Card transactions play a key role in online shopping and retail shopping because they allow people to purchase anything without cash. Nowadays, different types of debit cards and credit cards are available in the markets which aim at fulfilling the needs of customers. However, it is necessary to make a detailed study of them for choosing the right one accordingly. Banks, card issuing companies, and payment processing organizations will charge interchange fees from merchants when a customer uses a card. Several factors will determine the fees and a merchant should know them in detail.
Do interchange rates change over time?
Since interchange fees are not fixed, they will change over time based on the market conditions and other factors. As a result, both consumers and merchants should be aware of the changes from different sources that will help avoid any unwanted problems. The card associations will update their interchange rates for a variety of reasons. Some of them include safety, merchant behaviors, new card products, federal regulations, and so on. Moreover, they aim at protecting cardholders from unethical practices that will help to prevent hacking, identity thefts, etc.
How often do interchange fees change?
Interchange fees change twice a year in April and October, but they will come into effect after some days or months. It is wise to check for the details online that give ways to manage the change with ease. The card issuing banks or associations make money only from interchange fees. For example, Visa and Mastercard typically make 0.11% per transaction when customers swipe their card. They will set the interchange fees every year for various purposes. Some of them include network maintenance, customer service, fraudulent activities prevention, and so on. Merchants should know how to overcome the interchange fees change because it will affect their business to a large extent.
How to lower interchange fees?
Merchants should understand the basics of merchant fees first that will help gain more ideas. They must compare the costs of merchant accounts before working with a provider. This, in turn, gives ways to lower the interchange fees initially that will help manage additional expenses due to changes. Another thing is that they should implement PCI compliant measures for ensuring safe and secure transactions. Besides that, retail stores must request customers to make card present payments rather than card-not-present payments.
Choosing the right type of card processing level
Businesses should consider choosing the right type of level when they want to process card transactions. Level 2 credit card processing is one of the best options for them because it will lower the interchange fees. In the same way, level 3 credit card processing allows a business to minimize the interchange fees. It is the best option for businesses with high sales volume and a large client base. The technique provides ways to get more data while processing a transaction. However, it is imperative to seek support from experts who have a wide knowledge of payment gateways and other things that will help make the right decision.