Since the technological revolution in the early 2000’s, the entire world economy seemed to switch from being cash-based to rarely depending on paper money at all. In fact, credit and debit cards have taken the place of banknotes in our wallets ever since they were introduced. Cards became so popular because they are very convenient, and they take up a lot less space than the bills that preceded them. However, the convenience offered by these cards isn’t free. Huge companies like American Express, Visa, and MasterCard are raking in hefty amounts of money every month in credit card fees, as well as usage fees that stores must pay to accept credit cards.
There doesn’t seem to be any hope that prices will drop anytime soon, as more and more people come into the consumer world paying with a card instead of cash. However, some credit card companies will try to trick you into spending more than you have to, and this can lead to some problems both financially and mentally. This is why you need a trusted credit processing company like thesoutherninstitute.com/cbd-oil-credit-card-processing/ to aid your business.
Types of Credit Card Plans
The first thing you need to be aware of when signing up with a credit card company is how many transactions you are liable to make in a month, and what transactions are the most common. This might seem very easy to figure out, but for some, it’s very difficult to know for sure. After all, nobody can see into the future. However, you can make your decision based on past purchases, and there are several plans to choose from.
You can go with tiered-pricing, which is a rate based on the type of transactions you perform every day. Tiered pricing is based on three types of transactions: qualified, mid qualified, and non-qualified. Qualified transactions are the least costly because they are the least risky for the credit card company to process. If there is less data for the credit card to process, there is less risk that they might screw up the numbers and get sued for charging someone more than they agreed to. Mid-qualified and non-qualified purchases are ones that require more processing by the company, and therefore cost more to the consumer.
Interchange-Plus pricing is a similar form of tiered pricing but it solves the problem of the individual tiers. This option was originally for large companies with high purchasing volumes, but it has since been opened to all businesses. The rates are usually flat, with the prices varying by purchase size.
The other option is flat-rate pricing, an option introduced by Paypal and Square. There isn’t much to say about this option except that they always charge the same rate, no matter how large your purchase it. For PayPal, the rate is about 3%. This charge goes on everything transferred through the account, but mostly for money coming in. Square works similarly, but the company has since expanded its horizons to websites and other things, making their services cheaper.
Payment processors have several different options for their consumers to choose from. Some are better than others, but of course, this is objective. With all of these options in mind, you now can pick the one you like best and choose the lowest price for that option. Before you do anything, you have to do some calculations yourself to make sure you’re getting the right deals. Otherwise, lots of money will be lost. Above all else, read the offered plans and pick the one that fits you the best.