Shopping Merchant Account Rate Quotes

It can be difficult to compare quotes from one provider to the next. The problem is that most merchant account providers quote a qualified “rate as low as” price then surcharge “non-qualified” transactions. If you’ve been asking "what's your rate?" then you are likely contributing to the problem.

First recognize that as a merchant, you will accept a diverse mix of credit and debit cards for payment and failing to find out how specific card types like signature debit, rewards, enhanced, world, business, corporate and others will be billed leads to higher bottom line costs.

Action Steps

The best contacts and resources to help you get it done

Start with an understanding of Interchange

Interchange fees are paid to cardholder-issuing banks and these rates are set by MasterCard and Visa card associations. Interchange pricing depends on your industry category, your card acceptance method and the type of card you accept. Two opposing views of Interchange can be studied below but it remains that small and mid-sized businesses must insist on an Interchange pricing method just as the largest merchants already pay to get the best bottom line processing costs.

I recommend:

The Electronic Payments Coalition is a broad-based group of payment card networks, financial services companies and financial services trade associations whose primary goal is to educate policy-makers, consumers and the media about the value of electronic payments systems. They promote protecting consumer value, choice and competition in electronic payments systems.

The Merchants Payments Coalition, which counts 13 trade groups among its members, including the National Retail Federation, is working to regulate the fees card-accepting merchants pay issuing banks.

Learning about Interchange will give you the knowledge you need to negotiate your best merchant rates.

Identify the rates for your industry by charge type, transaction size

Certain industries qualify for reduced incentive Interchange pricing levels. Examples include supermarkets, business-to-business, schools, non-profits, public sector, movie theaters, taxis, tolls, quick copy, news stands, dry cleaners, car washes, convenience stores, quick serve restaurants and more. For example: Restaurants can qualify for reduced Visa Interchange rates for credit and signature debit (check cards) transactions under $15. Check availability for your industry. The types of cards you accept play a role in determining your overall processing expenses.

I recommend:

There are over 200 million Visa check cards in the market accounting for over 40% of Visa sales volume. Make sure you compare quotes for credit and check card rates independently.

2/3 of consumers have a rewards credit card, many with 2 or more. If you are not being quoted a rewards card rate, carefully examine the fine print for the definitions of mid/non qualified rates!

Visa transactions may account for nearly 70% of your bankcard acceptance. Consider card market share and price structure when shopping for the lowest rates available.

Get merchant account rate quotes for MasterCard and Visa separately and inquire if any incentive rates are available. Realize the importance of how your rates will be billed. Avoid tiered rate plans that include non-qualified rate surcharges. The best pricing model is an Interchange pass through.

Get all merchant rate quotes in the same format

Interchange is the largest component of your discount rate pricing. Visa and MasterCard publish their Interchange rates so you can monitor these costs. The transparency of Interchange with a mark up to cover the service delivery costs of network communications, risk management, customer service, account funding and reporting is your best pricing method. Identifying merchant service providers that simply pass through Interchange will make it easier to compare rate quotes.

I recommend:

Visa USA Interchange rates are published at

MasterCard Interchange rates are published at

Use an Interchange rate calculator like the one found at

Tips & Tactics

Helpful advice for making the most of this Guide

  • A typical internet search will produce millions of results. Add the keyword "Interchange" to your "merchant account" searches.
  • Dictate that you will only accept Interchange style rate quotes to make comparisons easier.
  • The best way to keep your processing expenses low in a competitive industry is to insist on a month-to-month contract. Don't settle for getting the term and termination fee waived; true month-to-month agreements are available. Read the fine print yourself, don't rely on your sales person's assurances. Find out if your sales person has the authority to waive items on your application or terms. Most contracts have a clause that stipulates who can modify the agreement.

by Ty Hardison

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