Eight Ways to Save Money - Method #6
Gain Authorization/Settlement Mismatch Exceptions
In general, any variation between authorization and settlement amounts cause a downgrade resulting in higher fees. However, certain industries are allowed authorization/settlement variances. These industries include restaurants, taxi cabs and limousines, bars, taverns and cocktail lounges, beauty and barber shops and health and beauty spas.
Because an authorization amount will not include a figure for a tip, this amount typically differs from the settlement amount for industries where tipping is commonplace. For businesses whose accounts are setup with a suitable Merchant Category Code, Visa and MasterCard can recognize this and forgive mismatches up to a specific limit, which can vary by industry.
What You Can Do
Talk to your credit card processor to confirm that your industry classification exempts you from mismatch downgrades. Also ask them to make sure your account is properly coded to allow this exemption. Lastly, ask them to help you understand any mismatch limitations your industry has. Of course, if your current processor can’t help you with any of this feel free to contact me for a free merchant account analysis.
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Authorization amounts and mismatch downgrades are little-known to most people. More simply, it’s Greek to them. Appreciate the explanation.
Authorization amounts and mismatch downgrades are little-known to most people. More simply, it’s Greek to them. Appreciate the explanation.
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