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COST OF EACH TRANSACTION MADE THROUGH HIGH RISK CREDIT CARD PROCESSING

There are 2 components of a debit or credit card transaction.

Every time a merchant has to process a debit card or a credit card, he is charged with an “inquiry fee” and some percent of the value the transaction. The “inquiry fee” will cost the merchant anywhere from twenty cents to thirty five cents. The other one, percentage charge, depends on the “credit card rate” which is based on the type of credit card you hold and also the transaction type.

Categories of Credit Card Rates:

The Rates of Credit Cards are split into 2 categories:

Card – Present transactions attract the lowest credit card rates in the industry. These transactions are done using the credit card and the swipe terminal where the credit card has to be swiped in the terminal and then the receipt has to be signed by the owner.

Card – Not – Present transactions also called MOTO are transactions where the card isn’t swiped in a terminal. These are mostly phone transactions or internet transactions or transactions where your credit card number is keyed into the terminal. These type of transactions attract a higher rate.

Types of Credit Card Rates

The rate for any type of credit card transaction is decided based on the type of the card, the processing method and the amount of time it costs the merchant for the processing of the transaction. Since, there is high variation in credit card rates depending on its type you have to decide whether you need a card not present or card present before applying for the card, because the charges on card not present in much higher in Type 1 plan and is lower in Type 4 plan.

Retail or Type 1 Plan – This plan is mostly designed for the card present transactions.

Type 1 Qualified – here the credit card is swiped in the terminal and is batched for processing by the merchant within a day. Most of the credit cards come under this category. This plan has the lowest rates.

Types 1 Mid – Qual – These only refers to cards issued for giving rewards and are mostly key – entered transactions. These transactions are batched between 24 and 48 hours.

Type 1 Non – Qualified – All government and corporate cards attract this rate without regard to the time needed for batch processing. All transactions which are batched by the merchant after 2 days also attract this rate. This type has the highest rates in the industry.

MOTO or Type 4 – This kind of account is applicable for transactions without the card.

Type 4 Qualified – Most of the transactions come under this category if the merchant batches the transactions within a day. These attract the lowest rates in this type.

Type 4 Non – Qualified – All reward, government and corporate cards attract this kind of rates without regard to the processing time required. Also, all the transactions batched in the next day also attract this rate.

Classification of debit cards is done in the same way as that for the credit cards but with lower rates.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.