What Does That Fee Mean Anyway?

Accepting credit cards in your office is almost essential for the convenience of your patients.  In a day when wallets are more likely to carry debit and credit cards than they are to carry cash, it would be hard-pressed to find a dental office that does not accept credit or debit cards.  How do you choose the perfect merchant processor for your office?

Rewards Credit Cards Like These Often Have Less Favorable Rates

Now what do you do when you’re shopping around for a merchant processor?  Or, what do you do when you have many sales representatives knocking on your door for your business with hugely attractive rates?  For many business owners, finding a merchant processor can be a very daunting and confusing task.  With all these terms flying around like “tiered pricing,” “interchange fees,” “qualified rate” and “mid-qualified rate,” how do you know what they are and what they mean for your overall merchant services bill?  For example, did you know that swiping airline rewards cards and department store rewards cards usually carry a less favorable rate than the use of regular Visa and MasterCard?

We figured our clients could use a crash course on the terms they see.   Here’s a breakdown of the key terms:

Qualified Rate:

This is usually the most favorable rate and involves a regular consumer credit card, meaning a non-rewards cards.

Mid-Qualified Rate:

The mid-qualified rate usually refers to rewards cards and airlines cards.

Non-Qualified Rate:

This usually pertains to payments made while the card is not present, for example, payment made over the phone, on the internet, or automatic payments, as well as business cards.

You can usually choose between a physical (left) and virtual (right) terminal

Some other factors, like the type of card (Visa, MasterCard, Discover, American Express, Debit, Rewards) also plays into effect the qualification of the card.

In general, PIN-based transactions cost retailers significantly less money, so it may be in your best interest to automatically prompt patients to enter a pin on the terminal where they swipe their cards rather than complete a signature-based transaction.

Offices might wonder why the merchant charges you a percentage for swiping a credit card in the first place.  The reason for this is that the merchant has to pay the issuer of the credit card (the cardholder’s bank) to compensate the issuer for their risk in accepting, carrying, and collecting cardholder charges.  These are called interchange fees.  To make up for these fees the merchant is charged, they in turn charge you, the business owner a fees in their tiered pricing.

Other terms common on a merchant bill: equipment leasing fees (do you wonder if your’s is too high?), monthly maintenance fees, set-up fees, programming fees, and the list goes on!!

Allow us us analyze a recent statement to determine your potential savings with PayConnect. We can decipher even the most complex statement and provide you with a true, apples-to-apples comparison.  Give us a call at 800-576-6412 x 467 and send us a merchant statement for your free rate analysis.  Even if you’re stuck in a contract, our friendly specialists can go over the fees you’re being charged, so you can make a more informed decision the next time around.

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