They pass through to you (the merchant) the whole VISA & MasterCard rates, and just add their mark-up.  So you get the wholesale price and the same mark-up everytime!  You always know what you pay.

If I can give anyone any kind of advice that is looking into merchant processing STAY AWAY from TIERED PRICING.  Until the credit card company can give you an exact detailed accounting of how they determined which cards were applied to which Tier, you are at their mercy.  I believe the best program in the industry is going to be Large Corporate Pricing. It is made for me and not the processor.

Posted in Merchant Services Sales, Understanding Merchant Services on March 20, 2009 by Danny