The Card payment processing card fees that the banks charge merchants are linked to the VISA/MASTERCARD interchange rates. From March 2015, the European Union issued a directive that reduced the disparity between the costs of processing credit and debit card payments.
From this date, debit card fees became a percentage instead of a pence charge and credit card processing rates fell gradually throughout 2016.
Whilst it may be good news for some merchants it doesn’t necessarily mean lower rates for every business owner taking card payments.
We won’t want to bore you about the interchange rates but safe to say it will create an opportunity for some providers to improve their margins and increase your card fees.
Some providers offer an “interchange plus a mark up” pricing strategy and some simply charge a blended rate?
Bamboozled by it all ? then speak to us.
Debit card charges
If your typical average transaction value is less than £35-£45 then a percentage instead of a pence charge is the better option for you as your debit card rates will become cheaper.
It’s bad news if your average transaction value if higher than £40 as this means your debit card rates will be costing you more.
Either way – it’s worth giving us a call to discuss as there are alternative options available to cap the debit card rate at a pence rate.
Credit card charges 2016 onwards
Whilst Visa and Mastercard Credit card have reduced rates over the last 12 months, there is no guarantee that your provider is going to pass on the cost benefits to you so contact us to independently compare card fees, discuss your current rates, the proposed new rates, and the options available to you.
Always remember though that the net gain in sales from accepting credit/debit cards far outweighs the cost of interchange fees.