Major credit card companies regularly increase interchange costs, these are the costs associated with processing payments from their cards. These costs inevitable get passed to any business accepting non cash payments in their business. These price increases add up, creating a significant expense for your business. What’s a business to do if you don’t want to inconvenience your customers by only accepting cash payments? Protect yourself from these increases by using EDGE Merchant Processing, from North American Bancard.
Card Processing Price Increases
Each April and October, and often more frequently, major card companies such as Visa and MasterCard increase costs to process payments from their brand. This month is no exception – here’s a look at some of the changes impacting businesses like yours:
- A 25 percent increase on Visa’s international service fee, an increase from 80bps to 100bps
- A 229 percent increase in international authorizations for Visa APF debit transactions, from $0.0155 to $0.0355
- A 202.6 percent increase in international authorizations for Visa APF credit transactions, from $0.0195 to $0.0395
- A 6 percent increase on NYCE debit network switch fees, from $0.0425 to $0.0450
If you accept credit cards in your business, your merchant services account is likely not directly between your business and the brands. Your agreement is likely with a payment processor such as Electronic Payment Exchange (EPX) or with a bank, or with an independent sales organizations (ISOs). These companies almost always pass the increase in fees on to their customers – your business.
They also detest the increases just as much as you do, because their margins are lowered when interchange costs rise. Therefore, when the card brands increase their processing fees, you’re likely to be hit with an increase from your processor so they can preserve their margins. Small business owners have been powerless to insulate themselves from these increases for decades. But now, with our Edge program, we can protect you.
Protect Against Processing Price Increases
Business owners around the country are hit with these increases and added fees at the same time. In the past, there has been little to nothing a business could do about it other than to increase your prices in turn, to the detriment of your customers. This has been particularly painful to cash paying customers, which tend to be your most profitable customers. But now, protection exists – EDGE Merchant Processing.
What is EDGE? Edge allows you to be completely revenue neutral regardless of if your customer pays in cash or not. EDGE is an alternative to offering cash discounts which allows you to retain the same profit margins, even when a customer pays with a non cash form of payment.
Edge is not a Cash Discount Program. Cash Discount programs are used in all 50 states currently. However, Cash Discount programs add a fee to the receipt as a separate line item which shows this as a service fee, convenience fee or something like that. The problem is that when you charge customers a fee for paying with a card, this shows up on the receipt – leading to questions and complaints.
While the 2011 Durban amendment to the Dodd Frank bill allows for cash discounts, card brands heavily scrutinize them and continually look for legal loopholes to force merchant and processor compliance. Cash discount programs require regular adjustment, plus cash discount software doesn’t account for the differing rates to process different card brands. These programs are likely to be ended at some point by card brands or payment processors. Avoid the hassle by using EDGE now, which is not regulated as cash discount programs are because we are not adding a fee for using credit cards; rather, we are increasing the actual price of your goods and services at the point of sale only when a customer uses a non cash form of payment.
With EDGE merchant processing software, the program knows in real-time how much your business is going to be charged for a non-cash transaction. EDGE simply increase the customer’s prices to offset this cost. The increase is included with the price of goods rather than as a separate line item – there’s nothing in the subtotal showing the customer they are being charged an additional fee, resulting in less confusion and little to almost zero complaints. We provide you with free signage to explain this fact to your customers.
Cash Discount programs change a monthly for the Cash Discount Program and some charge additional fees for PCI compliance or statement fees, or batch header fees. There is no monthly fee to use EDGE, unlike with cash discount programs. All other fees are are rolled into the non-cash price adjustments paid by non-cash customers. The result is zero cost to your business at the end of the month. We are truly getting most of our customers’ costs to zero if they use Edge.
With EDGE, non cash paying customers do not pay a fee for using a card to pay – no service fees appear on the receipt. There is simply a price increase of the actual goods and services the customer is purchasing. This means that taxable sales are taxed after the price adjustment.
Edge greatly increases your margins without necessarily increasing your revenue, by offsetting the costs you have been paying for non-cash tender processing. You’ll receive 100 percent of the sticker price of your sales instead of losing money to non-cash processing fees. Your business remains revenue neutral no matter what payment method is used by your customers.
Get Started with EDGE Today
Get started with EDGE today to avoid card processing fee increases. Many options are available to provide free equipment for your business, or to partially integrate with your current POS. Contact us today to learn more about EDGE and see how the EDGE software benefits your business.