Merchant Accounts > Rates

Merchant Account Rates

What is the Discount Rate?

In understanding the discount rate associated with merchant accounts, you have to understand how banks define a card type. From a swiped debit card, to keyed rewards cards, to swiped business cards; each card type and how it is accepted at the time of purchase is defined a specific way, thus has its specific rate associated to it. Since the banks define over 100 different card types, there are over 100 different rates!

Discount rate comprises a number of dues, fees, assessments, network charges and mark-ups merchants are required to pay for accepting credit and debit cards, the largest of which by far is the Interchange fee.

Interchange fee is payment card industry term for the fee your merchant accounts bank is charged by the customers bank for using a credit card network such as Mastercard or Visa.
 
Typically, a low rate quote should not be trusted. The companies making such quotes are only quoting the lowest rate out of the hundreds that the banks have defined. The reality of it is that the card holder has to have a specific type of credit card and the merchant will need to accept the card a certain way in order to get that low rate.
 
The low quoting is a tactic that is often used by unscrupulous companies to get merchants to sign up for their services. Their services also require the merchant to agree to a contract, which can last up to 5 years! Once the merchant is in a contract, the unscrupulous companies typically raise their rates and/or introduce hidden fees. If the merchant realizes the unethical treatment, they would have to pay a hefty contract termination fee just to get out. Either way, these unscrupulous make money regardless!
 
So buyer beware: If the rate is too good to be true, it probably is!

Merchant Accounts

 

Have Questions?
If you are interested in Accepting Credit Cards and have any questions. Contact Merchant Warehouse.  Merchant Warehouse specializes in merchant accounts, and we guarantees the lowest cost on credit card machines, credit card processing and merchant accounts. Visit their site Merchant Warehouse or call toll free. They have in-house support and can answer any questions you may have 886-421-4158