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by adrr
3075 days ago
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2.0% blended pricing wouldn't cover the interchange for Amex, VISA Signature Cards or Mastercard World Elite. 0.9% wouldn't cover anything except durbin debit cards. If you're big enough you do interchange plus pricing where the interchange is passed through and small processing fee is added. Blended rates are for small companies. |
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2.0% blended does actually cover premium segment cards on a per transaction basis even at the top-end shelf rate depending on how you've structured your payment processing pipeline. Fully international transfers on high-end cards often cost less than intra-jurisdictional premium card purchases. Shelf rate, you're looking at 2.7 in the worst case without negotiation or any work on the part of the merchant.
But even if didn't - premium card penetration isn't very high.
So why are you paying for the full premium card interchange on every transaction?
Your merchant agreement restricts how you can do it, but you can provide incentives to use different payment venues. You don't have an incentive to push people towards low-interchange channels if you're getting fleeced on every channel.
Given the difference for a 10% margin product purchase between a 1.0 and 3.0 blended rate processor is literally a 28% difference to your bottom line, getting on top of the minutiae of your agreement is tremendously important.