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When it comes to card payment, merchants find themselves in a maze of hidden fees and confusing terminology. It makes it hard to understand what you are paying for when your card processing statement arrives. Adding to the confusion, different acquirers use different wording for the same terms!
Why transparent pricing matters
Transparent pricing ensures you know exactly what you are paying for. Your payment provider should provide you with pricing that’s clear and easy to understand. If you see a fee/charge that you are unsure of, make sure to ask.
Providers who are open and honest will explain all the fees, so you as a merchant, understand everything you are paying for. This includes processing rates, chargebacks, statement generation, terminal hire, settlement pricing, interchange rates, and more. This transparency will allow you to see if you are getting a fair deal.
Watch out for charges that are not obvious
The saying “If it’s too good to be true, it probably is” couldn’t be more fitting for the card payment industry! Here’s a quick example: A provider offers you free next day settlements, which is a service that usually comes with a cost. It’s important to understand the rest of your pricing, so you can see if this free service has been covered for in another fee. For example, a higher authorisation fee may raise the cost of the next day settlements.
Similarly, when a provider boasts free terminal hire, you should be curious on how this is possible. Every payment provider buys the hardware so it should be seen as unusual if you are offered a terminal free of charge. The provider is a commercial entity who will need to recover the cost of the terminal AND make a profit. If you’re offered a free terminal, you may be sure you’re paying for it in the other charges.
Asking the right questions
To avoid any unpleasant surprises, ask key questions to your provider:
- Will these fees quoted be the sole charges on the bill, or will there be a separate bill from the acquirer too?
- Is there a chance of price increase?
- Are there any extra charges for things such as paper statements or using a merchant portal online to access your bill?
- What fees accompany chargebacks, and how are they managed?
By asking questions like the above and similar, as a business, it will help you to make sure you choose an open and honest provider, who will provide the service and charge you the prices that are right for your business. We all know how rare it is to receive “something for nothing”, so look at the overall package.
