Credit Card Processing:

All Pricing Models Are Not Equal

THERE’S A LOT OF DIFFERENT KINDS OF CREDIT CARD PROCESSING MODELS.

As a business owner you want to accept a wide variety of cards from your customers while

paying the lowest possible rate for each card type.

However, since interchange fees are non-negotiable your hands are a little tied. This

means you’ve got to choose the right pricing model to ensure you aren’t paying additional

charges for things that don’t add any value to your business.

Choosing the right pricing model is your only hope to have a major impact on your bottom line.

ENHANCED RECOVER REDUCED (ERR)ERR is a pricing structure where the merchant pays one set rate for

qualified cards, then billed back the difference for non-qualified

cards (such as reward cards) each month.

Simplicity - there is only one rate displayedBest �t for merchants with low transaction volume

> You won’t know effective rate until you know

the target margin and actual interchange rate

> Businesses cite they receive a lower quoted rate

and then get a higher rate once they sign on

> Known as the most opaque credit card

processing fee structure in the industry

+ Simplicity: - Unreliable Quotes:> Only one rate displayed

+ You pay the exact interchange fee, plus a fixed

processing fee set when you sign up

+ If Card Associations change or reduce the fees,

you get the savings

+ Payment acceptance fees are explained to you

in a way that you can understand

+ No hidden fees

+ Used by all 100 top largest U.S. retailers

INTERCHANGE PLUSA 100% transparent pricing structure based on the interchange tables published by Visa

and Mastercard, plus percentage and authorization fees. In this model, interchange fees

are passed directly through to the merchant with a markup (that’s the “plus").

- While Interchange Plus is the most transparent

you always want to be sure that the rates you

negotiate fit your business needs and

processing volume

TIERED PRICINGWhen a merchant account provider designates pricing by tiers (based on a set of qualifying criteria) and then

prices transactions accordingly. For example, in the 3-tiered pricing system, the first tier (lowest cost to the

merchant) is a standard transaction or swipe of a qualified card, the second tier might be a higher transaction cost,

and so on.

Simplicity - there is only one rate displayedBest �t for merchants with low transaction volume

- Beware of a “teaser tier” scheme - It promises

low rates for a small number of cards

- Merchants often find it difficult to navigate

these contracts and subsequent statements

+ Defined rates make it easy for the

merchant to understand what they are paying

for each tier

+ Often the least expensive method up front

+ Easiest structure for merchants to reconcile

fees at the end of the month

SO WHAT DOES SWIPELY DO?

Swipely is a simple way for businesses to understand customers

and grow sales. By combining valuable information from systems

that businesses already use - payments, point-of-sale, and the

social web - into one cloud-based platform, Swipely uncovers

hidden opportunities and identifies areas where businesses can

make small changes that add up to big results.

www.swipely.com | 888-794-7359 | merchantsales@swipely.com

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