What is Straight Pass Through?
Straight pass through has to do with merchant account risk. Visa and MasterCard have set specific rules to deal with these risks. For example, a keyed in transaction is a higher risk than a swiped transaction, because many times the card holder is not physically present. For keyed transactions, processed correctly, Visa and MasterCard have set an edict, a very specific surcharge of .31 percent for all Keyed or Card Not Present transactions. This surcharge is to be added to your base rate. This is TRUE BANK COST. If a merchant account processor charges more than the .31 for this kind of transaction they are not giving you “straight pass through.”
If this is happening to you don’t be too upset because padding Visa and MasterCard surcharge fees is the norm in the merchant account industry. They are basically buying something from Visa, and marking it up to increase their profit. When they are taking profit on one surcharge they are usually inflating them all the way down the line, rendering your attractive “font rate” as just a facade. In fact the lower your front rate is the higher your surcharges usually are.
In regards to merchant accounts straight pass through is receiving your surcharge fees at true bank cost. This my company’s niche in merchant account processing. Typically we are able to keep our new clients front rate the same and still give them up to 50% savings just by providing straight pass through to them.
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I didn’t know what straight pass through was until reading this article. Interesting.
Amanda <3
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