Tip of the Iceberg - Missing Debit Card Rate Reduction

I am reviewed three merchant account statements today and they all have one thing in common - these businesses are not receiving a reduction in rate when a customer uses a debit card. On one statement there is no debit card activity noted at all. So just in case you have not heard or you forgot - when a customer uses a debit card your rate should be lower…if your merchant account provider is passing along the savings they receive to you.

Here are the interchange rates for Visa debit transactions:

Visa Debit Card Present 1.03% + $.15
Visa Debit Card Not Present 1.60% + $.15

Interchange for a regular swiped Visa is 1.54% so with Visa the reduction in cost is .51% for a swiped debit card and .25% for a key in one.

Here are the interchange rates for MasterCard debit transactions:

Visa Debit Card Present 1.05% + $.15
Visa Debit Card Not Present 1.64% + $.16
Interchange for a regular swiped MasterCard is 1.58% so with Visa the
reduction in cost is .53% for a swiped debit card and .25% for a key in
one.

If you do not see a rate reduction on your debit card transactions matching what is above you are paying more than you have to. In other words you do not have straight pass through and you are probably paying inflated rates on your other categories of transactions.

The savings you would receive through lower debit card rates may not be large. However, not having the lower fees is usually as strong warning sign that your merchant account is not in order. Is your merchant account set up right? Are you receiving lower rates on other transaction categories? Do you have any EIRF? Isn’t it time to find out?

To have your merchant account reviewed fill out the form here and I will show you how we can significantly reduce your overall costs.

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