Chris Brown, Director of Sales, Global Payments
The payment processing world has seen many changes in 2008. Visa® Canada became a publicly traded organization. Also, Visa® and MasterCard® have had fundamental changes to their interchange, the platform that merchant discount rates are calculated from. With all these changes, it can be difficult to determine how to keep costs down and minimize exposure to surcharges.
Here are a few tips to assist:
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Swiping a card is considered low risk to the card brands. Therefore, there is a lower associated cost to processing because the risk of fraud through chargebacks is reduced. Therefore, ALWAYS swipe or inject the credit card into your point-of-sale terminal when you have the opportunity to do so.
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If you manually key the transaction into your point-of-sale terminal, the cost is higher. The reason is the same as above: there is a direct correlation to fraud through chargebacks when a card is not swiped.
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To reduce conversion headaches and surcharges for US (or foreign) on a Canadian merchant account, open a USD merchant account with Global payments as well. This way, your US cardholders are happy that they can settle in USD.
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Ensure you have a CHIP enabled point-of-sale terminal with Global Payments. If you do not, call your global payments Sales representative to replace your Legacy terminal. If your terminal is not ready to accept a CHIP transaction, there will be a surcharge as the transactions are less secure.
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Want to avoid dial-up fees? Get an IP device. You can avoid a dial-up fee by ordering an “IP” terminal. It can plug into a router in the back of your computer. Wow…it’s fast. 3-4 seconds per transaction!
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Want to get into electronic processing but are scared to start with credit cards? That is okay. Start simple with accepting debit first. Once you’re comfortable move to add credit and then you’ll be off to the races. After all, debit is currently offered at a “per item” rate and not a discount percentage of a transaction. This way you can maintain low processing costs.
Things we can’t avoid:
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There are exotic credit cards in the market that every merchant in Canada is exposed to accepting. These “high spend” or high cost cards are hard to identify when you are presented with one. As a merchant accepting Visa® or MasterCard® you can’t turn away a specific card under that brand…you must still accept it. It is likely that these cardholders are from another country with high reward programs attached, hence why the cost of the card is more expensive to accept. What’s the good news? The Good news is, there is a direct correlation to the use of these cards and the amount the cardholder spends at your business. They spend MORE! And isn’t that why we’re in business…to sell more?
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Downgrade fees on no-shows. If you bill a cardholder a no-show charge, you are likely going to manually key it in to your point-of-sale device. Remember, manually keying is higher risk…so you will see a downgrade surcharge fee applied to your bill.
For further information or assistance contact me at 416.847.4288 or email chris.baron@globalpay.com
